WSJ Criticizes PA Governor for State Lawsuit Racket

The Wall Street Journal ran editorials on April 8th and 16th alleging that Governor Rendell granted a huge no-bid, no-compete contract to Bailey, Perrin & Bailey of Houston in return for approximately $90,000 in campaign contributions. Rendell's spokesperson acknowledges the contributions but says the money had nothing to do with the decision to hire the Texas law firm.

Rendell appointed the private law firm to represent PA in a fraud case against Janssen Pharmaceuticals, the manufacturer of Risperdal. The WSJ asks why PA would hire a firm on contingency when firms could competitively bid their services to be paid on an hourly basis. A glaring problem for PA is that the Texas firm demands monetary compensation for its services, or PA is barred from settlement under the contract, ruling out many other kinds of relief from which taxpayers may benefit.

Even more curious is these alleged "pay to play" legal dealings when juxtaposed with PA's ongoing failure to pass state FCA legislation. PA could tool up its own legal apparatus under a state FCA and qualify for a share of any federal proceeds from these kinds of Medicaid fraud prosecutions at the same time. There wouldn't be the same level of need to hire Texas lawyers,...and PA taxpayers would get the full benefit of the litigation.

Besides marring public trust in fraud prosecution, the relationship between Rendell and the Houston law firm is impeding the PA Risperdal litigation as well. Janssen has filed a motion in the PA Supreme Court to invalidate the agreement between PA and the Houston firm, laying out in detail the timing of payments by the firm to Rendell's campaign, just before and after the award of the contract.

WSJ calls for reform in the way contracts are awarded to outside firms by state governments. Better yet, Rendell and PA should correct the problem and lessen the need for outside counsel by passing a state FCA.