Governors, better start taking good notes. If you thought you were having money woes already, wait until the American Legislative Exchange Council comes to town Actually, they’ve probably already been there (and yes, we know you know).
ALEC and the big corporate members who control its agenda have a thing – a very big thing – against state Attorneys General (see more here), especially the ones who target corrupt and harmful corporate practices and force these big corporations to pay the state back – with millions or sometimes billion of dollars. (Note that these lawsuits don’t cost the state a thing even when the AG brings in outside help, because fees are all paid by the companies – not the taxpayers.)
So for example, in the late 1990s, state attorneys general in 46 states forced the tobacco industry to settle for more than $200 billion to reimburse states for having shelled out huge funds (via state Medicaid budgets) to pay for one of the biggest public health disasters in modern times - the one caused by cigarette smoking. These lawsuits also exposed the industry’s corrupt practices, uncovering for the first time how it promoted addiction through manipulation of nicotine levels, engaged in a secret campaign to hook teens and even pre-teens and lied to government officials and the public. (See more in this CJ&D fact sheet.)
Turns out that getting fraudulent and in some cases criminal corporations to pay states back (not to mention taxpayers who were hurt or ripped off) is just something state AG’s do, thank goodness. There are countless other examples.
Like in October 2008, when Eli Lilly settled with 33 state AG’s over Lilly’s marketing of the anti-psychotic drug Zyprexa. Somewhat like the tobacco companies, Lilly had deliberately kept information from doctors and consumers about Zyprexa’s links to severe weight gain and elevated blood sugar, both known risk factors for diabetes, because it would weaken sales. What’s more, several state AGs pursed individual lawsuits against Lilly, which they only could do with the help of outside counsel. In April 2010, Louisiana Attorney General Buddy Caldwell announced a $20 million Zyprexa settlement with nearly $17 million going to the state’s general fund, $3 million reimbursing the state’s Medicaid fund and the company pledging to significantly change the way it marketed Zyprexa. In October 2009, South Carolina reached a $45 million settlement with Lilly - over $37 million went to Medicaid/State Health Plan reimbursement, with Lilly pledging to institute significant changes in how it marketed Zyprexa. As then-South Carolina Attorney General Henry McMaster explained when announcing the settlement, “The Eli Lilly case was handled on a contingent basis by special counsel appointed by the attorney general. Special counsel paid and incurred all up front costs associated with bringing the case, and their expertise in similar pharmaceutical litigation was instrumental in its successful resolution.”
We could go on and on, but you get the idea. (See more examples here, here.) So to sum up, AG’s get states large sums of free money from corporate wrongdoers, reimbursing state coffers at no cost to the state. Enter ALEC.
Yesterday, after refusing to even allow Mississipppi AG Jim Hood to speak at a legislative hearing, Mississippi lawmakers moved at "warped speed" to pass an ALEC bill that strips away significant powers from Hood, a pro-consumer AG and the only statewide Democrat in office. Mississippi, you will recall, had led the nation in going after the tobacco industry and getting billions back for state governments. ALEC has made plenty sure that won’t be happening again in Mississippi.
Responded AG Hood:
"In the past eight years the office has recovered more than $600 million for our taxpayers from wrongdoers without costing the taxpayers one dime ... However, the huge corporate interests that paid for and supported this bill through the American Legislative Exchange Council have decided that they did not like having to pay what they owed the taxpayers of Mississippi."
And in terms of ALEC’s agenda, it gets worse. At its recent meeting in Charlotte, ALEC discussed its new scorched-earth approach: an unbelieveable bill that would simply stop an AG from bringing any kind of lawsuit unless they get prior state legislative approval.
Governors, your move.