Bill Saracino
June 28,  2004

While U.S. Attorney for New York, Rudy Guiliani devised an exceptionally effective way to cripple organized crime – cut off their funding.  Instead of “show arrests” of dons and capo regimes, Guiliani went after their “fronts” – businesses which supplied their operating capital.  Guiliani was devastatingly effective in reducing the scope and influence of New York’s Tony Soprano wanna-be’s.

Just as the Soprano empire relies on the Bada-Bing club to supply endless cash, so does today’s Democrat Party rely on the trial lawyers. The litigious legions of the plaintiff’s bar are now the largest contributors to both the national and California Democrat Party, outstripping even public employee unions. 

Considering the low regard most voters have for trial attorneys, the Democrats have paid little price for this alliance.  The latest punitive damage award outrage (millions of dollars for spilling coffee on yourself) occasionally rouses public ire, but the Democrats mostly get a free ride.

A case may be brewing here in California that could help unmask the trial lawyer money machine and heighten public awareness of their scams. Last year, Public Interest Watch (PIW), a national group that monitors non-profit organizations, filed complaints – which are still pending - with the IRS and the Franchise Tax Board against a group with the innocuous sounding name of California Advocates for Nursing Home Reform (CANHR). The complaint charged CANHR with abusing its non-profit tax status by operating a “lawyer referral service and other programs aimed principally at benefiting lawyers rather than the public”.

During the period examined by PIW, in the guise of helping nursing home residents sue for abuse, trial lawyers pocketed over $2.5 million in legal fees from cases referred by CANHR.  In return, CANHR collected a tidy $450,000 in “referral fees”.  There’s no telling how much of the $2.5 million ended up in Democrat campaign coffers, though $2.5 million is a small fraction of total trial lawyer contributions to Democrats.  

CANHR’s website makes prominent mention of its lawyer referral service, not alerting its readers that the service is a major cash cow for this “non-profit”.  The organization also conducts attorney training seminars, publishes training manuals and legal newsletters and even acts as a front man in cases brought by the lawyers who use its referral service.

The group’s latest targets are estate planners who are not attorneys. CANHR and the trial lawyers are – surprise- vehemently against allowing anyone who is not an attorney help senior citizens set their affairs in order. Having gone through this with my own father I can testify that unless an estate is particularly complex, there is no practical need for an attorney except at the very end, to give the documents a once over.  But if CANHR gets its way it would be a crime for any non-attorney to assist seniors in these matters.   This certainly buttresses PIW’s assertion that the organization “appears to be run principally for the benefit of private attorneys” instead of for nursing home residents.

Adding to the mix, Assemblyman Ray Haynes has just (June 10) formally asked Attorney General Bill Lockyer to investigate CANHR.  In a press release Haynes said that rather than protecting the elderly from nursing home abuse, what it does in reality is “provide a referral service for a panel of private attorneys, conduct legal training seminars and provides support for private litigation. They (CANHR) are a group of attorneys using a misleading name in order to troll for clients to sue nursing homes”.

Bill Lockyer is as big a feeder at the trial attorney teat as any Democrat, so I wouldn’t hold my breath for an in-depth investigation.  But people of good will in all parties interested in cleaning up California should not let this die.  There is at least the appearance that CANHR serves the trial lawyers in exactly the same way the Bada-Bing serves Tony Soprano – as a source of ready cash. The Department of Consumer Affairs, now under the command of a Governor free from the grip of the trial lawyers, ought to vigorously investigate this issue.  Like-minded worthies in the legislature should also put their shoulders to the wheel. There is no reason Ray “Lionheart” Haynes should be alone in his effort.

Trial lawyer tentacles have for years been squeezing the life out of California’s business competitiveness while at the same time stuffing Democrat coffers full of litigation-generated cash.  This current imbroglio might offer a chance to truncate one of those tentacles.  Anyone for some octopus sushi?

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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