Readers of these columns may recall that in the spring we remarked on the lawsuit brought by the state comptroller, Alan Hevesi, against Citigroup and 16 other banks on behalf of WorldCom stock and bondholders. We noted that the two law firms that stood to “earn” a $144.5 million legal fee from the Citigroup settlement had directly or indirectly, through committees and associated individuals, poured a total of $121,800 into Mr. Hevesi’s campaign coffers in the year before an aide to Mr. Hevesi signed a retainer agreement with the firms stipulating that the legal fee “is presumptively fair, adequate and reasonable.”

Now, the litigious Mr. Hevesi is at it again. Last week, he sued Merck & Co. and eight current and former Merck employees on behalf of the New York state common retirement fund. And sure enough, one of the two law firms that Mr. Hevesi has hired is a major campaign contributor. Individuals associated with the law firm Abbey Gardy LLP sank a total of at least $115,500 into Mr. Hevesi’s campaign in 2002.Now Abbey Gardy stands to win a gargantuan legal fee if its litigation against Merck is successful.

In Mr. Hevesi’s defense, he also hired another law firm, Entwistle & Cappucci. That firm and individuals associated with it gave $40,000 to William Mulrow, a Democrat who ran against Mr. Hevesi in the primary, and $25,000 to John Faso, Mr. Hevesi’s Republican opponent. So it, too, was trying to help elect a state official who would be in a position to steer it work.

The point is not to restrict potential state contractors from participating in the democratic process by donating to candidates. Nor is the point to cast any doubt on whether the comptroller did anything illegal. No one has accused him of such. But this is evidence of the old saw about the scandal being not what’s illegal but what’s legal. The fees in these class-action cases are so outsized that winning the chance to represent the New York State pension fund in a case like this is like winning the lottery.

Because the inevitable settlements are often accompanied by admissions of no wrongdoing, moreover, they do little to serve justice in a larger sense. Shareholder suits against companies, like Merck, whose stock has fallen have their own distorting effect on the markets. After all, the reason stocks overall pay a higher return than other, less risky investments is that there is a greater risk. Mr. Hevesi wants the return of stock ownership, but he’s unwilling to accept the risk. As a Merck shareholder, Mr. Hevesi is essentially suing himself, which would have its own illogic but for that insurance companies – some of whose stocks are also owned by the New York pension funds – may potentially cover some of Merck’s liabilities.

We’ve been asking the comptroller for several days now what the process was by which this legal work was awarded. In general, when it comes to government contracts for services worth tens or hundreds of millions of dollars, there is a request for proposals and a transparent bidding process by which government can drive down the cost. But now that Mr. Hevesi has handed out this potentially lucrative assignment to a big campaign contributor, the proverbial cat seems to have got his tongue.

So we called Arthur Abbey,a partner at Abbey Gardy who wrote a $44,000 check to Mr. Hevesi’s campaign in March of 2002. Asked how his firm was chosen to represent Mr. Hevesi in the Merck case, Mr. Abbey told us, “I can’t tell you…It’s like how you come to get a gift. It was his decision.” He said that the fee structure he agreed to is “remarkably low” and that he has a distinguished record in securities litigation. “As far as I am concerned, it is a merits decision,” he said.

Until Mr. Hevesi makes this hiring process more transparent – and less lucrative for the lawyers – he can expect the questions to keep coming about the lawyers he is hiring, the donations they are making, and the fees they are collecting.