Chicago Dumps Linebarger, Claiming Ethics Violation

The City of Chicago has terminated its business relationship with legal collections firm Linebarger Goggan Blair & Sampson, ending a deal that generated $33.7 million over five years for the Austin, Texas-based collector. Chicago this week began shifting the business to the local law firm of Arnold Scott Harris PC.

Chicago’s Inspector General said it closed the contract due to an ethics violation by an employee of the city Department of Revenue, who had contract management authority over Linebarger. The city said Linebarger paid for a 2003 private trip taken by Robert Forgue to inspect the firm’s information technology and call center facilities.

Forgue was directed to reimburse Linebarger but never did, according to an investigation by the inspector.

Linebarger spokesperson Jay Householder confirmed it picked up the tab with the understanding that it would be reimbursed by Forgue. Householder said Forgue sent a reimbursement check that bounced. A subsequent check “apparently cleared, because it didn’t come back to us,” Householder said. “We reported this to the city’s ethics committee, but they told us to do nothing at the time because the matter was under investigation.”

Last Thursday, Inspector General David Hoffman announced that Forgue had resigned after it was recommended he be fired. Hoffman also terminated the contract with Linebarger because it failed to notify the Revenue Department that it hadn’t been reimbursed by Forgue. 

The firm doesn’t plan to contest the decision, Householder added.

Linebarger was one of nine law firms Chicago used for debt collection work, starting its relationship with the city in 2002 to collect unpaid parking ticket debt. The firm has also worked with the city on other collection matters, collecting $138.6 million in unpaid debt for the city between 2002 and 2007. The city paid Linebarger $33.7 million during that time.

Starting Monday, all of Linebarger’s upcoming business with the city was moved to the Chicago-based firm of Arnold Scott Harris PC. Linebarger work that was already in process will be moved to Arnold Scott Harris within the next six months.