Hageman isn’t a stranger to state contracts

Cheyenne-based natural resources attorney Harriet Hageman has attacked one of her opponents in the Republican gubernatorial primary — businessman Sam Galeotos — over contracts between the state and Green House Data, a company whose board he chairs.

“Sam’s company happily accepts government subsidies and enjoys no-bid State contracts,” says a campaign-funded website where Hageman is critical of her competitors.

Former Wyoming Attorney General Pat Crank, however, called those criticisms hypocritical given Hageman’s own history with state contracts.

Legal contracts with the state in the early 2000s helped Hageman start a law firm, Hageman & Brighton, as she built her business and her professional reputation. Hageman refers to those legal battles on the campaign trail  — against a Clinton administration roadless area conservation effort and with Nebraska over North Platte River water — as evidence of her fierce defense of Wyoming’s natural resources on the campaign trail.

Crank ended the law firm’s state contracts.

“Her attack on Galeotos for taking state contracts … I mean she had huge state contracts,” Crank said. “Some of the positions she’s taken in this race are just hypocritical to me.”

As the Republican gubernatorial candidates have put an increasing focus on fiscal responsibility and government transparency, service contracts that are awarded by the state without a competitive bidding process have taken fire from several candidates, including Hageman.

Hageman’s debate attacks on Galeotos have continued on her website wrongforwyoming.com, where she criticizes Green House Data for a $94,492 no-bid contract with the Wyoming Department of Environmental Quality, and for contracts with the state’s technology agency. Those contracts, and the unusual and subsequently disavowed endorsement of Galeotos by the head of the state’s technology agency, was reported on by WyoFile in early July.

Hageman’s own contracts were not competitively bid either, she said, though she called that the nature of legal work. The Wyoming Attorney General’s office and the Department of Administration and Information, which signs off on no-bid contracts, did not provide a definitive answer in response to WyoFile inquiries on whether the firm received a bid waiver, as is the practice for sole source or no bid contracts today. Crank’s recollection is that they would not have been competitively bid.

“I believe the Hageman and Brighton contract was a sole-source contract and was not competitively bid,” he said.  

In an email, Hageman said legal services aren’t usually done on a “bid” or “no bid” basis.

“Neither the State nor other local governments are looking for the “cheapest” legal services,” Hageman said. “They are looking for the best attorneys available in order to make sure that they receive the best representation available in order to win the case.”

She was interviewed by the state for her work on the Clinton administration’s environmental rule, she said. “I assume that the State may very well have interviewed other attorneys to handle the lawsuit, but do not know for sure.”

In an email to WyoFile, Hageman said she distinguished between fees and state grants, like the ones Green House Data has applied for and received at key points in its development.

“I started my own law firm, on my own dime, and at my own risk,” Hageman said. “I borrowed money to pay rent, to set up my computer system, to purchase a phone system, and to pay my employee. I then began providing legal services to my clients, one of whom was the State of Wyoming. My clients received legal services in exchange for paying my fees.”

Grants aside, Hageman’s defense of the contracts she took to serve the state’s needs isn’t too different from Galeotos’ own defense against Hageman’s attacks during debates and online: “To imply [Green House Data] behaved inappropriately by simply responding to the service needs from the state is ridiculous,” Galeotos wrote in an Aug. 1 campaign email defending himself.  

Hageman called her legal work more specialized than the type of services provided by Green House Data.  

“I am an expert in water and natural resource issues,” Hageman wrote. “There are few attorneys in Wyoming with my expertise. Digital services, in contrast, are generalized in terms of the product being purchased.” Hageman went on to say that technology companies provide uniform services to clients, “and are not providing a specialized service or expertise that is only available from one vendor.”

Crank remembers over half a million paid

Hageman and her eventual business partner, Kara Brighton, were initially hired as state employees by the AG’s office to work on a lawsuit between Wyoming and Nebraska over the North Platte River in the late 1990s, according to a report on her law firm in the Wyoming Livestock Roundup, an agriculture industry publication. The case settled in May of 2000, Hageman said. In August, she and Brighton founded their law firm, she said. The firm opened its doors on Aug. 1, 2000, according to the Wyoming Livestock Roundup.

They began their business with a contract from their former supervisor — Thomas Davidson of the Natural Resources Division of the AG’s — to oversee the implementation of the settlement of the North Platte case.

Hageman signed the contract for the North Platte work on July 28, according to the contract.  

Gov. Dave Freudenthal, a Democrat, was elected in 2002. Crank took over the AG’s office in 2003. He and Freudenthal became concerned about the amount of money being spent on outside attorneys to fight Wyoming’s legal battles and sought to end the practice, Crank said. Between the North Platte case and a 2001 contract for the state’s fight against the Clinton environmental rule, Hageman may have made over half a million dollars in legal fees as she was just beginning in private practice, he said.

Hageman did not know what her firm was paid in total for work for Wyoming, she said, but said the fees they charged was less than most firms would have.

“I can’t speak to what Pat Crank may ‘recollect,’” she said.  

Exact records of payments from the a state to the Hageman and Brighton law firm are unavailable given the time that has passed, according to the state. In response to a records request, the Wyoming State Archives told WyoFile that payment records are destroyed on a seven year cycle. But two sets of contracts exist — one from 2000 for litigation over the North Platte river, and one from 2001, for legal services to be paid for out of Wyoming’s Federal Natural Resources Account.

The charges laid out in those contracts — $100 per hour for Hageman and $80 per hour for Brighton, align with Hageman’s recollection. The contracts also include a $45 per hour fee for a paralegal’s work.

The second contract, with roughly the same fee structure, was to fight the Clinton administration’s “roadless rule.” The rule would have put conservation protections in place over vast areas of federal lands. It threatened Wyoming’s various extractive industries, opponents said. Hageman was hired to try and stop its implementation.

The firm worked for the state for two and a half years on the two contracts, Hageman said. At the time, she said, she was engaged in other cases and left much of the work on the North Platte case to her partner, Kara Brighton, who left the firm in 2013 and is now a member of the Wyoming Public Service Commission.

Crank’s estimate could be high but is not unreasonable. To have charged the state half a million dollars over two and a half years at the contracted rates, both attorneys would have needed to work a combined 21 billable hours a week on the cases. Both attorneys had other clients at the time however, Hageman said. “We had numerous clients who hired us soon after we formed our law firm,” she wrote.

“It was far more cost effective for the State to pay an hourly rate than it would have been to keep Kara Brighton and I as employees,” Hageman said. “I in fact did very little work in relation to the [North Platte] settlement, instead working for other clients.”

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One document gives a clue to how much the state might have paid Hageman’s firm to fight the Roadless Rule. A conservation group opposing the state’s lawsuit contended that Hageman’s firm was paid at least $168,925 before Crank ended the contract, according to a January 2003 letter from the group to Crank. The letter was referenced in a 2009 High Country News article and obtained by WyoFile through a state records request.

The letter, written by an attorney for the Wyoming Outdoor Council, which supported the roadless rule, asked Crank to terminate the firm’s contract. “This will save the taxpayers a good deal of money that is currently being wasted on this case,” the letter, from WOC attorney Steve Jones said.

Hageman’s firm had been paid $69,195 to write an amicus brief — essentially a legal argument supporting another party’s lawsuit — to back the state of Idaho in its own lawsuit against the rule, Jones wrote. By January 2003, the law firm had also billed Wyoming $99,750 for work on its own lawsuit, according to the letter. “This is not a terribly complicated case and can easily be handled in house,” Jones wrote.

Personal crusade?

Like Hageman, Crank said he saw the Clinton administration’s rule as a potential threat to Wyoming’s extractive industries. But Hageman was using the lawsuit to go on a crusade against environmental groups on the state’s dime, he said.

“Hageman and Brighton had gone off on what I thought was a side tangent trying to challenge a number of environmental group’s impact on the Clinton administration,” he said. “There were a bunch of depositions scheduled for environmental [group] officials and I just never felt that was going to develop into something to push back on the Roadless Rule.” 

Hageman disagreed.

“It was my work that allowed us to succeed in winning the Roadless Rule case,” Hageman wrote. Indeed, after Hageman was removed from the case by Crank, a federal judge issued an injunction against the rule, based in part on the grounds Hageman argued. Hageman went on to continue fighting the rule for other, nongovernmental entities, according to the High Country News report.

“I worked tirelessly on that lawsuit and was able to expose the shenanigans that went on with the Clinton administration and the environmental groups in drafting that rule,” Hageman told WyoFile.  

Crank and Freudenthal “were not committed to winning that case or defending the decision on appeal,” Hageman said.  

But Crank said the new Wyoming leadership expected the administration of George W. Bush, who had taken office two months before Hageman was hired to sue to stop the rule in 2001, would roll back the rule.

The Bush administration did decline to continue defending the rule in court, according to news reports. It has since gone through a complex series of twists and turns that continues in some manner today. State lawyers for Wyoming have continued to fight it.

Crank assigned further work on the North Platte settlement to in-house attorneys. Under his watch, he said, the AG’s office discontinued the practice of contracting important legal work out to private firms, preferring instead to build expertise within the agency’s lawyers.

Asked by WyoFile, Crank said he had not endorsed a candidate but favored State Treasurer Mark Gordon. 

The GOP primary has at times seemed to be a referendum on which candidate can bring the most disdain for government to the governor’s mansion. Galeotos, Foster Friess and Bill Dahlin are all running as businessmen and “political outsider” candidates. Hageman and Taylor Haynes talk about sharply reducing government size and removing government shackles on free enterprise to fix Wyoming’s economic woes. Even Gordon, after six years of service as treasurer, talks about “getting government out of the way.”

However, when it comes to legal work at least, Crank called it critical that the state have experts working for it, particularly in the AG’s office. Farming that work out stunted the growth of expertise in that branch of state government, he said.  

“You need to be prepared to constantly review federal rules and regulations and be prepared to have the staff on board to challenge regulations that would wreak harm on Wyoming’s industries or environment,” he said.  

CORRECTION: This story has been updated to indicate that Green House Data’s contract with the Department of Environmental Quality was not a per-month contract, but instead a one time fee, as WyoFile has previously reported.  -Ed.