Report: Amtrak Cost Taxpayers Millions of Dollars in Legal Fees

Amtrak cost taxpayers tens of millions of dollars in unnecessary legal expenses, an independent investigator said Wednesday.

The legal department of the federally subsidized passenger railroad failed to properly manage its outside law firms, which charged $103 million from June 2002 through June 2005, according to a review by the Transportation Department's inspector general.

"In-house counsel was co-opted," John Toothman, a consultant working with the inspector general, told a news conference. "They're in bed with them, they're not managing them."

Amtrak's law department responded that the review didn't take into account "the rigorous oversight of work done by outside counsel."

Amtrak's lawyers also said they save money by performing work in-house, which is cheaper than using outside firms.

The law department lowered its legal fees by 22 percent, from $31 million to less than $24 million, from 2003 to 2005.

Amtrak's 130-person law department includes 25 lawyers, investigators said.

Rep. John Mica, a Florida Republican who requested the report, said Amtrak's lax management of its law firms cost taxpayers somewhere in the tens of millions of dollars.

"We may not know what the total loss is," Mica said.

Toothman agreed with Mica's estimate but said that Amtrak is probably not unique among government agencies.

"My suspicion is that it's toward the bad end," said Toothman, who has investigated other government agencies.

The report found that Amtrak didn't review law firms' bills, didn't request budgets and didn't scrutinize bills. The railroad also hired expensive big-city law firms without requiring them to compete for its business, the report said.

Mica conceded that Amtrak had changed some of its practices since the inspector general's investigation.