OIG-City Lawsuit

January 2007 OIG began investigating the award of a sole-source contract to a former City employee made in apparent violation of City ethics and contracting rules. The investigation, which relates to possible misconduct by current and former City employees acting in their capacity as City employees, is clearly within OIG’s authority under Chapter 2-56.   After initiating the investigation, OIG interviewed eighteen persons, requested and received documents from five City departments or offices, and reviewed thousands of relevant documents.

August 15, 2008, OIG sent a written request to the City’s Law Department for documents relevant to the award of the sole-source contract.   The Municipal Code grants OIG the authority to request information related to an OIG investigation from “any [City] employee, officer, agent or licensee,” § 2-56-030(e), makes it the unqualified “duty of every [City] officer, employee, department, [and] agency . . . to cooperate with the [OIG] in any investigation or hearing undertaken pursuant to [the] chapter,” and directs that “[e]ach department’s premises, equipment, personnel, books, records and papers . . . be made available as soon as practicable to the inspector general.” § 2-56-090.   The Law Department produced some documents but redacted others on the basis of attorney-client privilege and/or the work product doctrine.

October 8, 2009, believing that the City could not properly assert the attorney-client privilege and work product doctrine under these circumstances, and after unsuccessful attempts to persuade the Corporation Counsel otherwise, OIG issued and served a subpoena for the documents.   After timely objection and further discussions, the Corporation Counsel again declined to comply, and this lawsuit was filed on November 4, 2009.

December 23, 2009, the Corporation Counsel moved to dismiss all counts of the complaint. Following briefing and a hearing held on April 21, 2010, Circuit Court of Cook County Judge Nancy Arnold granted the motion to dismiss and dismissed the complaint with prejudice. OIG appealed.

The Appellate Court reversed and remanded, holding that OIG does have the right to sue the Corporation Counsel to pursue records that could aid an investigation, but that it did not have enough facts surrounding the documents to determine whether the privilege applied. Ferguson v. Georges, 948 N.E.2d 775 (Ill. Ct. App. 2011).   In making its ruling, the Appellate Court stated that “[w]ithout the ability to bring an action to enforce the subpoena, the Inspector General has no means to challenge the Corporation Counsel’s refusal other than asking the mayor to resolve the dispute. The ordinance creating the OIG could not have been designed to tie the Inspector General’s hands in this way because in doing so its investigative process would be meaningless.”   Corporation Counsel Stephen Patton appealed the Appellate Court’s decision to the Illinois Supreme Court, asserting that the Inspector General has no capacity to bring his lawsuit and that the Appellate Court had no jurisdiction to hear the lawsuit. In making this argument, Corporation Counsel has adopted wholesale the position of the prior Administration in asserting that OIG:

  • is not an independent agency
  • that OIG’s authority to enforce its subpoenas is subordinate to the authority and decisions of the Law Department, even when the Law Department has a direct legal conflict of interest in the matter
  • that there is no OIG recourse to the courts and that the courts lack the authority to resolve such enforcement and legal conflict issues, which instead devolve to the sole discretion of the Mayor.

The Illinois Supreme Court granted the petition for leave to appeal and September 20, 2012, heard oral arguments.  The court ruled on March 21, 2013 in an opinion that reversed in part and vacated in part the Appellate Court’s judgment and affirmed in part and vacated in part the judgment of the Circuit Court.

The Supreme Court held that the municipal code does expressly confer authority to legally represent itself as necessary for it to independently enforce its own subpoenas in court, and that only the Corporation Counsel is authorized to represent the City in court. The Court noted that the Corporation Counsel had a conflict of interest in the case, where the subpoena it issue in the case sought materials from the Corporation Counsel, but concluded that the Municipal Code has no provision for the judicial appointment of a special counsel, and, thus, only the Mayor can settle the dispute and compel the Corporation Counsel’s compliance with an OIG subpoena.

The ruling has the effect of abridging OIG’s critical independence and the functionality of its investigative process. Requiring the Inspector General to obtain Corporation Counsel approval and legal assistance to enforce OIG subpoenas – even when OIG may be investigating misconduct within the Office of the Mayor (as in this instance) or the Law Department itself – nullifies the Inspector General’s expressly granted statutory subpoena power. The outcome of the case means that OIG cannot represent itself in court to enforce its subpoenas; the Inspector General must seek the Corporation Counsel’s assistance even in cases of clear conflict; and the Inspector General cannot sue to protect the office’s legal and functional existence. The Supreme Court noted that all of the foregoing can be addressed through a simple amendment to OIG’s enabling ordinance.

Because of its ruling on OIG legal capacity to represent itself in court, the Court did not resolve the legal question of the Corporation Counsel’s right to invoke attorney-client privilege. As a consequence, and with the Mayor’s support, Corporation Counsel continues to assert the attorney-client privilege to block OIG access to certain information in the the context of official OIG investigation into possible government misconduct.