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Sept. 27, 2022

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Flint water crisis costs Michigan $53 million in legal bills so far

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DETROIT — The state has spent nearly $53 million since 2016 for both the prosecution and defense of Michigan’s top officials in the Flint water criminal and civil litigation, with costs spanning four departments and at least 25 state employees, according to records obtained and reviewed by The Detroit News.

About $15.8 million of the $53 million total has been spent by the attorney general’s office since 2016 to investigate the actions surrounding Flint’s lead-tainted water, prosecute state and local officials, and defend against civil lawsuits.

About $37.1 million has been paid to at least two dozen firms for legal contracts associated with the defense of state employees and state departments since 2016, according to state records.

The $53 million total has led to two rounds of criminal charges — both of which have failed to secure any convictions — and the state’s promise to pay Flint residents $600 million of a $626 million civil settlement for its part in the crisis occurring under state emergency managers.

The state of Michigan has paid $53 million for criminal and civil legal costs associated with the Flint water investigation. The Attorney General’s office has accounted for $15.8 million of the spending.

Flint Mayor Sheldon Neeley, who was a state lawmaker while money was being appropriated for the Flint-related cases, noted the total cost for Flint residents has never been a dollar amount but instead what Neeley described as a “death deficit.” And the largest remaining payment Flint residents are due, he said, is justice.

“The impact to the state of Michigan was greater and is greater than just dollars and cents,” said Neeley, referring to the health effects on residents who were exposed to the lead-tainted water.

“We need to get a clear course of direction in getting justice for families. So our prayer here is to bring resolve, to bring closure. And it’s going to take more dollars to bring personal closure for families of Flint and the state of Michigan. That far outweighs the monetary totals.”

The costs were released to The News through a combination of informal requests and Freedom of Information Act requests a little more than two weeks after the Michigan Supreme Court ordered charges against a key defendant in the latest round of prosecutions be dismissed.

The high court found the one-judge grand jury process used to indict former state health director Nick Lyon and eight other defendants was unconstitutional. It’s likely in the coming weeks that Lyon and other defendants, including former Gov. Rick Snyder, will have their cases dismissed based on the high court’s decision.

Of the $53 million total, at least $15.1 million has been incurred since Attorney General Dana Nessel’s office made the controversial decision to dismiss the cases filed under her Republican predecessor, Attorney General Bill Schuette. The $15.1 million total reflects costs starting in fiscal year 2020, or Oct. 1, 2019, through the first three quarters of fiscal year 2022.

Of the $15.1 million total, $5.2 million was spent by Nessel’s office and $9.9 million was spent by the governor’s office, environmental department and health department to defend state employees.

Snyder’s legal team called for an end to the Flint water prosecutions in light of the recent Supreme Court opinion that’s upended the most recent round of charges.

“The Michigan tax payers have funded these political persecutions for far too long and wasted millions of dollars on the attorney general’s vexatious, frivolous, and bad faith prosecution of former Gov. Snyder and other public officials and employees,” said Snyder’s lawyer Brian Lennon.

Complex prosecution

The mounting legal costs related to the Flint water litigation date back to 2016, when Schuette said he would investigate the actions leading to, exacerbating and extending the water crisis spurred by a 2014 switch of the city’s water source from Lake Huron water to the Flint River.

The city, which was under state emergency management at the time, failed to put in proper corrosion controls to accommodate the different chemistry of the Flint River. The corrosive water leached lead from old lead service lines running from the curb up to homes and into their faucets.

The result were elevated lead levels across the city, lead poisoning among some Flint residents and an alleged link to two later Legionnaires’ Disease outbreaks in the Flint area that killed at least 12 people.

Schuette’s investigation, contracted out to special assistant attorney general Todd Flood, led to charges against multiple state and local officials in June 2017. The most high-profile cases involved involuntary manslaughter charges against Lyon and Chief Medical Executive Eden Wells.

Some of the cases stretched into 2018 as Lyon and Wells and other defendants lawyered up. Lyon was bound over for trial in August 2018 while several other defendants charged with lesser crimes worked out plea deals that resulted in no jail time.

Flint water legal costs have mounted since the office of Michigan Attorney General Dana Nessel decided to restart the investigation from scratch and used a now-illegal one-judge grand jury to indict nine former state and local officials on criminal charges.

For each state defendant, the Michigan departments they worked for paid their legal fees since the alleged actions occurred while on the job for the state. Additionally, the departments paid legal fees associated with responding to subpoenas for both civil and criminal cases, and paid for legal representation for any employee subject to a deposition related to the case.

The costs were mounting and Flood had reportedly been paid about $8.2 million by March 2019, according to MLive. In April 2019, Nessel fired Flood and replaced him with Solicitor General Fadwa Hammoud, a former employee of the Wayne County Prosecutor’s Office, and Wayne County Prosecutor Kym Worthy.

In June 2019, Nessel’s team dismissed all of the charges authorized under Schuette and said Hammoud and Worthy would restart the investigation from scratch. Nessel cited as her reasoning new evidence, drawn-out preliminary examinations, plush plea deals and the political timing of charges.

Hammoud and Worthy spent the next nearly two years investigating and embarked on an indictment process that used a one-judge grand jury in Genesee County who was shown evidence and testimony behind closed doors supporting the indictments — a process that eventually would land the cases before the Michigan Supreme Court.

The pair also collected new evidence without employing a taint team to sort through whether some evidence was protected by attorney-client privilege — an issue that now could cause a two-year delay in the case and cost another estimated $37 million. A lower court’s order to employ the taint team has been appealed to the Michigan Supreme Court, which has not yet signaled whether it would take up the case.

In January 2021, Nessel’s one-judge grand jury issued indictments for 41 charges against nine defendants, including Snyder and two of his aides.

The state’s costs to prosecute and defend those individuals resumed. While the use of a one-man grand jury avoided some of the costs associated with drawn-out preliminary exams, the state saw its coffers strained again by appeals related to the investigative collection of privileged information and an appeal of the one-judge grand jury to the Supreme Court.

In June, the court issued a ruling that would ultimately end the second round of prosecutions, though Nessel’s team is making a last stab at reviving the cases in the lower courts.

Gov. Gretchen Whitmer’s office maintained that the $15.1 million spent on the second round of prosecutions was reined in by controversial cost controls put in place when she took office. Whitmer put in some ceilings on what would be reimbursed for state employees’ defense attorneys.

“The administration has since put several reforms in place to ensure accountability,” Whitmer spokesman Bobby Leddy said. “Since beginning to implement a better process for cost controls and a uniform system of contract management, the executive office now has a full accounting of the legal fees paid to represent Snyder and (former Snyder spokesman Jarrod) Agen in the criminal cases against them.

But costs remain considerable. Lyon’s defense has come to about $1.25 million since 2021; Snyder’s totals about $1.75 million; and Agen’s has hit about $535,900.

Even before Snyder and Agen were charged in January 2021 — the first individuals from the executive office to face charges — the governor’s office had spent about $9.4 million on criminal and civil defense costs.

Costs by employee

Defense attorneys have defended their Flint legal costs and pushed the blame on the prosecutors, which they said filed “groundless charges” that any defense attorney worth their salt would challenge.

“Each and every lawyer worked hard and properly charged for their services,” said Chip Chamberlain, Lyon’s attorney. “And each and every lawyer wishes they hadn’t had to, because none of us believe Nick should have been charged.”

The cost for Lyon’s defense against multiple manslaughter charges in both the first and second rounds of prosecution are some of the highest of any state actor involved in the Flint cases. It is about $3.3 million since 2016 for his criminal defense alone.

The legal defense of former Michigan Department of Health and Human Services Director Nick Lyon has cost $3.3 million alone of the $53 million spent by the state of Michigan on civil and criminal legal costs related to the Flint water crisis.

That cost includes the price of a lengthy preliminary examination, hundreds of thousands of dollars in expert witness fees and what might soon be two trips to the Michigan Supreme Court.

Chamberlain noted his firm kept Lyon as a client without a state contract, starting in late 2019 and through early 2021, because the state declined to pay for Lyon’s defense while his charges were dismissed.

“We’ve always raised really good legal issues and the reason it’s drawn out is because the attorney general is scared of our position,” Chamberlain said. “They knew we were right in 2017. They knew we were right in 2022.”

In all, the state has paid more than $1 million each for the civil and criminal defenses of 11 employees.

Those 11 include three currently facing charges: Lyon, Snyder and Wells.

The 11 employees incurring more than $1 million in civil and criminal defense costs also include six defendants charged in the first round of prosecutions, but not the second: former health department employee Robert Scott and former environmental department employees Stephen Busch, Liane Shekter Smith, Patrick Cook, Adam Rosenthal and Michael Prysby.

In addition, former state environmental director Dan Wyant and his spokesman Brad Wurfel had civil and criminal defense costs clocking in at above $1 million, though they’ve never been charged in the Flint investigation.

The $53 million total does not include costs associated with the defense of former emergency managers Darnell Earley or Gerald Ambrose, former Flint Public Works Director Howard Croft or former Snyder aide Richard Baird, who declined state assistance to cover his legal costs.

It’s not yet clear whether the legal costs for Earley, Ambrose and Croft were paid by the city of Flint or the state treasury. Neither entity could respond definitively before deadline.

Department costs rise

Broken down by state department, the highest Flint-related legal costs are found in the attorney general’s office followed by the Department of Health and Human Services, the Department of Environment, Great Lakes and Energy and the executive office.

Since 2016, the attorney general’s office has spent a total of $15.8 million, including about $4.7 million for employee compensation, $11 million for contracted services and materials — including Flood’s contract between 2016 and 2019 — and $24,535 for travel, according to records provided through a Freedom of Information Act request.

Since 2019, the office has paid nearly $1.3 million alone for “auto data processing,” a vendor that stores and maintains files obtained through discovery.

Since 2016, the Department of Health and Human Services spent $13.3 million to defend its employees and the department itself against criminal and civil suits. Those costs broke down to about $7.9 million for criminal defense, nearly $1 million for legal contracts associated with the civil case and $4.4 million associated with “other Flint contract expenses.”

Since 2016, the Department of Environment, Great Lakes and Energy — formerly dubbed the Department of Environmental Quality — has spent $12 million to defend the department and its employees. About $8.9 million was spent on civil litigation and $3.2 million on criminal litigation. The environmental department’s criminal defense costs have been relatively low over the past few years because the second round of charges didn’t involve any of its employees.

The state of Michigan has paid $1.75 million on the criminal defense expenses of former Gov. Rick Snyder, who was charged with two misdemeanor counts of willful neglect of duty.

Since 2016, the Michigan governor’s office has paid about $11.7 million to defend executive office staff against civil and criminal litigation. Between 2021 and 2022 alone, $1.75 million was spent on Snyder’s criminal defense and more than $535,000 was spent on Agen’s defense.

Prior to fiscal year 2021, the governor’s office expenses related to Flint civil and criminal litigation were classified only by firm, but not by defendant or type of litigation.

Warner, Norcross and Judd, the firm currently representing Snyder, has been paid nearly $6.1 million for Flint-related litigation from 2016 through the third quarter of fiscal year 2022, according to state records. Dickinson Wright, the firm representing Agen, was paid a little more than $644,000 through the same time period.

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