Spokane City Council narrowly approves former U.S. Attorney Mike Ormsby as city attorney

Former U.S. Attorney Mike Orsmby earned confirmation to head Spokane City Hall’s legal department Monday by the slimmest of margins, overcoming objections about how he handled discrimination claims by a former employee and his involvement in securing taxpayer-funded bonds for a downtown garage.

The City Council voted 4 to 3 to confirm Ormsby, Mayor David Condon’s pick to fill a position that has gone without a permanent replacement since Nancy Isserlis stepped down last summer amid the turmoil caused by the ouster of former police Chief Frank Straub. Condon told council members Ormsby was “Spokane through and through” and praised his lengthy public service, beginning with an election to the school board at age 18.

“I think living here is a blessing,” Ormsby said. “I love this community.”

Supporters, including Ormsby’s predecessor as U.S. attorney for Eastern Washington, Jim McDevitt, and Condon’s previous pick to head city legal, Laura McAloon, praised Ormsby’s managerial skills and devotion to his employees.

“Even though I recognize the irony of coming here to talk to you tonight about this appointment, I cannot do anything except encourage you to make this decision in favor of appointing Mike Ormsby,” said McAloon, who dropped her bid amid a falling-out with City Council President Ben Stuckart and others for her legal involvement in the Straub matter last summer. “It’s what the citizens deserve.”

A trio of council members, including unlikely allies Mike Fagan and Breean Beggs, voted against Ormsby’s confirmation, citing the lawsuit filed by former employee Katherine “Jill” Bolton, who also testified Monday night, and the city’s lingering debt following default on taxpayer bonds Ormsby helped purchase in the late 1990s for the River Park Square mall parking garage.

Bolton, the first to testify before the City Council, said she was treated unfairly by both McDevitt and Ormsby when she asked for pay records for assistant U.S. attorneys. The lawsuit was settled for $225,000 earlier this year.

Fagan said the lawsuit raised red flags about Ormsby’s ability to handle personnel issues, a big part of the city attorney job, particularly after the Straub matter.

“You’re a heck of an attorney. I don’t think that anyone can question that half of the equation,” Fagan said. “But the job we’re contemplating hiring you for tonight is personnel management.”

Beggs turned his attention to the River Park Square bond issue, saying it “still haunts us today” because the city must find money in its annual budget to pay back bonds that were defaulted on.

Then a private attorney with the firm K&L Gates, Ormsby represented the Spokane Downtown Foundation and facilitated the sale of $31.5 million in what was represented as tax-exempt bonds to fund construction of the mall parking lot. The foundation was set up by the Cowles Co., owners of River Park Square and publisher of The Spokesman-Review.

A review by the Internal Revenue Service later claimed the bonds were not tax-exempt, and the city stepped in to purchase the debt that paid for the garage acquisition. The deal was scrutinized because of an appraisal that set the value of the garage based on expected revenue from future parkers. Ormsby and fellow K&L Gates attorney David O. Thompson, who was also involved in the deal, were named by the IRS’s Office of Professional Responsibility for violations of rules governing practices for dealing with the federal agency, including a failure to perform “due diligence” on the garage bond deal.

The Attorney’s Office of Eastern Washington was asked to review the case, and McDevitt recused himself as a former co-worker of Ormsby’s at K&L Gates. The office in Western Washington later said there was no evidence of criminal wrongdoing.

Stuckart, who along with council members Karen Stratton, Amber Waldref and Lori Kinnear, cast the deciding votes in favor of Ormsby’s confirmation, said he “hated that we keep litigating River Park Square” at every turn. He said it wasn’t Ormsby’s fault the city decided to default on the bonds and forfeit revenue from the garage.

“Think about in the last 17 years, if we’d have had control of that garage as an asset, and receiving all the parking revenue,” Stuckart said.

Waldref, who was ill, joined the meeting by phone to cast what amounted to the deciding vote in Ormsby’s favor. City Councilwoman Candace Mumm, who cast the other vote against confirmation, said she approved of the job that was being done by interim City Attorney Mike Piccolo and preferred a system where the city attorney is not an at-will employee who can be fired by the mayor at any point, a position Beggs also supported.

Ormsby, who is set to earn $156,706, said after the vote he wasn’t concerned about the narrow vote.

“I think it was a fair airing of views by the council members, and they had a good discussion,” he said. “I look forward to working with all seven of them, and I don’t think it will be a problem at all.”