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Local

McMahon letter asserts chairman exceeded his authority with outside contracts

Lauzen: 'I hope it's not retaliation'

ST. CHARLES TOWNSHIP – Kane County State’s Attorney Joe McMahon sent a letter to all 24 county board members Sept. 9 stating that Chairman Chris Lauzen exceeded his authority when he entered into three agreements with an outside law firm, in violation of state law and the county’s own ordinances.


Lauzen said the contracts were for consultant work, not legal services. Consultant work has at least five components, Lauzen said, which are strategy, relationships, regulation, legislation – and legal advice if necessary, he said.


Lauzen said he sought advice on getting revenue from better cellphone reception, fiber optics and turning municipal waste into fuel.


“Where do these ideas come from?” Lauzen said. “They do not drop from heaven. … I’m positive I have the authority to engage in getting help in a consulting contract. I’ve done that before without a problem.”


Lauzen said when McMahon sent the letter detailing these allegations to county board members, it was possibly done in retaliation for his public objection to bonuses McMahon paid to his employees, and seeking more money for his office.


“The personnel in the state’s attorney’s office were being paid bonuses for years … between $25,000 and $29,000 and I said, ‘We are not going to do this any more. … I'm going to push back.’ … I hope it’s not retaliation.”


Lauzen said McMahon’s office’s current budget is $2.6 million, and asking for an additional $800,000 represented a 30 percent increase.


“Sorry, we can’t do that,” Lauzen said.


As to the contracts, Lauzen said McMahon has total authority in litigation areas, but that he believes “state statutes are silent when it comes to civil matters,” which is what Lauzen sought from the outside law firm.


“Was this a deliberate intention of – what I hope is not a retaliation – for me just doing my job of saving money?” Lauzen said. “I think what the state’s attorney’s office is doing is hurting the property taxpayers. These folks are supposed to protect justice and this is a misuse. I think they are misusing their authority. We are trying to make forward progress and they are trying to stymie.”


McMahon’s office stated it cannot respond to Lauzen’s comments, nor elaborate on the contents of the letter he sent.


McMahon’s letter, which was obtained by the Kane County Chronicle, asserts that Lauzen entered into agreements with the Chicago law firm of Schain Banks Kenny & Schwartz, at a cost of $95,000, without being authorized as required by state law, the county’s own purchasing ordinance, nor were they reviewed or approved by the state’s attorney’s office.


“These unilateral decisions to retain and pay for legal services using county funds are acts in excess of the authority of a Kane County board chairman,” McMahon’s letter stated.


“We are informing you [board members] that this office is reviewing the selection and payment authorization history to determine whether any legal violations may have occurred and the extent of the breakdown in the financial oversight controls that are in place to protect the county from the unauthorized use of funds,” McMahon’s letter stated. “We will inform the board of our findings upon the conclusion of our review.”


Specifically, Lauzen entered into the agreements about Nov. 30, 2015, at a cost up to $95,000, “in exchange for certain legal services,” McMahon’s letter stated.


“Both state law and the Kane County Purchasing Ordinance are very clear that the retention of legal counsel for non-home rule counties is the exclusive province of the state’s attorney,” McMahon’s letter stated. “Non-legal professional services which exceed $30,000 must go through the competitive bidding process, which includes the issuance of a request for proposal.”


State law and the county’s own ordinance “prohibit the stringing of contracts to evade the financial controls established by the state and local ordinances for contracts over a certain dollar amount,” McMahon’s letter stated.


“Contracts for non-legal professional services that exceed $30,000 must be awarded by the County Board or the Executive Committee … after completion of the competitive bidding process,” McMahon's letter stated.


Lauzen said he did not intend to go over the $30,000 limit because he thought the expenditures for the contracts would go over two budget cycles.


Though McMahon’s letter noted that Lauzen, as chairman, can execute contracts on behalf of the county if properly authorized, “[the state's attorney's office] can find no minutes or resolutions of the County Board or its Executive Committee” that permitted the three contracts or obligated Kane County to pay the Schain Banks law firm, the letter stated.


McMahon’s letter stated that $40,000 was paid to the law firm in March, some funds were returned in July, and a balance of $25,375 still remains as “an unauthorized expenditure of county funds.”


McMahon also took Lauzen to task, stating in his letter that Lauzen was advised “orally and in writing” that his past attempts to hire attorneys without consulting the state’s attorney “is contrary to law.”


“Pursuant to Illinois law and the Kane County Code, the Office of the State’s Attorney is the sole authority for the provision of legal services to the county,” McMahon’s letter stated. “Any further unauthorized legal work must cease immediately to minimize financial exposure and further payment of unauthorized funds.”


Lauzen said if there was a problem with the contracts, all McMahon had to do was call him rather than send out a letter.


“They want to soil my efforts and they are doing their very best,” Lauzen said. “I certainly did not start this. … They intended to do this publicly. I would have done it privately and professionally.”

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