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If you fail to pay, law firm will come calling
Legal Business | 2007/11/26 01:02

If you refuse to pay your property taxes in Dallas County, chances are you're going to hear from a lawyer.

And the chances are even greater that lawyer will be from Linebarger Goggan Blair & Sampson.

Dallas County and most of its cities and other taxing entities pay the law firm to collect delinquent taxes each year and foreclose on properties when necessary.

Linebarger is a giant in the collections field – the largest law firm of its kind in the nation. The Austin-based firm has offices across the country. It aggressively seeks governmental contracts, uses an army of lobbyists and has millions to spend on political campaigns.

Linebarger has had the lucrative Dallas County tax collection contract since 1984. The firm represents nine of the 10 largest taxing authorities in Texas. It also handles collection efforts for governments in California, Florida, Illinois, Louisiana and Pennsylvania, as well as for the U.S. Treasury.

"We're good at it. There's a reason why people hire us," said DeMetris Sampson, a managing partner of the firm's Dallas office high atop the Univision tower downtown.

The incentive for Dallas County is that the firm's services are free to taxpayers. Delinquent property owners subsidize the collection effort by paying an additional attorney fee that's tacked onto their bill.

County officials say that they are pleased with Linebarger's work and that privatizing the tax collection process has been a success.

The firm says it has collected more than $374 million for Dallas County since 1984. This year alone, Linebarger will collect more than $1 billion for its 1,800 clients nationwide, Ms. Sampson said.

She declined to say how much the Dallas County contract is worth or how much her firm earns. But assuming a fee of at least 15 percent, its revenue this year could translate to $150 million.

Linebarger was one of three private collection firms the IRS began using last September to collect outstanding federal income taxes. But its contract was not renewed when it expired in March. The U.S. House voted in October to end the controversial private-collection program, but the measure died in the Senate.

Despite its successes, Linebarger has not avoided controversy. In 2002, a partner was indicted on charges of conspiring to bribe two San Antonio City Council members who had voted to award the firm a collection contract. Juan Pena resigned from the firm and pleaded guilty two years later.

The law firm settled a lawsuit around the same time from a competitor that accused Linebarger of offering illegal gifts and bribes and rigging bids to win collection contracts from several local governments.

Ms. Sampson said people can file lawsuits for just about anything. She said the firm wins contracts by relying on its track record.

But money doesn't hurt.

From 2000 through this July, Linebarger gave more than $1.9 million to candidates for statewide office, most of it to Texas Attorney General Greg Abbott and Gov. Rick Perry, according to data from the Texas Ethics Commission.

The law firm also gives generously to local Dallas County politicians.

Linebarger and its lawyers typically give between $1,000 and $5,000 to each Dallas County commissioner every year. In total, the firm has spent at least $90,000 in campaign contributions to Dallas County commissioners since 1999.

More than half of sum that went to commissioner John Wiley Price, campaign finance reports show.

Mr. Price said the campaign money does not influence his decision-making on matters related to the firm, which he praises for its work.

"They're in the business of trying to collect. What would you expect?" he said about the campaign donations. "I would expect them to be aggressive."

In 2002, the firm's Dallas office asked Dallas County for and received an increase in its fees from 15 percent to 20 percent of all delinquent taxes, penalties and interest it collects – the maximum allowed under state law.

That means the firm gets a fee equal to 20 percent of every dollar collected, regardless of whether the firm does anything on the case.

In 2005, Dallas County commissioners extended Linebarger's contract for seven additional years, from January 2008 to January 2015, in exchange for the firm agreeing to provide the county with a Web-based tax collection system.

"We think we're doing a great job," said Nancy Primeaux, regional manager of the firm's Dallas office.



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