A political leader’s commitment to ethics is genuine if he or she applies high standards to friends and adversaries alike. Thus, an early test for Barack Obama in the White House will be if he orders a full Justice Department probe of corrupt conduct that attorney William Lerach – now in federal prison after a felony conviction – described as standard “industry practice” for the class-action bar. The incoming chief executive’s position on this issue is especially important as neither House Speaker Nancy Pelosi nor Senate Majority Leader show any sign of heeding the repeated calls by House Minority Leader John Boehner and other Republicans for a congressional investigation of predatory class-action litigators.
If Obama wants to show that justice in his new administration will be even-handed, there is no better place to start than with the scandalous behavior of Lerach and three of his former partners at the Milberg Weiss law firm. The four were convicted for involvement in an $11.7 million kickback scheme that federal prosecutors said involved more than 250 cases going back to 1981. Yet when Lerach repeatedly claimed after his conviction that “everybody” in the plaintiffs’ bar engaged in the same illegal conduct – conduct that harmed plaintiffs not involved with the illegal schemes, as well as consumers and pensioners who own shares in the companies being sued – congressional Democrats refused to investigate. These same lawmakers have been eager to investigate corporate scandals that arguably did less damage to the economy than class-action lawyers running wild.
Predatory class-action attorneys for years have been among the biggest financial backers of Democrats, none more so than incoming vice president Joe Biden. The Delaware Democrat did their bidding on all 13 of the most important legal-reform votes in the past decade, as identified by the National Association of Manufacturers. Both Biden and Obama were among the top 10 Senate recipients of dirty money from Milberg-Weiss. The Obama-Biden campaign neither returned the money, nor donated it to charity. In fact, the Obama campaign even hosted a major fundraiser last July during the national convention of the top national trial lawyer lobby, the American Association for Justice, formerly known as the American Trial Lawyers Association (ATLA).
If Obama ignores his political alliance with the trial bar and demands a credible and comprehensive investigation into corrupt class-action litigation tactics, he will be true to George Washington’s famous maxim to “raise a standard to which the wise and honest can repair.” A man with such credibility is a man who can truly lead.
