New York Assembly Speaker Sheldon Silver was last week arrested and accused by the feds of an elaborate kickback scheme. House Republicans this week reintroduced an important tort-reform bill. Sitting at the crooked nexus of these two events are Washington Democrats.
Mr. Silver is alleged to have pocketed more than $5 million in a set-up in which he directed state funds to the clinic of an asbestos doctor, who in turn provided him with patients who could be turned into jackpot plaintiffs. Weitz & Luxenberg, a class-action titan, paid Mr. Silver huge referral fees for these names, off which the firm stands to make many millions.
An equally powerful trial firm in Illinois, the Simmons Law Firm, has shuffled money to the same doctor to obtain its own plaintiffs. Indeed, it’s now common for asbestos firms to get claimants this way. And yet when the Silver headlines broke, Weitz & Luxenberg founder Perry Weitz said he was “shocked” that Mr. Silver was engaged on the law firm’s behalf in a political version of standard industry practice. The firm quickly put the Albany politician on “leave.”
Yet, here’s the revealing bit. Queried by prosecutors as to what exactly the firm did hire Mr. Silver to do—since he performed no legal work—Weitz & Luxenberg admitted that he was brought on “because of his official position and stature.” In other words, this was transactional. Weitz & Luxenberg gave Mr. Silver a plum job, and Mr. Silver looked out for the firm—namely by blocking any Albany bills that might interfere with its business model.
Weitz & Luxenberg hasn’t just been generous to Albany fixers. Its employees have in the past four years showered $600,000 on federal candidates, 99% of them Democrats. Then Senate Majority Leader Harry Reid ’s top contributor from 2009 to 2014 was Weitz & Luxenberg. The firm played the same role for Bruce Braley, the trial-lawyer Democrat who just lost an Iowa Senate race. Mr. Reid’s second-biggest contributor? The aforementioned Simmons firm, which was also underwriting that New York asbestos doctor. Simmons was also top funder of Senate Democrat Dick Durbin, and a big giver to the Democratic Senatorial Campaign Committee.
And Mr. Reid, like Mr. Silver, has performed—namely by blocking any Washington bills that might interfere with the firm’s business model. At the top of that list was his refusal to bring up a House-passed bill called the FACT Act, which would root out asbestos-litigation fraud, making it harder for lawyers to simultaneously raid asbestos bankruptcy trusts and courtrooms. Weitz & Luxenberg derives 60% of its revenue from asbestos cases, and has an extraordinary financial interest in keeping the FACT Act dead.
Republicans this week reintroduced that legislation, and if they were savvy, they’d be all over the Silver story. The GOP has long complained about the outsize influence the plaintiffs’ bar has on Democrats. What it has failed to do is to make that influence and funding an outright political liability.
It shouldn’t be hard. The left is forever insinuating that corporate America is awash with crooks and thieves, yet you’d be hard-pressed to find a business sector in recent years that has provided more proof of industrywide malfeasance than the tort bar.
Bill Lerach and Melvyn Weiss, securities class-action kingpins, both went to federal prison after revelations of illegal client kickbacks. Their Milberg Weiss firm itself was federally indicted (later dropped). Dickie Scruggs, Mississippi legal bigfoot, was jailed for attempted bribery of judges. Two top lawyers in the infamous fen-phen litigation are in jail for defrauding their clients. Stanley Chesley, once known as the Master of Disaster lawsuits, escaped prosecution in that case, though was disbarred.
Law firms were sanctioned and hauled in front of Congress for manufacturing silicosis claims. Rail company CSX in 2012 won triple damages in a racketeering lawsuit against two prominent Pittsburgh asbestos attorneys. Chevron last year won its own racketeering suit against Steve Donziger, in which a judge declared the famous lawyer had used “coercion, bribery, money laundering and other misconduct” to obtain a pollution verdict against the oil firm.
The Garlock gasket company is in the midst of a racketeering suit against four big law firms, accused of conspiracy and fraud involving asbestos clients. If even one, say, auto CEO were alleged to have engaged in, much less been jailed for, any of this behavior, it would cast suspicion on industry political contributions for years.
Some Republicans might already be asking how it is Democrats feel comfortable sitting on money provided by firms connected to the Silver scandal, or others. And when Senate Majority Leader Mitch McConnell does hold a vote on the FACT Act, those Democrats opposed should have to explain why they are going to bat for a law firm that employed a politician who is accused of engaging in asbestos-related fraud and corruption. Or why they are swinging for an industry that essentially pays doctors to buy plaintiffs.