Publicity-seeking politicians and contingency-fee lawyers corrupt the law

James K. Glassman | January 29, 2001

(Page 2 of 2)

Alabama’s Republican attorney general, Bill Pryor exposed the dangers contingency-fee arrangements between government officials and trial attorneys, as in the tobacco suit, posed to the law. Pryor as Alabama’s AG is obligated to defend the state’s suit against ExxonMobil, but he has publicly criticized the governor’s paying a contingency fee to the law firm hired to handle it.

As Pryor said in a speech last November, “The use of contingent-fee contracts allows government lawyers to avoid the appropriation process; it creates the illusion that the lawsuits are being pursued at no cost to the taxpayers. These contracts also create the potential for outrageous windfalls or even outright corruption for political supporters of the officials who negotiated the contracts.”

Strange that one of the best of the attorneys general comes from a state with a reputation for ridiculous verdicts. In the latest case against ExxonMobil, the contingency fee law firm hired by Alabama stands to earn $490 million if the verdict holds. Was ExxonMobil wrong about the lease? I don’t know. But the verdict has had a “Smith & Wesson-type” effect with one of four other oil firms that have lease disputes with the states. That firm, it is reported, offered to surrender to the state’s terms without a fight.

What really makes this case obnoxious (and too typical) is that Siegelman had one of his biggest campaign donors do the litigating. According to triallawyermoney.org, a database of campaign contributions available over the Internet, attorneys in the firm that was chosen gave $69,600 to Siegelman’s campaign in the last election cycle and $235,000 to the State Democratic Executive Committee of Alabama. In all, Siegelman received $850,000 from Alabama’s trial lawyers and their political action committees.

As Reich wrote two years ago: “In the old days, state legislatures or Congress would enact laws, which would be administered by regulatory agencies.” Now, instead, we are “regulating U.S. industry through lawsuits.” Why? One big reason is the alliance between attorneys general, ex-AGs (like Siegelman) and trial lawyers. It’s an old story of a lust for publicity, for money, for votes at any price, but it is fast making the nation’s system of justice into a tool for government extortion – placing the New Economy at further risk.