Milberg, Weiss, Hevesi, & Spitzer

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun
The New York Sun
NEW YORK SUN CONTRIBUTOR

What does a federal indictment in California have to do with state politicians in Albany? Potentially a lot, based on a review of campaign-finance records. A New York law firm implicated in a recent fraud case in California turns out to have contributed large amounts of money to New York politicians who are portraying themselves as foes of corporate fraud.


Last week, a federal grand jury handed up an indictment in which it charged Seymour Lazar of participating in a scheme to game the civil courts. Mr. Lazar allegedly received substantial kickbacks from his lawyers for agreeing to serve as the lead plaintiff in several class-action shareholder lawsuits. The indictment charges that Mr. Lazar received “millions of dollars in secret and illegal kickbacks” between 1981 and 2004. Doing so would be illegal, since named plaintiffs are required to avoid such conflicts of interest. Mr. Lazar pleaded not guilty on Monday; a trial has been scheduled for August.


Mr. Lazar’s name might not ring a bell in Albany, but the law firm’s should. The indictment itself leaves nameless the “New York Law Firm” that prosecutors believe paid the kickbacks. But a front-page Wall Street Journal article noted on Monday that the firm in question is widely understood to be none other than Milberg Weiss, class-action plaintiffs’ attorneys extraordinaire. Both the firm and its senior partners could be subject to charges down the road, the Journal said.


That’s the same Milberg Weiss that contributed $100,000 to Alan Hevesi’s successful campaign for comptroller in 2002, while senior partners Melvyn Weiss and William Lerach chipped in another $13,500 each as individuals. And the same Milberg Weiss that Mr. Hevesi’s office hired in 2003 to represent the state pension fund in a lawsuit against Bayer AG. Mr. Hevesi’s office denied any link between the contributions and the decision to retain the firm, as our William Hammond reported at the time. A spokesman for Mr. Hevesi, David Neustadt, said yesterday that, absent formal charges being filed, it would be premature to speculate as to how the comptroller might respond if the firm or its partners are indicted.


Mr. Hevesi isn’t the only one whose campaign has received contributions from Milberg Weiss. Attorney General Eliot Spitzer’s gubernatorial campaign has already received $15,000 from the firm, and another $35,000 from partner Melvyn Weiss as an individual, according to state campaign-finance records and Cynthia Darrison, managing director of Mr. Spitzer’s campaign. That’s on top of at least $3,000 the firm contributed to Mr. Spitzer’s 2002 campaign for attorney general.


Milberg Weiss, incidentally, was one of the law firms that sued insurer Marsh McLennan while Mr. Spitzer’s office was investigating the company in the fall of 2004. The firm also filed dozens of suits against the mutual fund companies Mr. Spitzer investigated so vigorously. Ms. Darrison says that, since neither the firm nor Mr. Weiss has been indicted, the campaign has no plans to return any of the donations. She declined to speculate on what the campaign might do if an indictment is issued down the road.


Between October 2000 and May 2003, Milberg Weiss contributed at least $90,000 to the New York State Democratic Committee. Mr. Weiss contributed another $10,000 personally in 2001, while Mr. Lerach contributed $10,000 himself in 2004. And, although the bulk of the donations went to Democrats, Republicans also cashed in, to the tune of $2,500 from the firm to the state GOP Senate campaign committee in 2002. Mr. Lerach contributed $12,000 to Friends of Pataki in 2001 and 2002. The governor will take a look at the situation as the case proceeds, a Pataki spokesman, Kevin Quinn, told The New York Sun yesterday.


In a written statement, the firm said that “the indictment unfairly implicates the firm in the wrongdoing alleged against Lazar” and that it “rejects [the charges] as baseless.” Mr. Lerach, who left Milberg Weiss last year but was a partner at the firm during the period of time covered in the indictment, could not be reached for comment. They are all entitled to the presumption of innocence. We find Mr. Weiss personally likable, and he played an important role in Holocaust restitution.


Our concern has more to do with the standards of our public officials, and, by our lights, it doesn’t look good that, so far at least, Messrs. Hevesi and Spitzer, who top the list of individual recipients and who have either done official business directly with Milberg Weiss or launched investigations the outcome of which could benefit the firm, don’t seem more concerned about the alleged activities of their donors and colleagues. It’s one case of alleged fraud in which Messrs. Spitzer and Hevesi seem uncharacteristically willing to leave the investigation to the federal law enforcement officials.

The New York Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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