Democratic rivals mum on firm’s dirty cash
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Hillary Clinton and Barack Obama will not say whether they plan on returning the Milberg Weiss donations. – Getty Images

Hillary Clinton and Barack Obama will not say whether they plan on returning the Milberg Weiss donations. – Getty Images

WASHINGTON (Map, News) - Democratic presidential candidate Hillary Clinton has received more campaign money from disgraced lawyers at the controversial Milberg Weiss law firm than any other member of Congress, but she won’t say whether she’ll keep the contributions.

Sen. Barack Obama of Illinois, Clinton’s chief rival for their party’s nomination, received much less money from the same lawyers but is likewise mum.

Clinton received $21,971 and Obama $5,300 from four senior partners of the firm or their spouses. Presumptive Republican nominee John McCain got no money from the firm’s four senior partners.

Three of the partners — William Lerach, David Bershad and Steven Schulman — have pleaded guilty to participating in an illegal kickback scheme in securities class-action lawsuits first made public by federal investigators in 2002. The firm itself and Melvyn Weiss, its senior named partner, were also indicted and face trial later this year.

Neither Democratic presidential candidate responded to multiple queries from The Examiner about whether they are keeping the money, have returned it or will donate it to charity. Federal Election Commission (FEC) records show no evidence that the donations were returned.

The New York Times also asked similar questions of both campaigns last October, without result. Then-candidate John Edwards, on the other hand, continued to use Lerach as a fundraiser even after widespread reports of the now-former Milberg Weiss partner’s involvement in the kickbacks, which federal investigators called a “criminal enterprise.”

Edwards donated Lerach’s contributions to charity after the flamboyant securities class-action lawyer pleaded guilty last year to participating in the kickback scheme.

The Examiner analyzed donations made by the four lawyers after January 2002, which was when the federal investigation became public knowledge. Federal officials say the firm paid $11.7 million in kickbacks relating to lawsuits from which it realized more than $200 million in tainted fees.

Obama’s apparent decision to keep the money stands in contrast to his decision to donate to charity $160,000 from controversial Chicago businessman Tony Rezko and his associates. Rezko, a longtime financial backer of Obama, is now on trial for alleged extortion relating to the administration of Illinois Gov. Rod Blagojevich.

Clinton has been associated with Lerach since the mid-1990s, when Lerach was a guest in the Lincoln Bedroom during her husband’s presidency. Just days after Lerach spoke with Bill Clinton at a White House dinner in 1995, the president vetoed legislation, fiercely opposed by Lerach, that was aimed at reining in abusive lawsuits. (It was the only Clinton veto Congress overturned during his two terms in office.)

Donations to Hillary Clinton from all Milberg Weiss lawyers (not just the charged individuals) since her first Senate race in 2000 total $49,794 (compared with $20,100 for Obama since 2004); her husband’s 1996 campaign received $31,500 from the firm’s lawyers. Lerach also donated more than $100,000 to the Clinton presidential library.

Both Clintons have been associated with controversial campaign donations for more than a decade — including the so-called White House “coffee Klasches” in the 1990s, a Hollywood fundraising event that resulted in the imposition of massive fines on Hillary Clinton’s first Senate campaign, and the arrest of fundraiser Norman Hsu on fraud charges in connection with hundreds of thousands of dollars donated to Hillary Clinton’s presidential campaign.

“There is no ethical requirement [to return the contributions],” said Lester Brickman, a professor of legal ethics at the Cardozo School of Law who has been one of the biggest public critics of Milberg Weiss’ practices. “When office holders return these contributions, they are concerned about public reaction.”

Michael Barone, founder and author of the Almanac of American Politics, went one step further: “I think there is a good case for donating the money to third parties ... because these guys were accused of pretty nefarious conduct and the charges against them are serious.”

qhillyer@dcexaminer.com


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Comments from Examiner Readers

6:10 AM MST on Thu., Mar. 20, 2008 re: "Democratic rivals mum on firm’s dirty cash"

Joe said:
Hillary Clinton is only honest when she gets caught, and then, not always.

11 agree | 3 disagree
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8:16 PM MST on Fri., Mar. 7, 2008 re: "Just the threat of a lawsuit can be worth millions"

Examiner Reader said:
My attorney did not to help my case against a city in RI, no investigation, no interviews, no discovery.How do I sue him for not doing the job I hired him to do? Swansong

8 agree | 9 disagree
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1:08 PM MST on Wed., Oct. 3, 2007 re: "How important are judges?"

Steve White said:
I'm glad to read this series, but I also think there should be a lot more attention paid, not to how big companies get screwed over by the legal system, but how normal people without big money get abused in civil lawsuits, divorce cases, child custody, etc. The Constitution says you have a right to represent yourself in court, maybe the courts should facilitate that, rather than trying to make it hard.

172 agree | 166 disagree
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2:18 PM MST on Mon., Oct. 1, 2007 re: "How important are judges?"

Examiner Reader said:
Why is the Judicial Hellholes report making such a big deal about a quote that is from a book that was 8 years old at the time of the report? Why are you making such a big deal about that quote, and why do you seem to be blindly relying on a report that so blatantly misuses and misunderstands the quote?

167 agree | 179 disagree
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2:16 PM MST on Mon., Oct. 1, 2007 re: "How important are judges?"

Examiner Reader said:
So this Judicial Hellholes report seems to be where you got the Judge Neely quote, and they do the same thing with it. They ignore the fact that Neely's book supports at least some of their points, and twist the quote to support their cause. This tells me that maybe the Judicial Hellholes report that you seem to have fallen in love with is probably not very accurate or reliable.

192 agree | 157 disagree
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2:01 PM MST on Mon., Oct. 1, 2007 re: "How important are judges?"

Examiner Reader said:
Your quote from Judge Neely is ridiculous. It is totally out of context. It was taken from a 1998 book in which he argues that product liability law has gotten out of hand and that state courts are helping home state plaintiffs at the expense of out state companies. His book is, at least partially and most likely more honestly, arguing your point. But you feel compelled to quote him out of context, to argue a point that is the opposite of his book's conclusion. He actually calls for the US Supreme Court to step in and review state court decisions to make sure they are fair to out of state companies. I sure hope this was an honest mistake by you, Ms. Chumley.

160 agree | 154 disagree
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11:18 AM MST on Mon., Oct. 1, 2007 re: "How important are judges?"

not me said:
this article is so insanely one-sided. for example, what of all the money that defense firms give to judges who they think will help them?

176 agree | 179 disagree
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11:03 AM MST on Fri., Sep. 21, 2007 re: "Donations from lawyers sometimes spell trouble"

Examiner Reader said:
Say it isn't so. Trial lawyers convicted of crimes contributing to Democrat candidates and Democrat causes. Here I though that the Democrat controlled Congress (the opposite of Progress) was going to fix all of that!!!! No wonder Congress has half the approval ratings of the President.

191 agree | 203 disagree
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1:08 PM MST on Sat., Sep. 15, 2007 re: "High-dollar settlements mark class action cases"

Examiner Reader said:
It is difficult to determine how reasonable these fees are without knowing more about the amount of work required to achieve these settements and the amount of risk taken by these lawyers. In general, the amounts seem high, but aren't these fees the result of contracts negotiated between the lawyers and their clients? If the governrment starts putting caps on these fees, will it then try to cap the salaries and binuses paid to corporate CEOs?

184 agree | 223 disagree
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4:17 AM MST on Fri., Sep. 14, 2007 re: "High-dollar settlements mark class action cases"

Examiner Reader said:
Nice series of stories. OK, I can see that these lawyers and law firms are making obscene amounts of money off of suits and settlements. But what about the problem of lead paint, even if it was painted decades ago? If it's hurting people, shouldn't it be cleaned up? So how can we protect citizens and prevent abuse at the same time?

244 agree | 222 disagree
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