Two parasites
Posted on 09/22/2007 7:17:26 PM PDT by South40
His influence forced Silicon Valley's hand
SACRAMENTO – During the peak of his power, William S. Lerach was feared and despised by Silicon Valley executives, not just for his shareholder lawsuits against them but also for his mastery of the political system. The San Diego lawyer did something that high-tech executives didn't: He systematically donated to politicians.
During his more than three decades as a donor, Lerach and members of his two law firms have given millions of dollars to officeholders and candidates, almost all Democrats, including a president, senators, governors and even Assembly members.
Lerach, 61, has helped elect people who share his belief in keeping the courtroom doors open for shareholder lawsuits.
But his most important legacy as a political player may be that he spurred his enemies in the high-tech industry to become a political powerhouse in their own right.
Lerach – who pleaded guilty in a plaintiff-kickback scheme Tuesday – had a deserved reputation for being aggressive not only in court, but also in the political system, where he sought to tilt the rules in favor of his law business. High-tech executives felt they had no choice but to get on the playing field.
As a result, technology companies have transformed national politics into a more friendly environment for their agenda of increasing visas for skilled foreign workers, opposing Internet taxes and overhauling education. Their early backing of Democrats gave the party a new source of campaign cash and something that had seemed largely the province of Republicans: business support.
Some technology company leaders trace Silicon Valley's new clout to December 1995, when Lerach was seen talking with President Bill Clinton at the White House.
A few days later, Clinton vetoed legislation that would limit the type of shareholder suits that made Lerach and his former law firm wealthy.
His former law firm, Milberg Weiss, typically filed fraud suits against companies that had experienced a sharp drop in their stock prices, which frequently occurred among volatile high- tech companies. Companies often settled out of court.
Lerach and his allies saw Clinton's veto as good policy to help investors battle corporate fraud.
But high-tech executives saw the veto as a blunt power play by a lawyer with extraordinary political influence.
“It was an eye-opener for Silicon Valley when they saw that the Clinton administration had good relations with this guy,” said Sean Garrett, who works for a high-tech communications company, 463 Communications.
Eventually, Congress overrode the veto, with the support of many Democrats and Republicans.
Lerach wasn't deterred.
A few months later, in 1996, his law firm spent millions of dollars to qualify a measure for the state ballot, Proposition 211, which would have made it easier to file shareholder suits in California courts.
As high-tech executives worked to defeat the measure, they realized they needed a permanent political presence.
They sought to counteract Lerach's influence by forming TechNet, an organization to push the technology agenda in Sacramento and Washington, D.C.
“It was the day that Silicon Valley grew up,” Garrett said. “Before then they were completely ineffectual and uninvolved. They weren't organized.
TechNet helps provide sympathetic politicians with the technology industry's stamp of approval. Garrett, who works for TechNet, said Lerach was the spark that lit the fire under Silicon Valley.
During the Proposition 211 campaign, software entrepreneur Tom Proulx told the Recorder, a San Francisco legal newspaper, that “politics is a cultural anathema to Silicon Valley” because executives were busy building their companies.
But, Proulx said, “people are finally starting to realize that it's a game we have to play.”
Since then, high-profile executives, including venture capitalist John Doerr and Cisco Systems Chief Executive Officer John Chambers, have become state and national political figures.
During the 1994 election cycle, officials in the computer industry ranked 41st among industry groups in their donations to federal candidates, contributing $4.6 million, according to the Center for Responsive Politics. By the 2000 cycle, the high technology industry had leaped to eighth place, donating $39 million, according to the center.
“Silicon Valley has taken its place alongside Hollywood and Wall Street as a must-stop area for politicians,” Garrett said.
Unlike Lerach, technology companies generally give to Democrats and to Republicans.
But even many Democrats believed Lerach had gone too far with Proposition 211. President Clinton, U.S. Sen. Dianne Feinstein and then-Senate President Pro Tempore Bill Lockyer, who is now the state treasurer, all came out against the measure. It was easily defeated.
Tech companies began to be more politically active, while Lerach continued to be a major donor.
During the past two decades, Lerach and his family have contributed more than $1.6 million to federal candidates and hosted a fundraiser for President Clinton at his Rancho Santa Fe home.
He has also given hundreds of thousands of dollars to state officials, including more than $200,000 to former Gov. Gray Davis, a Democrat.
Lerach was so notorious among executives that Republican gubernatorial candidate Dan Lungren briefly made him a 1998 campaign issue.
Lungren claimed that Davis might appoint Lerach to the state Supreme Court, a claim that wasn't taken seriously. For one thing, it would have forced Lerach to take a pay cut of many millions of dollars each year.
Last week, Lerach pleaded guilty to conspiracy while at his old firm of Milberg Weiss for participating in a scheme to pay kickbacks to recruit plaintiffs for 150 class-action lawsuits against U.S. companies.
He agreed to forfeit $7.75 million in unlawful gains, pay a $250,000 fine and accept a prison sentence ranging between one and two years.
Yea, this made all the major news...not.
If a Republican, MSM wall to wall
Two parasites
As a long time Silicon Valley professional and resident — I truly hope that this leach of a lawyer meets a 300 pound “bubba” in prison and that Bubba falls in love with the sweet talking lawyer.....
Hope disbarment was included.
Dirty thieving pirate, rot in jail. May you soon be joined by many hundreds of thousands of your other filthy greedy scum-sucking compatriots.
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