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CRC News Release

May 24, 2006

For Immediate Release

Contact: Doug Kendall
202-296-6889 x3

Tobacco and Oil Company Documents Undercut Groups’ Claims to Media, Judges and Public About Corporate Funding for Judges’ Junkets



Community Rights Counsel (CRC) recently documented that corporate-funded junkets for judges have increased by more than 60% in the last decade. Since they were first exposed by CRC eight years ago, the junket programs have generated a growing stream of criticism by ethics experts, policy makers and editorial writers, who have concluded these programs are vehicles for corporate underwriters to lobby federal judges. During his confirmation hearings last year, Chief Justice John Roberts said he opposed efforts to lobby judges, and the Judicial Conference, headed by Roberts, has recently announced a special task force that will consider banning junkets.

Throughout it all, however, the two main junketing programs have repeatedly asserted to the media – and currently claim on their websites – that big corporations have no influence on their judicial junkets. One junketing organization has steadfastly denied that corporations support its programs, while the other says the corporations are not allowed to influence the program they support.

However, newly obtained documents reveal that statements made by Foundation for Research on Economics and the Environment (FREE) and the Law and Economics Center (LEC) to the media, the public and judges about their funding sources and the nature of their judicial trips are untrue. The documents show that LEC gets tobacco money, and FREE gets direct support from Exxon for its judicial junkets. Indeed Phillip Morris uses LEC as one of five "key allies" advancing the company's litigation agenda.

The two junketing programs provided over 300 junkets to more than 150 federal judges between 2002 and 2004.

This new information comes at a time of growing, bipartisan congressional outrage over the judiciary’s failure to enforce its ethical mandates. In January, Senators Patrick Leahy (D-VT), John Kerry (D-MA) and Russ Feingold (D-WI) introduced legislation that would ban judicial junkets while providing a new source of funding for needed continuing legal education for judges. In April, Senator Charles Grassley (R-IA) and Representative James Sensenbrenner (R-WI) introduced a far more sweeping proposal that would establish an Inspector General for the judicial branch.

Internal Philip Morris Documents Identify Law and Economics Center as a “Key Ally” of the Tobacco Industry.

The Law and Economics Center, housed at George Mason University’s Law School, runs the nation’s longest running and largest junketing program for federal judges. LEC refuses to tell anyone, including judges who attend their programs, who is paying for these events. Here’s the explanation from LEC’s website:

For the past several years the LEC has not made public the names of its donors. * * * The relevant federal Code of Conduct opinion (Advisory Opinion No. 67) puts judges who attend educational programs upon enquiry into the propriety of participation in the program where "there is a reasonable question concerning the propriety of participation." We are advised by our Judicial Advisory Board that, given the academic nature of our programs, no such duty arises with respect to the LEC.

LEC also tells judges that “no corporate donor is ever allowed to interact with any program participants in any manner whatsoever.” See Koch report at page 6, which quotes an LEC letter to a federal judge. (See below for a description of the Koch report.)

Documents produced by Philip Morris during the course of litigation undercut both of these claims by LEC. These documents confirm that Philip Morris funds LEC. More significantly, in one document Philip Morris identifies LEC as one of five “key allies” of the company among legal policy groups. Three of the remaining four groups -- Pacific Legal Foundation, Washington Legal Foundation and the Institute for Justice – litigate cases in federal and state courts around the country. The final group mentioned, the Law and Organizational Economics Center, was an LEC spin-off that was formed to hold junkets for state court judges.

An internal Phillip Morris email exchange further documents that LEC specifically sought money from the company to fund its law and economics programs for federal judges -- the programs most in line with the company's litigation interests.

The import of this document is plain. Philip Morris funds LEC to advance the company’s litigation agenda. The company funds groups such as Washington Legal Foundation (WLF) because WLF routinely litigates on their side of critical cases. The company funds LEC because they provide educational junkets for the judges that decide those cases. And LEC regularly hosts programs on topics such as “Science in the Courts” and “Economics of Tort Law” that address the key legal and scientific issues that are raised again and again in tobacco cases. LEC regularly features speakers at these programs who also serve as expert witnesses in litigation for Philip Morris.

The most prominent of these experts is Kip Viscusi, a professor of law and economics at Harvard Law School, who has been an expert for Philip Morris and the tobacco industry in more than a dozen cases. See Viscusi testimony at page 19. On behalf of the tobacco industry, Viscusi has asserted that smokers "assume the risk" by smoking and that the tobacco industry actually saves money for the States because their product kills smokers earlier than these individuals would otherwise die. See Viscusi Article at page 5 and 6. Available LEC program schedules confirm that Viscusi has run at least eight sessions for federal judges at five different LEC seminars.

Similarly, George Priest, the Olin Professor of Law and Economics at Yale Law School, regularly lectures to judges at LEC junkets. Priest has also served as a paid expert for Philip Morris and other tobacco companies. For example, Priest testified in one case in which tobacco growers were seeking $175 million in attorneys’ fees after prevailing in an anti-trust case brought against cigarette manufacturers. This case, Deloach et. al v. Philip Morris Companies, et al, 2003 U.S. Dist. LEXIS 23240 (MD-NC, December 19, 2003) was heard by Judge William Osteen, a judge who attended four LEC seminars between 1999 and 2003. Judge Osteen awarded the plaintiffs $71 million in fees, $100 million less than they requested from the tobacco industry.

Philip Morris’s funding of LEC and their identification of LEC as a key ally in advancing the company's legal agenda clearly raises a reasonable question about the propriety of judicial participation in LEC seminars. The fact that two individuals who have served as expert witnesses for the company regularly teach judges at LEC seminars exacerbates this concern and raises questions about the accuracy of LEC’s assertion that corporate donors are not able to interact with judges at LEC programs “in any manner whatsoever.”

Philip Morris is not the only tobacco company that has funded the Law and Economics Center. Documents produced by the tobacco industry also show LEC funding from both Brown & Williamson and RJ Reynolds. See also 1993-1994 LEC Annual Report, listing RJ Reynolds as a contributor. Indeed one email indicates that the Law and Economics Center sought $20,000 from RJ Reynolds in February 2000 for their federal judicial seminars. RJ Reynolds gave LEC $5000 that year.

Exxon Mobil Documents Show Corporations are Using FREE Junkets to Lobby Federal Judges

Headquartered in Montana, Foundation for Research on Economics and the Environment hosts junkets for judges promoting what the organization calls “free market environmentalism.” Since 1998 when FREE’s trips – and FREE’s funding from corporate polluters -- was reported on the front page of The Washington Post, FREE has maintained that there is a Chinese wall of sorts between its corporate funding and its programs for judges. According to FREE’s website:

"FREE accepts general support from private foundations, corporations, and individuals. However, we do not accept any corporate support for federal judges seminars. We reimburse judges' expenses (e.g., lodging, meals, and travel) with funds only from foundations whose principle founder is deceased, whose operation and oversight are independent of any corporate entity, and which do not participate in litigation in the federal courts." See http://www.free-eco.org/funding.php

As FREE explained for years on its website “it is a violation of judicial standards for judges to accept [corporate] support.” Indeed, FREE’s Chairman, John Baden, told National Public Radio in June 2000 that FREE is so concerned about the taint of corporate funding for their programs that they “sent checks back, large checks.” Previously Baden told The Washington Post in 1998 that with respect to its judicial junkets:

"We take money only from dead people. This money has to come from foundations, and the reason is obvious. I'm sure there are a large number of companies who would love to fund this program but I'm sure a company large enough to fund it would have many cases before the federal courts so there's a potential conflict."

A recent report by Exxon Mobil Corporation and a tax return filed by the corporation’s foundation in 2005 contradict this central claim. Exxon Mobil reports giving a total of $70,000 to FREE during 2004, $50,000 from the corporation’s foundation and $20,000 directly from the corporation. According to Exxon Mobil, the corporation’s $20,000 was earmarked for a FREE “climate seminar.” (For FREE's own description of a 2002 judges seminar on global warming click here.) In addition, the Exxon Mobil Foundation, which is clearly not “independent of any corporate entity,” earmarked $20,000 of the $50,000 donated to FREE in 2004 for FREE’s "federal judicial seminars,” and the remaining $30,000 was for general support.

Additional corporate disclosures show that FREE accepted other corporations’ money as well for its seminars. In 1998, the GE Fund reported giving $10,000 for FREE’s “environmental economics judicial programs.” And in a 1999 report, foundations controlled by Charles Koch, chairman of Koch Industries, a privately held energy conglomerate, questioned whether FREE was accurate in describing its foundations as “dead man” foundations:

On questioning, a staff member of FREE indicated that "dead-men foundations" are, roughly speaking, those foundations that are not controlled by the settlor. Thus, under this view, the CRL [Claude R. Lambe] Foundation is a "dead-man" foundation notwithstanding the fact that it is controlled by Charles Koch. Charles Koch's control of Koch Industries, however, calls into question at least the relevance of this term, as defined by FREE, if not the accuracy of the disclosure. See Koch report at page 13.

It is important to reiterate that Koch-controlled foundations are major supporters of FREE: even organizations that give to FREE question the accuracy of its representations about its funding sources.

Exxon Mobil’s tax filing and report demonstrate that FREE was accepting corporate funding for its judicial junkets as late as 2004 and directly undercuts FREE’s defense of its programs.

FREE has always acknowledged that it gets money from corporate polluters.  It has always been clear that these polluters donate to FREE because of their programs for federal judges.  And one of the things these polluters frequently get in exchange for their donations is the ability to send their lobbyists to FREE’s trips to lecture to and dine with federal judges. See Tainted Justice pages 23-24.  

But what’s clear from these ExxonMobil documents is something worse.  Not only does FREE take corporate money and fashion seminars to advance the interests of these corporate benefactors, FREE is willing to mislead the public, the media and participating judges about its use of corporate donations.  Like Jack Abramoff and his gang, FREE seems willing to do just about anything to keep the doors open on its judicial lobbying operation. 

There is a pattern here.  In our Tainted Justice report, we documented that while the most important environmental case in the 1990s was pending before the U.S. Court of Appeals for the DC Circuit, FREE added to its Board of Directors Edward Warren, the lawyer who briefed and argued the case for industry.  Warren sat on FREE’s board with Judge Douglas Ginsburg, who was the deciding vote in a sweeping ruling in industries’ favor.  Warren was added to the faculty of a FREE program where he got to lecture to a second DC Circuit Judge.  FREE violated tax laws by failing to report that Mr. Warren ever served on its board.

These facts were all laid out in ethics petitions CRC filed in 2004, which resulted in the resignation of Judge Ginsburg and two other judges from FREE’s board of directors.

* For more information on CRC's effort to prevent corporate judicial lobbying at judicial junkets, click here.

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