Realize they bought this new. What did a Wrangler cost in 97? I know someone who bought a defender new and I think it cost around 27 grand. If a jeep was 20k and the Defender was 27k this seems less ridiculous of a purchase. It's a quirk of importation laws that the jeep would new be work 3000 and the Defender is worth 60k.
You piqued my curiosity on that one, so I did some digging...
According to sites I searched, the Wrangler SE MSRP was $13,995 in 1997 which is $20,560 in 2014 dollars (inflation is a bitch). Defender 90 soft top MSRP was $32,625 in 1997 or $47,931 in 2014 money.
Effectively a $13k increase in value (using 2014 dollars because that's all we can spend today) for the D90 and the same Jeep takes a $17k depreciation hit. Granted, a 1997 Wrangler probably wouldn't look as good as that D90 does, especially if it spent ANY time near a fire station of any kind.
Even if your friend got the Defender at invoice price (which was - from what I've found, around $27k), the spread against a Jeep would still have been cost-prohibitive for most municipalities. The bean counters would have stroked out because they probably wouldn't have been able to amortize the costs over a 20+ year life span like they do the heavy trucks.