At the same time renegade law firm Milberg Weiss and its partners were raking in tens of millions of dollars allegedly conjuring fraud-tainted shareholder suits, they were using the proceeds to fund Senator Barbara Boxer’s 2004 re-election campaign.

The Center for Responsive Politic’s opensecrets.org website shows that for the 2004 election cycle, the firm Milberg Weiss and / or its partners and employees donated $31,500 to Boxer (D-Marin County) — making them her sixth largest contributor.

Milberg Weiss is infamous for shaking down companies with slumping stock prices, usually claiming that management misled shareholders.

But the Los Angeles Times noted “Its ability to find clients and launch class action lawsuits almost immediately — sometimes within hours of bad financial news — also had raised questions.” It now appears those questions will be answered by Federal prosecutors, who are far along in an investigation of whether Milberg Weiss illegally paid plaintiffs in suits brought by the firm.

Last week the Wall Street Journal reported (link to pay site) that the investigation is expanding in several new directions. Reuters summarized that article and the action to date:

U.S. prosecutors have stepped up their criminal probe of law firm Milberg Weiss, a specialist in class-action cases, and have given immunity to two former partners at the firm, The Wall Street Journal reported on Monday.

Milberg Weiss was implicated in a federal indictment unsealed in June against a client of the firm who allegedly accepted secret kickbacks to act as a plaintiff in more than 50 securities class-action suits.

… The newspaper said prosecutors have informed (former partner William) Lerach and two other former partners, David Bershad and Melvyn Weiss, that they could face indictment for conspiracy.

A WSJ editorial speculated that “criminal charges against Milberg Weiss partners, or even the entire firm, are possible.”

The kicker: Milberg Weiss and its affiliates have been Senator Boxer’s largest contributors from the legal industry. They also gave Boxer $44k in her first term, the 1998 cycle. They are her #4 all-time contributor.

So one of Senator Boxer’s most significant sources of funds, a firm of white collar ambulance chasers, is probably tainted by fraud. And any money that came from a Milberg Weiss profit participant — i.e, a partner — is tainted too.

Is Boxer going to return the funds to the contributors, like President Bush did last month when a contributor came under investigation for misuse of public funds? Better yet, will she take all her Milberg Weiss contributions and reimburse pro rata the companies and shareholders damaged by the actions of the firm that took their money and handed it to Boxer?

We’ll start the clock today.

We expect we’ll be waiting a long time. The Senator may have no moral issue with Milberg Weiss.

How can we think such a thing? Three reasons:

First, Boxer has shown a certain … flexibility in her fundraising before — see our post last week Fox News Conservative? Don’t tell Barbara Boxer or Her Pocketbook. If she took money from ideological opposite Fox, it seems she’ll take money from anyone.

Secondly, she seems to have no compunction collecting substantial contributions from the type of attorney who gives other lawyers a bad name. She received a total $1.5m in contributions from law firms and their affiliates in the 2004 cycle, more than from any other industry. But not just any type of law firm — Boxer is Exhibit A for the trial lawyer - Democratic party symbiosis. Of the six law firms among her 20 largest contributors in the 2004 cycle, only one — the smallest — seems to have a practice outside plaintiff work.

Money coming from these other plaintiff’s firms may be as dirty as that from Milberg Weiss (see: silicosis class action scandal, budding). She takes it anyway.

But the most significant reason we doubt that Barbara Boxer has any moral issue with taking money from Milberg Weiss is that they were more than a contributor. She promoted their interests — specifically, she supported drag-on-the-economy shareholder class actions.

Ten years ago, the Private Securities Litigation Reform Act of 1995 was intended to curb the worst shareholder class action excesses. Boxer acted against the interests of California technology companies and was one of only thirty senators who supported President Clinton’s veto of the bill. The veto was overridden. The next year, when Milberg Weiss partner William Lerach crafted California Proposition 211 to undermine the new federal law, she failed to oppose it (Sen. Diane Feinstein, among others, spoke out against it; it was defeated in a landslide).

Meanwhile, Milberg Weiss worked its way around the new rules and grew big and rich off of this type of suit. The firm was identified as one of the country’s eight largest litigation practices in 2004. The firm’s website claims over $45 billion in “recoveries.”

And the people involved continued to send some of that money to the Senator. Alignment of interests? “Access?” Quid pro quo? We’ll never know. But we’ll soon find out how much of it was tainted by illegality.

And then we’ll see if Senator Boxer does the right thing — which, difficult as it may be for her, will not be to blame President Bush for the entire mess. She should return the funds either to the contributors — unfortunately, Milberg Weiss and its staff — or, more appropriately and poetically, directly to the firms and shareholders they damaged.

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Update: Boxer is not the only Democrat tainted by Milberg Weiss’ ill-gotten contributions — Charles Schumer, John Edwards, and John Kerry, among others, also took money from the firm’s partners and affiliates. See our follow-up post here.

Update 2: For another embarrasing Boxer revelation, see our “Barbara Boxer’s Halliburton Connection”. We have an entire collection of posts about our least favorite Senator here.

factoid: Milberg Weiss partners and employees made a total $429k in political contributions during the 2003-2004 cycle; we could not find a single Republican recipient.

More on California’s annoying, lightweight junior Senator here.

Technorati Tags: Barbara Boxer, class action, contributions, Milberg Weiss, politics, shareholder

This entry was posted on Sunday, August 14th, 2005 at 9:30 pm by A Senior Administration Official and is filed under Barbara Boxer. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.