State auditor has now spent $100,000 on legal fees as she decides whether to sue Legislature

State Auditor Rebecca Otto has paid more than $100,000 to an outside law firm while she mulls whether to sue the Legislature over a new law allowing counties to use private audit firms instead of her office to do their books.

Otto, elected to her third term in 2014, said in an interview and a news release Tuesday that while she is "loath to incur these costs, the risk to the future work of the [State Auditor], the Minnesota Constitution and today's and future taxpayers is too great for me to just stand by."

Otto's own internal lawyers are working on the issue, but she hired the law firm of Frederikson & Byron for additional assistance.

Republicans attacked her for spending money on potential litigation over a law that passed the GOP House and DFL Senate and was signed by Gov. Mark Dayton. "At the end of the day, it's the taxpayers who pay the bill," said Rep. Sarah Anderson, R-Plymouth, chairwoman of the House State Government Finance Committee.

Otto said she has not decided whether to sue the Legislature; the attorney general would defend the state in that scenario, setting up a constitutional conflict.

Otto said the situation could be averted if the Legislature were to repeal the law. "It's in their hands," she said. Only Dayton can call a special legislative session; in any case, legislators have no plans to repeal the law.

The new law, birthed in the middle of the night on the final day of the 2015 legislative session, has been a continuing political headache for Otto and her fellow Democrats, despite its obscure provisions.

In her statement Tuesday, Otto said the Legislature is interfering with her office's "core functions," specifically "safeguarding taxpayers by auditing the billions of tax dollars Minnesota counties spend each year."

Even before the new law, some of the largest counties, like Hennepin, were using private firms. Republicans say counties can save money by hiring private audit firms instead of Otto's office. In that case, they say, the state auditor would still have ultimate authority to approve the audits.

Otto said the new law has created chaos in her relations with counties because of the uncertainty surrounding it.

Anderson said that two months ago she requested all correspondence from Otto regarding outside legal bills and attempts to undo the new law but has not received a response. She said she will request the documents again Wednesday. Otto declined to respond to Anderson directly.

Otto said she is using existing office funds for the legal bills, forgoing needed equipment purchases to do so.