Thursday, December 7, 2017

Alabama listserv, which might become the target of an IRS audit, was the venue for Senate candidate Doug Jones to attack my reporting on his ties to Rob Riley

Doug Jones
U.S. Senate candidate Doug Jones used an Alabama listserv, which might soon become the subject of an IRS audit, to trash my reporting about Rob Riley's curious role in a HealthSouth lawsuit that generated roughly $51 million in attorney fees -- with Jones (a Democrat) and Riley (a Republican) happily partaking in the windfall.

Jones' harsh words about my reporting have a disturbing parallel to the cheat job I experienced at UAB, costing me my job of some 20 years. Retired attorney Jill Simpson, who blew the whistle on a Republican scheme to prosecute former Democratic governor Don Siegelman for political reasons, has stated in recent Facebook posts that she believes Jones was connected to blow back against her -- which included a mysterious fire at her home and multiple alarming highway incidents.

Simpson is calling for an IRS audit of a Huntsville-based listserv, run by Pam Miles, that reportedly raised millions of dollars to help with Siegelman's legal expenses, but now is supporting Jones in various ways -- including, it appears, raising money for his U.S. Senate campaign against Roy Moore. In short, Simpson and I have been two of Siegelman's most outspoken supporters, and yet evidence strongly suggests Jones has been involved in abuses targeting both of us -- or, at the very least, he knows who did direct the abuses -- and has been silent about it. And yet, Jones in his Senate campaign touts his "integrity." My question: what integrity?

The record is clear that Jones has benefited from his association with Rob Riley. In fact, it appears Jones' run against Roy Moore in a Dec. 12 special election got off the ground financially because of the HealthSouth-lawsuit funds. Jones ran for Senate once before, in 2002, but quickly folded his tent for lack of fund-raising support. That was more than four years before the HealthSouth case settled for $445 million, with Jones serving as co-liaison counsel. Who was the other liaison counsel, joining Jones as the chief local lawyers for plaintiffs? Why, it was Rob Riley.

Jumping in bed with Rob Riley is a way for Jones to show his "integrity"?

Legal Schnauzer published two primary articles about the curious nature of Rob Riley's ties to the HealthSouth case. The first -- "Did Rob Riley cash in on Siegelman prosecution (March 8, 2008) -- was based largely on original reporting by Sam Stein, of Huffington Post. Stein noted that Riley entered the litigation late, had virtually no experience with complex securities cases, and likely was brought in for his ties to the Don Siegelman-Richard Scrushy criminal matter. Stein concluded that Riley had engaged in what amounted to "legal insider training."

The second Legal Schnauzer story -- "Does Rob Riley engage in fraud as he 'fights fraud" (March 31, 2009) -- noted that Riley was a curious choice to fight health-care fraud, given that his own company (Performance Group LLC) was the subject of a qui tam lawsuit that alleged it had engaged in fraud related to physical-therapy services.

Jones' critique of my reporting, which ran on Miles' listserv, makes it clear he primarily was miffed about my first report on his alliance with Rob Riley -- the one dated March 8, 2008. Ironically, the post was published almost exactly three months before I was cheated out of my job at UAB -- and a tape-recorded conversation with a UAB HR administrator named Anita Bonasera makes it clear I lost my job because of my reporting on the Siegelman case, and not because of anything I had done wrong at work.

In other words, the record indicates Doug Jones is far more loyal to Rob Riley, a Rove Republican, than he is to Don Siegelman. After all, Riley helped generate the cash that now is fueling Jones' run for the Senate -- but Jones knows that is likely to turn off the black voters he desperately needs to defeat Roy Moore. Hence, Jones has held a grudge against me for almost 10 years, and likely has joined with the Riley Machine to heap all kinds of abuse on my wife, Carol, and me -- or to at least stay silent about that abuse. Integrity?

Rob and Bob Riley
Before we run Jones' full, unedited critique of my reporting, let's raise a few points (which will be highlighted below):

* Jones acknowledges he was involved with the HealthSouth civil case before becoming Siegelman's criminal-defense lawyer in 2003 -- where the former governor's co-defendant was former HealthSouth CEO Richard Scrushy. We've called Jones "The King of Conflicts," and he has earned that title.

* Jones tosses around words like "innuendo" and "speculation" below, but he never points to anything in my posts that is inaccurate;

* Jones makes much of back-room legal wrangling, which my posts don't even address;

* Jones admits Riley entered the HealthSouth litigation late and had almost no experience in such securities cases:

* Jones' own words show he mainly is miffed about my March 2008 post, the one that came curiously close to the cheat job I experienced at UAB;

* Jones admits he knows nothing about alleged fraud against Rob Riley's company, Performance Group LLC. Furthermore, Jones gives the distinct impression that he really doesn't give a damn.

This guy is absolutely full of something -- but it isn't integrity.

Here is Jones' complete, unedited response, as posted on Pam Miles' listserv:

I try to limit my responses to most of the posts on Pam's distribution list, but when someone writes to something that they obviously know nothing about and hit hits close to home, then I am compelled to respond. Such is the case with Roger's post below. I have been involved as liaison counsel in the HealthSouth securities fraud case since the beginning of the case in August of 2002, even before the FBI raid that occurred in March of 2003. As such I have been privy to facts and not just innuendo and speculation. So let me try and clear the air on this once and for all:

To begin with I should explain that in any securities fraud case there are usually a number of complaints that are filed and both the plaintiffs and their lawyers seek appointment as "leads" from the court. The lead plaintiffs are usually large institutional investors with huge losses from the drop in the stock price. The law also states that there is a presumption that the investor or combination of investors with the largest loss should be appointed as the lead plaintiff to maintain the class action on behalf of all investors. The lead counsel is the law firm that brings that lead plaintiff to the table. Lead counsel will often have a local or liaison to assist in the case. Liaison counsel can and usually does do a good bit of work on the case, which is a all done on a contingency basis. To imply, however, that liaison counsel is some how a "lead" counsel is very misleading.

It is true that Rob Riley was not involved in the early stages of the litigation. His entry into the case, however, was more fortuitous than sinister. Until 2005, my former law firm and I were the sole liaison counsel in the case. The Coughlin Stoia firm from San Diego and the Lowey Danenberg firm from NYC were designated by the Court as the lead counsel and their clients were the lead plaintiffs. However, as the litigation progressed a conflict of interest developed for the institutional investor plaintiffs and they moved to withdraw from the case. At that time the Court opened up the lead plaintiff and lead counsel appointments again. A number of new institutional investors and their lawyers applied for the lead plaintiff and lead counsel positions, including the New Mexico Retirement Systems who had sought Rob Riley as their local counsel. The Court heard arguments from all plaintiffs and their lawyers seeking lead status. During the appointment process the primary lawyers for the New Mexico Retirement Systems, the Labaton Sucharow firm, and the Coughlin Stoia firm struck a deal whereby they would jointly put forth their respective clients as co-lead plaintiffs and the two firms as co-lead counsel. As part of the deal, Rob Riley (for the Labaton firm) and I (for the Coughlin firm) were named as co-liaison counsel. The appointment of Rob riley was solely the result of these negotiations by the lead counsel and had absolutley nothing to do with Siegelman, Scrushy or Judge Fuller. I tried to explain all of this to Mr. Stein of the Huffington Post. Anyone that was involved involved in the appointment of lead and liaison counsel will simply laugh at the suggestion that Rob Riley's entry into the case was somehow connected to Siegleman or the result of "legal-political insider trading." We both had to go through the appointment process with the court.

It is true that Riley had very little experience in securities fraud cases at time that he was selected by the Labaton firm as their local counsel. However, B'ham did not have many plaintiffs counsel that were experienced in this type litigation and all of those were already involved in the case and thus had conflicts. Moreover, while experience is helpful it is not a prerequisite for local counsel. All facets of the litigation are controlled by the lead counsel, which in the HealthSouth case was 2 of the best in the country. I will candidly say, however, that Rob Riley and his firm have provided assistance in all phases of the HealthSouth litigation and have done an outstanding job. It is a more than a stretch, however, to suggest that Rob Riley "engineered" the 445M dollar settlement paid by Healthsouth and their insurers.

I have no knowledge of whether or not Rob Riley has an interest in any health care related firm, but the fact is that the HealthSouth debacle was of Healthsouth's own making, not the plaintiff lawyers who brought the case for stockholders who lost literally billions of dollars, and certainly not Rob Riley. The settlement against HealthSouth was presented to the court for approval by lead counsel, not me or Rob Riley. The settlement against EY will be presented by lead counsel, not me or Rob Riley.

Rob Riley and I have many, many political differences, but the HealthSouth case and our duties to our clients and the stockholder class is not one of them. The bottom line here is before anyone decides to jump to absurd conclusions based on what appears to be purely political motivations they should check out facts from those involved and try and actually learn at least something about the legal proceedings they are writing about.

What "absurd conclusions" did I reach? What "purely political motivations" did I have? What "facts" did I (or Sam Stein, for that matter) get wrong? Jones doesn't say.

We do know that Jones charged Siegelman $300,000 for a criminal defense that he never really performed. After all, Jones developed a scheduling conflict and dropped out of the case before trial, apparently keeping hundreds of the thousands of dollars.

This much is for damned sure: Doug Jones defended Rob Riley (for free) in a way he never defended Don Siegelman (at an extremely high cost).

But Jones is pitching "integrity" to voters?

No comments: