Posted at freedomproject.org
CONGRESS GIVES GOODIES TO TRIAL LAWYER ALLIES WHILE FAMILIES SUFFER
American families haven’t received the change they deserve from the Democratic Congress, but one segment of the population – the American trial lawyer industry – has gotten every penny out of its hefty investment in the Democratic Party. The Democrat-controlled Congress has been sitting silent while a major scandal churns in the trial lawyer industry – a scandal that may have exposed a clear and present danger to our nation’s economy. It has also been handing out millions of dollars in taxpayer-funded goodies to its trial lawyer allies while stiffing American families who are anxious for action on gas prices and other economic matters.
On May 19, former powerhouse trial lawyer and major Democratic contributor William Lerach reported to federal prison to begin serving the two-year sentence he received after pleading guilty to charges for his role in a multi-million dollar kickback scheme involving illegal kickbacks to clients. Lerach and his partners at the giant law firm Milberg Weiss reaped untold fortunes by launching job-killing lawsuits against American employers – lawsuits that now appear to have been tainted by corruption and illegal kickbacks. Lerach told the Wall Street Journal his crimes were an "industry practice" – suggesting such job-killing corruption in the trial lawyer industry may now be rampant at a time when our economy can least afford it.
The Milberg Weiss scandal has been described in some circles as "the Democrats’ Enron." But while the GOP Congress responded with clear action in the wake of the Enron and WorldCom scandals of the early part of this decade, the Democratic Congress has done nothing to investigate the Milberg Weiss scandal and Lerach’s admission that corruption in the trial lawyer industry is an "industry practice." And this month, the inaction of the Democratic Congress became conspicuous after Democratic leaders refused to even schedule a hearing on the matter, even as Lerach headed to federal prison. What are they hiding? Who are they protecting?
The trial lawyer industry, of course, has given huge sums of campaign cash to the Democratic Party, and it played a pivotal role in giving Democrats majority control of Congress in 2006. And Democrats have abandoned any pretense of shame as they’ve returned the favor, doling out millions of dollars in special benefits to rich trial lawyers while doing nothing to help middle-class families who are being squeezing by soaring gas and food prices triggered by flawed Democratic policies.
The housing legislation passed by the House in early May, for example, included a $35 million giveaway for the trial lawyer industry. Vital national security legislation to modernize our electronic surveillance laws – passed by the Senate with a large bipartisan vote early this year – has been stonewalled in the House for months by Democratic leaders at the behest of the trial bar, which wants to retain the right to sue American companies that cooperate with the government in the war against terror.
The most obnoxious example yet, however, may be a provision tucked into the "tax extenders" bill authored by Rep. Charles Rangel (D-NY) that is slated for consideration on the House floor today. The bill would spend $1.5 billion to provide preferential tax treatment for plaintiffs’ trial lawyers. It contains a provision that allows attorneys to take a business deduction for advanced litigation costs (such as travel costs, court fees, and other costs) that are incurred in contingency fee cases. The Democrats’ bill would reward the trial lawyer industry for its financial support of the Democratic Party by making the trial bar the only profession in America that is allowed to take a tax deduction for such costs. The cost of this special perk for special interests is $1.5 billion dollars – money the trial lawyer industry can turn around and invest in new job-killing litigation.
This is the same Congress whose leaders vowed they would "break the link between lobbyists and legislation" and "drain the swamp" of Washington corruption. Watch for House Republicans and a growing coalition of grass-roots allies to mobilize against abuse of America’s legal system and this potential threat to our economy.
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