CHARLESTON, W.Va. -- The West Virginia Housing Development Fund has spent more than $302,000 in outside legal fees during an ongoing federal investigation.
The state housing agency's legal expenses have more than tripled since late January.
"We're trying to be good citizens and cooperate with the investigation," said Erica Boggess, the Housing Development Fund's acting executive director. "As an accountant, I obviously would rather not see us having to incur these costs."
The Housing Development Fund has paid the bulk of the legal fees to the Jackson Kelly law firm, whose attorneys have been advising Housing Development Fund executives and in-house agency lawyers during the investigation.
Other payments went to six private lawyers representing agency staff members and a lone board member's representative. The agency also paid about $13,000 to an out-of-state forensic computer firm that's retrieving emails and documents from employees' computers.
What's more, the Housing Development Fund spent $24,750 for legal advice on whether they should release documents in response to Freedom of Information Act requests, agency officials said.
The FBI and U.S. Attorney's Office are investigating state Treasurer John Perdue's sale of an 11-acre property in Mason County to Charleston developer Douglas E. Pauley. Perdue serves on the Housing Fund's board of directors.
In December 2010, the agency awarded Pauley a $3.67 million federal stimulus grant. Pauley paid Perdue $215,000 for the property, located about six miles north of Point Pleasant.
In recent months, agency executives have been responding to federal prosecutors' subpoenas and questions.
The Housing Development Fund's outside legal fees are already 250 percent over budget for the fiscal year, which started July 1.
"The process to continue to cooperate with the U.S. Attorney has been more time consuming than we anticipated," Boggess said Monday. "Unfortunately, it's a cost of doing business."
Last fall, the Housing Development Fund hired outside lawyers to represent five employees and Perdue's top aide, Danny Ellis, who attends agency board meetings as Perdue's delegate.
The six lawyers specialize in criminal defense work. Four of the attorneys formerly served as federal prosecutors.
In addition to Ellis, the lawyers are representing former executive director Joe Hatfield and four agency administrators -- Sherry Bossie, Mary Mason, Michelle Wilshire and Nancy Parsons.
Boggess said Ellis and the five employees are potential witnesses, not targets of the investigation. The lawyers accompany employees during interviews with federal investigators.
The Housing Development Fund did not provide a breakdown of legal expenses charged by the six private lawyers or the Jackson Kelly firm.