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No Contest Corporate Lawyers and the Perversion of Justice in America
No Contest Corporate Lawyers and the Perversion of Justice in America
- ISBN 13:
9780375752582
- ISBN 10:
0375752587
- Format: Paperback
- Copyright: 12/22/1998
- Publisher: Random House
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Summary
The legal rights of Americans are threatened as never before. In No Contest, Ralph Nader and Wesley J. Smith reveal how power lawyers--Kenneth Starr perhaps the most notorious among them--misuse and manipulate the law at the expense of fairness and equity. Nader and Smith document how corporate lawyers File baseless lawsuits Use court secrecy to their unfair advantage Engage in billing fraud Nader and Smith sound the warning that this system-wide abuse is eroding our basic legal rights, and propose a positive, commonsense vision of what should be done to reverse the corporate-inspired corruption of civil justice. Timely, incisive, and highly readable, this is a book for all citizens who believe that prompt access to justice is the backbone of democracy, and a precious right to be reclaimed.
Author Biography
Read more<b>Ralph Nader</b>, the nationally renowned consumer activist, works in Washington, D.C. Author and attorney <b>Wesley J. Smith</b> lives in Oakland, California. Together Nader and Smith are the authors of Winning the Insurance Game and Collision Course: The Truth About Airline Safety.
Table of Contents
Read more| Acknowledgments | p. ix |
| Introduction | p. xiii |
| The Power Lawyers | p. 3 |
| I've Got a Secret | p. 60 |
| The Obstructionists | p. 100 |
| Burning the Tapes | p. 134 |
| SLAPP: Taking Care of Business | p. 158 |
| The Games Corporate Lawyers Play | p. 193 |
| The "BUTS" Principle | p. 232 |
| The Corporate Scheme to Wreck Our Justice System | p. 256 |
| Finding the Courage to Change the System | p. 320 |
| The Top-Grossing Law Firms in the United States | p. 371 |
| The Appleseed Foundation Statement of Purpose | p. 377 |
| Notes | p. 383 |
| Index | p. 415 |
| Table of Contents provided by Syndetics. All Rights Reserved. |
Supplemental Materials
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The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.
Excerpts
Read moreLloyd N. Cutler, founding partner of the Washington, D.C., law firm Wilmer, Cutler & Pickering, is not your typical corporate attorney. He is the consummate power lawyer, a man so systematically dedicated to expanding his influence that he could have come straight out of central casting. Born in 1917, Cutler seems to have wanted it all at least from 1962, when he opened Wilmer, Cutler, which now has 230 lawyers and is one of the nation's highest-earning law firms. To say simply that Cutler touched all the bases and made all the right tactical moves is to fail to note bases and moves that he invented. His tracks illustrate both the pathways to power and the costs to society and people that result from the maneuvering of skilled power lawyers, driven by the twin towers of ambition and acquisitiveness.
Cutler wanted to build a law firm that would represent the largest, most powerful corporations in the land. He wanted to take their agendas to the courts, the regulatory agencies, and the Congress. He needed capable attorneys from pedigree law schools and former high officials in agencies such as the Securities and Exchange Commission and the Department of Justice. He needed to have it known that his young firm had a close relationship with the venerable New York law firm Cravath, Swaine & Moore, where he had once toiled as a junior attorney. He sought a high profile at his alma mater, Yale Law School, whose alumni included leading corporate executives, attorneys, and politicians, so he led a fund-raising drive and spent a semester teaching a course at the school on "the limits of regulation." What he needed he got. But there was more.
Cutler had to be more than a lawyer-lobbyist for many companies and trade associations, more than just a corporate attorney. He sought, both personally and for the firm's growth, to appear as a statesman, as a person so influential and well connected that he could, at times, transcend individual contesting parties and represent "the situation," as the legendary Washington criminal defense attorney Edward Bennett Williams liked to describe his own role.1 The concept of the "lawyer for the situation" is associated with Louis Brandeis, who considered himself to have served in such a role in at least one matter before he became a Supreme Court justice in 1916. But this representation was attacked by critics during Brandeis's confirmation process. University of Pennsylvania law professor Geoffrey Hazard, Jr., says the "lawyer for the situation is advocate, mediator, entrepreneur, and judge, all in one. He could be said to be playing God." He adds, "Playing God is tricky business." Cutler strove to be praised by presidents, senators, and cabinet secretaries, to serve on presidential commissions, to be published regarding his "detached" reflections on governmental reforms, and to become, as one of his clients, The Washington Post, described him in 1994, "a pillar of the Washington legal establishment."
To Cutler, the quests for power and position were of a piece. In a town where "social is political," he was and is a frequent presence in the city's salons. He befriended the reporters, columnists, editors, publishers, and politicians who count for his purposes. He took them to Baltimore Orioles baseball games, appeared at their dinner functions, and ended up representing quite a few of them as clients, including CBS, ABC, the Los Angeles Times, James Reston of The New York Times, and syndicated columnist Joseph Kraft. Officially a member of the Democratic party but aggressively bipartisan when the need arose, Cutler made sure his circle included the Democrats' mother of all political networkers, Pamela Harriman, Republican Secretaries of State Henry Kissinger and George Shultz (both clients), and Katharine Graham, publisher of The Washington Post. He had the right combination of meticulous patience and ego to connect with the powers that be and ride on their shoulders. Cutler's socializing with such influential persons doubtlessly made them less inclined to take seriously the substantive criticisms made about his work.
High-and-mighty society was but one important dimension of Cutler's presentation of self. There had to be more to him than just a wealthy attorney on the make. In 1968, sensing the mood of the street demonstrations, Cutler brought many in his firm down to the District of Columbia criminal courts during the night rioting after the slaying of Martin Luther King to provide counsel to the detainees. The resultant publicity, along with his enduring Democratic party credentials, led President Lyndon Johnson to appoint Cutler to be executive director of the National Commission on the Causes and Prevention of Violence. In 1979, President Jimmy Carter appointed Cutler to be White House counsel. In 1988, during the Reagan administration, he was chairman of the President's Quadrennial Commission on Executive, Legislative and Judicial Salaries, which was designed to take the public heat off Congress and the president on the touchy subject of pay increases. Cutler came through with a very vocal recommendation to raise the salaries of the president, cabinet members, members of Congress, and federal judges by at least 50 percent. Was there a better way to become popular with the branches of government, each of which is crucial to your law firm's success?
Once again, in 1994, Cutler let it be known that he was available for White House service. President Bill Clinton had seen his White House counsel, Bernard Nussbaum, resign in the wake of the Whitewater investigation and the suicide of Nussbaum's deputy, Vince Foster. Clinton needed the reassuring influence of an old Washington hand whose confident voice and friendly, high-level media contacts could be translated into instant political capital. He was looking for, as he put it, "a Lloyd Cutler type."4 The man himself was available, but he laid down distinct terms never witnessed in White House history. He would serve as a "special government employee" (SGE) without compensation for 130 working days, the maximum period permitted under this designation. SGE status was developed years ago to allow federal agencies to bring in scientific or other technical specialists for a short period without obligating these experts to sever all relationships with their employers. It was never remotely applicable to top, sensitive positions like White House counsel. Until, that is, power lawyer Lloyd Cutler conceived of that application.
As an SGE he could remain as a senior counsel to his law firm and continue to draw a salary (Cutler said that his earnings, reportedly $450,000 annually, would be reduced to account for the time spent at the White House), be exempt from some of the more stringent government ethics regulations and would continue working for undisclosed private clients whose needs did not conflict, in his judgment, with his White House duties. Imagine, for a moment, if an experienced attorney for the AFL-CIO retained his position there and at the same time became White House counsel. The corporate and media uproar would be loud and explicit. But few complaints were heard when Cutler, a key legal representative of major corporations, assumed a dual role. Cutler had spent a lifetime laying the groundwork that led the Washington publication Legal Times to write, "Full-time White House counsel have never been able to conduct any outside work, but no one has raised questions about Cutler's arrangement--perhaps partly because of his stature."
Having established this dubious precedent that blurred the separation between the public and the private, Cutler then grandly announced that, though he did not have to, he would voluntarily disclose information about his clients and would voluntarily comply with the Clinton administration's postemployment guidelines, such as a five-year ban on official appearances before the agency he would serve and a lifetime ban on lobbying for foreign interests. Such promises may matter very little, since it is difficult to envision an "appearance" before the White House, and other attorneys at Wilmer, Cutler can continue to lobby for foreign interests attracted to the firm by the Cutler name. Such unenforceable self-restraint nevertheless appeared to impress President Clinton, who described Cutler as a "man of seasoned judgment . . . and the highest ethical standards."
There are three vital functions that a White House counsel is expected to perform: screen nominees for sensitive executive branch positions, supervise the selection of federal judges, and keep the president out of legal difficulties. With this portfolio, on March 9, 1994, Cutler was at large in the White House while his law firm, retaining his name and senior counselship, was on the prowl for more business and more success for its clients.
Cutler's SGE coup was all the more remarkable because his past "seasoned" advice had not always worked out. He was a strong supporter of a controversial Reagan nominee to the Supreme Court, Robert Bork, whom the Senate rejected; he was an unyielding backer, until her withdrawal, of Aetna Insurance Company's general counsel, Zoe Baird, to be Clinton's attorney general, though she plainly lacked the experience and judgment for this top cabinet post; and he advised Clinton not to seek a special counsel to investigate Whitewater, again a losing position as Clinton soon acceded to congressional and public pressure and asked for such an appointment. So Cutler was at least a three-time loser on crucial matters. But the privileges of power overcome such liabilities.
Some forms of influence in Washington are priceless. One of them is for a law firm to have its senior counsel in the cockpit position at the White House passing on scores of federal court nominees, including an appointee to the Supreme Court. Among a group of semifinalists, Stephen Breyer was Lloyd Cutler's friend and ideological match, especially in their shared opposition to effective regulation of business. Breyer was Cutler's choice for the job, and he got it. In their private, jocular moments, litigators, those lawyers who specialize in going to court rather than simply advising clients, have been heard to say that they do not practice law, they practice judge. For corporate attorneys and their high-earning clients, Cutler had scored the touchdown that won the Super Bowl.
On the occasion of being named White House counsel, Cutler said, "In government, as in other aspects of life, trust is the coin of the realm, and I pledge myself to do what I can to assure that trust is maintained." A few reporters, not so trusting, were asking questions about his continuing ties with his law firm. Cutler warded them off by referring them to ethics officials in the White House who had approved his unique arrangement as an SGE. To an unusual degree, Cutler's sensitivity to what he does and how he does it leads him to refer repeatedly to approval by government ethics officials, despite the fact that the history of ethics offices--one of providing ethical sheens for improprieties or worse--should raise cautionary signals.
Indeed, few in public life so regularly find it necessary to describe their own integrity in public. Journalist Andrew Ferguson wrote of Cutler's testimony before a House committee on Whitewater that Cutler "is a dignified, highly skilled lawyer whose integrity is unimpeachable. I know this because he kept saying it himself all day long."
When, as director of President Johnson's Violence Commission, Cutler was asked by a law professor if he had recused himself from the commission's review of violence in the media, since he represented media clients, Cutler scolded him, "I do not think it appropriate for you to question my ethical judgment in the matter."
While many of his colleagues embrace the response of Henry Ford II to the public--"never explain, never complain"--Cutler, to his credit, is driven to explain his behavior. He complains about any media criticism, through letters to the editor, op-ed articles, or, more often, through well-placed phone calls to publishers and top editors.
Implausibility has rarely daunted Cutler. Testifying before the House Banking Committee on July 26, 1994, on Whitewater, Cutler tried to behave like an impartial judge rather than an advocate for his boss, the president. He told the legislators, "I am not here as a special pleader for the President of the United States. I am here to report to you about a factual investigation that I conducted. I didn't ask for this job, I came in, and I took it, and I reported, frankly, to the best of my ability as a lawyer and a person of integrity." Earlier that day Cutler had appeared on morning network television shows vigorously defending the president. (Trusting Cutler is not always a good idea. The day before Harry A. Blackmun announced he was resigning his Supreme Court seat, the one that went to Stephen Breyer, Cutler told a reporter that the White House knew "nothing beyond the rumors" of Blackmun's plans. Yet the very next day Cutler said that Blackmun had previously called Cutler's deputy, Joel Klein, to discuss the timing of his resignation announcement.)
Before the Senate Banking Committee in August 1994, Cutler declared that the Office of Government Ethics had concluded there were no ethics violations by White House staff in their numerous contacts with Treasury officials over Whitewater. But fifteen months later, before the same committee, Cutler admitted he "may have gone too far . . . may have transgressed" in making that statement, since the ethics office had neither investigated the matter itself nor reached any conclusions about violations.
Constant concerns about image and the appearance of propriety may help explain the frequently observed physical suggestions of tenseness that punctuate Cutler's otherwise calm, composed manner. As well described twenty years ago by Mark Green, "As he speaks his fingers do a digital dance, waving in the air like some upside-down caterpillar. His feet twitch and jerk this way and that, as his elbows flap up and down, as if unconnected to his body."
Sometimes such tenseness turns to anger. At an August 1983 American Bar Association meeting in Atlanta, Joan Claybrook, the president of the nonprofit consumer group Public Citizen14 and a former head of the National Highway Traffic Safety Administration, spoke about how the automobile companies and their attorneys were working to undermine or block the installation of air bags both before and after the unanimous Supreme Court decision that year to reinstate this important crash protection standard.15 Cutler, who was to follow Claybrook on the podium to speak about an entirely separate Supreme Court decision, became furious and launched a laborious response on the technical deficiencies of air bag systems--a misguided view he held after years of representing major auto industry clients. The minutiae and defensiveness puzzled other attorneys in the room. After the program ended, a major attorney-lobbyist for the oil industry, J. D. Williams, turned to Claybrook and drawled, "I don't know why Lloyd Cutler is so embarrassed about what he does."
Maybe this attorney did not know, but many consumer, environmental, and labor advocates who have been on the opposing side of Cutler's corporate clients think they know.16 In 1966, the major U.S. automakers hired Cutler to gut the proposed motor vehicle safety legislation that was beginning to move through Congress. He began his moves, mostly unsuccessful in this case, to turn the bill into his specialty, a toothless, no-law law. His principal success was to defeat a provision, customary in safety laws, that would have made it a crime to knowingly and willfully violate federal auto safety standards or regulations. He defended his action by saying his clients--General Motors, Ford, and Chrysler--would never stoop to such criminal behavior. Apart from such touching fealty to his paying clients into the distant future, Cutler's work absolved not only those companies from criminal liability but also thousands of other domestic and foreign vehicles and parts manufacturers, wholesalers, and retailers who might commit intentional, deliberate violations of this federal safety law. Cutler lobbied legislators to give all of these corporations immunity from criminal sanctions in a perverse kind of pro bono advocacy in order to service his few clients.
More than 100,000 Americans lost their lives and many more were seriously injured while Cutler masterminded years of delay for his auto industry paymasters to keep air bags out of any federal safety standards. Cutler even represented Ford Motor Company in the early seventies against air bags when General Motors, however briefly, was touting the devices. Cutler worked against air bags even as they were installed in some twelve thousand (mostly GM) automobiles in the seventies and demonstrated their reliability during actual crashes. (Cutler now protects himself and his family by driving a vehicle equipped with the very air bag technology he once derided.)
Representing the Automobile Manufacturers Association back in the late 1960s, Cutler persuaded the Justice Department's antitrust division to drop a pioneering criminal prosecution of the automobile industry for "product fixing"--namely, conspiring to restrain competition by agreeing to freeze technological innovations related to vehicular smog controls. Even after the antitrust division had convened a grand jury and concluded that it had "evidence to prove beyond a reasonable doubt the existence of [a] conspiracy among the auto manufacturers," Cutler managed to resolve the matter by means of a civil consent decree with the government, under which his clients admitted no wrongdoing but promised not to violate the law in the future.
Cutler has bristled at being labeled a "lawyer-lobbyist" because of the term's odious association with the run-of-the-mill influence peddlers who cavort around Capitol Hill.18 He calls attention to his support of campaign finance reform and his work representing the citizen group Common Cause years ago on this issue. He tells author Hedrick Smith that contributions to politicians by political action committees are "one step away from bribery. PACs contribute because they count on you to vote with them. You've got to take the money from PACs to survive, and then you're under obligation to them."19 But meanwhile, when Cutler and his firm lobby to weaken the Drug Safety Act of 1962, to block auto safety standards, to advance the interests of banks, telephone companies, broadcasters, steel companies, airlines, and chemical manufacturers, their efforts are aided by political action committees and other corporate campaign contributors every step of the way. Members of Congress give Cutler their attention not just because of the wealth of his clients but also because these same clients grease the legislative wheels with their campaign dollars. Having it both ways--accepting praise for advocating reform while quietly earning big fees from the very system in need of reform--is a measure of Cutler's dexterity.
Wanting to have it both ways has led Cutler to many a paradox. One involves his association with the Lawyers Committee for Civil Rights Under Law, of which he was co-chairman at the same time that his firm represented the Lloyd Corporation before the Supreme Court, where it won a decision barring protesters from peacefully distributing leaflets on the "private property" of a large, enclosed shopping mall occupying a sprawling fifty-acre site.
Many corporate attorneys appear to find nothing troubling about such inconsistencies. "In a society where [having] a lawyer matters" so much, it is "perfectly appropriate for a lawyer to represent clients whatever they may do," an ex-Food and Drug Administration official turned corporate attorney, who declined to be quoted by name, told The Washington Post in an article about how two former Food and Drug Administration (FDA) legal heavyweights, Richard Cooper and Arthur Levine, left their jobs and went into private practice, where they represented tobacco companies.
But Cutler does not hide behind the rules of legal ethics that permit such a stance, such as Rule 1.2 of the American Bar Association's Model Rules of Professional Conduct, which provides: "A lawyer's representation of a client, including representation by appointment, does not constitute an endorsement of the client's political, economic, social or moral views or activities." On more than one occasion, Cutler has coolly declared the position he once gave an interviewer: "Listen . . . There is one point I want to make clear: We believe in the arguments that we make."
Cutler's stance opens up interesting opportunities for evaluation. Did Cutler believe the argument he made on behalf of Parke, Davis and Company before a Senate investigating committee that his client had the right to avoid placing a warning in international advertisements for Chloromycetin that the drug had risks of fatal side effects for certain users--as would have been required in the United States?23 Knowing that several hundred Americans had died in the 1950s, before the warning information was required by U.S. law, Cutler nevertheless said that his client could avoid printing the warning in any country that had no such requirement (failing to heed Elihu Root's advice to his client: "The law lets you do it, but don't. . . . It's a rotten thing to do"). At the end of a day of hearings, which included a physician's testimony about his own ten-year-old son's death from Chloromycetin's side effects, Senator Gaylord Nelson, Democrat of Wisconsin, pointedly said to Cutler, "It shocks me that you do not even blush." Somehow, Cutler's experience running a presidential commission on street violence could not generate a comparable concern about corporate violence.
Earlier, in the sixties, Cutler represented the Pharmaceutical Manufacturers of America's (PMA) drive to block the McKesson and Robbins Company's agreement to sell the government of Colombia lower-priced generic drugs--from 80 to 90 percent cheaper than the brand-name medicines for some important antibiotics. Senator Nelson's investigator, economist Benjamin Gordon, believed that the effect of the PMA's opposition to generic drug marketing would be to deny necessary medicines to large numbers of impoverished people in South America. More than ten years later, Cutler was asked what had finally happened with respect to McKesson's proposed deal with Colombia. He replied, "I don't know; you see, I was only outside counsel to PMA." In Cutler's long career and within his large firm of attorneys, this episode is only one of dozens that are handled in routine daily work, where a situational ethic of amorality is just part of being a "professional."
In the case of the National Commission for Housing Partnership (NCHP), Cutler adroitly spotted an opening to gain a long-standing client. In 1967, President Johnson established the Commission on Urban Housing to develop ways to increase low- and moderate-income housing. He asked Edgar Kaiser, head of Kaiser Industries and a Cutler client, to be the chairman. Kaiser then asked Cutler, who sat on the Kaiser board of directors, to be the committee's special counsel. Over the objections of the committee staff, Cutler pushed through a proposal whereby wealthy investors in housing efforts would receive very large tax write-offs. In a short time Congress passed the NCHP, whose promotional brochures then attracted partnerships by openly touting the "tax savings generated." Although Cutler presented his firm's efforts in this matter as pro bono publico, in reality he simply reduced his hourly billing by about 30 percent during the gestation period. By 1971, NCHP was paying Wilmer, Cutler & Pickering the firm's standard rates. Cutler had conceived and lobbied into law an institution that became a client, built on the activities of another client, Edgar Kaiser. Cutler subsequently became a paid director of NCHP. Paul Nelson, chief of staff for the House Banking Committee for more than 20 years (through 1987), was not impressed with NCHP, which he called "only a gimmick, a subsidy for big corporations, another tax write-off, something they could put in their public relations brochure to the effect, 'Look how we are helping the poor people.' " But to his competitors in Washington's legal business, Cutler's work was a masterstroke--converting, as one attorney put it, pro bono publico into a permanent pro bono privato client propped up by an ongoing corporate welfare scheme.
Another form of giveaway of the public's assets emerged with Cutler's recent Canadian client, Barrick Goldstrike Mines, Inc., which located $10 billion worth of gold on federal public land in Nevada. Prior to joining the Clinton administration, Cutler pressed Bruce Babbitt, Clinton's secretary of the interior, to sell the land above the gold deposits for the tiny sum of $9,765--a price of about five dollars per acre, authorized by the antiquated 1872 Mining Act. Babbitt denounced the giveaway of the people's gold and urged the passage of pending reform legislation in Congress to give the government a more realistic value for such lucrative public properties. But Congress did not act and, in May 1994, while Cutler was serving his dual roles as White House counsel and an attorney with Wilmer, Cutler, Secretary Babbitt had to sell the billions in gold to Barrick Goldstrike at lower than fire sale prices. We were unable to determine whether Cutler recused himself or played a role in the matter. Apparently, Cutler, who favored Stephen Breyer over Babbitt for the Supreme Court vacancy, believes in his arguments here because he has never spoken out against the ridiculous policy of surrendering what belongs to all Americans to domestic or even foreign companies essentially for nothing in return--other than leaving taxpayers with the burden of cleaning up the environmental wreckage after such hard rock mines are exhausted.
An overview of Cutler's cumulative impact, along with that of other corporate attorneys working similar territories at the seat of the national or state governments, involves more than simply describing client-by-client advocacies. With relentless focus and resources, the Lloyd Cutlers of the legal world work to indenture government and the people to large corporations, to have government subsidize in many ways entire industries, to compromise the arm's-length relationship between government and business by systemically undermining the rule of just law that is supposed to protect wronged or harmed citizens. By complex means, public assets, from natural resources to medical research and development, are given away to private monopoly ownership and/or control. Neutering the purpose of the law vis-à-vis corporations--as with health and safety regulations--yet keeping its pretense to mislead public expectations--as he has done particularly in the auto and drug areas--is a specialty at which Cutler has excelled, but he has had many imitators and competitors. All the while, innocent people, many of whom have never heard of Cutler or his colleagues, have suffered in the workplace, marketplace, and environment. Michael Pertschuk, the normally reserved former chairman of the Federal Trade Commission, once said of Cutler after years of dealing with him when Pertschuk served as general counsel to the Senate Commerce Committee, "He is clearly a very skilled advocate and a real technician at drafting amendment after amendment. He's a genius, but an evil genius. The role Lloyd Cutler plays reflects poorly
on the legal profession. . . . It is not in the best tradition of the practice."
Attorneys like Lloyd Cutler matter intimately and often adversely to the health, safety, and economic well-being of many people here and abroad. They matter to the quality of the air, water, soil, and food. They matter to the state of our democracy and the integrity of the law and its enforcement. They matter to future generations, who will inherit the harmful results of their labors.
In calling for a more vigorous public interest law commitment back in the 1970s, Antioch Law School co-deans Edgar and Jean Cahn made the point that law firms "already operate as the makers of public policy--with regard to the operation and design of the legal system, and with respect to official government policy." They might have added that hundreds of these corporate lawyers go into government, where they directly shape policy, during a few years of on-the-job training and influence gathering, before returning to corporate practice with more salable skills and contacts.
Corporate power lawyers are not just any citizens equipped only with the influence of their facts and arguments. They are paid to be what Fortune magazine once called Lloyd Cutler, "the very model of a modern legal conduit,"29 for the greatest powers in the private sector--the giant, multinational corporations spanning the globe and transcending national jurisdictions and gaining unaccountable advantages. The paradoxes and seeming contradictions of Cutler's fluctuations between commercial lucre and his shorter government service and pro bono stints have one singular theme--the supremacy of his law firm's role as an architect of the corporate state from whence he derived his power, his wealth, and his status.
Cutler wanted to build a law firm that would represent the largest, most powerful corporations in the land. He wanted to take their agendas to the courts, the regulatory agencies, and the Congress. He needed capable attorneys from pedigree law schools and former high officials in agencies such as the Securities and Exchange Commission and the Department of Justice. He needed to have it known that his young firm had a close relationship with the venerable New York law firm Cravath, Swaine & Moore, where he had once toiled as a junior attorney. He sought a high profile at his alma mater, Yale Law School, whose alumni included leading corporate executives, attorneys, and politicians, so he led a fund-raising drive and spent a semester teaching a course at the school on "the limits of regulation." What he needed he got. But there was more.
Cutler had to be more than a lawyer-lobbyist for many companies and trade associations, more than just a corporate attorney. He sought, both personally and for the firm's growth, to appear as a statesman, as a person so influential and well connected that he could, at times, transcend individual contesting parties and represent "the situation," as the legendary Washington criminal defense attorney Edward Bennett Williams liked to describe his own role.1 The concept of the "lawyer for the situation" is associated with Louis Brandeis, who considered himself to have served in such a role in at least one matter before he became a Supreme Court justice in 1916. But this representation was attacked by critics during Brandeis's confirmation process. University of Pennsylvania law professor Geoffrey Hazard, Jr., says the "lawyer for the situation is advocate, mediator, entrepreneur, and judge, all in one. He could be said to be playing God." He adds, "Playing God is tricky business." Cutler strove to be praised by presidents, senators, and cabinet secretaries, to serve on presidential commissions, to be published regarding his "detached" reflections on governmental reforms, and to become, as one of his clients, The Washington Post, described him in 1994, "a pillar of the Washington legal establishment."
To Cutler, the quests for power and position were of a piece. In a town where "social is political," he was and is a frequent presence in the city's salons. He befriended the reporters, columnists, editors, publishers, and politicians who count for his purposes. He took them to Baltimore Orioles baseball games, appeared at their dinner functions, and ended up representing quite a few of them as clients, including CBS, ABC, the Los Angeles Times, James Reston of The New York Times, and syndicated columnist Joseph Kraft. Officially a member of the Democratic party but aggressively bipartisan when the need arose, Cutler made sure his circle included the Democrats' mother of all political networkers, Pamela Harriman, Republican Secretaries of State Henry Kissinger and George Shultz (both clients), and Katharine Graham, publisher of The Washington Post. He had the right combination of meticulous patience and ego to connect with the powers that be and ride on their shoulders. Cutler's socializing with such influential persons doubtlessly made them less inclined to take seriously the substantive criticisms made about his work.
High-and-mighty society was but one important dimension of Cutler's presentation of self. There had to be more to him than just a wealthy attorney on the make. In 1968, sensing the mood of the street demonstrations, Cutler brought many in his firm down to the District of Columbia criminal courts during the night rioting after the slaying of Martin Luther King to provide counsel to the detainees. The resultant publicity, along with his enduring Democratic party credentials, led President Lyndon Johnson to appoint Cutler to be executive director of the National Commission on the Causes and Prevention of Violence. In 1979, President Jimmy Carter appointed Cutler to be White House counsel. In 1988, during the Reagan administration, he was chairman of the President's Quadrennial Commission on Executive, Legislative and Judicial Salaries, which was designed to take the public heat off Congress and the president on the touchy subject of pay increases. Cutler came through with a very vocal recommendation to raise the salaries of the president, cabinet members, members of Congress, and federal judges by at least 50 percent. Was there a better way to become popular with the branches of government, each of which is crucial to your law firm's success?
Once again, in 1994, Cutler let it be known that he was available for White House service. President Bill Clinton had seen his White House counsel, Bernard Nussbaum, resign in the wake of the Whitewater investigation and the suicide of Nussbaum's deputy, Vince Foster. Clinton needed the reassuring influence of an old Washington hand whose confident voice and friendly, high-level media contacts could be translated into instant political capital. He was looking for, as he put it, "a Lloyd Cutler type."4 The man himself was available, but he laid down distinct terms never witnessed in White House history. He would serve as a "special government employee" (SGE) without compensation for 130 working days, the maximum period permitted under this designation. SGE status was developed years ago to allow federal agencies to bring in scientific or other technical specialists for a short period without obligating these experts to sever all relationships with their employers. It was never remotely applicable to top, sensitive positions like White House counsel. Until, that is, power lawyer Lloyd Cutler conceived of that application.
As an SGE he could remain as a senior counsel to his law firm and continue to draw a salary (Cutler said that his earnings, reportedly $450,000 annually, would be reduced to account for the time spent at the White House), be exempt from some of the more stringent government ethics regulations and would continue working for undisclosed private clients whose needs did not conflict, in his judgment, with his White House duties. Imagine, for a moment, if an experienced attorney for the AFL-CIO retained his position there and at the same time became White House counsel. The corporate and media uproar would be loud and explicit. But few complaints were heard when Cutler, a key legal representative of major corporations, assumed a dual role. Cutler had spent a lifetime laying the groundwork that led the Washington publication Legal Times to write, "Full-time White House counsel have never been able to conduct any outside work, but no one has raised questions about Cutler's arrangement--perhaps partly because of his stature."
Having established this dubious precedent that blurred the separation between the public and the private, Cutler then grandly announced that, though he did not have to, he would voluntarily disclose information about his clients and would voluntarily comply with the Clinton administration's postemployment guidelines, such as a five-year ban on official appearances before the agency he would serve and a lifetime ban on lobbying for foreign interests. Such promises may matter very little, since it is difficult to envision an "appearance" before the White House, and other attorneys at Wilmer, Cutler can continue to lobby for foreign interests attracted to the firm by the Cutler name. Such unenforceable self-restraint nevertheless appeared to impress President Clinton, who described Cutler as a "man of seasoned judgment . . . and the highest ethical standards."
There are three vital functions that a White House counsel is expected to perform: screen nominees for sensitive executive branch positions, supervise the selection of federal judges, and keep the president out of legal difficulties. With this portfolio, on March 9, 1994, Cutler was at large in the White House while his law firm, retaining his name and senior counselship, was on the prowl for more business and more success for its clients.
Cutler's SGE coup was all the more remarkable because his past "seasoned" advice had not always worked out. He was a strong supporter of a controversial Reagan nominee to the Supreme Court, Robert Bork, whom the Senate rejected; he was an unyielding backer, until her withdrawal, of Aetna Insurance Company's general counsel, Zoe Baird, to be Clinton's attorney general, though she plainly lacked the experience and judgment for this top cabinet post; and he advised Clinton not to seek a special counsel to investigate Whitewater, again a losing position as Clinton soon acceded to congressional and public pressure and asked for such an appointment. So Cutler was at least a three-time loser on crucial matters. But the privileges of power overcome such liabilities.
Some forms of influence in Washington are priceless. One of them is for a law firm to have its senior counsel in the cockpit position at the White House passing on scores of federal court nominees, including an appointee to the Supreme Court. Among a group of semifinalists, Stephen Breyer was Lloyd Cutler's friend and ideological match, especially in their shared opposition to effective regulation of business. Breyer was Cutler's choice for the job, and he got it. In their private, jocular moments, litigators, those lawyers who specialize in going to court rather than simply advising clients, have been heard to say that they do not practice law, they practice judge. For corporate attorneys and their high-earning clients, Cutler had scored the touchdown that won the Super Bowl.
On the occasion of being named White House counsel, Cutler said, "In government, as in other aspects of life, trust is the coin of the realm, and I pledge myself to do what I can to assure that trust is maintained." A few reporters, not so trusting, were asking questions about his continuing ties with his law firm. Cutler warded them off by referring them to ethics officials in the White House who had approved his unique arrangement as an SGE. To an unusual degree, Cutler's sensitivity to what he does and how he does it leads him to refer repeatedly to approval by government ethics officials, despite the fact that the history of ethics offices--one of providing ethical sheens for improprieties or worse--should raise cautionary signals.
Indeed, few in public life so regularly find it necessary to describe their own integrity in public. Journalist Andrew Ferguson wrote of Cutler's testimony before a House committee on Whitewater that Cutler "is a dignified, highly skilled lawyer whose integrity is unimpeachable. I know this because he kept saying it himself all day long."
When, as director of President Johnson's Violence Commission, Cutler was asked by a law professor if he had recused himself from the commission's review of violence in the media, since he represented media clients, Cutler scolded him, "I do not think it appropriate for you to question my ethical judgment in the matter."
While many of his colleagues embrace the response of Henry Ford II to the public--"never explain, never complain"--Cutler, to his credit, is driven to explain his behavior. He complains about any media criticism, through letters to the editor, op-ed articles, or, more often, through well-placed phone calls to publishers and top editors.
Implausibility has rarely daunted Cutler. Testifying before the House Banking Committee on July 26, 1994, on Whitewater, Cutler tried to behave like an impartial judge rather than an advocate for his boss, the president. He told the legislators, "I am not here as a special pleader for the President of the United States. I am here to report to you about a factual investigation that I conducted. I didn't ask for this job, I came in, and I took it, and I reported, frankly, to the best of my ability as a lawyer and a person of integrity." Earlier that day Cutler had appeared on morning network television shows vigorously defending the president. (Trusting Cutler is not always a good idea. The day before Harry A. Blackmun announced he was resigning his Supreme Court seat, the one that went to Stephen Breyer, Cutler told a reporter that the White House knew "nothing beyond the rumors" of Blackmun's plans. Yet the very next day Cutler said that Blackmun had previously called Cutler's deputy, Joel Klein, to discuss the timing of his resignation announcement.)
Before the Senate Banking Committee in August 1994, Cutler declared that the Office of Government Ethics had concluded there were no ethics violations by White House staff in their numerous contacts with Treasury officials over Whitewater. But fifteen months later, before the same committee, Cutler admitted he "may have gone too far . . . may have transgressed" in making that statement, since the ethics office had neither investigated the matter itself nor reached any conclusions about violations.
Constant concerns about image and the appearance of propriety may help explain the frequently observed physical suggestions of tenseness that punctuate Cutler's otherwise calm, composed manner. As well described twenty years ago by Mark Green, "As he speaks his fingers do a digital dance, waving in the air like some upside-down caterpillar. His feet twitch and jerk this way and that, as his elbows flap up and down, as if unconnected to his body."
Sometimes such tenseness turns to anger. At an August 1983 American Bar Association meeting in Atlanta, Joan Claybrook, the president of the nonprofit consumer group Public Citizen14 and a former head of the National Highway Traffic Safety Administration, spoke about how the automobile companies and their attorneys were working to undermine or block the installation of air bags both before and after the unanimous Supreme Court decision that year to reinstate this important crash protection standard.15 Cutler, who was to follow Claybrook on the podium to speak about an entirely separate Supreme Court decision, became furious and launched a laborious response on the technical deficiencies of air bag systems--a misguided view he held after years of representing major auto industry clients. The minutiae and defensiveness puzzled other attorneys in the room. After the program ended, a major attorney-lobbyist for the oil industry, J. D. Williams, turned to Claybrook and drawled, "I don't know why Lloyd Cutler is so embarrassed about what he does."
Maybe this attorney did not know, but many consumer, environmental, and labor advocates who have been on the opposing side of Cutler's corporate clients think they know.16 In 1966, the major U.S. automakers hired Cutler to gut the proposed motor vehicle safety legislation that was beginning to move through Congress. He began his moves, mostly unsuccessful in this case, to turn the bill into his specialty, a toothless, no-law law. His principal success was to defeat a provision, customary in safety laws, that would have made it a crime to knowingly and willfully violate federal auto safety standards or regulations. He defended his action by saying his clients--General Motors, Ford, and Chrysler--would never stoop to such criminal behavior. Apart from such touching fealty to his paying clients into the distant future, Cutler's work absolved not only those companies from criminal liability but also thousands of other domestic and foreign vehicles and parts manufacturers, wholesalers, and retailers who might commit intentional, deliberate violations of this federal safety law. Cutler lobbied legislators to give all of these corporations immunity from criminal sanctions in a perverse kind of pro bono advocacy in order to service his few clients.
More than 100,000 Americans lost their lives and many more were seriously injured while Cutler masterminded years of delay for his auto industry paymasters to keep air bags out of any federal safety standards. Cutler even represented Ford Motor Company in the early seventies against air bags when General Motors, however briefly, was touting the devices. Cutler worked against air bags even as they were installed in some twelve thousand (mostly GM) automobiles in the seventies and demonstrated their reliability during actual crashes. (Cutler now protects himself and his family by driving a vehicle equipped with the very air bag technology he once derided.)
Representing the Automobile Manufacturers Association back in the late 1960s, Cutler persuaded the Justice Department's antitrust division to drop a pioneering criminal prosecution of the automobile industry for "product fixing"--namely, conspiring to restrain competition by agreeing to freeze technological innovations related to vehicular smog controls. Even after the antitrust division had convened a grand jury and concluded that it had "evidence to prove beyond a reasonable doubt the existence of [a] conspiracy among the auto manufacturers," Cutler managed to resolve the matter by means of a civil consent decree with the government, under which his clients admitted no wrongdoing but promised not to violate the law in the future.
Cutler has bristled at being labeled a "lawyer-lobbyist" because of the term's odious association with the run-of-the-mill influence peddlers who cavort around Capitol Hill.18 He calls attention to his support of campaign finance reform and his work representing the citizen group Common Cause years ago on this issue. He tells author Hedrick Smith that contributions to politicians by political action committees are "one step away from bribery. PACs contribute because they count on you to vote with them. You've got to take the money from PACs to survive, and then you're under obligation to them."19 But meanwhile, when Cutler and his firm lobby to weaken the Drug Safety Act of 1962, to block auto safety standards, to advance the interests of banks, telephone companies, broadcasters, steel companies, airlines, and chemical manufacturers, their efforts are aided by political action committees and other corporate campaign contributors every step of the way. Members of Congress give Cutler their attention not just because of the wealth of his clients but also because these same clients grease the legislative wheels with their campaign dollars. Having it both ways--accepting praise for advocating reform while quietly earning big fees from the very system in need of reform--is a measure of Cutler's dexterity.
Wanting to have it both ways has led Cutler to many a paradox. One involves his association with the Lawyers Committee for Civil Rights Under Law, of which he was co-chairman at the same time that his firm represented the Lloyd Corporation before the Supreme Court, where it won a decision barring protesters from peacefully distributing leaflets on the "private property" of a large, enclosed shopping mall occupying a sprawling fifty-acre site.
Many corporate attorneys appear to find nothing troubling about such inconsistencies. "In a society where [having] a lawyer matters" so much, it is "perfectly appropriate for a lawyer to represent clients whatever they may do," an ex-Food and Drug Administration official turned corporate attorney, who declined to be quoted by name, told The Washington Post in an article about how two former Food and Drug Administration (FDA) legal heavyweights, Richard Cooper and Arthur Levine, left their jobs and went into private practice, where they represented tobacco companies.
But Cutler does not hide behind the rules of legal ethics that permit such a stance, such as Rule 1.2 of the American Bar Association's Model Rules of Professional Conduct, which provides: "A lawyer's representation of a client, including representation by appointment, does not constitute an endorsement of the client's political, economic, social or moral views or activities." On more than one occasion, Cutler has coolly declared the position he once gave an interviewer: "Listen . . . There is one point I want to make clear: We believe in the arguments that we make."
Cutler's stance opens up interesting opportunities for evaluation. Did Cutler believe the argument he made on behalf of Parke, Davis and Company before a Senate investigating committee that his client had the right to avoid placing a warning in international advertisements for Chloromycetin that the drug had risks of fatal side effects for certain users--as would have been required in the United States?23 Knowing that several hundred Americans had died in the 1950s, before the warning information was required by U.S. law, Cutler nevertheless said that his client could avoid printing the warning in any country that had no such requirement (failing to heed Elihu Root's advice to his client: "The law lets you do it, but don't. . . . It's a rotten thing to do"). At the end of a day of hearings, which included a physician's testimony about his own ten-year-old son's death from Chloromycetin's side effects, Senator Gaylord Nelson, Democrat of Wisconsin, pointedly said to Cutler, "It shocks me that you do not even blush." Somehow, Cutler's experience running a presidential commission on street violence could not generate a comparable concern about corporate violence.
Earlier, in the sixties, Cutler represented the Pharmaceutical Manufacturers of America's (PMA) drive to block the McKesson and Robbins Company's agreement to sell the government of Colombia lower-priced generic drugs--from 80 to 90 percent cheaper than the brand-name medicines for some important antibiotics. Senator Nelson's investigator, economist Benjamin Gordon, believed that the effect of the PMA's opposition to generic drug marketing would be to deny necessary medicines to large numbers of impoverished people in South America. More than ten years later, Cutler was asked what had finally happened with respect to McKesson's proposed deal with Colombia. He replied, "I don't know; you see, I was only outside counsel to PMA." In Cutler's long career and within his large firm of attorneys, this episode is only one of dozens that are handled in routine daily work, where a situational ethic of amorality is just part of being a "professional."
In the case of the National Commission for Housing Partnership (NCHP), Cutler adroitly spotted an opening to gain a long-standing client. In 1967, President Johnson established the Commission on Urban Housing to develop ways to increase low- and moderate-income housing. He asked Edgar Kaiser, head of Kaiser Industries and a Cutler client, to be the chairman. Kaiser then asked Cutler, who sat on the Kaiser board of directors, to be the committee's special counsel. Over the objections of the committee staff, Cutler pushed through a proposal whereby wealthy investors in housing efforts would receive very large tax write-offs. In a short time Congress passed the NCHP, whose promotional brochures then attracted partnerships by openly touting the "tax savings generated." Although Cutler presented his firm's efforts in this matter as pro bono publico, in reality he simply reduced his hourly billing by about 30 percent during the gestation period. By 1971, NCHP was paying Wilmer, Cutler & Pickering the firm's standard rates. Cutler had conceived and lobbied into law an institution that became a client, built on the activities of another client, Edgar Kaiser. Cutler subsequently became a paid director of NCHP. Paul Nelson, chief of staff for the House Banking Committee for more than 20 years (through 1987), was not impressed with NCHP, which he called "only a gimmick, a subsidy for big corporations, another tax write-off, something they could put in their public relations brochure to the effect, 'Look how we are helping the poor people.' " But to his competitors in Washington's legal business, Cutler's work was a masterstroke--converting, as one attorney put it, pro bono publico into a permanent pro bono privato client propped up by an ongoing corporate welfare scheme.
Another form of giveaway of the public's assets emerged with Cutler's recent Canadian client, Barrick Goldstrike Mines, Inc., which located $10 billion worth of gold on federal public land in Nevada. Prior to joining the Clinton administration, Cutler pressed Bruce Babbitt, Clinton's secretary of the interior, to sell the land above the gold deposits for the tiny sum of $9,765--a price of about five dollars per acre, authorized by the antiquated 1872 Mining Act. Babbitt denounced the giveaway of the people's gold and urged the passage of pending reform legislation in Congress to give the government a more realistic value for such lucrative public properties. But Congress did not act and, in May 1994, while Cutler was serving his dual roles as White House counsel and an attorney with Wilmer, Cutler, Secretary Babbitt had to sell the billions in gold to Barrick Goldstrike at lower than fire sale prices. We were unable to determine whether Cutler recused himself or played a role in the matter. Apparently, Cutler, who favored Stephen Breyer over Babbitt for the Supreme Court vacancy, believes in his arguments here because he has never spoken out against the ridiculous policy of surrendering what belongs to all Americans to domestic or even foreign companies essentially for nothing in return--other than leaving taxpayers with the burden of cleaning up the environmental wreckage after such hard rock mines are exhausted.
An overview of Cutler's cumulative impact, along with that of other corporate attorneys working similar territories at the seat of the national or state governments, involves more than simply describing client-by-client advocacies. With relentless focus and resources, the Lloyd Cutlers of the legal world work to indenture government and the people to large corporations, to have government subsidize in many ways entire industries, to compromise the arm's-length relationship between government and business by systemically undermining the rule of just law that is supposed to protect wronged or harmed citizens. By complex means, public assets, from natural resources to medical research and development, are given away to private monopoly ownership and/or control. Neutering the purpose of the law vis-à-vis corporations--as with health and safety regulations--yet keeping its pretense to mislead public expectations--as he has done particularly in the auto and drug areas--is a specialty at which Cutler has excelled, but he has had many imitators and competitors. All the while, innocent people, many of whom have never heard of Cutler or his colleagues, have suffered in the workplace, marketplace, and environment. Michael Pertschuk, the normally reserved former chairman of the Federal Trade Commission, once said of Cutler after years of dealing with him when Pertschuk served as general counsel to the Senate Commerce Committee, "He is clearly a very skilled advocate and a real technician at drafting amendment after amendment. He's a genius, but an evil genius. The role Lloyd Cutler plays reflects poorly
on the legal profession. . . . It is not in the best tradition of the practice."
Attorneys like Lloyd Cutler matter intimately and often adversely to the health, safety, and economic well-being of many people here and abroad. They matter to the quality of the air, water, soil, and food. They matter to the state of our democracy and the integrity of the law and its enforcement. They matter to future generations, who will inherit the harmful results of their labors.
In calling for a more vigorous public interest law commitment back in the 1970s, Antioch Law School co-deans Edgar and Jean Cahn made the point that law firms "already operate as the makers of public policy--with regard to the operation and design of the legal system, and with respect to official government policy." They might have added that hundreds of these corporate lawyers go into government, where they directly shape policy, during a few years of on-the-job training and influence gathering, before returning to corporate practice with more salable skills and contacts.
Corporate power lawyers are not just any citizens equipped only with the influence of their facts and arguments. They are paid to be what Fortune magazine once called Lloyd Cutler, "the very model of a modern legal conduit,"29 for the greatest powers in the private sector--the giant, multinational corporations spanning the globe and transcending national jurisdictions and gaining unaccountable advantages. The paradoxes and seeming contradictions of Cutler's fluctuations between commercial lucre and his shorter government service and pro bono stints have one singular theme--the supremacy of his law firm's role as an architect of the corporate state from whence he derived his power, his wealth, and his status.
Excerpted from No Contest: Corporate Lawyers and the Perversion of Justice in America by Ralph Nader, W. J. Smith
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.
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