Podcast: A Conversation with Our State AG Team About the Role of a Governor's Counsel

Stephen Cobb: Welcome to another installment of Holland & Knight's Eyes on Washington Podcast State Attorneys General Edition. My name is Stephen Cobb, I'm a partner in our Washington, D.C. office and former deputy attorney general of the Commonwealth of Virginia. I'm very excited to have not one, not two, but three of my colleagues on the podcast today as we talk about the important role that governors' counsels plays in both policy formulation and regulatory enforcement across the United States. And so I'm very lucky that I have three colleagues who served as counsel to the governor in their respective states. So we have Chris Riano, Jim Schultz and Robert Highsmith coming from the great states of New York, Commonwealth of Pennsylvania and Georgia. Gentlemen, welcome to the podcast.

Robert Highsmith: Thanks, Steve. Thanks for having.

Chris Riano: Yeah, thanks Steve.

Jim Schultz: Thanks for having us.

Chris Riano on Working in the New York Governor's Office and the Role of its Counsel

Stephen Cobb: So let's get started. Chris, I want to start with you. Let's talk a little bit about, you know, very briefly your career trajectory, and how it got you to the governor's office and some of the kind of overarching roles or responsibilities that you had while serving in the counsel's office to the governor of New York. And then, Jim, Robert, if you can do the same. One of the interesting things here that I think we're going to highlight is that each office is a little bit different, and the issues that you touch on and the powers that you have vary from state to state, which really impacts the private sector's knowledge and ability of when and how to interact with those officers. So Chris, start us off.

Chris Riano: Steve, I so appreciate that. I think, you know, I had the fortunate opportunity to kind of go backwards from what most people get to do, as opposed to going from the central executive staff as an assistant counsel to the governor into an agency, I went backwards where I was the general counsel of the New York State Liquor Authority before becoming the assistant counsel for education and constitutional law for the Governor of New York. And I think one of the things that is very unique about at least the processes here that we have in New York, and I know that not every state's like this, but at least here it's a pretty top down structure. Right under the governor are two statutory offices and only two. There's the secretary to the governor who handles all of the political questions that may come up. And there's counsel to the governor that handles all of the legal questions that come up and that flows all the way down into every state agency. So each council has a portfolio of general counsels that report to them, which then have a portfolio of lawyers in each agency that report to them. And it's a very unique structure. But what it really allows for, at least in the New York model, is for an incredible opportunity to have an influence, particularly when it comes to the enforcement of regulation. So at the State Liquor Authority, I was in charge of regulating all alcohol in the state of New York. The buck really did stop with me. As assistant counsel to the governor for education. I was in charge of making sure that the laws and regulations of the state managed the $40 billion education budget, almost a third of the state budget of New York. And that includes writing legislation, that includes editing legislation, that includes writing regulation, approving regulations for all the agencies that report to you. It's an incredible opportunity to really have a very big impact on the state, and especially in a state that has as large of an influence as the state of New York does within both the state level and the locality level. You really do have this opportunity to have a massive and impactful difference in a way that's very, very unique as an attorney.

It's an incredible opportunity to really have a very big impact on the state, and especially in a state that has as large of an influence as the state of New York does within both the state level and the locality level. You really do have this opportunity to have a massive and impactful difference in a way that's very, very unique as an attorney.

Jim Schultz on Working in the Pennsylvania Governor's Office and the Role of its Counsel

Stephen Cobb: Now, Jim, that sounds slightly similar to what I understand the formatting is in Pennsylvania, as well, as the counsel to the governor, largely sitting in a general counsel role to departments and agencies. Are there parallels there?

Jim Schultz: There are some parallels, Stephen. In Pennsylvania, it's unique. By statute, the general counsel is appointed by the governor and his general counsel, not only to the governor, but to the commonwealth of Pennsylvania. So your title is General Counsel to the Commonwealth. And why that's important is because you oversee the legal operation for 37 state and independent agencies. So for instance, even the state system of higher education, which is 14 higher educational institutions in Pennsylvania, is a separate board. The board is appointed by the legislative bodies and by the governor. The general counsel to the governor oversees the Chief Counsel's Office to the Department of Higher Education. Similarly with state agencies like Department of Transportation, Department of Environmental Protection, Department of Human Services, those chief counsels are also appointed by the General Counsel to the Commonwealth and are sole appointments by the General Counsel to the Commonwealth. So essentially the Secretary of the Department of Environmental Protection is counseled by a lawyer that's appointed by the General Counsel to the Commonwealth and that gives tremendous oversight opportunity for and a top down oversight opportunity for the Governor's office. And we're also involved in the regulatory review process at the agency level and then ultimately has to be signed off on by the general counsel. So there's tremendous power and authority in statute for the general counsel by and through the regulatory review process as well.

In Pennsylvania, it's unique. By statute, the general counsel is appointed by the governor and his general counsel, not only to the governor, but to the commonwealth of Pennsylvania. So your title is General Counsel to the Commonwealth. And why that's important is because you oversee the legal operation for 37 state and independent agencies.

So other things the general counsel does is review death penalty cases where the governor has to sign off on death warrants. That's something general counsel performs a review on. Pardons is another one that the General Counsel's Office provides some review on. There's a lot of issues that come up through many of the independent state agencies. For instance, when I was there, those pension systems were also counseled by the Governor's Office of General Counsel. So they were really the lawyer for the state and the interplay with the AG's office was a little different. So for instance, if a state agency was sued by an outside entity at the right of first refusal, would go to the AG's office to handle the litigation. But the instance where the General Counsel's Office might differ from the AG's office in terms of policy, the General Counsel's Office could take that case back and handle it themselves or assign it to their own outside counsel to handle it.

Robert Highsmith on Working in the Georgia Governor's Office and the Role of its Counsel

Stephen Cobb: That is very interesting. I mean, in Virginia, both Chris and Jim, the responsibilities that you talked about and the oversight for those agencies is all held within the Virginia attorney general's office. And so it can create those very interesting dynamics at times with the governor's office, particularly when they are of different parties. But there is no statutory creation of counsel to the governor in Virginia. It is at the pleasure of the governor, so much like they might have a deputy chief of staff or a senior adviser, but the role is sometimes they make it cabinet level through an executive order and other times they don't. So it can really vary administration to administration. Robert, talk to me a little bit about the counsel to the governor in Georgia. Where does that fall kind of in the scheme of things with New York and Pennsylvania on one end of the spectrum and Virginia on the other? Where does Georgia fall?

Robert Highsmith: Thanks, Stephen. It's really more closer to the Virginia model. In Georgia, there is a statute that specifically authorizes the governor to hire executive counsel. The statute has been on the books for decades, and governors for decades have employed between two and five lawyers in their offices to report directly to them and advise them on the whole gamut of executive branch legal matters. When I was in Governor Sonny Perdue's office, there were two of us, Harold Melton and me. Harold would go on to become chief justice of our Supreme Court here in Georgia, a role from which he only recently stepped down to rejoin private practice. We don't have the formal level of oversight that Jim was describing, but it's very much an informal level. That is to say, most of the agency heads in Georgia are appointed and serve at the pleasure of the governor. A few of them have terms, and most of them have some sort of board that ratifies their appointment.

In Georgia, there is a statute that specifically authorizes the governor to hire executive counsel. The statute has been on the books for decades, and governors for decades have employed between two and five lawyers in their offices to report directly to them and advise them on the whole gamut of executive branch legal matters.

But practically speaking, the governor hires and fires executive agency heads and the executive counsel to the governor will frequently be the ones that lawyers embedded in those agencies will call and say, We've got this issue. What would the governor like us to do? So even though it's not a formal, supervisory or oversight role embedded in statute, it nonetheless is one where you are the lawyer in state government that all these agencies are calling to determine, you know, how they should handle a particular problem. We differ from Virginia in most states in that in Georgia, the governor has absolutely no powers of executive clemency. All of the executive clemency powers are reserved to a constitutionally established Board of Pardons and Paroles. And so I remember on the first day in office, the governor's green new chief of staff wanted to know where the red phone was, you know, where their calls would come in from the President Jackson. And we just we didn't have that at all, which, frankly, suited me fine.

Stephen Cobb: I'm sure that wasn't an awkward conversation at all, though.

Interplay Between the Office of the Attorney General and the Office of the Governor

Robert Highsmith: Thinking he might have been looking forward to it. I certainly wasn't. So, again, no executive clemency, got no executive clemency powers. Then you have the attorney general in Georgia, the attorney general is an elected position and the attorney general provides, by Constitution and statute, provides representation to the agency so that if there's litigation or advice that the agencies seek from the attorney general, then the attorney general and the state law department provides that advice and that can create friction. I mean, in the first year of divided government, when I served as executive counsel, as an executive counsel in Sonny Perdue's office, we sued the attorney general 17 days into the administration because there was a tug of war over who got to set the direction in some litigation the state was involved in concerning redistricting, and the Democratic elected attorney general wanted to pursue it. The governor wanted him to drop it. The attorney general refused. And so off we went. That case, we ended up losing that case, that case ended up setting some of the parameters around what legal powers the governor has to direct the legal affairs of the state and what powers the attorney general has. I would say, though, Stephen, that even then, even when we were fighting hammer and tongs over something as politically volatile as redistricting, the attorney general's office and the governor's office work together hand in glove and get along no matter where they come from, what party they come from, on I would say 90 to 95% of the issues. It's a very professional, you know, working relationship almost because it has to be. And, since 2006, we've had the governors and attorneys general of the same party and that has that has limited the amount of friction between those offices in Georgia.

Even when we were fighting hammer and tongs over something as politically volatile as redistricting, the attorney general's office and the governor's office work together hand in glove and get along no matter where they come from, what party they come from, on I would say 90 to 95% of the issues.

Jim Schultz: Building on that, I had the same experience. So in addition to just litigation issues, every contract, every procurement that comes to the Commonwealth has to go through what's called a form and legality review process in Pennsylvania, which involves a sign off by the agency counsel to sign off by the Office of General Counsel to the Commonwealth, but also sign off by the Office of Attorney General. So whether it's litigation or contract review, there's always this interplay and back and forth between the Office of Attorney General and the Office of the General Counsel to the Commonwealth.

States as 'Laboratories of Democracy:' What's on the Policy Horizon? 

Stephen Cobb: That's an excellent point. And it also leads to a good segue. I know you all are regular monthly listeners to this podcast, so this will come as no surprise at all. But one of the things that I have talked about with all of our guests over the last year or so is kind of my underlying thesis, which is that states at this point really are the driving force for both policy and regulatory enforcement across the country. You know, I talk about the tens, if not hundreds of billions of dollars over the last 20 years that state AGs have collected in the form of fine settlements and judgments. But also, as a matter of, to borrow the Clintonesque adjective, "the laboratories of democracy" that are the states for when it comes to pushing forward, what is the new public policy agenda across the country. So, comment a little bit, if you can about kind of where you see states as driving forces in comparison to their federal counterparts on the policy and regulatory enforcement space. Chris, I'll start with you.

Chris Riano: Sure. I mean, in so many ways, there's no question in my mind that as important as the federal regulatory space is and federal enforcement is, and it most certainly is very, very important. You know, the state, especially in the state of New York, the state AG, state agencies, and especially throughout the state budget process. There's no doubt in my mind at all that there's an incredible amount of power vested in the various different bodies that exist within the state, both to create regulation and to enforce regulation that can be inside an agency that can be internal to an agency when a particular agency is created to be a regulatory body. And that can be with the state AG's office. And we have a famously engaged attorney general's office. In fact in New York we always call and we have a moniker for the AG, we call them the aspiring governor because we have such an engaged attorney general's office. And to one of the points that was brought up earlier, you know, it's interesting because sometimes there can be a little bit of tension; that does come up. You have independently elected officials. Here, we have four: the governor, the lieutenant governor, the attorney general and the comptroller. And there can be tension between those independent statewide offices. I know the vast majority state agencies use the AG's office for litigation. I was fortunate or maybe just had a very unique experience in that we did not use the AG's office for litigation, we self-litigated at the state liquor authority, which made for a really interesting experience being the chief lawyer at that agency, especially since we did not hire outside counsel, we just litigated ourselves. And so I think in so many ways it's why it becomes really important to understand the state itself. Because, Stephen, to your point, states are that laboratory and states do have an incredible amount of authority, dominion and control, particularly since so much money, so, so much money, whether it's health money, education money or other forms of money, flows through states, even when it comes from the federal government, flows through states to localities. And therefore, states have an incredible amount of authority over how that might get spent and then the ability to investigate when there's problems that come up in those various different areas.

States are that laboratory and states do have an incredible amount of authority, dominion and control, particularly since so much money, whether it's health money, education money or other forms of money, flows through states, even when it comes from the federal government, flows through states to localities. And therefore, states have an incredible amount of authority over how that might get spent and then the ability to investigate when there's problems that come up in those various different areas.

Stephen Cobb: Robert, give me your two cents here, because I mean, in particular, I know Georgia really considers itself a driver here in best practices. And I've heard AG Carr talk about the environment that they're trying to build in Georgia as a driving force for economic growth. But whether that's economic growth or like what Chris is talking about, regulatory enforcement in a state that seems to be tip of the spear. What are your thoughts?

Robert Highsmith: Sure, Stephen. I mean, in Georgia, the attorney general's office again, as we've discussed, you know, handles most very nearly all of the litigation that the state's involved in. And whenever there's a major settlement with an industry on, you know, whether it's tobacco with the master settlement agreement or the opioid settlements that are coming down now, the attorney general's office oversees those. But honestly, has to share a lot of the duties with the governor's office and legislature in terms of how those funds will be spent. Frequently, there's accompanying legislation when there's a major settlement. So the attorney general doesn't have just plenary authority on how those funds are spent. The major policy decisions and policy direction, though, is really set by the governor's office. I mean, those are you know, they'll consult with the attorney general, you know, where there are legal issues. But all of the legislative review and you know, it's rare for the attorney general to have a major influence in, you know, in significant legislation. They'll be consulted, you know, here and there. But it's really the governor's office that drives those processes. Now, one thing that has moved away from the governor's office in recent years and into the attorney general's office is consumer protection. For decades, we had the governor's office of consumer protection that had lawyers in the office and a director that reported directly to the governor. And they're the ones that went around, you know, engaging in consumer protection, litigation, etc., that has recently been moved under the attorney general the way it is in many other states. You know, the attorney general's office now has primary enforcement and litigation authority for consumer protection matters. And, you know, states have been, you know, as we all know, working in this space, states have been pretty active in that regard. But in terms of the major policy initiatives, our attorney general, who you mentioned, Stephen, Chris Carr, is going to work hand in glove with his ticket mate and party mate. They came into office at the same time almost, and they're going to work very closely on policy issues. But it's really the governor's office that drives it.

One thing that has moved away from the governor's office in recent years and into the attorney general's office is consumer protection... The attorney general's office now has primary enforcement and litigation authority for consumer protection matters. And, you know, states have been working in this space, states have been pretty active in that regard.

Stephen Cobb: So, Jim, look into your crystal ball here, whether it's governor's offices, AG offices know, what do you see as the hot policy slash legal issues that are going to be dominant over the next, whether that's six months, 18 months? Where do you see those driving issues percolating up from the state level?

Jim Schultz: So I'm going to talk a little bit about the, you know, Pennsylvania on this on this topic, because Pennsylvania is kind of ground zero for natural gas and Marcellus Shale. And you have this constant, you know, push and pull over pipelines. You have a constant push and pull on how to, you know, get through zoning to get the pipelines across the state to move the oil and gas. You have philosophical differences between the last administration in the state and this current administration who's on his way out, and then a city attorney general who's now running for governor. And, you know, there has to be this balance. And the governor's office and the department of environmental protection, really sets the policies that well, as it relates to environmental issues and energy, if you will, and then the office of attorney general really only gets involved in civil enforcement and criminal enforcement, should folks cross the line? And we've seen, you know, General Shapiro bringing cases against energy transfer in a criminal capacity recently. And we've also seen, you know, prior attorney generals take on other entities in the same way. And, you know, sometimes they're at odds with the department in terms of the governor's administration. Even if they're on the same side of the aisle, they might not necessarily agree as to what's appropriate and what's not and what's in the best interest of the Commonwealth and what's not. And that's just an interesting push and pull to see and very important that the legislature also step in and has its role as it relates to regulating these industries as well, because you have the balance that you're striking between, you know, the need for energy independence and then the need to make sure you protect the environment. And in Pennsylvania, we actually have an environmental rights amendment.

Pennsylvania is kind of ground zero for natural gas and Marcellus Shale. And you have this constant, you know, push and pull over pipelines. You have a constant push and pull on how to, you know, get through zoning to get the pipelines across the state to move the oil and gas.

Stephen Cobb: That's an excellent point. And also includes that kind of dichotomy, which is when are you working, particularly in states like New York and Pennsylvania, and when are you working with agency counsel that goes to regulatory compliance and when are you working with the AG's office, which is civil enforcement. And sometimes those lines can be really blurred. But in order for companies to really be able to have effective and productive business models, kind of understanding that push and pull between the two, I think can be a really important factor in the success of their business in ensuring their regulatory compliance going forward.

Best Practices for the Private Sector When Engaging with State Government

Stephen Cobb: Robert and I think, you know, Georgia having that interesting change that you mentioned of moving consumer from kind of one side of the divide to the other, provides an interesting foil for that. But what are some of the areas, pivoting here just a little bit as we talk about how do we work with within the regulatory paradigm that varies from state to state. When are you working with the governor's counsel's office? When are you working with a general counsel to an agency? When are you working with an AG's office? When do you reach out? What are some best practices, tips and tricks that you've noticed over the years that has really helped private sector engage in a productive manner as part of that regulatory overlay, in order to make sure that they're able to continue to grow and do their business but at the same time remain compliant.

Robert Highsmith: Sure, you just have to know who in these various pockets of lawyering is in charge of what issue. For example, it's very helpful to know if you're dealing with a utility regulatory issue that the AG's office actually is heavily involved in that because there's a longtime senior assistant attorney general who not only advises the Public Service Commission, but also litigated before and on behalf of the commission. And it's been the same guy for 20 years, Dan Walsh. And, you know, you're going to talk to him as you're dealing with utility regulation, if it's a consumer protection issue, the longtime head of that office, both when it was under the governor and now that it's under the attorney general's office, Anne Infinger is a longtime lawyer there who you're going to want to talk to. If it's a legislative issue, you would want to start with David Dove, who's the executive counsel to Governor Kemp and has held that role since Governor Kemp took office. And one function, by the way, that I should have mentioned, is that all of the legislative review before the governor signs anything flows through that office, the Office of the Executive Counsel, they're the ones that review all the legislation, the several hundred bills that the Georgia General Assembly will pass at any given session, and advise the governor on which ones to sign and which ones to veto. They also vet and frequently draft the governor's legislative package. So if you have an issue that you hope to have the governor champion through the legislative process, that's going to be the governor's counsel. In the agencies, though, if you're dealing with a procurement issue, you have the Department of Administrative Services that has, and it's general counsel, by the way, was their longtime general counsel was just promoted to commissioner, she's now running the agency. She actually, Rebecca Sullivan is her name, she succeeded me in the role of executive counsel to Governor Perdue. And that office is going to handle the mechanics of procurement. But in a pre-procurement, you know, when the RFP is being thought about or considered, you know, the agency counsel is going to have a heavy role in designing that RFP and pushing out the end user specifications that the DOAS will then release. So, you know, each of these, it's different in each state, as we know. And in Georgia in particular, it's important to know, you know, which of these, you know, little mini law firms that serve state government, you know, what's in each of their wheelhouses, so you know who to call. And it can be agency counsel, it can be the governor's counsel, it can be the attorney general's office. And it's going to vary, you know, with issue and with agency according to what it is you're trying to achieve for your client.

You just have to know who in these various pockets of lawyering is in charge of what issue.

Stephen Cobb: And Chris, I imagine you come across that a lot, not just from the work that you did inside government in New York, but as part of the national regulatory practices as well.

Chris Riano: Absolutely, Stephen. And I think something that was mentioned that's really important is legislation and the incredible role that frequently those agency counsel, but especially governor's counsels have in legislation. And whether that's negotiating the legislation ahead of time to make sure that it's something that will be signed or in New York, we have a very unique structure where we actually can negotiate amendments to legislation after it's been passed, and that can actually become part of the negotiated package called a chapter amendment. And that's all the counsels, that's a huge part of your portfolio is deciding what gets signed, what gets vetoed, making those recommendations, making amendments to see if you can get the veto rate down and get more things signed by amending legislation that's already been passed. And that's just on the normal legislative cycle. The budget itself is written in tandem with the budget division by counsel's office because there's so many different policy initiatives that end up being put in the budget because of the way that the state constitution works in New York. But that's actually not too rare that that's where a lot of that resides. And that is a humongous role because legislation, of course, drives policy, and it's a small number of people in every single state that have that opportunity to make those not just recommendations, but often decisions on legislation that can have a massive impact on industry.

I think something that was mentioned that's really important is legislation and the incredible role that frequently those agency counsel, but especially governor's counsels have in legislation.

Closing Thoughts

Stephen Cobb: That's an excellent point. Gentlemen, as you can see, I can probably talk about state regulatory do's and don'ts and ins and outs for hours and hours, but unfortunately, we do only have a limited amount of time. So, first. Chris, Robert, Jim, thank you for your service as counsel in your respective states of New York, Georgia and Pennsylvania. And we're lucky to have you as part of our team here at Holland & Knight. So before we sign off, are there any other final parting thoughts or bits of wisdom that you'd like to add that you'd like to give each of you just a moment or two if you have any parting comments.

Jim Schultz: I think Robert summed it up very well, it doesn't matter if you're talking about a government procurement, government tax incentive, government grant, legislative priority or regulatory priority. All of those issues are centrally located in the governor's office and more particularly in the governor's offices of counsel and they have a unique ability to impact those issues. And it's very important that you also have a good relationship, understand the inner workings between the governor's counsel and the AG's office in order to accomplish those goals. So I appreciate all of our listeners out there hearing us out, and if you have those kinds of issues, please give us a call.

It's very important that you also have a good relationship, understand the inner workings between the governor's counsel and the AG's office in order to accomplish those goals.

Robert Highsmith: I can't improve on that, Jim.

Chris Riano: Yeah, Jim. That was so well said. I think you're exactly right. And I think it's one of those interesting parts of having had a chance to serve in government that we've all had a chance to see that at that level.

Stephen Cobb: On that note, thanks again, gentlemen, for joining the podcast. This has been Holland & Knight's Eyes on Washington Podcast, State Attorneys General Edition as we talked about the role of Governor's Counsel, I hope you'll all tune in to the next installment. Thanks so much.