Wednesday, Oct. 14, 2009

Donations from special counsel should be banned

IT SEEMS FAIRLY obvious that Attorney General Henry McMaster was right when he said it was legal for him to accept campaign donations from attorneys he had authorized to bring a lawsuit on behalf of the state.

The law his critics claimed he violated prohibits people from making campaign contributions to officials who awarded them a government contract. Although that term isn't defined in the law, as Circuit Judge Roger Couch explained in dismissing complaints made by the drug company that the attorney/campaign donors sued on behalf of the state, "there are huge differences between retainer agreements between Special Counsel and the Attorney General and commercial contracts between a municipality and its vendors."

Special counsel appointed by the attorney general are essentially awarded the right to gamble that they'll win a huge verdict if they're allowed to bring a lawsuit in the name of the state. If they succeed, they get a cut; if they fail, they have to eat their costs, which can be considerable.

But while that distinction is important when it comes to figuring out what currently is and isn't legal, it's all but meaningless in terms of what the law should be.

The purpose of the ban on contractor donations is to protect the public, by making sure that officials dole out state business based on the best interests of the state, rather than on their own hope of personal or political gain. It's the same reason that kickbacks are illegal.

Although being allowed to bring a lawsuit in the name of the state carries a degree of risk that conventional vendors don't have to assume, it also carries tremendous potential value. That's why, as he explained when he imposed more restrictive terms, Mr. McMaster was able to require anyone who wants to be named special counsel to shoulder all the risk of a lawsuit while severely limiting the potential reward. (In the largest cases, the contingency fee is less than 4 percent, and out-of-pocket expenses are circumscribed; the industry standard is at least 25 percent and expense reimbursements largely unchecked.)

Lawyers - especially lawyers of the caliber who generally are retained to bring suits on behalf of the state - would not agree to such terms if they didn't believe the potential benefits were enormous. And so the temptation to "reward" an elected official for that opportunity is just as great as it is for someone who wants to sell the state gasoline, or build roads or renovate state office buildings.

Judge Couch's order suggests that if the state tries to prohibit special counsel from donating to the attorney general rather than merely prohibiting him from accepting those donations, it could run afoul of the court's sensitivities (which in this case feel like a failure to distinguish between the attorney general's dual roles as client and political candidate). But that's an easy enough change to make, and there's no reason not to; our interest as citizens and taxpayers is, after all, less in policing the ethics of the private attorneys and far, far more in ensuring that our government is retaining the best counsel.

Mr. McMaster eventually decided to return the donation, as he should have. The Legislature should waste no time changing the law so future attorney generals don't face that same choice.

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