Power of Attorney

As the state’s chief legal counsel, Lori Swanson has tangled with corporate giants and targeted businesses that prey on the elderly. She has pushed for legislation that helps vets and disadvantaged kids, and she has declared herself a champion of “everyday people.” So why do so many lawyers think she’s destroying the Office of the Attorney General?

On January 2, 2007, Lori Swanson was sworn in as Minnesota’s 29th attorney general, becoming the state’s most powerful lawyer. Standing before a small crowd gathered under the dome of the capitol in St. Paul, she took the oath of office from outgoing attorney general Mike Hatch and former attorney general and federal judge Miles Lord. She stepped behind a podium bearing the official seal of the State of Minnesota and delivered an address that quoted Teddy Roosevelt, Martin Luther King Jr., and Clarence Darrow, pledging to use her muscle to champion the causes of mentally ill kids, veterans returning from war, and families victimized by predatory lenders. “My mission is for the attorney general’s office to fight for the rights of everyday people, and especially those without a voice,” she proclaimed.

Swanson moved quickly to fulfill such promises. Her first week in office, she filed suit against Allianz Life, charging the Minnesota-based insurance giant had sold senior citizens long-term annuities that often tied up their money beyond their life expectancies. She took action against other insurers, too, and the resulting settlements made more than 13,000 seniors eligible for refunds totaling approximately $700 million.

In 2007, Swanson successfully pushed lawmakers to pass a bill that protects consumers from unscrupulous lenders, requiring that a borrower’s ability to repay a loan be verified. She also sought passage of legislation that would allow members of the armed services to cancel cell-phone and satellite-TV contracts when called to duty and would aid them in finishing their college education when they returned from deployment. In the fall of 2007, she sued Sprint Nextel Corporation, alleging that the company extended cell-phone contracts without customer consent when people made small changes in their plans. (Sprint denied the charges but altered its practices.)

Such accomplishments deserve praise, say Swanson’s supporters. “The attorney general can do a lot of things for people that they can’t do for themselves,” says Warren Spannaus, who served as attorney general from 1971 to 1983. “Lori Swanson is doing a good job.”

But others believe Swanson’s accomplishments have come at significant cost to office morale. “She’s a pseudo populist,” says Susan Damon, who joined the office in 1991 and served an assistant attorney general in the health-licensing division until last June. “If she were a populist, she would empower her own staff instead of firing them, involuntarily transferring them, muzzling them, and retaliating against them.” Damon says she quit because she could no longer tolerate administrative practices she describes as “dishonest, unethical, and not in the public’s best interest.”

Damon is one of approximately 60 lawyers who have left the attorney general’s office since Swanson took charge. (The office employs more than 150 attorneys, including a management team of Swanson, a solicitor general, and four to five deputies.) The numbers have attracted notice at the capitol and elsewhere, but Swanson says such turnover is simply a changing-of-the guard, typical of any political transition. Others, however, worry the upheaval may have far-reaching and damaging effects, adversely impacting the very “everyday people” that Swanson once pledged she’d fight for.

Lori Swanson extends a hand as a visitor enters a sunny conference room on the 14th floor of the Bremer Tower in downtown St. Paul. (The attorney general’s personal office is at the capitol, but much of her staff is housed here.) Slender and standing roughly five-and-a-half feet tall, with short brown hair and sharp brown eyes, she looks younger than her 42 years. She jumps into a spontaneous description of that morning’s work, investigating a possible suit against health-insurance companies for improper use of patient data.

Swanson eventually sits and answers questions about herself—a little awkwardly. She loves taking walks with her 11-year-old golden retriever, Bailey, but when the weather is bad, she works out on the elliptical trainer in the basement of the Eagan home she shares with her husband, Gary Swanson, an insurance broker. She enjoys movies like Michael Moore’s Sicko and reads four newspapers daily (the Pioneer Press, Star Tribune, New York Times, and USA Today). On weekends, she enjoys shooting trap with her ’53 shotgun, and she devours books, mostly legal thrillers and books about American history. Occasionally, she brings homemade baked goods to work for her staff. “I make a really good blueberry bread,” she says with pride.

But many in the attorney general’s office don’t know such personal details. They describe their boss as introverted and private. She’s not one to chat in the halls or to crack jokes in meetings. Her closed-door management style makes her a stranger to most of her staff.

What the staff does know is her resumé. They know she grew up Lori Quinn in suburban Milwaukee, the youngest of three girls raised by a mechanical engineer and a homemaker. They know that she completed a double major at the University of Wisconsin–Madison in political science and journalism in 1989. That she graduated magna cum laude from William Mitchell College of Law in 1995. That her first job out of college was as an analyst for the Minnesota Department of Commerce, where Mike Hatch was commissioner. They also know her career path has closely followed his: She clerked at Hatch’s law firm while attending William Mitchell, then became a staff attorney. When Hatch became Minnesota’s attorney general in 1999, she worked for him as deputy attorney general and, later, as solicitor general. They know that Hatch remains her staunchest supporter, having hosted several fundraisers for her at his Burnsville home.

They also know Swanson is smart and diligent, famous for her 14-hour workdays. “She has one of the best legal minds I have worked with,” says Karen Olson, the deputy attorney general in Swanson’s office. “She has a passion that’s unstoppable.” Others tout her “ability to think on several planes.” They call her “phenomenally bright” and a “good lawyer.” Many want to see her succeed as the state’s first female attorney general.

Nonetheless, many employees say Swanson’s talents have been overshadowed by her management style. “She wants to do good work,” says one former assistant attorney general, who declined to speak on the record for fear of retribution. “But she has treated lots of people horribly.”

The trouble began almost immediately after Swanson took office. On the very day that she was sworn in as attorney general, Swanson announced that she had made her first official hire: Her old boss, Mike Hatch, who had failed in his bid to become governor, would oversee all complex litigation handled by the office. Attorneys in the powerful consumer-enforcement division were told that all matters must go through him. The result was confusion and chaos: Who was really in charge?

What’s more, Hatch’s return to the office had significant impact on staff morale. As attorney general from 1999 through 2006, the often-prickly Hatch had a reputation for being short-tempered and vengeful—getting even with anyone who crossed him. He fired nearly 50 attorneys in his first few months on the job, and an atmosphere of fear and uncertainty hung over the office, staffers say. When Swanson was elected to succeed him in November 2007, many staffers were skeptical that the mood in the office would change. With Hatch’s hiring, the pall over the office grew darker. (Hatch did not respond to Minnesota Monthly’s requests for an interview.)

Longtime staffers began to make their exit. In April 2007, Minnesota Lawyer blog editor Mark Cohen questioned why the media had barely noted the departures of two respected deputy attorneys general from Swanson’s office, Kris Eiden and Mike Vanselow. The observation touched off a bevy of anonymous website posts blasting the attorney general. In response, some former staffers believe, Swanson initiated an office campaign with several of her top lieutenants, including Hatch, soliciting favorable comments from staff attorneys to be posted on the Minnesota Lawyer blog. Some attorneys, like Chuck Roehrdanz and Peter Krieser, enthusiastically blogged their support for Swanson. Others did so begrudgingly, fearing the consequences of not complying with their superiors’ request. At least three, including Damon, flatly refused.

Additional information about the episode came to light last June when the Office of the Legislative Auditor issued a report about the matter. There were allegations that Hatch had gone so far as to ask one attorney in the office to sign his name to blog comments that Hatch himself had composed. The attorney said no, but Hatch posted the comments under the attorney’s name nonetheless. The attorney also testified that Hatch asked him to take vacation time retroactively to cover the time of the post so it would not appear to have been made on state time. The attorney refused and eventually quit, citing the incident as one reason for his departure.

Hatch resigned abruptly in May 2007. In his letter of resignation to Swanson, he wrote: “[I]t is apparent that changes I made during my administration are unfairly being attributed to you. It is not appropriate that you should become the target of complaints involving my administration…. Your administration has been fantastic.”

Some staffers saw Hatch’s comment as a reference to the high staff turnover. Others speculated that Hatch feared his bogus blogging would become public and he wanted to resign before he was forced out.

Hatch’s influence wasn’t the only reason for the low morale.

Staffers noticed that Swanson seemed particularly keen on securing favorable media coverage for her initiatives, and she continued Hatch’s practice of staging press conferences to showcase lawsuits. (Such promotion had not been common under his predecessors, Hubert “Skip” Humphrey III and Warren Spannaus.)

Attorneys working on such cases say that once media attention wanes, however, so does Swanson’s. The lawsuits are often quietly dropped or settled. There’s a running joke among assistant attorneys general that once the press conference is over so is the case. “It’s clearly about political gain and press coverage for her—everything else is irrelevant,” says a former assistant attorney general who left shortly after Swanson took office but asked to speak anonymously for fear of retaliation. “You’d work up a case, then they’d tell you to drop it after the press coverage was over. You had talked to the victims, found a claim, but you couldn’t help them. The sole concern was getting favorable press coverage.”

When asked about such comments, Swanson does not respond directly. Instead, she criticizes attorneys who objected to the requirements of responding to citizen mail: “There are some attorneys who have, in the past, taken the position, ‘We’re too good for that. We don’t ever want to write a letter back to a citizen.’ I just fundamentally disagree with that.”

But several attorneys say they simply questioned the allocation of their time and resources. Responding to citizen mail was given priority above other duties that many attorneys saw as more important. Brad Delapena, a former assistant attorney general in the tax-litigation division who left the office in April 2007 because he was put off by Swanson’s management style, says: “If a lawyer is working on a $200 million case and is being told to write letters to people complaining about coupons misrepresenting the price of melons at Cub Foods, you begin to wonder if their time is being used wisely.”

Many attorneys also resented the way their letters were edited, as often as four times, going up four levels of management. They would be asked to redo the letters, inserting a comma or capitalizing Office. “The level of micromanaging on little things feels Big Brotherish and shows a lack of trust,” says Stephanie Morgan, an assistant attorney general who exited the office in the fall of 2007. “If you can’t trust me to write a boilerplate letter, how can you trust me to do complex lawsuits or other legal work?”

Shortly after Swanson was elected, some of her staff met to discuss forming a union. Frustrated with the administration of the office under Hatch, they hoped to put in place a system that would provide more job security—something that would prevent attorneys from being fired without “cause.” They contacted Council 5 of the American Federation of State, County, and Municipal Employees (AFSCME), a public-employees union that had endorsed Swanson during her campaign, and collected signatures on union cards from a majority of the assistant attorneys general. In May 2007, the union organizing committee asked to meet with Swanson, but the attorney general declined on the grounds that the state Public Employee Labor Relations Act does not apply to the attorney general’s office or its employees. “If she had met with us, it would’ve helped, but she missed an opportunity,” says Morgan, one of the union organizers. “I don’t understand why she’s fighting this so hard.”
 

 

Over the next several months, the departures continued and the discontent grew. In February 2008, Susan Damon and two assistant attorneys general, Daniel Goldberg and Amy Lawler, wrote their boss a letter on behalf of the union organizing committee, a group of roughly 10 staff attorneys. The letter requested that Swanson recognize “the will of the staff to be represented by a labor union” and meet with them to discuss terms and conditions of employment, including “job stability and security, just cause for discipline and discharge, and our ability to perform our required professional duties free from any undue political influence.”

But Swanson was out with the flu the day the letter was delivered. When she didn’t respond after two days, the union organizers upped the ante by posting the letter on a website. Swanson reacted swiftly. The next week she called in two retired judges, Miles Lord and Jonathan Lebedoff, to survey the staff attorneys on whether they supported the Damon-Goldberg-Lawler letter. Thirty said the three did speak for them, 14 refused to vote, and 52 said they supported the attorney general, according to previously published figures. The balance was not polled. Swanson viewed the outcome as a vote of confidence for her; the union organizers, noting that Lord and Lebedoff were political supporters of Swanson, rejected the survey’s results.

Swanson circulated a staff memo via e-mail that characterized the online publication of the union’s letter to her as “a political swipe.” She wrote, “I strongly disagree with many of the accusations.” In a letter written directly to Damon, Goldberg, and Lawler, she scolded them for “your personal and public attacks on this Office and the good work we are doing.” It accused them of creating a “public spectacle” and of bringing “embarrassment to this Office.”

A month later, Lawler, a Harvard Law School graduate hired by Swanson, spoke with a reporter from MinnPost.com for an article about the discord in the attorney general’s office. She questioned her boss’s ethics, saying Swanson had instructed her to find a defendant to sue over a consumer issue that had recently cropped up in the news. Shortly after the article was published, Lawler (who declined comment for this article) was informed that she had breached an office policy that all media interviews be approved in advance. She was placed on unpaid administrative leave while Thomas Mengler, dean of the University of St. Thomas Law School, investigated the matter. In late May, after Mengler concluded that there wasn’t enough evidence to substantiate Lawler’s claims, Swanson immediately fired Lawler and lodged a complaint against her with the state’s Lawyers Professional Responsibility Board. (The board later admonished Lawler.)

Former staffers say the Lawler incident was only the most visible example of Swanson’s tendency to deal with critics by taking away their cases, transferring them to undesirable divisions, or demoting them. They note that Swanson offered no reason for firing one union organizer, attorney Kari Jo Ferguson, in March 2007. And she terminated another, investigator Jody Wahl, by eliminating her position in January 2008. “It seemed more and more Lori was trying to figure out who was loyal to her because only she could decide the right thing to do,” says Wahl, who had worked in the attorney general’s office for 23 years. “If she perceived you weren’t personally loyal to her, even if you were loyal to the work of the attorney general’s office, she was uncomfortable.”

For her part, Swanson says that complaints about staff dissatisfaction have been overblown, and she accuses Eliot Seide, executive director of AFSCME’s Council 5, of pushing an agenda and manufacturing complaints in an effort to try to organize the office. “They, in order to form a union, need to stir the pot and try to create turmoil in the office,” she says, “so that’s sort of what they’ve been doing.”

But Seide says the staffers in Swanson’s office contacted him first—not vice versa. Nobody from the outside needed to stir the pot. “Unions don’t just happen,” Susan Damon points out. “There’s a problem in the workplace driving someone seeking a solution. The union effort arose from serious issues with the management of the office.”

Even many not associated with the union effort agree that workplace morale has sunk to a new low in the last year. But Swanson’s supporters seem unconcerned by the turnover. “Change is always good,” Olson, the deputy attorney general, says. “I don’t believe anyone has left this office because of poor morale.”

It’s really not about the union,” says Jim Nobles, the state’s legislative auditor. “There are much bigger issues here.”

Nobles, who has conducted nonpartisan audits and evaluations of government agencies for the Legislature since 1983, began scrutinizing goings-on in the attorney general’s office last spring. The review was launched after state representative Steve Simon, who had once worked in the office, approached his colleagues on the Legislative Audit Commission with some “serious and troubling” allegations about practices at his old workplace. Simon told the 12-person committee that he had heard complaints from attorneys working under Hatch and Swanson that they had felt pressured to act unethically. The charges included offering unsound advice to clients, inserting unsubstantiated information in affidavits, and finding defendants to justify filing certain lawsuits, among other things. The commission directed Nobles to conduct a “preliminary assessment” to determine whether the allegations warranted a broader investigation. Members were particularly concerned about charges that officials had misused public funds. They also expressly directed Nobles to steer clear of the union dispute.

Nobles issued his report in June. He stated that his office had interviewed seven people associated with the attorney general’s office and found that the events related to the allegations had indeed occurred and that individuals “felt pressured to act inappropriately.” But the witnesses “also stated that no inappropriate, unethical, or illegal actions resulted from the pressure.” In other words, the attorney general’s office might be in disarray, but no laws had been broken. Nobles’s duties were essentially complete. (One matter uncovered during the preliminary assessment remains under investigation: whether the office misspent federal funds intended to fight Medicaid fraud.)

Still, Nobles red-flagged one issue. The “pressures” in the office, he wrote, were exacerbated by the fact that attorneys in the office could be “dismissed or demoted ‘at will.’” Attorneys could be fired without reason or cause. “The question for the Legislature to consider is whether the legal services provided by the Attorney General’s Office require that all of the attorneys in the office serve ‘at the pleasure’ of the Attorney General,” Nobles wrote in his report.

He remains concerned. “I think the Legislature and citizens have a legitimate concern whether the [attorney general’s] office is being managed in a way that state agencies are getting sound, nonpartisan legal advice in running their departments,” he says. “I have no basis to conclude that they’re not being provided with sound advice. I’m just saying it’s a legitimate question for the Legislature to pursue.”

The greatest cost of the turnover under Swanson isn’t bruised egos or hurt feelings; it’s the diminished quality of legal representation the attorney general’s office is able to provide. “Whether it be public utilities or human services or health, you’ve got a very specific body of law that governs that area, so you really want people who are experts in those areas of law,” says David Schultz, a professor who teaches law and business classes at Hamline University in St. Paul. “As attorney general, you want to recruit people who will stay in your office and who, over a number of years, will develop expertise in different areas of law, so that the state can write regulations, write procedures, perform services, and do its job.”

The loss of key staff affects, among other things, the office’s ability to pursue important lawsuits. In 2003, Hatch sued GlaxoSmithKline, alleging the company was conspiring with other drug manufacturers to boycott Canadian pharmacies exporting low-cost prescription drugs to the United States. The case was set for discovery, then trial, but the three lawyers who had handled the case from the onset left within months of Swanson taking office. Two more attorneys added to the case also left. In November 2007, Swanson settled the case for nothing, not even asking for compensation to cover the office’s costs and attorney fees, which were substantial after four years of litigation.

“They dumped the case because there were no lawyers left who could handle it,” says Paul Civello, a former manager of the Medicaid-fraud division who was initially assigned to the case and who departed the office in frustration in 2007. “Needless to say, Swanson did not hold a press conference to announce this settlement.”

Swanson says the settlement was prompted by the outcomes of similar cases filed across the country, which did not bode well for Minnesota’s case. “We were dealt a very, very unfavorable ruling by the federal courts in connection with this private litigation,” she explains.

The attorney general’s office also serves as the chief legal counsel for all state agencies. “That office is unique in our democratic system. It is the only office that touches all three branches of government,” says former attorney general Skip Humphrey. “In Minnesota, there’s just one office that handles the legal business, that can go to court, that can present the positions before the courts, and that is the attorney general’s office.”

Ideally, when it comes to administrative matters, the attorney general’s office helps state agencies avoid litigation. To that end, the office provides proactive counsel intended to help administrative departments avoid future litigation. Attorneys once spent roughly 70 percent of their time offering such advice, say agency personnel. Increasingly, however, the number of hours devoted to such counsel has dwindled. “There’s more time taken to ramp up and train new people,” says Anne Barry, chief compliance officer for the Department of Human Services, one of the state’s largest agencies. “Their attorney skills are not in question. Their competency is not in question. It’s the depth with which they understand our programs that requires additional work.”

It will take years for new hires to replace the lost institutional memory, specialized skills, and accumulated wisdom of the departing attorneys, says Civello. “Those who have left include some of the best, brightest, most dedicated attorneys the attorney general’s office had. They are irreplaceable,” he says. “No law firm that has suffered the loss of so many talented, experienced lawyers in so short a time could claim to be well-managed and functioning.”

The hour has passed. Lori Swanson has talked at length about her position as the people’s attorney. “The attorney general should be the people’s lawyer,” she says. “The attorney general should help level the playing field for ordinary people. Having that kind of citizen advocacy, to me, is highly, highly important. It’s why I’m here. It’s why I ran: to be able to stand up for the ordinary citizen.”

She is not concerned about the morale in her office, she says, dismissing union organizers as “dissidents.” She describes her current staff as “phenomenal,” and she claims that many of the attorneys who have left have taken jobs where the pay is higher or the workload is easier. “This is not a good place for someone to work if they’re looking for a soft, cushy job,” she says.

Swanson stands up. The interview is over. “I don’t spend a minute of my day on the bulk of what you just asked me about,” Swanson says as she moves toward the door. “I’ve got a great job, a great office, a great team. I think we’re doing a great job for the public, and that’s what I’m about.”

She walks out and closes the door behind her.

John Rosengren, a Minneapolis writer, profiled attorney Brian O’Neill in the March 2008 issue of Minnesota Monthly.

 

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