HARRISBURG, Pa. (Legal Newsline) - A contingency fee contract awarded to a Houston firm by Pennsylvania Gov. Ed Rendell is the ultimate example of "pay-to-play," the Washington Legal Foundation recently argued.
The WLF submitted an amicus brief Aug. 11 in Janssen Pharmaceutica's challenge of the contract given by Rendell to Houston-based plaintiffs firm Bailey Perrin Bailey to sue the company. The closely watched issue is currently before the Pennsylvania Supreme Court.
The brief calls the agreement "offensive to Commonwealth contracting policies" and says it "takes pay-to-play to new heights."
"The contract at issue here, effective in Nov. 2006, was awarded amidst a wave of unprecedented out-of-state political contributions by F. Kenneth Bailey," the brief says.
"In addition to more than $116,000 in campaign contributions from Mr. Bailey himself, the Governor's campaign committee in 2006 was the beneficiary of largess from Mr. Bailey's prior law firm - Williams & Bailey - which continued to use his name after he left, and from John E. Williams, Jr., the other name partner of that firm."
Bailey gave $75,000 to Rendell and provided more than $16,000 in air travel. He also gave $25,000 to the Democratic Governors Association that year.
The brief says Williams contributed $25,000 to Rendell and provided $20,000 in air travel. The firm Williams & Bailey contributed $50,000 to Rendell.
"Should there be a recovery of the 'millions' of dollars that the complaint alleges are at issue, this apparent investment in Pennsylvania's pay-to-play political system would pay off most handsomely," the brief says.
The case involves alleged off-label marketing of the prescription drug Risperdal. The Court will rule on:
-Whether Janssen lacks standing to seek the disqualification of BPB on the basis of alleged violations of constitutional law;
-Whether Rendell's office is allowed to enter into a contingent fee agreement with BPB;
-Whether BPB should be disqualified because the General Assembly did not authorize the contingent fee contract; and
-Whether BPB should be disqualified because it has a direct financial interest in the outcome of the litigation.
After setting up a meeting between Republican Attorney General Tom Corbett and BPB, Rendell decided to hire BPB himself. Corbett was not impressed with BPB's evidence at the meeting and declined to have his office file the suit.
Attorneys for Janssen are not making the argument for BPB's disqualification based on the contributions given to Rendell, but have mentioned them in several briefs.
Attorneys for Janssen argue that counsel representing a government office should be motivated by justice, not money, and that BPB is controlling the decision-making instead of someone from the Office of General Counsel.
The WLF argues that the due process clauses of the U.S. and Pennsylvania constitutions are being violated, and that the appearance of impropriety surrounding the contract requires BPB's disqualification.
"The retention of Bailey Perrin occurred in a manner that permits no one, least of all those responsible for that non-bid contract, to assert that the public interest or the taxpayers have been well served," the brief says.
"There was no legislative authorization of this contract. There are no records of hearings, findings, bids or contemporaneous notices to support any favorable assessment of the arrangement.
"In short, there are no objective criteria that stand in opposition to the overpowering appearance of impropriety that exists here."
The brief also quotes Robert Pratter of the Office of General Counsel. Rendell has maintained that there was no pay-to-play in the awarding of the contract.
"The potential for misconduct that is created by the appointment of an interested prosecutor is not outweighed by the fact that counsel... may often be most familiar with the allegedly contumacious conduct," Pratter said.
"That familiarity may be put to use in assisting a disinterested prosecutor... but cannot justify permitting counsel for the private party to be in control of the prosecution."
The WLF is a public interest law and policy center that devotes a substantial portion of its resources to defending free enterprise and a limited and accountable government, it says.
Bailey has contributed heavily in other states, also giving $75,000 to Mississippi Attorney General Jim Hood, who hired BPB to pursue a claim against Eli Lilly & Co.
In Louisiana, another state BPB is representing in litigation, Bailey gave $20,000 to the state's Democratic Party. In Arkansas, which hired BPB for a suit against Janssen, he gave $70,000 to the Democratic Party in 2006.
Arguments before the Pennsylvania Supreme Court are scheduled for Oct. 21.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.