S.C. AG McMaster taking contributions from outside counsel he hired

John O'Brien Sep. 24, 2009, 4:00pm


COLUMBIA, S.C. (Legal Newsline) - As the State of South Carolina's case against Eli Lilly & Co. nears trial, state Attorney General Henry McMaster's relationship with the private attorneys he hires to pursue lawsuits is being questioned.

Records show that members of Harrison White Smith & Coggins in Spartanburg have contributed heavily in recent years to McMaster, who has announced that he will run for governor in 2010. He was a part of a five-person Republican debate Tuesday.

Thursday, a report by The Associated Press noted that he has received contributions from those he hired in the Lilly case, which is scheduled for trial Oct. 5. It also said State Ethics Commission investigator Cathy Hazelwood said there is a law prohibiting contractors from contributing to those who hired them.

McMaster's office did not return a message seeking comment.

John White of Harrison White gave $2,000 to McMaster in 2008, and John Simmons of Simmons Law Firm in Columbia, S.C., gave McMaster $7,000 ($3,500 in 2006 and 2008). The two, along with Houston-based firm Bailey Perrin Bailey, are representing the State in the Lilly litigation.

Other members of Harrison White who gave to McMaster include: Danny Smith ($2,000 in 2007 and $2,000 in 2008); Ben Harrison ($2,000 in 2007); and Donald Coggins ($3,500 in 2006).

The firm itself gave McMaster $3,500 in both 2006 and 2008.

In Aug. 2006, McMaster announced the State was filing suit against several pharmaceutical companies and seeking more than $40 million. Each in-state attorney has contributed to his campaign fund.

The companies sued were Abbott Laboratories, Baxter International, Dey, Boehringer Ingelheim Roxane and Schering-Plough.

Two out-of-state firms were contracted -- Beasley, Allen, Crow, Methvin, Portis & Miles of Montgomery, Ala., and President Barack Obama's former employer Miner, Barnhill & Galland of Chicago.

Of the in-state counsel, Stephen Schmutz of Schmutz & Schmutz in Charleston donated $3,500 to McMaster in 2008, as did Kate Schmutz. The firm also gave McMaster $3,500. Pete Strom of Columbia gave $3,500 in 2008, while T. English McCutchen of Columbia gave $3,500 in 2006 and Mike Kelly of Columbia gave $1,000 the same year.

The idea of state attorneys general hiring outside counsel on a contingency fee basis is currently being weighed by the Pennsylvania Supreme Court, where attorneys for Janssen Pharmaceutica argue that an attorney for a government agency should be motivated by justice instead of money.

Gov. Ed Rendell hired BPB to sue Janssen and received $75,000 in contributions from the firm, as well as more than $16,000 in airplane travel.

Such "pay-to-play" allegations have been made against other state attorneys general, like Mississippi's Jim Hood and West Virginia's Darrell McGraw.

McMaster did not try to hide the contributions during the debate Tuesday, admitting that he is accepting money from such firms.

"There's a lot of attorneys, a lot of non-attorneys, who have made contributions to me and my opponents," he said, according to The State.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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