LOS ANGELES : Council Asks Audit of Fees Sought by Philip Morris

The Los Angeles City Council this week called for an audit of legal fees that a subsidiary of tobacco giant Philip Morris has asked the city to pay for its failed proposal to buy the Central Library.

Several council members said they consider the latest $221,000 bill from the law firms of Hunton & Williams and Morrison & Foerster to be excessive. The charges are in addition to $240,000 already paid to the firms, just a portion of the total of more than $1.3 million the city may end up paying on the scuttled deal.

Under a plan backed by the Community Redevelopment Agency and Mayor Richard Riordan, the Philip Morris Capital Corp. would have purchased the library and leased it back to the city in a financing gambit that might have saved the city as much as $11.5 million. The city would have retained control over all the library’s operations.

The City Council authorized negotiations on the proposal, but eventually killed it. Council members had agreed to pay $250,000 of Philip Morris’ costs to get the deal going, but bills from the firm’s lawyers now total $461,000.

The council agreed Wednesday to pay several related bills--a total of $175,000 to three law firms that represented the city in the deal--Orrick, Harrington & Sutcliffe, Grant & Duncan and Kane, Ballmer and Berkman. The City Council will take up the question of the tobacco subsidiary’s billings in about three weeks, when the audit is complete.