Tuesday, September 23, 2008

Public Corruption costs us all

no matter where we live in the US.

[click here] for a post on the Connecticut Attorney General

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Are campaign contributors buying justice?
Sunday, September 21, 2008

For 10 years, Hugh Caperton, a financially debilitated coal producer from southern West Virginia, and the Pittsburgh attorneys who represent him have waged a courtroom war against Massey Energy CEO Don Blankenship, one of West Virginia's most powerful businessmen.

Massey Energy CEO Don Blankenship, one of West Virginia's most powerful businessmen.

Chief Justice Elliott "Spike" Maynard recused himself after damaging pictures of him and Mr. Blankenship on a 2006 Mediterranean vacation were filed with the court.

West Virginia Supreme Court of Appeals Justice Brent Benjamin cast the decisive vote against Mr. Caperton's business.

Their next battle could be fought in the U.S. Supreme Court. Mr. Caperton claims he was denied a fair hearing in West Virginia's highest court, which he says was under the influence of Mr. Blankenship.

"Personally and professionally, it's pretty well ruined me," says Mr. Caperton, a cousin of former West Virginia Gov. Gaston Caperton. "To go through that battle for 10 years and to lose on a 3-2 decision in a certain Supreme Court that in my opinion obviously had an agenda is dispiriting and disgusting."

Before the dispute started, Mr. Caperton was the owner of Harman Development Corp., whose 150 workers produced 800,000 tons of coal annually.

"Today, that operation is in shambles. It's gone," he says.

Since suing a Massey affiliate in 1998, Mr. Caperton has divided his time between trying to put his business back on its feet and pursuing Mr. Blankenship. The Daniels, W.Va. resident has survived a bout with kidney cancer and, in December, a fall that broke bones in his back and foot.

"There's a tremendous amount of pressure and tension in what we've done," said Mr. Caperton, who gives his age as "an old 53."

The constitutional issue Mr. Caperton wants the court to hear -- whether the integrity of the nation's courts is threatened by campaign contributions to judicial candidates -- transcends his problems.

Reformers backing his appeal say money is jeopardizing justice in many more places than West Virginia. They want the high court to issue clearer guidance on what circumstances require elected judges to disqualify themselves from hearing cases that involve contributors to their campaigns.

"Where outsized judicial contributions ... create the perception that legal outcomes can be purchased, economic actors will lose confidence in the judicial system, markets will operate less efficiently and American enterprise will suffer," lawyers for the Committee for Economic Development wrote in a brief supporting Mr. Caperton's request for a hearing.

Enormous sums

The business group is not the only party concerned by the increasing sums being contributed to judicial candidates. Nationwide, state supreme court candidates raised over $165 million between 1999 and 2007 compared to $62 million over the previous six years according to the Justice at Stake Campaign.

The Washington, D.C. coalition of judicial reform groups ranked Pennsylvania fifth, with contributions totalling $13.4 million compared to $36.4 million in No. 1 Alabama.

"The court has to be concerned with things like this," says Duquesne University law professor Ken Gormley. "If they [the Supreme Court] are going to face this issue seriously ... [the Caperton case] seems like a very attractive case to do it."

Mr. Caperton's complaint involves $3 million in campaign contributions made by Mr. Blankenship and the candidate who benefited from them: Charleston attorney Brent Benjamin, who won a seat on West Virginia's Supreme Court of Appeals in 2004.

Nearly $2.5 million of Mr. Blankenship's money went to "And For The Sake Of The Kids," an organization that wanted to oust incumbent Justice Warren McGraw, saying his decisions were soft on crime and hurt the state's business climate. Mr. Blankenship also spent more than $500,000 on newspaper and television advertisements and other activities directly supporting Mr. Benjamin.

Three years after the election, the W.Va. Supreme Court overturned a 2002 lower court decision that ordered a Massey affiliate to pay $50 million in damages for fraudulently interfering with Mr. Caperton's business. Justice Benjamin cast the decisive vote in the 3-2 decision, announced in November.

Chief Justice Elliott "Spike" Maynard recused himself while the court was considering rehearing the case, after damaging pictures of him and Mr. Blankenship on a 2006 Mediterranean vacation were filed with the court in January. So did Justice Larry Starcher, who had publicly criticized Mr. Blankenship's campaign contributions. After Justice Benjamin appointed two justices to take their place, the case was reheard, with Massey winning by the same 3-2 margin.

Along the way, Justice Benjamin denied three requests to disqualify himself. The requests were made by Mr. Caperton's attorneys, David Fawcett of Buchanan Ingersoll & Rooney and Reed Smith's Bruce Stanley.

Justice Benjamin's refusal to recuse himself in light of Mr. Blankenship's contributions "created a constitutionally intolerable appearance of bias," the attorneys wrote in a July 2 petition to the U.S. Supreme Court.

Long, costly battle

Mr. Fawcett says Mr. Blankenship typifies "everything that is wrong with Corporate America today."

Mr. Fawcett, 50, is the son of a former president of the Allegheny County and Pennsylvania bar associations. He was a public high school teacher before earning his law degree from the University of Pittsburgh. As a Republican member of the Allegheny County Council, the Oakmont resident cast the deciding vote approving the controversial 10 percent drink tax.

Mr. Stanley, 48, filed the pictures of the justice and Mr. Blankenship with the court. He is a former journalist from Mingo County, W.Va., the same coal mining area that produced Mr. Blankenship and Chief Justice Maynard. He left journalism to study law at West Virginia University, where he was editor of the school's law review.

Mr. Caperton's opponent is not one to shy away from a fight. Mr. Blankenship organized enough opposition to defeat West Virginia Gov. Joe Manchin's 2005 pension bond referendum and sued the Democrat, claiming his coal companies were singled out by state regulators because of his political activities. Mr. Blankenship is also suing the West Virginia Supreme Court over the way justices decide whether to disqualify themselves.

"It's been a great challenge to stand up to a company willing to devote enormous resources to derail or delay justice," says Mr. Fawcett, adding that witnesses testified Mr. Blankenship warned Mr. Caperton not to sue Massey because the company would drag the case out for years.

Mr. Fawcett also sued Massey on behalf of Wheeling-Pittsburgh Corp., which accused Massey of violating terms of a coal supply contract. The steelmaker, now owned by Russian producer Severstal, was awarded a $240 million verdict in July 2007. West Virginia's supreme court declined to hear Massey's appeal, an action the coal producer is appealing to the U.S. Supreme Court.

"The fight against Massey has been a big chunk of my time, a lot more than I expected the first day I met Hugh Caperton back in 1998," Mr. Fawcett says.

Mr. Fawcett and Mr. Stanley have enlisted powerful allies to overcome the long odds of getting their case before the U.S. Supreme Court by hiring former U.S. Solicitor General Theodore B. Olson as their lead counsel. Mr. Olson's Supreme Court credentials include representing George W. Bush in the contested 2000 presidential election and a 1986 case that provided the last major ruling on the recusal issue.

That case involved an Alabama judge who reviewed a decision against an insurance company while he was pursuing a similar claim against the same insurer. The court ruled judges must disqualify themselves if they have a personal interest in the outcome of a case.

Grounds for recusal

Forty-seven states, including Pennsylvania and West Virginia, require judges to recuse themselves when their impartiality might reasonably be questioned. Interpretations of the guideline vary. Some, including Justice Benjamin, believe a judge should be disqualified only when there is evidence of bias.

"Disqualification of a publicly elected judge is appropriate when the motion is supported by a factual basis," Justice Benjamin wrote in denying one of Mr. Caperton's recusal motions.

In a brief asking the Supreme Court not to take up Mr. Caperton's appeal, Massey's attorneys stated that Mr. Fawcett and Mr. Stanley did not allege that Justice Benjamin was biased, "which is required to trigger recusal under due process." Justice Benjamin had no financial interest in the outcome of Mr. Caperton's case so he was not required to disqualify himself, they argued.

Chief Justice Maynard said he would have been fair and impartial. However, he recused himself from Massey cases because "the mere appearance of impropriety, regardless of whether it is supported by fact, can compromise the public confidence in the courts."

Studies analyzing whether campaign contributions taint a judge's impartiality have produced mixed results, according to Malia Reddick of the American Judicature Society, a judicial reform group in Des Moines, Iowa.

"But it doesn't matter whether you can establish that methodologically or not. It's the perception that's going to be there and that's what matters," Ms. Reddick says.

There's also the issue of what amount of contributions should trigger disqualification. Legal scholars say there can be no strict standard because the costs of running a campaign vary from state to state. The $3 million Mr. Blankenship spent in West Virginia would not have had the same influence if others had contributed more to the race or if the campaign had been waged in a larger state, they say.

There's no way to tell if the Supreme Court will agree to hear Mr. Caperton's case. Last year, it refused an appeal involving campaign contributions thatindividuals and organizations associated with State Farm Insurance made to an Illinois supreme court justice in 2004. The next year, that justice cast the deciding vote when the court threw out $456 million of a more than $1 billion verdict against the insurance company.

That case involved many contributors who accounted for a smaller percentage of overall contributions, while Mr. Caperton's case involves one executive who provided more than half of the money used to elect a judge.

"That's why this is a good clean case," Mr. Fawcett says. "As soon as people start to think there's a possibility justices can be affected by campaign contributions, quickly you're at a point where the pillars of the system can collapse."

Shortly after the Supreme Court returns to work next month, Mr. Fawcett and Mr. Stanley expect to hear whether justices will consider Mr. Caperton's case, which began Aug. 5, 1997 when a Massey affiliate started a chain of events that Mr. Caperton alleges resulted in the bankruptcy of Harman Development.

Five days later, Mr. Caperton's daughter was born. She is now 11 and in the sixth grade, proof that the wheels of justice can turn slowly.

"It's been a long journey and a long ordeal, but we're still fighting," says Mr. Caperton. "I'll continue to fight for what is right for as long as it takes."

Len Boselovic can be reached at lboselovic@post-gazette.com or 412-263-1941.
First published on September 21, 2008 at 12:00 am

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