Indicted lawyer gave generously to House freshmen

LAW AND DISORDER - High profile figures in a 20-count federal indictment have contributed thousands of dollars to, from left, U.S. Representatives Tim Mahoney, Mike Arcuri and Jerry McNerney.

David Bershad, partner in what Fortune Magazine dubbed “America’s Meanest Law Firm,” is currently under a 20-count federal indictment for criminal charges including obstructing justice, perjury, bribery and fraud.  He is also among the most generous political contributors to freshmen U.S. Representatives Tim Mahoney, D-FL, and Michael Arcuri, D-NY, research by the Majority Accountability Project (www.majorityap.com) has found.

Bershad and another partner, Steven Schulman, were named in a May, 2005, indictment along with their firm, Milberg Weiss, for “allegedly paying three plaintiffs $11.4 million in illegal kickbacks in about 180 cases spanning 25 years - and then repeatedly lying about it to the courts.”  According to a report in the New York Sun, “Bershad earned some $161 million as his share of the firm's profits between 1983 and 2005.”

The indictments were handed down long before Arcuri and Mahoney received their checks, and have been widely publicized.

Bershad gave Arcuri $2,100 on October 27, 2006.  Mahoney received the same amount on December 15, 2006, little more than a month after his election to Congress.  While the contributions are believed to be legal, they should raise eyebrows among those who listened to the pair lamenting the “culture of corruption” they promised to fight if elected.

A former partner in that firm, William Lerach, gave U.S. Representative Jerry McNerney, D-CA, $2,000 on November 4, 2006.  While not indicted, Lerach has long been a reported target of federal investigators.  Lerach was removed as lead counsel in a suit against Halliburton, Inc., earlier this year, because the plaintiff in the case was concerned about his possible role in the Milberg Weiss scandal.

Prior to the indictment, Milberg Weiss was frequently described as a “lawsuit factory,” ostensibly filing class-action lawsuits “against huge corporations on behalf of shareholders who claimed they were wronged,” but then allegedly paying kickbacks to those plaintiffs.

“These alleged crimes weren't victimless,” the Sun reported. “Those millions upon millions of dollars came from the pockets of the unsuspecting shareholders in the defendant companies. The plaintiffs' attorneys' fees that apparently lined the pockets of Messrs. Schulman, Bershad…and others implicated in the case came from those shareholders in the form of profit-reducing payouts that cut dividends, while the lawsuits threatened to depress stock prices.”

According to a recent article in the Wall Street Journal, Bershad is working to cut a deal with federal investigators.  Lerach, widely believed to be “Partner B” referenced in the federal indictment against Milberg Weis, could reportedly still be charged in the case.