|Maryland Among States Targeted by U.S. Chamber of Commerce for Tobacco
By Jonathan Sheir
Capital News Service
Wednesday, March 14, 2001
WASHINGTON - The U.S. Chamber of Commerce said Wednesday it wants the
Maryland Attorney General's office to reveal the full story on Peter
Angelos' claim for $1.1 billion in attorneys' fees from the state's $4
billion tobacco settlement.
The chamber's Freedom of Information Act request is part of its
campaign to force 21 states to tell how they contracted for outside legal
help on the tobacco suit, in what one chamber official called "the most
sordid piece of money-changing in the temple of the American bar."
Nationwide, attorneys have claimed $11 billion in fees from the
settlement, according to the chamber, money that it said should be going
to public use.
"This is an extraordinary matter, and we expect to get some
extraordinary answers," to the FOIA requests, said chamber President and
CEO Thomas Donohue.
Maryland Deputy Attorney General Carmen Shepard said much, if not all
of the information requested already is public record.
"We have reams of material. They're welcome to it," Shepard said. "All
they need to do is call. We have nothing secret or held back."
Neither Angelos nor his firm returned repeated calls seeking comment
Only three states had higher attorneys' fees than Maryland -- Florida,
Texas and Mississippi. All of them hired multiple firms to do the tobacco
litigation, while Maryland hired only Angelos' firm.
Maryland is one of several states to challenge the fees, and its
lawsuit against Angelos recently reached the Maryland Court of Appeals.
When the suit against the tobacco industry was filed in 1996, the
state did not have the resources or the expertise to support it, Shepard
"The way we did it is not particularly secret," she said. "We issued
requests for bids nationally, and Angelos' firm gave the lowest bid."
Shepard said there were no offers to handle the work on an hourly
basis, and the other seven or eight firms that bid wanted even higher
contingencies. Maryland was one of eight states that had 25 percent fee
Angelos' bid for 25 percent of the state's estimated $4 billion award
would amount to $1.1 billion. He at first agreed to seek the fees directly
from the tobacco companies through a three-member arbitration panel,
which would have left the state its entire $4 billion.
But after the General Assembly cut his fee to 12.5 percent and
attorneys for other states saw their fees cut, Angelos decided to seek
the money directly from the state. Maryland sued and was ordered to put
25 percent of its award into escrow. In the meantime, state officials
petitioned the arbitration panel themselves in the event the court orders
the state to pay Angelos' fees.
Chamber officials said the arbitration panel does little to assure the
public that attorneys' fees in the tobacco case are reasonable.
"There is a concerted effort by these outside counsels to avoid
review," said James Wootton, president of the U.S. Chamber Institute for
Legal Reform. "We're asking for the information that will allow the
public to review the fees."
Calling the fees "almost an extortion" and bad for America, Donohue
said anyone who does not realize something needs to be done now is either
"dumb, dumber or dumbest."
The chamber also plans to ask Republican congressional leaders to hold
hearings on the matter, he said.
Copyright © 2001 University of Maryland College of Journalism.
Top of Page | Home Page