Posts tagged as:

scandals

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The IRS scandal is a genuine scandal, for sure; efforts to portray it as merely a “scandal” within quotation marks, as by the L.A. Times’s Michael Hiltzik, are well answered by Megan McArdle, Patterico, Ed Krayewski, and (implicitly in advance) by this Josh Barro column exploding the notion that 501(c)4 status was somehow intended only for volunteer fire departments and the like and not for politically engaged citizen groups.

Once the scandal momentum gets going, however, people start in on all sorts of efforts to connect dots that may not have any necessary connection or even qualify as dots at all. Example: at the Daily Caller this morning, reporter Patrick Howley is out with a story headlined, “Embattled IRS official Lois Lerner’s husband’s law firm has strong Obama connections.”

Curious, I read on to see which law firm with strong Obama connections Lerner’s husband, an attorney named Michael Miles, is a member of. It turned out to be Sutherland, Asbill & Brennan, a pillar of the Atlanta legal establishment known for its strong tax practice.

Sutherland, Asbill & Brennan is a so-called BigLaw firm. Per the American Lawyer’s profile, it has 387 lawyers and represents all sorts of clients, with an emphasis on corporate work across a wide range of industries.

So what’s the evidence that Sutherland has “strong Obama connections” or is tight with White House Democrats? Here it is: according to Howley, the firm:

hosted a voter registration organizing event for the 2012 Obama re-election campaign, praised President Obama’s policy work, and had one of its partners appointed by Obama to a key ambassadorship.

Really? In a 387-lawyer BigLaw firm, those are the strongest Obama links Howley was able to come up with? As with virtually all BigLaw firms, Sutherland has attorneys active in both parties who host events favorable to one side or the other. It took me only a minute or two on search engines to confirm that Sutherland lawyers and alumni are quite successful in landing prominent appointments under Republicans. Here’s a 14-year Sutherland alum (though he’d moved on to other employers in the interim) who served as National Executive Director of Lawyers for Bush-Cheney in 2000 and went on to a distinguished career as ambassador appointed by that administration. Here’s a Sutherland attorney (“top lawyer at the Pentagon for six years”) nominated by President George W. Bush to the Fourth Circuit U.S. Court of Appeals.

Of course, some BigLaw firms do have a distinct coloration that falls toward one side of the political spectrum while tolerating the occasional maverick from the other. Is this true of Sutherland? I consulted the Open Secrets database and found that in the last election cycle the firm’s lawyers donated $41,700 to Mitt Romney and $35,413 to Barack Obama. In Congressional races, the firm’s lawyers donated $38,040 to Republican candidates and $25,350 to Democrats. The biggest recipient by far in the Congressional races? Ted Cruz (R-Texas), who got $16,250 from Sutherland lawyers. Overall, these figures would rank Sutherland as not a particularly heavy hitter among law firms in federal donations. Twenty other law firms’ attorneys gave upwards of $1.2 million in the last election cycle, mostly leaning much more toward the Democratic side than did the donations from Sutherland’s attorneys.

I suppose “Embattled IRS official Lois Lerner’s husband’s law firm has strong Ted Cruz connections” would have made for too confusing a headline on a Daily Caller lead story.

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For all with eyes to see (except maybe some folks at The New Yorker) the IRS scandal has been hiding in plain sight for more than a year, I argue in a new Cato post. For example, this site briefly covered the Service’s ridiculously broad documentary demands on Tea Party groups — for things like transcripts of speeches and radio shows and the contents of Facebook and Twitter postings– in March and May of last year.

The Treasury Inspector General’s report on the affair, released yesterday, is here. (Coverage roundup: Paul Caron, TaxProf.) It makes clear that many groups were singled out because of their controversial political stances and then subjected to both objectively unreasonable document demands (e.g., for thousands of pages of documentation) and objectively unreasonable delays (e.g., for two years) in resolving their applications. (The Service seldom if ever actually denied applications from the singled-out groups, perhaps because its actions would then have come under more rigorous court review). Meanwhile, other groups with controversial views of a different political valence were waved through. It is not a question of whether applications for tax exemption should somehow be “approved without question,” as some have contended, but whether they should come under review that is even-handed and with no more delay and regulatory burden than is inherent to the process. At Time, Michael Scherer collects past examples that suggest IRS retaliation against political adversaries is something of a tradition in America. (Similarly: Cato video podcast).

P.S. Defending itself against the Inspector General’s report, the IRS says the applicants flagged for special scrutiny “included organizations of all political views.” It points to three such left-leaning groups — out of 471 in all singled out for extra screening. [Bloomberg via Newser] Much more: Gregory Korte, USA Today (“As applications from conservative groups sat in limbo, groups with liberal-sounding names had their applications approved … the liberal groups applied for the same tax status and were engaged in the same kinds of activities as the conservative groups.”) Meanwhile, L.A. Times columnist Michael Hiltzik is unafraid of going way out on a limb to defend what the Service did: if you don’t want to be harassed for your dissidence, it seems, you shouldn’t have sought (c)(4) status in the first place.

Yet more: Reuters has illuminating coverage of how the Service tried to break one of the year’s biggest stories on a Friday afternoon via a friendly question before a room full of tax lawyers. (“They made a bet that this would be the quietest way to roll it out,” [Eric Dezenhall] said of the IRS strategy. “It didn’t work.”) “Did Citizens United Critics Push the Agency To Misbehave?” asks my Cato colleague John Samples, while Tim Lynch adduces “Some Empirical Evidence of IRS Political Manipulation”. The BBC has a lexicon of political scandal euphemisms (“tired and emotional,” “hiking the Appalachian Trail,” etc.)

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Kings of Tort, the new book on Mississippi’s Dickie Scruggs and Paul Minor scandals by Alan Lange (YallPolitics) and Tom Dawson, is now out. Its website links to reviews and other angles of interest.

P.S. A blog reaction from Tom Freeland.

Gene Cauley gets seven years

by Walter Olson on November 24, 2009

The Arkansas plaintiff’s lawyer says he was too embarrassed to make layoffs as his finances turned sour, which is why he stole the $9.3 million in class-action settlement funds [WSJ Law Blog, ABA Journal] Earlier here, here, and here.

More from Kevin LaCroix:

An earlier WSJ.com Law Blog post reported (here) that Cauley was in fact a protégé of Bill Lerach. Today’s article on Bloomberg (here) about Cauley’s criminal sentencing notes that Cauley joins a growing list of plaintiffs’ securities class action attorneys who have “been jailed for felonies,” including Bill Lerach himself and his former law partners, Mel Weiss, Steven Schulman and David Bershad, and including even Marc Dreier.

These gentlemen of course made their living for many years accusing corporate officials of fraud. Ahem. Yes, well…isn’t ironic, don’t you think?

Bringing to a close another chapter in the Scruggs scandals. [WSJ Law Blog]

One is co-written by Alan Lange of YallPolitics blogging fame. [Freeland] More: Joe Palazzolo, “Scruggs Prosecutor Writes Tell-All Book”, Main Justice.

The Louisville Courier-Journal profiles Angela Ford, who took the lead in exposing Kentucky’s massive fen-phen settlement fraud.

Stiff sentences for the two lawyers most closely identified with the Kentucky fen-phen settlement scandal. [Louisville Courier-Journal, Lexington Herald-Leader, Bloomberg, ABA Journal]. More: Howard Erichson, Mass Tort Lit Blog.

Who would have dreamed that a protege of Bill Lerach would wind up later copping to a felony rap resulting from ethical infractions? (Wait, don’t answer.)

At a barbershop in 1994, [Cauley] says, he picked up Forbes magazine and saw a profile of Lerach; it was the famous article, where the attorney was quoted as saying, “I have the greatest practice . . . I have no clients.”

Cauley approached Lerach and was soon launched in a thriving class action practice (“His usual way to deal with things was to yell and bang things and threaten,” said a fellow plaintiffs lawyer, Glen DeValerio of Boston.) It came crashing down under revelations that the Little Rock, Ark.-based lawyer took $9 million from clients’ settlements to spend on firm overhead and unrelated investments. [Koppel/WSJ, ABA Journal, interview-based WSJ Law Blog story first, second]

“Prominent Arkansas plaintiffs’ lawyer Gene Cauley has landed in some hot water due to his apparent inability to produce more than $9 million in settlement money he was overseeing for clients, according to federal court records.” His lawyer, John Wesley Hall, told Judge Jed Rakoff at a hearing “that the missing settlement funds ‘are presently unavailable,’ but Hall declined to elaborate, citing Cauley’s privilege against self-incrimination.” He says, however, that Cauley is working to “find the money and pay it in 90 days” and expects to “make everyone 100% whole”. [WSJ Law Blog].

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What with all the money in Edwards’ own name from his legal career, not to mention the late Texas trial lawyer Fred Baron’s generosity in solving the housing needs of Edwards’ girlfriend, it wouldn’t seem necessary to use campaign or charitable funds for her benefit, too, but a U.S. attorney is said to be pursuing allegations along those lines. Hunter was paid $100,000 to do documentary filmmaking about the Edwards campaign, which gave the couple many opportunities to be close to each other. [New York Daily News, CBS News, Raleigh News & Observer] More: Althouse, Kaus.

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From the Times Online:

A former television presenter who became one of Britain’s highest-earning solicitors has been struck off for “disgraceful” misconduct in his handling of sick miners’ compensation claims.

Andrew Nulty, who earned £13 million from the claims in one year, joins a growing list of solicitors punished for their role in the coal health scandal, exposed by The Times.

Earlier: Feb. 3, 2009; Feb. 19 and Dec. 12, 2008; May 8, 2007.

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And attorneys were the brains of the operation, according to Judge Victoria Chaney (transcript, PDF, courtesy American Lawyer). Ben Hallman of American Lawyer calls it “the most egregious plaintiffs lawyer extortion and fraud allegations we’ve seen this side of criminal indictment”:

After several days of testimony on defense allegations of Dominguez’s misconduct [Los Angeles plaintiff's lawyer Juan Dominguez], Chaney tossed the tort cases before her. “I find that there is and was a pervasive conspiracy to defraud American and Nicaraguan courts, to defraud the defendants, to extort money from not just these defendants — but all manufacturers of DBCP and all growers or operators of plantations in Nicaragua between 1970 and 1980,” she said from the bench. Her ruling puts in doubt $2 billion in pending judgments Dominguez won in dozens of similar suits. Chaney also said she would refer the matter to state bar associations and to prosecutorial agencies. …

The court testimony that led to Chaney’s ruling detailed how a group of Nicaraguan lawyers, in apparent collusion with local officials, judges and lab technicians, rounded up 10,000 men whom they coached to claim sterility — and to blame that sterility on Dole’s chemicals.

When Dole attempted to investigate the claims, its representatives were harassed and some plaintiff’s lawyers even put out a bounty seeking the identity of witnesses. Chaney said that she did not suspect a Sacramento law firm that also represented the plaintiffs of being involved with the fraud. I’ve started a new tag to collect our coverage of the scandal.

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March 21 roundup

by Walter Olson on March 21, 2009

  • A triumph for good sense, good policy, and the Constitution: Supreme Court declines to disturb 2005 Protection of Lawful Commerce in Arms Act, thus ending NYC’s wrongful and unfair lawsuit against gun makers [AP/Law.com] Interestingly, the Obama administration joined its predecessor in urging that the law’s constitutionality not be questioned [Alphecca] One of my fond memories is of giving the lead presentation to the House Judiciary Committee at a hearing on the bill during its drive for passage.
  • “Tinkering With DWI Evidence Costs NY Judge and Law Prof Their Jobs” [ABA Journal; Buffalo, N.Y.]
  • Coalition of media organizations urges First Circuit to reverse judge’s “truth-no-defense” defamation ruling, but the Circuit denies en banc rehearing [Bayard/Citizen Media Law and sequel; earlier]
  • Car-crash arbitration-fixing angle heating up in probe of Luzerne County, Pennsylvania judicial scandals [ABA Journal]
  • ACORN helping with the Census? Based on their voter work, we can be sure they’ll give it that 110% effort [Jammie Wearing Fool]
  • To protect the public, why do you ask? Cook County, Ill. sheriff engages in “constant surveillance of Craigslist’s erotic services” [Patrick at Popehat]
  • Imposed-contract provisions mean that Employee Free Choice Act is “not as bad as thought. It’s worse!” [Kaus]
  • West Virginia lawmaker proud of introducing ban-Barbie bill: “If I’ve helped just 10 kids out with this, to me it was worth it” [AP/Charleston Gazette-Mail, earlier]

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The jury convicted the veteran pol on all counts after a five-month trial. The case raised allegations of lawyer misconduct, and we have previously covered the bare-knuckled tactics Fumo used to protect some of his friends in the Pennsylvania courthouse machine.

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A week ago I briefly noted that now-imprisoned securities class action king Mel Weiss appeared on the list of Bernard Madoff victims (163-pp. PDF courtesy WSJ, via Christopher Fountain) and observed how ironic it seemed that someone who made great claims to expertise in sniffing out stock fraud should have been taken in by it.

According to correspondence from New York securities lawyer (and longtime Weiss critic) Howard Sirota, however, there might be to the story than that:

I wouldn’t be so quick to jump to the conclusion that Mel Weiss [fouled] up investing with Madoff.

Weiss’ wife and son Stephen A. Weiss invested with Madoff, as did [Milberg Weiss partners] David Bershad and Pat Hynes.

In addition, convicted serial Milberg plaintiff Howard Vogel invested with Madoff.

Buchbinder Tunick, Milberg’s accountants and ironically Milberg’s principal forensic accounting experts, appear on the list, although the entries may be clients of the Buchbinder firm.

Class action firms Wolf Popper and Wolf Haldenstein also appear.

Sirota believes that other persons and entities on the Madoff victims list have also served as lead plaintiffs in securities litigation or as plaintiffs in other litigation handled by class-action firms. All of which could be mere coincidence, or could suggest that either Madoff himself or others in his circle might have played some role in funneling lead plaintiffs to the class-action bar. (Particularly in the “race to the courthouse” era that preceded the Private Securities Litigation Reform Act, having a stable of cooperative repeat plaintiffs was vital to the success of many plaintiff’s firms.)

One way to check this thesis, Sirota suggests, would be to check the names on the Madoff victims list against those on the list of plaintiffs maintained by the Stanford Law School securities class action clearinghouse to see whether there are any other noteworthy matches and if so whether they follow any particular pattern. He also asks whether some of the law firms that have been organizing task forces to recruit and represent plaintiffs in the Madoff scandals — they include the Milberg firm and Wolf Haldenstein — have adequately disclosed to potential clients in their literature that their firms’ own names figure on the Madoff victims list. More: Gary Weiss, Larry Ribstein.

Further: Yet more views. And in comments, a visitor says Wolf Haldenstein is on the list because clients of the firm invested with Madoff, not because the firm itself did.

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Mississippi:

The 5th U.S. Circuit Court of Appeals on Monday upheld the conviction of Vicksburg lawyer Robert Arledge, convicted of bilking the drug company Wyeth of more than $6.7 million over the diet drug Fen-Phen….

U.S. District Judge David Bramlette sentenced Arledge to six years in prison for knowingly allowing clients to make claims of about $250,000 each for health complications although they had no legitimate reason.

Seems it was a clergy scandal as well as a lawyer scandal:

Regina Reed Green of Fayette, who pleaded guilty to tax evasion involving false Fen-Phen claims, testified Arledge knew about the scheme to defraud the drug company. She said he told her every resident of 9,740-population Jefferson County would get $1 million.

“The evidence showed that when Green became concerned that she might be caught fabricating the prescriptions and expressed a desire to stop her illegal activity, she contacted (the Rev. Gregory) Warren,” the appeals court wrote. “Warren tried to convince Green to continue fabricating the prescriptions, but Green was not assuaged.”

Green testified Arledge persuaded her to continue: “And he said … I wasn’t going to get in any trouble because like (Warren) said, they were going to box all those files up, put them away, and never be seen again.”

Earlier coverage here, here, and here (via).