CON: A.G. Lawsuits - Legislature should halt hounding of companies that create jobs

April 11, 2014 

By Tiger Joyce

When the Kentucky executive branch contracts for outside expertise and services, the process is largely transparent to the public and subject to legislative oversight.

Such good-government transparency helps ensure that Kentucky taxpayers get the best value for their money.

But Attorney General Jack Conway refuses to share comparable details of the various arrangements made with the private sector personal injury lawyers he's hired to conduct lawsuits on behalf of the state, any number of whom have contributed to his campaign coffers.

And contrary to our constitutional system of checks and balances, which generally leaves to the legislative branch of government the authority to decide how state funds are spent, Conway apparently believes that it is his unilateral right to decide how funds derived from state lawsuits should be distributed.

But Kentucky's Senate recently passed two reform bills that put the state on a path already traveled by 15 other states where citizens had grown tired of the scandalous pay-to-play relationships between state officials and private-sector personal injury lawyers.

Instead of having state staff attorneys prosecute potentially lucrative state lawsuits, officials hire outside lawyers on a contingency-fee basis for such jobs and, not coincidentally, those lawyers often end up kicking back generous campaign contributions to the officials who hired them.

The Senate-passed bills would rein in this racket. Senate Bill 223 would reestablish the legislature's primary authority over the appropriation of funds derived from state lawsuits on behalf of citizens and taxpayers.

SB 198 would establish a long overdue competitive bidding process for the state's hiring of outside counsel with reasonable limits on contingency fees, legislative oversight and a requirement that state attorneys ultimately remain in charge of all state litigation.

Now it's time for the House to pass this legislation, too, and send it along to Gov. Steve Beshear for final enactment. To do otherwise would be to support a corruptible status quo that puts Kentucky's economy at risk.

How so? It's simple really. When a state attorney general or other politically ambitious officials put their self-interest and that of profit-maximizing personal-injury lawyers above the public's interest in even-handed justice, it is rarely long before business decision-makers from across the country (and even from around the world) begin to see that state as a bad place to expand or relocate.

If a shamelessly populist state attorney general is going to act like a small-town sheriff with a speed-trap in the days before the interstate highway system, ginning up lawsuits to fleece job-creating and tax revenue-producing companies, those companies will naturally be less inclined to do business in that state.

Kentucky's unemployed and underemployed citizens don't need more specious lawsuits that put money in the pockets of politicians and personal injury lawyers. They need good jobs, and it's up to lawmakers and the governor to make sure that happens — regardless of the objections Conway may raise.

In defending the game he's been running, Conway recently said that since 2008, his office "has returned more than $260 million to state coffers, which is a 400 percent return on its investment." He sounds like he'd be more comfortable on Wall Street. But House lawmakers should now make it clear to him, by following the Senate's reform lead, that Kentuckians don't want a financial wizard as their attorney general. They want an honest and open champion of the public interest.

Tiger Joyce is president of the American Tort Reform Association, based in Washington, D.C.

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