John Edwards 2008: What’s not to like

John Edwards launched his slight public career — one Senate term, two presidential candidacies — with the money and reputation he made as a trial lawyer. Today he is the candidate of a small fraction of the electorate but a sizable portion of America’s trial lawyers. Edwards says Washington is “corrupt.” Well.

Within Edwards’ lucrative trial bar constituency, there has been a flurry of criminal indictments. Their target has been what Fortune magazine calls the law firm of Hubris Hypocrisy and Greed. (See Peter Elkind’s jaw-dropping report in the issue of Nov. 13, 2006.) The real name of the nation’s foremost securities class-action firm is Milberg Weiss.

It has been indicted as a “racketeering enterprise” that obstructed justice and committed perjury, bribery and fraud while collecting about $250 million in fees from about 250 cases using paid plaintiffs, which is illegal. Several of the firm’s members, past and present, also have been indicted.

Since 1965, the firm has won, often by tactics indistinguishable from extortion, $45 billion from corporations — more than $1 billion a year for plaintiffs claiming to have been cheated as investors. Plaintiffs firms such as Milberg Weiss are paid contingency fees — they are paid only if they win, but up to 30 percent of what is won. Mel Weiss, whose case is going to trial, and his former partner, Bill Lerach, who specialized in volatile stocks of Silicon Valley companies in the 1990s and is now going to jail, each pocketed — it would be strange to say they earned — more than $100 million in the 1990s. The firm itself has been charged with paying $11.4 million to three serial plaintiffs who testified in 180 cases over 25 years, claiming to have been repeatedly defrauded.

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Until Lerach pleaded guilty he was a fundraiser for Edwards, for whom he collected $64,000 from lawyers in the firm he founded after he had a falling out with Weiss. Remember this when next you hear Edwards’ populist riff about trial lawyers as white knights protecting little people.

Real Clear Politics 11/18/07
http://www.realclearpolitics.com/articles/2007/11/legal_troubles_mount_for_edwar.html

Hillary Clinton raised big bucks at a Chinatown fund-raiser from donors who listed seemingly modest-paying jobs on contributor forms, prompting an angry exchange between John Edwards’ campaign and Team Clinton.The flap came after the Los Angeles Times reported people holding jobs such as dishwasher, server or chef made donations ranging from $500 to $2,300.The newspaper said it could not find one-third of the donors using property, telephone or business records.By mid-afternoon, David Bonior, Edwards’ campaign manager, issued a statement that “many Clinton campaign contributions are raising eyebrows again.”Howard Wolfson, a top Clinton adviser, said the campaign does not “ethnically profile donors.”

He acknowledged the campaign flagged a number of questionable donations based on occupations and amounts. It returned $7,000 it couldn’t confirm was legally given, he said.

As for the Edwards rebuke, Wolfson replied, “If Mr. Edwards is so concerned about campaign finance reform, he should give back the contributions he got from Geoffrey Fieger.”

In August, Fieger was indicted on charges of conspiring to make more than $125,000 in illegal donations to Edwards’ 2004 presidential campaign. Team Edwards said it will give the money to charity if Fieger is convicted.

New York Daily News 10/20/07
http://www.nydailynews.com/news/wn_report/2007/10/20/2007-10-20_hillarys_chinatown_fundraiser_draws_edwa.html”>LINK

Last year, the firm was indicted on federal charges of fraud and bribery. But the political partnership has not been entirely severed. Since the indictment, 26 Democrats around the country, including four presidential candidates, have accepted $150,000 in campaign contributions from people connected to Milberg Weiss, according to state and federal campaign finance records. And some Democrats have taken public actions that potentially helped the firm or its former partners.The recent contributors include current and former Milberg partners who had either been indicted or were widely reported to be facing potential criminal problems when they wrote their checks. One of them, William S. Lerach, was a fund-raiser for John Edwards’s presidential campaign until his guilty plea last month. Melvyn I. Weiss, a founder of the firm, gave the maximum $4,600 to Senator Hillary Rodham Clinton in June. Other firm members contributed to the presidential campaigns of Senators Barack Obama and Joseph R. Biden Jr.

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In the current campaign, the race for cash has led to several embarrassments for the Democrats, including the indictment of a trial lawyer, Geoffrey Fieger, who was accused of using straw donors to make illegal contributions to Mr. Edwards’s 2004 presidential campaign, and the arrest of Norman Hsu, a businessman accused of fraud who raised hundreds of thousands of dollars for Mrs. Clinton.

In addition to the kickback charges in the Milberg Weiss case, federal agents have investigated allegations that the firm funneled campaign contributions through plaintiffs and expert witnesses in the 1990s, said two lawyers familiar with the inquiry. The guilty plea entered by Mr. Lerach hinted at that, but it also specified that prosecutors would not pursue campaign finance violations, in exchange for Mr. Lerach’s admission that he had conspired to obstruct justice by concealing the kickbacks.

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More recently, Mr. Edwards, a trial lawyer who became wealthy pursing personal injury cases, joined labor unions and consumer groups last May in pressing securities regulators to intervene in a lawsuit against banks brought by Mr. Lerach on behalf of Enron investors. His campaign said Mr. Edwards’s actions had nothing to do with Mr. Lerach, and were consistent with the candidate’s longstanding defense of working people.

Still, Mr. Edwards’s willingness to be seen doing anything that could benefit Mr. Lerach and allowing him to raise money provided fodder for critics. At the time the Edwards campaign took on Mr. Lerach as a fund-raiser, it was already widely reported that Mr. Lerach, who left Milberg Weiss in 2004, was one of the unnamed co-conspirators cited in court documents related to the firm’s indictment.

In all, Mr. Edwards collected about $16,000 from people connected to Milberg Weiss, including Mr. Lerach and two other former Milberg Weiss lawyers who had joined him at his new firm, Patrick J. Coughlin and Keith F. Park. Federal authorities agreed not to prosecute them as part of a plea deal with Mr. Lerach. (Mr. Lerach also raised $64,000 for Mr. Edwards from members of his new firm who were not named in the Milberg case.)

“With Edwards, he has associated himself with people in his campaign that don’t represent the face that even the trial lawyers want to put forward to the country,” said Walter K. Olson, a fellow at the Manhattan Institute, a conservative research group, who has written extensively on the American legal system.

New York Times 10/18/07
http://www.nytimes.com/2007/10/18/us/politics/18milberg.html?ref=politics

Democrat John Edwards’s list of bundlers includes well-known fellow trial lawyer William S. Lerach, who raised $80,000 from his family and law firm partners for the candidate after a government probe had begun of Lerach’s wrongdoing, campaign aides confirmed yesterday. Lerach pleaded guilty this week to a conspiracy charge, prompting Edwards to announce that he will give back Lerach’s personal donations but not the money Lerach raised from others.

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In recent weeks, Edwards has sharply criticized a “corroded and corrupt” Washington system in which politicians raise money from special interests, which then seek their help on government matters. His campaign’s latest statement on that subject came on Tuesday, the day of Lerach’s plea deal. Top strategist Joe Trippi sent out a mass e-mail criticizing Clinton’s campaign for hosting a fundraising event with companies and lobbyists seeking the government’s multibillion-dollar homeland security business.

“Too many in office have fallen under the spell of campaign money at any cost — and do not see that when they defend the system, they are protecting those that have rigged the game that puts corporate profits ahead of the interests of working Americans,” Trippi wrote.

In May, Edwards issued a statement urging the Securities and Exchange Commission to weigh in with the Supreme Court on behalf of an effort by Lerach’s clients — who had invested in Enron — to sue banks associated with the energy giant. “The question for all Americans is whether their government will be on the side of those big banks or regular families,” Edwards said in a statement released by his presidential campaign. Lerach posted the statement on his law firm’s Web site.

Edwards’s campaign declined to discuss how much it knew about Lerach’s legal problems while Lerach raised money. Campaign officials also said they do not consider the statement about the Enron case a favor to a major donor and fundraiser.

“This position is consistent with John Edwards’s long-standing support for protecting the retirement savings of middle-class families and is shared by many others, including the New York Times editorial page, Securities and Exchange Commission, Senate Banking Committee Chair Chris Dodd, and a coalition of consumer groups, to name a few,” Edwards spokeswoman Colleen Murray said.

Lerach is the second Edwards fundraiser to face legal troubles in the past year. Lawyer Geoffrey Fieger was indicted in August on federal charges of conspiring to route more than $125,000 in illegal contributions to Edwards’s 2004 presidential bid. Fieger has pleaded not guilty.

Edwards’s campaign has said it knew nothing about Fieger’s alleged scheme and has cooperated with the Justice Department. But the campaign has declined to refund the donations in question, waiting for the outcome of Fieger’s trial to avoid influencing jurors. If he is convicted, the campaign has said it plans to send his donations to charity.

Washington Post 9/20/07
http://www.washingtonpost.com/wp-dyn/content/article/2007/09/19/AR2007091902508.html?hpid=topnews

Though his former law firm came under indictment more than a year ago and he himself appeared likely to face criminal charges, prominent trial lawyer William S. Lerach slipped past the vetting of John Edwards’ presidential campaign and was permitted to raise large amounts of money for the Democrat’s 2008 bid.Lerach, his family and members of his new law Lerach Coughlin law firm accounted for nearly $78,000 in donations to Edwards’ campaign in the first half of this year, making the trial lawyer one of the North Carolina Democrat’s leading “bundlers” of contributions.

In the midst of that fundraising, Lerach negotiated behind the scenes for a plea deal that was consummated on Tuesday and will send him to federal prison for at least 12 months on a conspiracy charge involving his past legal work as partner in the Milberg Weiss law firm.

Through it all, Edwards stood by his fellow trial lawyer and even took an action this spring that was helpful to his longtime financial supporter in a government matter.

In May, Edwards used the bully pulpit of his presidential campaign to publicly pressure the Securities and Exchange Commission not to oppose Lerach’s new law firm in a Supreme Court case over whether Lerach’s lawsuits could proceed against banks on behalf of investors who lost millions in the collapse of energy giant Enron.

“The question for all Americans is whether their government will be on the side of those big banks or regular families,” Edwards said in a statement released by his presidential campaign that was trumpeted on the Web site of Lerach’s law firm.

All of this transpired while Edwards campaigned against what he calls a “corroded and corrupt” Washington system in which politicians raise money from special interests who then seek their help on government matters. To make his point, Edwards campaign is refusing any donations from lobbyists registered in Washington.

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Trippi’s attack made no mention of Lerach, the Edwards’ bundler, or the fact that Lerach had just reached a plea deal in a scheme prosecutors alleged involved kickback payments to plaintiffs in class action lawsuits he and his former law firm brought.

Lerach and his former law partner Melvyn I. Weiss were notified in the summer of 2005 that they had become targets in that lengthy criminal investigation, meaning they were likely to be indicted, according to lawyers involved in the case.

Court papers say that they employed the scheme for more than two decades in 150 cases that brought their firm more than $200 million in fees.

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Edwards campaign said it donated Lerach’s personal donations to charity yesterday after his guilty plea, but isn’t returning the money he raised from others.

As for the statement Edwards issued favorable to Lerach’s lawsuits earlier this year, Edwards spokesoman Colleen Murray said: “This position is consistent with John Edwards’ longstanding support for protecting the retirement savings of middle class families and shared by many others, including the New York Times editorial page, Securities and Exchange Commission, Senate Banking Committee Chair Chris Dodd, and a coalition of consumer groups, to name a few.”

Lerach is the latest bundler in the 2008 race whose background has raised questions about how carefully campaigns are vetting those who collect their checks.

Washington Post 9/19/07
http://blog.washingtonpost.com/the-trail/2007/09/19/lawyer_in_plea_deal_was_edward.html?hpid=topnews

Clinton this week took extraordinary steps to distance herself from Norman Hsu, a felon fugitive convicted on grand theft charges years ago, by returning to donors about $850,000 in bundled contributions he raised for her current and past campaigns.

Critics continue to hound her campaign, though, because it has said it will allow — and indeed hopes — the donors first recruited by Hsu will re-contribute the funds on their own.

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Clinton’s Democratic competitors, Sen. Barack Obama of Illinois and former Sen. John Edwards of North Carolina, have taken less drastic steps to inoculate themselves against donor problems.

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The Edwards camp is staking out a similar position on donations generated by Geoffrey Fieger, who is accused of using employees as surrogate givers to Edwards’ 2004 presidential campaign to get around campaign finance limits.

Eric Schultz, a campaign spokesman, said Edwards has cooperated with the federal investigation of Fieger, who is not raising money for this year’s race.

“Once this prosecution concludes, if Geoffrey Fieger is found guilty, the campaign will donate all the money in question to charity,” Schultz added.

The Politico 9/13/07
http://www.politico.com/news/stories/0907/5806_Page2.html

Geoffrey Fieger’s indictment on campaign finance charges could be troublesome for John Edwards, whose 2004 presidential campaign received the contributions at the heart of Friday’s indictment.Though federal officials emphasized that the Edwards camp had no knowledge of any wrongdoing and cooperated with the investigation, the charges could damage one of the central tenets of Edwards’ 2008 campaign.

“Edwards has been taking this high-and-mighty stance against lobbyists, portraying himself as an outsider,” said political analyst Stuart Rothenberg. “When something like this happens, it doesn’t erase this message, but it does undercut it a little bit. He doesn’t look like this babe in the woods anymore.”

Edwards is believed to have considerable support among union leaders in the Michigan Democratic Party.

Michigan GOP Chairman Saul Anuzis said Fieger’s indictment reflected an “apparently too cozy of a relationship” between trial lawyers and “liberal Democrat candidates.”

Still, the charges are not likely to play a huge role in the presidential campaign, Rothenberg said. Edwards can say, with backing from investigators, that his campaign played no role in any wrongdoing, Rothenberg pointed out.

“As the indictment makes clear, the 2004 Edwards for President campaign was unaware of these activities,” Edwards campaign spokesman Colleen Murray said in a prepared statement.

“We have and will continue to cooperate fully with the FEC and the Department of Justice.”

Murray said Edwards’ 2004 campaign would return the contributions if the charges prove true.

Detroit News 8/25/07
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070825/METRO/708250346/1003

Fieger indicted on campaign finance chargesAttorney Geoffrey Fieger and one of his law partners have been indicted by the U.S. government, which accused the pair of making $127,000 in illegal campaign contributions to the 2004 presidential campaign of John Edwards.

The indictment was unsealed today at the U.S. District Court in Detroit and accuses Fieger and Vernon Johnson of violating the $2,000 per election federal limit on individual contributions to presidential candidates. The indictment accuses them of soliciting 60 “straw donors” to also contribute the $2,000 maximum to Edwards and then reimbursing them for their contributions through funds from their Southfield-based Fieger, Fieger, Kenney & Johnson PC firm.

Fieger, the area’s most famous and flamboyant attorney, and Johnson are accused of conspiracy, making and causing conduit campaign contributions, causing false statements and obstruction of justice.

A call was placed to Fieger’s office, but he was said to be unavailable.

Earlier this year, Fieger accused federal agents and prosecutors of terrorizing his employees to find out whom they voted for in the 2004 presidential election and details about their political contributions over the years. He also accused the government of using its antiterrorism authority to seize financial records of his employees and their families. A lawsuit he field against the U.S. Department of Justice over its tactics was dismissed last week.

A statement from the U.S. Justice Department’s Office of Public Affairs absolved the Edwards campaign of any wrongdoing and said his campaign was unaware of the alleged illegal contributions and has fully cooperated with the investigation. Edwards is running for the 2008 Democratic nomination.

The indictment accuses Fieger and Johnson of uses attorneys from their firm and their spouses, non-attorney employees of the firm and their spouses, friends of Fieger and third-party vendors of services to the firm to make the illegal contributions. It also accuses Fieger and Johnson of using the children of those employees to serve as straw donors. Minors cannot contribute to campaigns. (more…)

Fieger’s legal tanglesSouthfield attorney Geoffrey Fieger is locked in battles with both the U.S. Justice Department and the Michigan Supreme Court:

U.S. Justice Department

# A federal grand jury is investigating whether Fieger illegally used employees and associates to sidestep limits on campaign donations and funnel money to 2004 presidential candidate John Edwards.

# Fieger and employee Nancy Fisher, represented by nationally prominent attorney Alan Dershowitz, have sued U.S. Attorney General Alberto Gonzales, alleging the investigation is unlawful.

# Fieger has also sued the lead FBI agent investigating the case and three federal prosecutors.

# Several Fieger employees and associates around the country have launched similar lawsuits.

Detroit News 7/02/07
http://www.detnews.com/apps/pbcs.dll/article?AID=/20070702/METRO02/707020335

The investigation into lawyer Paul Minor — part of a long-running and controversial federal case — has come to Washington in recent weeks, where four former fundraising aides to Edwards have spoken voluntarily to FBI agents.Democrats familiar with the investigation said that neither the current or past Edwards campaigns nor any of his staffers appear to be targets of the investigation, which is trying to determine whether Minor reimbursed his children for $8,000 in contributions to Edwards, an illegal practice known as “conduiting.”A lawyer for Minor, Abbe Lowell, said he’s aware of a federal investigation into “the issue of conduit contributions to the Edwards campaign in 2001.”

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The Minors’ contributions went to a committee intended to finance Edwards’ 2004 Senate reelection campaign, which he forwent to run for president. But Minor is just one of many prominent trial lawyers who have played a central role in the political career of Edwards, himself one of North Carolina’s most successful plaintiff’s attorneys.

Trial lawyers are a fixture of Democratic politics and fundraising, particularly in the South, but some also have a reputation in Democratic political circles for a freewheeling approach to campaign finance law. Within Edwards’ 2004 campaign, staffers referred to those flamboyant personalities by an acronym: They called them “DFTLs,” which according to former staffers was short for “dirty (expletive) trial lawyers.”

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The Edwards presidential campaign last year paid a $9,500 civil penalty to the Federal Election Commission after the FEC found that the campaign accepted free fundraising help from an Arkansas trial lawyer, Tab Turner, as well as contributions made by Turner in the name of his brother and sister-in-law. Turner paid a $50,000 civil penalty for the in-kind and financial contributions.

The Politico 3/21/07
http://www.politico.com/news/stories/0307/3225.html