Fired attorneys reported to Clark Dougherty
THE GM RECALL

GM's top N.A. lawyer shares hot seat with boss

Fired attorneys reported to Clark Dougherty

Millikin: He has revised protocol
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DETROIT -- When Lucy Clark Dougherty was appointed in early 2011 as General Motors' top lawyer for North America, she was viewed by GM insiders as the leading candidate to succeed her boss, General Counsel Michael Millikin.

Now the two attorneys are sharing an uncomfortable spotlight amid sharp criticism of the legal department's handling of a faulty ignition switch linked to at least 13 deaths.

Millikin, 65, was assailed during a Senate panel hearing this month for not having known about the deadly defect, even as lawsuits, costly settlements and other warning signs mounted. Clark Dougherty, 45, is even closer to the day-to-day workings of the department and normally would be the conduit for such bad news to flow to Millikin, according to three people familiar with the legal department's structure.

Clark Dougherty has ultimate oversight of product litigation and product safety matters, the sources say. All four of the GM attorneys dismissed in the wake of an internal investigation either reported to her directly or were in her chain of command.

They included two senior attorneys: Larry Buonomo, the head of GM's litigation department; and Bill Kemp, GM's top safety lawyer. Both directly reported to Clark Dougherty and typically met with her at least a few times a week, including standing weekly meetings, the sources said. The two other attorneys let go in the wake of the probe, Ron Porter and Jaclyn Palmer, reported to Buonomo, the sources said.

The internal probe, led by outside attorney Anton Valukas, found that each of those lawyers spent considerable time on the ignition switch matter. Buonomo, for example, headed two review committees that authorized several settlements with ignition switch plaintiffs. But he did not believe it was the role of the committees to flag safety trends or advocate for recalls, a view that differed from other staffers', the report says.

New liaison


Clark Dougherty not only avoided the fate of her four subordinates, who were let go along with 11 other GM staffers, but was picked by Millikin to serve as legal advisor to global safety chief Jeff Boyer, who was named to the position in March. GM has pointed to her newly created liaison role, which will be key to eliminating the communication breakdown between the legal and engineering departments that contributed to the defect's festering for a decade.

While Valukas' report concludes that Millikin knew nothing about the part defect until early February of this year, a week after GM decided to issue a recall that eventually would include 2.6 million cars, it is less definitive about Clark Dougherty's involvement and how much her staff might have kept her in the loop.

Clark Dougherty cited to Valukas investigators two occasions in which she said she might not have realized the magnitude of the problem.

Kemp and another safety lawyer told investigators that sometime in 2011, Clark Dougherty directed Kemp to have engineers investigate the issue of airbag non-deployment in the now-recalled cars, after the three attended an internal meeting on the subject. Clark Dougherty told Valukas investigators that she didn't recall the meeting or a directive to Kemp.

"She said it was possible that she had the conversation with Kemp but did not then understand the gravity of the situation or the full facts," the report says.

In December 2013, Clark Dougherty spoke to Millikin for the first time about the ignition switch issue.

"She told interviewers that at that time she did not understand the seriousness of the issue because she did not have the key facts," the report says. "As a result, she merely told Millikin that there was an issue with the Cobalt and that engineering was looking into it." She told Millikin she would give him a full update after the holidays, but her boss wouldn't find out until about seven weeks later, after the recall was authorized.

That December conversation came about three months after a committee Clark Dougherty sits on authorized a $5 million settlement in an ignition switch case. She was on maternity leave when the committee OK'd the settlement and didn't attend that meeting, the report says.

Valukas' account of the legal department's failings was enough to prompt Sen. Claire McCaskill, D-Mo., chair of the Senate oversight panel investigating GM, to publicly question why Millikin and Clark Dougherty weren't held accountable.

"I don't get how you and Lucy Clark Dougherty still have your jobs," the senator said to Millikin, later describing his department's performance as a "massive failure of responsibility" and saying that she believes Millikin needs to go if GM wants to move past the crisis.

Amid the intense scrutiny in the wake of the Valukas findings, GM has had outside attorneys further investigate aspects of the legal department's role, according to a person familiar with the issue. That review hasn't turned up any new information about what Millikin or Clark Dougherty knew and when, the source said.

Unconventional path


A native of Metamora, Mich., a small town 50 miles north of Detroit, Clark Dougherty took an unconventional career path to her current job, relative to other high-level GM lawyers. The Yale graduate earned her law degree at the University of Michigan and spent several years early in her career in Washington, D.C., as a litigation lawyer at a large private practice.

She later moved into the public sector, serving on President George W. Bush's transition team in 2001, representing the Department of Justice's Environment and Natural Resources Division. She then became the first chief legal officer for the Department of Homeland Security, before leaving government work around 2004 to start a consulting firm focused on anti-money laundering cases.

Millikin hired Clark Dougherty in February 2010 as executive director of legal and government relations in Washington, D.C. Her job was to advise GM on its interactions with the federal government, which at the time was the company's majority shareholder stemming from its mid-2009 bankruptcy.

Thirteen months later, Millikin named Clark Dougherty to her current post as chief counsel for North America. The move passed over several more-senior attorneys on the 85-person U.S. legal staff and surprised many staffers, the sources said.

Her appointment came after a period of considerable turnover in the post, with three men serving as general counsel of North America over the roughly three-year period before she took the job.

GM declined to make Clark Dougherty available for an interview.

A GM spokesman declined to comment on her role in the ignition switch case.

"The practices and procedures that legal staff leadership had in place failed because the individuals who had knowledge of the airbag non-deployment or ignition switch issue failed to follow those procedures and alert them on a timely basis," the spokesman said.

Millikin told lawmakers during the July 17 Senate hearing that he has revised his department's protocol so that he will personally review any settlement or case set to go to trial that involves a crash death or serious injury, "with a focus on any open engineering issues."

You can reach Mike Colias at mcolias@crain.com.


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