Voice in the Wilderness

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Friday, October 07, 2005

Madame Justice Crony

Just how much does George W. Bush owe Harriet Miers? According to Newsweek, as quoted by Joshua Frank in the online magazine Counterpunch, during his second gubernatorial campaign she helped him avoid embarrassing questions about his National Guard non-service.
As Michael Isikoff wrote in July of 2000: “The Bushies' concern began while he was running for a second term as governor. A hard-nosed Dallas lawyer named Harriet Miers was retained to investigate the issue; state records show Miers was paid $19,000 by the Bush gubernatorial campaign. She and other aides quickly identified a problem--rumors that Bush had help from his father in getting into the National Guard back in 1968. Ben Barnes, a prominent Texas Democrat and a former speaker of the House in the state legislature, told friends he used his influence to get George W a guard slot after receiving a request from Houston oilman Sid Adger. Barnes said Adger told him he was calling on behalf of the elder George Bush, then a Texas congressman. Both Bushes deny seeking any help from Barnes or Adger, who has since passed away. Concerned that Barnes might go public with his allegations, the Bush campaign sent Don Evans, a friend of W's, to hear Barnes's story. Barnes acknowledged that he hadn't actually spoken directly to Bush Sr. and had no documents to back up his story. As the Bush campaign saw it, that [sic] let both Bushes off the hook. And the National Guard question seemed under control.” (Read the entire story.)
But the cronysim doesn't stop there. As Frank writes:
It gets better, if not dirtier. At roughly the same time Miers was helping Bush dodge National Guard questions; Bush had named her chair of the Texas Lottery Commission, which had been scandal-plagued for years. The chief issue before Miers and the commission was whether to retain lottery operator Gtech, which had been implicated in a huge Texas bribery scandal.

According to the Philadelphia Daily News, Gtech's main lobbyist in Texas in the mid-1990s was none other than Benjamin Barnes, who just happened to have the low-down on how Bush got into the National Guard to avoid going over to Vietnam.

Gtech fired Barnes, in 1997. A short time after Barnes was fired, Gtech had its lottery contract renewed even though two companies had bid-lower than Gtech had.

Former Texas lottery director Lawrence Littwin filed suit, as he thought the whole charade smelled of scandal. Littwin's lawyers suggested in court filings that Gtech was allowed to keep the lottery contract, which Littwin wanted to open up to competitive bidding, in return for Benjamin Barnes's silence about Bush's entry into the National Guard.

Barnes and his lawyers denounced Littwin’s theory as "favor-repaid" theory in court pleadings as "preposterous ... fantastic [and] fanciful." According to the Philadelphia Daily News, Littwin was “fired after ordering a review of the campaign finance reports of various Texas politicians for any links to Gtech or other lottery contractors. But Littwin wasn't hired, or fired, until months after Barnes had severed his relationship with Gtech.”

Littwin later settled with Gtech for a hefty $300,000.
That Miers saw fit to take on such clients should not be surprising. When she was managing partner of the law firm Locke Liddell & Sapp, the firm was slapped for less-than-honest behavior, including having to pay $22 million to settle a suit asserting that "it aided a client in defrauding investors." According to David Sirota, director of strategic communications for the Center for American Progress:
Under Miers’ leadership, the firm represented the head of a "foreign currency trading company [that] was allegedly a Ponzi scheme." The law-firm admitted that it "knew in March 1998 that $ 8 million in [the company’s] losses hadn’t been reported to investors" but didn’t tell regulators.

This wasn’t an isolated incident, either. The Austin American-Statesman reported in 2001 that Miers’ lawfirm was forced to pay another $8 million for a similar scheme to defraud investors. The suit, which dealt with actions the firm took under Miers in the late 1990s, was again quite troubling. As the 9/20/00 Texas Lawyer reported, Miers’ firm helped a now-convicted con man "defraud investors and allowed the firm’s [bank] account to be used as a ’conduit.’" The suit said "money from investors that went into the firm’s trust account was deposited into [the con man’s] bank accounts and was used to pay for his ’expensive toys.’" (Read the entire story.)

The Associated Press followed up on Frank and Sirota's investigating. David Koening writes out of Dallas:
In 1998, the law firm, by then called Locke Liddell after a merger, found itself on the receiving end of lawsuits over two of its clients, Brian Russell Stearns and Russell Erxleben, a star football player at the University of Texas in the 1970s.

Erxleben's firm, Austin Forex Investments, placed short-term investments in volatile foreign currency markets. The investors contended Erxleben and Stearns used money from new investors to pay off old ones until the schemes unraveled. They also said Stearns often bragged that he used the same law firm as Bush.

The investors said they were cheated in part because Locke Liddell helped make the operations look legitimate and ignored signs of fraud and the selling of unregistered securities. They alleged that the law firm used its trust fund to direct millions in investor money to Stearns.

The lawsuit over Erxleben also named Locke Liddell partners Curtis Ashmos, Daniel N. Matheson III and Jane Matheson as defendants, and the case involving Stearns named another partner, Phillip Wylie. All but Ashmos have since left the firm.

In 2000, Locke Liddell agreed to pay Erxleben's clients $22 million, and in 2001 it agreed to pay $8.5 million to settle claims by Stearns' customers. (Read the entire article.)

Cynics may argue that this is just business law as usual. But others may insist that a person who is being charged with deciding the validity of our nation's laws should have a much better resume thansimply manipulating the law for the benefit of her well-heeled clients.

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