Stadium Consultant’s Deal With County Remains Secret

Attorney Michael Zischke's fee details have not been released by the county


San Diego County officials will not release any details about the hiring of a legal expert who is helping the city and county negotiate a stadium deal for the San Diego Chargers.

Attorney Michael Zischke is an expert in environmental law. He co-wrote a two-volume legal handbook on California’s Environmental Quality Act and according to his biography, has represented clients in land-use and environmental cases at all levels of California courts. Zischke is a partner in the Cox Castle Nicholson law firm in San Francisco.

Environmental issues – and possible legal challenges to any stadium proposal based on those issues – have become a huge factor in both the negotiations and the approval and construction of a stadium, if the Chargers, the city and the county do eventually strike a deal.

But Zischke’s involvement in those negotiations as part of the city and county’s team was not disclosed until Monday.

Until now, local government officials have repeatedly said only two outside consultants will be paid for their expertise: the Nixon Peabody law firm, for legal advice, and Citigroup Global Markets, for development of a financial plan for stadium construction.

In April, the city and county agreed to split up to $500,000 in taxpayer funds for those outside advisors. Those officials acknowledged payments to the two consultants may well exceed $500,000 if negotiations continue.

On Thursday, a San Diego County spokesman confirmed Zischke has been added to the negotiating team.

In response to a California Public Records Act request from NBC 7 Investigates, the county refused to provide any information about the terms of Zischke’s contract, including how and why he was picked for the job, how much he’s being paid for his legal advice and whether he’ll be reimbursed for travel, hotel and other expenses.

County attorneys cited state legal codes that classify written fee agreements as “confidential communication.” The county lawyers also refused to release any details about its contract with the Nixon Peabody law firm or Citigroup Global Markets.

When contacted by NBC 7 Investigates, Zischke declined to provide any information about his financial arrangement with the county.

But the city of San Diego had a much difference response to the same public records act request. The city clerk’s office gave NBC 7 Investigates detailed information about how San Diego taxpayers are paying those consultants.

The city’s 47-page agreement with Nixon Peabody reveals taxpayers will initially pay the firm up to $150,000 for legal advice and out-of-pocket expenses.

The firm’s partners and managing director will be paid $500 an hour for their legal advice, according to the agreement. Associate attorneys are paid $400 per hour, and paralegals get $195 an hour.

That agreement specifies the law firm will be reimbursed for “actual, necessary and reasonable out-of-pocket expense” including air travel at economy or coach class fare and hotel accommodations in San Diego “not to exceed the rate established by the U.S. Government General Services Administration for San Diego.”

The lawyers will not be paid for meals or drinks while working in San Diego, and Nixon Peabody cannot charge taxpayers for computer-assisted legal research, clerical or secretarial salaries, word processing fees or office supplies.

Other public documents supplied by the city to NBC 7 Investigates confirm the city “does not expect to advance (taxpayer funds) to pay for Citigroup’s services,” and that Citigroup will make its money only if it helps issue bonds and other financial instruments needed to build a new stadium.

Citigroup’s consulting agreement commits taxpayers to paying only for “reasonable out of pocket expenses” incurred by Citigroup executive Bill Corrado during the negotiations.

Two local attorneys told NBC 7 Investigates the city’s decision to share details about those consulting contracts will increase taxpayer confidence in the negotiations and help make the process transparent.

“The public should have access to how much taxpayer funds are being spent and who that money is being paid to,” said civil law attorney Gil Cabrera. “There are so many parties, each with their own agenda, in a project like this, so you need transparency.”

Cabrera said the county would be wise to release general information about Zischke’s contract, to maintain public confidence in the negotiations and the cost to taxpayers of pursuing a deal for a new stadium. He said outside lawyers and consultants who work for government agencies “have to assume that the terms of (their) agreement are public, and they should be public.”

Chief Deputy City Attorney Mara Elliot, who has a strong background in government law, said the city “did the right thing in releasing that information to the public.” Elliot said she has “no problem in releasing general information about rates and expenses” for outside attorneys and consultants.

Late Friday, a county spokesman provided limited information about Zischke’s work on the stadium project. The spokesman said Zischke has consulted for the county on other non-stadium legal issues, and that the county counsel’s office “engaged his services to assist with (the stadium) effort.” The spokesman confirmed that neither Board of Supervisors nor the city specifically approved using Zischke for the stadium negotiations, and no other environmental law experts were considered for the job. According to the county spokesman, Zischke’s consulting fees and expenses will be paid by both the city and the county, in keeping with the agreement between those two governments that splits the cost of outside experts on the stadium negotiations.

Also on Friday, the city released more information in response to the NBC 7 Investigates Public Records Act request. These documents show that at least six law firms submitted proposals to act as outside legal counsel for the stadium negotiations. Nixon Peabody, which has offices around the world, was the city’s choice.

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