Kickbacks, payola and the corrupt business

(Tucson, AZ - and other places across our corrupt country)

(Portions reprinted from The Wall Street Journal, 6-22-06)
Thanks to point of law.com - http://www.pointoflaw.com

When is a cash payment to someone an improper "kickback" or "payola"? Sometimes it is hard to discern the line. If you're a record producer who pays radio execs to spin a Jennifer Lopez disc, Eliot Spitzer will land on you with full force. But if you're a publisher who pays book chains to give prime display to your new hardcover thriller, you're safe. Economists and legal analysts typically consult a range of factors, including whether the person taking the payment owes some third party a duty of loyalty or independent judgment, whether an agent discloses his acceptance of a payment to his principal, whether a type of payment is accepted as customary in a given trade, and so forth.

Milberg Weiss lawyers have been in the forefront of efforts to define kickbacks broadly and punish them with rigor. The firm's Web site boasts that it "has sued major providers of private mortgage insurance for kickback violations, resulting in substantial settlements." Melvyn Weiss and others at the firm have expressed indignation at, and filed lawsuits over, alleged kickbacks in the contexts of Wall Street initial public offerings, mutual fund sales, insurance brokerage commissions and doctors' prescribing of pharmaceuticals.
Although there are many debatable cases, concealed payoffs to named plaintiffs in class actions aren't one of them: They're clearly improper under virtually any analysis. As the indictment states, both plaintiffs and their lawyers are under obligation 1) not to place a named plaintiff's interests above those of absent class members; 2) not to behave deceitfully or unethically toward the court or absent class members; and 3) not to withhold from the court "any fact" that might call into question the representativeness of the plaintiff (a financial dependence on the lawyer would be one such fact). As a class action proceeds, plaintiffs repeatedly swear under oath to these matters. Bonus payments to compensate named plaintiffs for their time and trouble are permitted at settlement, but they must be disclosed to absent class members and approved by the judge.These rules have a purpose. With other class members absent, named plaintiffs are one of the few watchdogs against self-dealing or misconduct by the lawyers—specifically, the pursuit of settlements that result in high legal fees, whether or not they serve the interest of the class. It's true that law firms do seek docile, loyal or merely clueless persons to serve as their named plaintiffs, which means it's rare (though not unheard of) for them to contribute an independent point of view in a case. But if the Justice Department's allegations are correct, Milberg was taking no chances on the watchdogs staying pacified: It threw regular chunks of raw liver into their cages. Significantly, Justice alleges that payoffs were computed not as a share of the class's eventual recovery, but as a share of Milberg's own fee haul—incentivizing the named plaintiff to side with Milberg's interests should the two clash.

Here is my point of view - especially the corrupt pharmaceuticals who try to gouge the consumer for every dime and yet extend gonga discounts if not free product to doctors insurance carriers and high volume pharmacies and pay certain ones to advertize their product in the form of swag, conference trips, conventions, meals, and in some cases vacations. All in the name of healthcare, and to help make the pharmaceuticals big bucks, without regard to anyone's health.

I have worked in both radio and the recording industry, although payola is still there. (new york state - sued several stations and labels for such activities) The under the table things like free music, swag, trips, & concert tickets, and travel and expenses for conventions and conferences all on the dime of labels... Which some of this is passed on to listeners. most of it stays with the management of the stations involved and it's kept to a mum.

My personal expierence... I'm insured, sure some of my medications are paid for but reciently the zero co-pay I had skyrocketed to 30% of the cash price on most meds. All the sudden I'm paying more than I get monthly for income - about a grand a month.

All this is blamed on a pharmaceutical lobby that is about as strong as the NRA, and why our legislators don't conger up the fortatude to challenge this?

Campaign contrabutions... another form of payola. "Why vote for my constituant's best interests... When I can get contributions to my campaign fund in the form of the cash, my pork projects, and fundraising dinners."

I have heard it all before...Business as usual. now many know why there is a war going on, instead of Disaster Relief, A universal child health care program, (S-CHIP) or even a universal health program like the one Canada has.

When some meds cost (cash price) over $2,000.00 for a months' supply. Hell... I'd rather die instead of paying something in the name of good health - when I can donate 8K (8 months salery) for my funeral planning.

The pharmaceuticals, State and Federal Insurance plans & HMO's - ALL can stick it up their collective asses.

This is my opinion. Call or e-mail your local legislators, and tell them what you want. Many voices speak louder than one.

Feedback is always welcome here.