State Auditor Otto Contracts With Law Firm Over Audit Change

ST. PAUL, Minn. (AP) — State Auditor Rebecca Otto has paid out $21,000 in public money on legal fees to a law firm she retained to give her advice about fighting a new audit privatization law, records her office released Tuesday show.

Documents provided to The Associated Press under a government records request show the firm was retained in June. Lawyers assigned to her file bill at rates ranging from $290 to $490 per hour, but she is getting a 15 percent discount under the Fredrikson and Byron contract. The purpose of the firm's hiring is redacted in an engagement letter provided to AP.

A state vendor database indicates the firm could make up to $171,000 in one year under the terms of the current deal.

The three-term Democrat is engaged in a heated dispute with legislators over a law change allowing counties to outsource financial audits to private companies. Otto argues it will do damage to her constitutional office's main role because she won't be able to retain qualified auditors if counties go elsewhere for the required periodic review of their finances.

She hasn't ruled out suing and said she retained the firm "to help me asses the implications of this law and its impact on the core function of auditing."

In a statement released in conjunction with documents the AP requested, Otto said, "The Office of the State Auditor has a constitutional obligation to protect the best interests of Minnesota's taxpayers. I continue to have serious concerns about the constitutional issues raised by the new law."

House State Government Finance Chairwoman Sarah Anderson, R-Plymouth, said she is troubled by Otto using taxpayer dollars to potentially sue another branch of government.

"Why is she spending money on attorneys when she is concerned about losing money on operations?" Anderson said.

According to a redacted invoice, the firm billed the $21,000 for 66 hours of work from June 10 through June 30. No further invoices were released. The work included meetings with Otto and staff, legal research and drafting of unspecified materials.

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