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Out of Prison, Bill Lerach Now Hangs Out with the ‘Progressives’

William Lerach, genius promoter of extortionate class-action litigation in the United States, spent two years in federal prison after he pleaded guilty to one felony count of conspiracy to obstruct justice and making false declarations under oath.

Now that he’s out of prison, Lerach seems to be trying to refurbish his reputation by casting his war against Wall Street as a progressive act. He speaks today at America’s Future Now! conference, a gathering of left-leaning activists organized by the Campaign for America’s Future.

From the agenda:

We know that self-styled progressives are all in favor of the redistribution of wealth, but do they really want to affiliate themselves with the class-action lawyer model of that redistribution?

From the list of bios of conference speakers :

William S. Lerach – lecturer, writer and investor advocate.

For decades, Mr. Lerach was one of the leading securities lawyers in the United States. He headed up the prosecution of hundreds of securities class and stockholder derivative actions which resulted in billions of dollars of recoveries for defrauded shareholders from Wall Street banks, big accounting firms, corporations and insurance companies. Mr. Lerach has been the subject of considerable media attention and is a frequent commentator on economic and political matters and securities and corporate law. His career was recently chronicled in the best-selling book “Circle of Greed.”

The subject of considerable media attention! How’s that for spin?

A reminder of his guilty plea and conspiratorial activities as a partner with Milberg Weiss, from the U.S. Attorney’s office a Sept. 18, 2007, news release, “WILLIAM LERACH, FORMER NAME PARTNER IN MILBERG WEISS, TO PLEAD GUILTY TO CONSPIRACY TO OBSTRUCT JUSTICE AND MAKE FALSE STATEMENTS TO FEDERAL JUDGES ACROSS U.S.“:

William S. Lerach, formerly a name partner in the law firm now known as Milberg Weiss, has agreed to plead guilty to a federal conspiracy charge and acknowledge that he and others agreed to conceal from judges in federal courts Milberg Weiss’ secret payment arrangements with named plaintiffs in class-action lawsuits.

Lerach, a 61-year-old resident of Rancho Santa Fe, California, was charged in a criminal information filed this morning in United States District Court with conspiring to obstruct justice and to make false statements under oath. In a plea agreement also filed this morning, Lerach agreed to plead guilty to the conspiracy charge, to forfeit $7.75 million to the government, to pay a $250,000 fine, and to accept a sentence ranging from one year to two years in federal prison.

The case against Lerach is part of an ongoing investigation that last year led to the indictment of Milberg Weiss and two of its name partners for allegedly participating in a scheme in which several individuals were paid millions of dollars in secret kickbacks in exchange for serving as named plaintiffs in more than 150 class-action and shareholder derivative-action lawsuits. The indictment alleges that the firm received well over $200 million in attorneys’ fees from these lawsuits over the past 20 years.

Here’s California Magazine’s article, “The Fall of Bill Lerach.” Earlier Shopfloor post on the America’s Future Now! conference, sort of a CPAC for the Left.

UPDATE: Ira Stoll reported this news first at Future of Capitalism.

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Manufacturing Employment Up Again in May

As expected, government employment surged last month as the Commerce Department hired 411,000 temporary workers to conduct the decennial census. Unfortunately, due to a sharp slowdown in private sector job growth, census-related employment accounted for 95 percent of the 431,000 total jobs added in May. After accelerating through the first four months of the year, private sector job growth slowed and only added 41,000 jobs last month.

The silver lining in today’s employment report is that manufacturing employment increased for a fifth consecutive month in May, a first in four years. The 29,000 gain accounted for 71 percent of private sector employment gains. Mirroring the prior three months, gains in fabricated metals and machinery accounted for the majority of the increase. This is likely being driven by several factors, including a recent upturn in construction-related activity as well as exports. Moving forward, support from the construction sector likely will moderate later in the summer as the positive effects from the recently-expired homebuyer tax credit begin to fade. However, the most recent reports on export activity signal that this important driver for the manufacturing sector continues to look positive.

 

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Card Check, NLRB: At Berkeley, a Hearing on First Contracts

The House Education and Labor Committee has scheduled a field hearing next Friday in Berkeley, with a hearing title that raises suspicions that advocates of the Employee Free Choice Act (EFCA) are looking for another way to sneak through provisions of the legislation. The hearing was called by Chairman George Miller (D-CA), chief sponsor of EFCA (H.R. 1409) in the House.

The hearing’s title: “Understanding Problems in First Contract Negotiations: Post-Doctoral Scholar Bargaining at the University of California

A central, anti-democratic provision of the Employee Free Choice Act is the imposition of binding arbitration in first-contract negotiations. Under Section 3 (see extended entry), a panel of government-appointed arbitrators forces an agreement onto an employer and employees if a first contract is not reached within 90 days of negotiations and 30 days of mediation. As Richard Epstein of the University of Chicago Law School puts it, “[EFCA's] compulsory arbitration structure introduces a partial but large-scale, covert government takeover of the private sector.”

And talking about “sneaking through,” here’s an unusual addition to the hearing notice: “Due to the off-site location of this hearing, there will be no webcast, videos or photos.”

There’s no lecture hall at Berkeley with video or Internet connections? Or space to take a photo? Ridiculous.

Another reason to pay attention to the hearing is its focus on union representation in the university setting. When President Obama made the recess appointments of Craig Becker and Mark Pearce to the National Labor Relations Board, speculation immediately started that the new, activist and pro-labor NLRB would find a way to reverse the board’s 2004 decision in the Brown University case (Brown University, 342 NLRB at 487), which held that graduate student teaching assistants could not unionize. But what about post-doc scholars?

The NLRB’s Chairman, Wilma Liebman, certainly anticipates the issue. As The Chronicle of Higher Education reported, “Faculty-Union Allies, Hopeful About Obama’s Labor Board, Hear From Its Leader“:

It’s only a matter of time before the National Labor Relations Board is faced with a challenge to a 2004 ruling that says graduate students at private institutions aren’t employees and therefore don’t have bargaining rights, its leader told attendees at a labor conference here on Monday.

“This is not an issue that we’ll bring up, but I have heard there are cases out there in the works,” said Wilma B. Liebman, the opening speaker at the conference, held at the City University of New York’s Baruch College.

So here it is, the issue being brought up, courtesy of the House Education and Labor Committee.

More…

(continue reading…)

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After Citizens United v. FEC, More Polling

Matt Sundquist of the legal affairs blog, Scotusblog, examines two public opinion surveys taken after the U.S. Supreme Court’s decision in Citizens United v. FEC, which held that incorporated entities—businesses, unions and nonprofit advocacy groups—have a First Amendment right to spend money from their general treasuries to fund independent advertisements urging people to vote for or against candidates for public office.

We had already critiqued one, a Washington Post/ABC survey, for the tendentious phrasing of its questions. The other survey Sunquist writes about was conducted for the self-styled campaign finance reform advocates, Common Cause, Change Congress, and the Public Campaign Action Fund, which seek to limit campaign spending and abridge First Amendment Rights.

[Neither] of the surveys mentions important distinctions between federal laws, which previously banned corporate contributions, and state laws, which in many cases have permitted it for years.  And in all three of the questions, the broad language seems to affirmatively mislead respondents.  Although respondents would assume that the survey used accurate, clear language and provided all of the information needed to form an opinion, the survey did neither.

Although the language of these polls is flawed, it is possible to design an improved poll.  Future Citizens United polls ought to distinguish between state and federal laws and eschew mistaken categorical claims.  Knowing that respondents will apply conversational definitions to words, the polls’ creators should use precise language, clarify what types of corporate and union spending are permitted, and accurately contrast the new scope of campaign laws with previous laws.

As we noted in a Saturday post, a survey conducted by the Center for Competitive Politics — which supported the Citizens United ruling — posed specific questions that elicited more informative responses.

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Anti-Jobs, Anti-Innovation — The Medical Device Tax

the great successes of the U.S. medical device industry in life-saving innovation have made the device manufacturers a target in Congress’ legislation to expand government control over health care. The revenue raisers have the industry in their sights.

From The Washington Post, “Medical-Device Firms Criticize Tax Proposal“:

Under the bill approved on Tuesday, the medical-device industry would pay a total of $40 billion over 10 years. Players big and small in the industry, which makes items from tongue depressors to artificial hearts, warned that the tax would harm their ability to innovate.

“This is a really devastating proposal for a large number of our membership,” said Stephen J. Ubl, president and chief executive of the Advanced Medical Technology Association, the organization hosting this week’s AdvaMed 2009 conference at the Walter E. Washington Convention Center. “It’s bad for patients, bad for jobs and bad for research and development.”

An amendment to remove the $40 billion tax was defeated last week in the Senate Finance Committee by a partyline vote, 13-10.

At a time when unemployment is still rising even with the nascent recovery, the device tax also represents a tax on job creation. As USA Today reports:

Twenty House members from California, home to heart-valve maker Edwards Lifesciences, signed a letter asking the Senate Finance Committee to reconsider the tax. Senators from Minnesota and Indiana — three Democrats and one Republican, in all — sent a similar letter.

“Minnesota, like many states, has lots of people employed in the medical device industry,” Sen. Amy Klobuchar, D-Minn., whose state is home to Medtronic, one of the nation’s largest device manufacturers, said in an interview. “I want to keep jobs in my state.”

Mark Leahy, President and CEO of the Medical Device Manufacturers Association, in a statement: “There can be little doubt — the proposed tax will have a cascading effect upon innovation, access to technology and employment in the industry.”

Meanwhile, the only interest group to have escaped the taxers and “reformers” in the health care legislation, the trial lawyers, also has the medical device industry targeted. The Medical Device Safety Act is one of the American Association for Justice’s top lobbying priorities, the goal being to replace a consistent federal regulatory regime with a patchwork of state regulations determined by the courts — that’s a much more lucrative environment in which to sue manufacturers.

In March, when the bill was reintroduced, NAM President John Engler issued a statement, making the central point: “At a time when our country is mired in a severe recession, suffering from rising job losses and a financial system in tatters, Congress is proposing legislation guaranteed to discourage innovation and drive up medical costs even further.” See also the Forbes column by Richard Epstein, “A Sickly Medical Device Safety Act.”

So here’s a test by which one can hold elected officials accountable: If in a speech, a member of Congress claims the future of the U.S. economy involves high-tech jobs, innovation, and the growth of medical sciences, just ask if this member supports the $40 billion tax on medical devices. If the answer is yes, judge the previous statements accordingly.

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Send Us Money to Protect Your Right to Sue Doctors

Commentary and developments worth noting on the issue of health care legislation and medical liability reform…

The Washington Times editorialized today in “Obama’s malpractice lip service,” reacting to President Obama’s health care speech last week.

Reformers in both parties want to curb abusive lawsuits that drive medical costs through the roof. Yet Mr. Obama could not even bring himself to say that any suits are abusive, but merely that doctors are for some reason practicing “defensive medicine [that] may be contributing to unnecessary costs.” To help pacify them, the best he could offer was to “direct” Secretary of Health and Human Services Kathleen Sibelius to “authorize demonstration projects in individual states to test these issues.”

That is to say, the President was demanding reforms be included in health care legislation, EXCEPT when it came to medical liability reform, which was going to be left to pilot projects overseen by Sibelius — former executive director of the Kansas Trial Lawyers Association. So if a bill actually becomes law, the non-statutory initiatives can fade away.

Even that faint acknowledgement has prompted push back from the trial lawyers. As the Times reports, “Malpractice plan low on support“:

Trial lawyers bristled that a Democratic president had ceded any ground on the issue.

“It has no place in the debate,” said Anthony Tarricone, president of the American Association for Justice (AJJ) [sic], which lobbies for trial lawyers. “Limited accountability will never improve the quality of health care.”

He said malpractice law was a distraction from the real issues of improving quality of care, reducing medical errors and expanding coverage to the millions of uninsured Americans.

The AAJ initially laid low on the issue, figuring that its allies in Congress could keep any prospects for tort reform out of the bill. But business groups, tort reformers and free-market advocates kept up the pressure, and Howard Dean’s frank admission of the trial lawyers’ political power brought much more attention to the issue.

The AAJ has now decided to make a virtue out of necessity, aggressively raising money from its membership to oppose medical liability reform. Yesterday the group sent out a mass email asking for contributions for its Protecting Patients Rights Campaign, a lobbying campaign to oppose medical malpractice provisions in the health care bill. From the website version:

A contribution to the Protecting Patients Rights Campaign is an investment in your practice and in your clients’ future. All the money raised for this campaign will go directly towards educating lawmakers about the dangers of medical malpractice reform, and towards debunking the myths spewed by the other side. We can win, but we need your help today to make a difference in this fight. We need your help today to make a difference in this fight. Please make a contribution via the attached form.

It’s not unusual for trade associations to raise money by pointing to legislative threat, but the AAJ has been politically ascendant since 2008 elections and hence on the offensive. It’s a change to see them return to the defensive posture they were so accustomed to earlier in the decade.

Clearly the AAJ must think the medical malpractice issue has legs. That, or the lawyers’ elected allies on Capitol Hill are asking for some help. (Contributions are non-tax deductible, so they can be used for both partisan and lobbying purposes.) Or warning against catastrophe is a good way to raise money.

Here’s what they’re fighting to preserve (again from the editorial):

A 2006 study by the Harvard School of Public Health found that 40 percent of medical malpractice lawsuits involve either no actual injuries or no medical error — yet of those meritless cases, more than 27 percent resulted in compensation. Meanwhile, the researchers concluded, “The overhead costs of malpractice litigation are exorbitant.”

Similar observations previously made at this Point of Law post.

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Dispatch from the Front: The Week of June 22

Health care will dominate the week in Washington, even as one of the most important regulatory deadlines in American history passes: On Tuesday, the comment period closes on the EPA’s proposed endangerment finding that would allow the regulation of carbon dioxide under the Clean Air Act. For more information, visit www.nam.org/epa. A House vote is possible, maybe, on the Waxman-Markey command, control, cap and trade program to limit greenhouse gas emissions.

The Senate convenes at 2 p.m. and moves toward a cloture vote on  S.1023, establishing what looks like a government-sponsored enterprise to promote tourism. (Travel Mac? Vegas Mae?)

The House convenes at 10:30 a.m. Tuesday. Major items of floor consideration for the week are H.R. 2892, the Department of Homeland Security appropriations; H.R. 2647, DOD authorization; and the Interior, Environment and Related Agencies appropriations. For more, see the House Majority Leader’s report.

For the full list of committee hearings, see the Daily Digest starting here.

President Obama signs the Family Smoking Prevention and Tobacco Control Act today. On Tuesday, he meets with the President of Chile, Michelle Bachelet. Wednesday is the White House health care reform event promoted the media outlet that calls itself ABC News. On Thursday, the President celebrates service and meets with members of Congress on immigration reform. Friday he welcomes German Chancellor Merkel to the White House.

Senate Hearings: The Senate HELP Committee continues to mark up the Affordable Health Choices Act at 3 p.m. today and continues its restructuring of U.S. health care throughout the week. A Commerce subcommittee on Tuesday reviews high-speed passenger rail, with Gov. Ed Rendell of Pennsylvania testifying. A Banking subcommittee reviews over the counter derivatives. Senate Judiciary on Wednesday holds a hearing on “Promoting Job Creation and Foreign Investment in the United States: An Assessment of the EB-5 Regional Center Program.” A Senate EPW subcommittee on Thursday considers mountaintop removal coal mining and water quality. The full EPW on Thursday ponders the expected Highway Trust Fund insolvency. Senate Judiciary tries yet again Thursday to mark up several bills, including the federal media shield, S. 448.

House Hearings:  House Education and Labor holds a full committee hearing Tuesday on the House Democratic draft proposal for health care reform. Energy and Commerce’s health subcommittee considers its portion of the PLAN on Tuesday and Wednesday, and the full committee also weighs in. Ways & Means looks at health care Wednesday, as well. The Homeland Security Committee continues its mark-up of H.R. 2868, the Chemical Facility Antiterrorism Act. House Oversight on Tuesday considers the future of the V-22 Osprey. House Financial Services on Wednesday, “Regulatory Restructuring: Enhancing Consumer Financial Products Regulation.” A House Foreign Affairs subcommittee on Wednesday, a hearing on U.S.-Africa trade relations. On Wednesday, a Small Business subcommittee considers Health IT and small group healthcare practices. The highways and transit subcommittee of House Transportation marks up the surface transportation reauthorization bill on Wednesday; on Thursday, the full committee reviews the stimulus bill’s effect on infrastructure. Science and Technology on Wednesday marks up bills on research and natural gas vehicles; a subcommittee on Thursday considers DHS and NIST cybersecurity efforts. A Ways & Means subcommittee holds a hearing Thursday on highway and transit investment needs. The trade subcommittee reviews the performance of the trade advisory committees. Fed Chairman Ben Bernanke testifies Thursday at a House Oversight Committee hearings on Bank of America’ acquisition of Merrill Lynch.

Executive Branch: Cabinet secretaries join the White House and First Lady Michelle Obama today in kicking off the “United We Serve” summertime program to lend a federal government imprimatur to local volunteer efforts. News coverage,

Economic Reports: The National Association of Realtors release the May home price index on Tuesday, and the Federal Reserves Open Market Committee begins a two-day meeting. Commerce releases May figures on new-home sales and durable goods Wednesday. Commerce on Thursday issues a report on first-quarter GDP and Friday releases figures on personal income and May spending. More from CNNMoney.com.

Here in Washington, the Smithsonian’s annual Folklife Festival kicks off Wednesday on the National Mall. Themes are African-American literature, music in the Latino culture, and Wales. For the latter, the schedule of events includes a few items related to Wales’ industrial heritage, including coal and slate mining, but it looks like there’s more promotion of wind turbines.

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In Wisconsin, Legislators Listen to Grassroots and Manufacturers

From The Associated Press, “Assembly Democrats back away from liability change,” reporting that Wisconsin Assembly Democrats have voted to remove Gov. Jim Doyle’s budget proposal to expand joint and several liability, which would encourage deep-pocket lawsuits against businesses and others.

Wisconsin Manufacturers and Commerce, an NAM affiliate, has been leading the fight against the provision sought only by trial lawyers and their political beneficiaries and a serious threat to the Wisconsin’s already struggling economy.

“It’s the classic victory for grass roots lobbying,” said James Buchen, vice president of Wisconsin Manufacturers and Commerce, the state’s largest business lobbying group. “If enough people make enough calls and write enough letters, legislators will do what the people want them to do.”

Darn right. WMC is on the mark in terms of policy, but it also has its act together in organization and PR efforts. On the front page of its website, www.wmc.org, is a June 10th column from its president, James Haney, “Defining Moment in Wisconsin State Government.”

In comparison, the latest news release on the website for the trial lawyers, the Wisconsin Association for Justice, is dated April 23. Not very good when you’re trying to plead your case.

There’s more education and persuasion to come. Senate Democrats may have other ideas than their brethren in the other chamber, and the joint and several provision — why is it in the budget? — is far from dead.

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CPSIA Update: D.C. TV Reports: Books! Danger! Lead! Books!

The typical inflammatory, fact-challenged, alarm-the-moms news reporting by local TV stations on “dangerous” children’s products hit a slow period this year after news producers around the country realized the Consumer Product Safety Improvement Act represented an overreaction. In drafting the legislation, Congress didn’t anticipate that used bookstores and libraries would destroy pre-1985 children’s books because of high lead content (high by CPSIA standards). Destroyed books? Awful! Pretty good story, though.

But now WJLA, Channel 7, the local ABC affiliate in Washington, is returning to the halcyon days of scaring the bejeebers out of people. The station broadcast a report Tuesday on its 5 p.m. news, “Local Library Books Could Contain Toxic Lead Levels“:

WASHINGTON – Lurking on library shelves may be a potentially toxic level of lead contained in the covers of some children’s books. And until recently, no one seemed to know it was there.

“That’s disturbing — very disturbing news,” said Diamond Phifer, a parent.

ABC 7/NewsChannel 8 grabbed an armful of children’s books from public libraries in Maryland, Virginia and D.C. The covers of nearly 30 books were checked using a home lead testing kit.

Tests showed lead, so the station followed up with more sensitive testing at Schneider Labs in Richmond.

Beginning in August, the Consumer Product Safety Improvement Act prohibits products intended for children 12 and under containing more than 300 parts per million of lead.

That drops to 100 parts per million in 2011 — but sources say even that can be dangerous. “Lead has been shown even at the lowest level we can test to cause harm, to cause significant long lasting harm,” said Dr. Dana Best, a lead expert at Children’s National Medical Center.

The lab determined the cover of one book had 1,793 parts per million, nearly 18 times the 2011 maximum and more than enough to be considered toxic.

The other book barely complies with the 2011 standards, having 86 parts per million on the cover.

A couple of problems with the story. First, you never learn when the books in question were published, which is a key question. Pre-1985 children’s books were printed with ink that contained minutes traces of lead, but the report never states when “The Merry Adventures of Robin Hood,” was published. Amazon lists many, many editions of the book from many different years. (Having loved the Howard Pyle stories as a kid, we’d assert it’s more dangerous not to have read them than to come into contact with their covers.)

The more important question is whether the lead standards required by the CPSIA make any real-world sense. (continue reading…)

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In Alabama, Dreaming It and Doing It

From The Huntsville Times, “Official praises ‘Dream it, Do it’“:

The state’s director of work force development on Tuesday praised a program called “Dream it, Do it” that’s aimed at improving the image of manufacturing among students, parents and educators.

The Tennessee Valley “Dream it, Do it” initiative, officially launched Tuesday for a 23-county area in North Alabama and southern Tennessee, is the first “Dream it, Do it” campaign in the Southeast and the first two-state effort.

“These are uncertain times – these are uncertain times in our economy,” said Dr. Matthew Hughes, director of the Governor’s Office of Workforce Development. “It seems like everywhere we turn, we’re faced with troubling news.” The way for the state of Alabama and the country to keep a leadership role in a global economy, he said, is having “a skilled and well-educated work force.”

Earlier story from the Times, “Program pushes manufacturing

“Dream It, Do It” is a grassroots, locally driven initiative that the Manufacturing Institute has helped spread throughout the country. Here’s the website.

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