Magazine article Insight on the News

Litigation Lotto

Magazine article Insight on the News

Litigation Lotto

Article excerpt

What began as a scheme for the states to recoup Medicaid expenditures for smokers has devolved into a multibillion-dollar ponzi scheme favoring trial lawyers who contribute to cronies in government.

The per-capita personal income in Mississippi is about $19,000 -- the lowest in the nation. A carton of cigarettes at the local Winn-Dixie supermarket costs $23 to $24. There are approximately 454,952 smokers in the Magnolia State -- slightly more than 23 percent of Mississippi's adult population.

It allegedly was to recoup the healthcare costs for the poorest of those smokers that Mississippi's lawsuit against tobacco companies was filed. Spoils from that effort now are enriching a small number of plaintiffs' lawyers who just happen to be very generous Democratic campaign contributors.

From 1997 through October 1999, trial lawyers contributed $809,525 to presidential candidates, alone, according to the American Tort Reform Foundation, or ATR Foundation. Of that, $705,948 went to Vice President Al Gore and $136,875 to former New Jersey senator Bill Bradley on the Democratic side; on the Republican ledger, $48,700 went to Texas Gov. George W. Bush and $27,250 to Arizona Sen. John McCain, an antitobacco warhorse. But the biggest money went to Democratic politicians at the state and local levels. The total political contributions from trial lawyers for all candidates for this period is estimated at $18 million.

The politics are clear: Instead of using specific claims of injury, the state attorneys general, or AGs, got state legislatures to change tort law to enable their attorneys to rely on statistical analysis of potential harm and set out to obtain restitution for Medicaid health-care costs. They used armies of public-relations specialists to present this as a crusade to save children from the evils of nicotine. "Make no mistake about it," former Arkansas AG Winston Bryant pronounced in a May 1997 statement, "this is a war to protect Arkansas' kids."

Critics say that is where health concerns ended and state-sponsored greed began. In February 2000, Matt Myers of the Campaign for Smoke-Free Kids lamented, "The American public rightfully assumed that the states would use a significant portion of their settlement money to fund comprehensive tobacco-prevention programs that have been proven to work." But, Myers reported, of the 30 states that dealt with their settlement money in 1999, only eight provided enough new funding for truly comprehensive tobacco prevention and cessation programs.

So the kids got cheated but the lawyers got paid -- and paid and paid. It turns out that key personal-injury lawyers hired to represent the various states in the grab for tobacco money received more than $92,000 per hour for their services. Local newspapers nationwide report campaign-contribution irregularities that suggest the lawyers have been funneling portions of their earnings back into election campaigns of state officials who hired them.

This hustle began in May 1994, when Mississippi Attorney General Mike Moore embarked on a crusade to tap the deep pockets of the tobacco industry for his state's smoking-related Medicaid costs. For special counsel, he went to the private sector for advice from personal-injury lawyers, starting with his former University of Mississippi classmate, Richard Scruggs, a Democratic partisan based in Pascagoula. Scruggs is the brother-in-law of U.S. Senate Majority Leader Trent Lott, another Mississippian, and Scruggs has said it was Lott who introduced him to political strategist and pollster Dick Morris. Scruggs convinced Moore to hire Clinton insider Morris to conduct public-opinion polls that would help the state's legal team determine the most popular strategies.

In 1992 -- after Scruggs had contributed more than $20,000 to Moore's reelection campaign -- Moore had hired him to represent the state in an asbestos lawsuit. Although states routinely pay for outside counsel according to a fixed or hourly fee, Scruggs favored a far more lucrative contingency fee and received $2. …

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