More pay-to-play from Team Obama. The Obama regime is prosecuting whistle-blowers at record pace and the whistle-blower’s attorneys are giving Obama huge amounts of campaign cash.
As the Obama administration has cracked down on corporate fraud, lawyers representing whistle-blowers have reaped multimillion-dollar rewards. Now, as they seek to sustain these historic payouts, they are donating generously to the president’s re-election campaign.
Still not crackdown on the financial fraud committed by the bailed-out banks due to several members of the DOJ, including Eric Holder, representing many of these fat-cat fraudsters while at Covington & Burling.
Lawyers in the tight circle who specialize in filing fraud claims with the federal government on behalf of clients with evidence of wrongdoing have raised more than $3 million so far for President Obama. The government, meanwhile, has paid out $1.6 billion to whistle-blowers during his tenure, with law firms taking a cut in some cases of up to 40 percent of the proceeds.
The lawyers have contributed directly to Mr. Obama’s campaign, served as “bundlers” who solicit contributions from others, donated to the Democratic National Committee and written large checks to Priorities USA, the “super PAC” supporting Mr. Obama’s re-election efforts. They have also donated heavily to Congressional Democrats.
Their support comes as Mitt Romney, the Republican presidential nominee, has called for repeal of the Dodd-Frank Act, which imposed new oversight of the financial services industry and expanded the government’s whistle-blower program to the Securities and Exchange Commission, which has set aside $430 million for payouts. Business groups have also pushed for legislation imposing a cap on payments to whistle-blowers, arguing that rewards reaching as high as $104 million, as happened in one case, have turned anti-fraud efforts into a lottery.
“The risks are enormous there will be real pullback because of pressure from the industry that has paid billions in penalties,” said John R. Phillips, one of the nation’s top lawyers for whistle-blowers, who has raised more than $200,000 for Mr. Obama’s re-election from colleagues, after first working in 2008 to help Mr. Obama get elected.
The fund-raising is already a flash point in Washington, where lawmakers have been divided along partisan lines over the administration’s efforts to regulate the financial industry and the political parties have long been at odds over trial lawyers and class-action suits. On the campaign trail, Mr. Romney has cast himself and fellow Republicans as champions of business and the president and Democrats as hostile to business interests.
The U.S. Chamber of Commerce, which represents many of the companies that have been targets of the whistle-blower investigations, has criticized the lawyers’ efforts, particularly their aggressive outreach for potential clients.
“If someone is defrauding the federal government or investors, they should have the book thrown at them,” said Matt Webb, senior vice president for legal reform policy at the U.S. Chamber Institute for Legal Reform. “But increasingly, this is not just about exposing wrongdoing. It is about trying to generate as much money and fees for the firms handling the cases.”
Then these lawyers donate millions to help re-elect Obama. Pay to play baby. It’s the Chicago-way.
Some of the lawyers in the field, including several from Mr. Phillips’s firm, played a central role in advising the Securities and Exchange Commission on the rules creating its whistle-blower program, including a provision to broaden the list of who was eligible to file a claim. In the last year, law firms that represent whistle-blowers have hired several top S.E.C. officials who helped write those rules. They include Jordan Thomas, who has started a new S.E.C. whistle-blower unit at Labaton Sucharow, a New York firm whose employees have contributed to the Obama campaign.
…The single biggest fund-raiser is John Morgan, a Florida lawyer. He has collected more than $1.7 million for Mr. Obama’s re-election or for the Democratic National Committee, making him one of the campaign’s biggest bundlers nationwide. He has also raised money for Elizabeth Warren, the Massachusetts Democrat running for the United States Senate. Ms. Warren served as interim head of the Consumer Financial Protection Bureau, also created as part of the Dodd-Frank law.