The News Release You Won’t See from CALA

The following is not a real news release. It is a mash up of recent stories in the news, all true, yet it takes the absurd and slanted WV CALA angle and shows what could be, if “they” cared and if “they” wanted to really be helpful to West Virginians.

“The recent release of evidence of corporate fraud and kickbacks by some businesses involved in pharmaceutical distribution is interesting as it may relate to litigation being heard in a federal courtroom in West Virginia. The fines are just the latest examples of widespread fraud in the medical device and pharma industries. Daiichi Sankyo agreed to pay $39 million to the U.S. federal government and state Medicaid programs to settle allegations of paying kickbacks to physicians to prescribe several of its drugs. The agreement, which is the latest in a string of such deals in recent years involving drug makers, stems from a lawsuit filed under whistleblower provisions of the False Claims Act by a former Daiichi Sankyo sales rep. according to West Virginia Citizens Against Lawsuit Abuse (WV CALA).

“This is another example of how some ruthless corporations take advantage of our system for personal benefit, and why West Virginia needs to crack down on corporate wrongdoing. Just last month, Daiichi Sankyo agreed to pay the $39 million, and recent revelations across the country show it is just the tip of the iceberg. When German multinational Siemens was caught paying out more than a billion dollars between 2002-07 to bribe foreign officials into giving the company government contracts, U.S. prosecutors led the case against one of the largest corporations in the world. Siemens cooperated, spending hundreds of millions of dollars on an internal investigation. And in the end, the company was still fined a record $1.6 billion.

In CALA’s view, Siemens got off easy. “At a trial, the fines could have been much greater and the company’s plea agreement helped it avoid a ban on winning future U.S. government contracts. Federal prosecutors may seem all-powerful, but when they are prosecuting huge multinationals, they are David to the corporate Goliath. “Up against the largest and most powerful corporations in the world,” prosecutors are the “little guy.”

And this is an abuse of our system that cannot be tolerated,” said Roman Stauffer, Executive Director of  WV CALA. This is big money fraud at the highest levels and CALA knows it. Stauffer went on to point out “the OtisMed Corporation, the maker of the OtisKnee, did not seek clearance from the Food and Drug Administration for its OtisKnee guides before it started selling them. When the company did apply for FDA review, its application was rejected because, the agency said, the company failed to show that the product was safe and effective. In December 2014, OtisMed and its former chief executive pleaded guilty in Federal District Court in Newark, NJ to criminal charges of distributing adulterated medical devices. The Justice Department said the company sold and distributed 18,000 of its OtisKnee devices from 2006 to 2009 without FDA approval.

No one can say with certainty if the OtisKnee device caused certain patient’s problems, but in announcing an $80 million settlement of criminal and civil charges against OtisMed, United States Attorney Paul J. Fishman said patients “should be entitled to trust that the devices their doctors are using are safe, effective, tested and approved.”

An examination of the OtisKnee case shows how easily that trust can be violated in the rapidly evolving world of medical devices, a thriving $110 billion-a-year industry. If not for a whistle-blower, the public might never have learned about the widespread use of a potentially dangerous device that sidestepped regulation. Stauffer says this “has to stop and it starts with an aggressive consumer and plaintiff oriented legislative and congressional team,” such that is missing here in West Virginia this session he says.

“It is wrong to think CALA would in any way sponsor or promote legislative leaders who would undermine the rights of individual. We cannot and won’t do that. Our supporters and incidentally the total funding for my position depends on doing right by everyday West Virginian’s which is why you’ll see in detail, who funds us and how much. It is open and transparent, as it should be.”

Stauffer pointed out how one drug and medical device manufacturer recently used their organization in an attempt to garner adverse pretrial publicity for the defendants against the plaintiffs by putting out a piece critical of lawyer advertising. Stauffer noted, the direct to consumer marketing by drug companies dwarfs that of lawyers. He also noted it was most unusual timing such that it was obvious the mfgr wanted to influence the prospective jury pool before and upcoming trial.

Other companies that Stauffer and CALA see as the beneficiaries of government leniency have forked over huge fines to Washington. Barclays, which was rewarded for its cooperation in a 2012 case about manipulating the London interbank offered rate, or Libor, settled for $453 million in fines paid to the U.S. Commodity Futures Trading Commission, the U.S. Department of Justice and the U.K.’s Financial Services Authority. In 2013, J.P. Morgan paid out $1 billion in fines for securities-law violations in the “London Whale” trading scandal, which caused the bank to lose some $6 billion on derivatives trades.

Stauffer concluded, “Now is the time for West Virginia to aggressively go after corporate fraud and not let the well to do escape by only paying corporate fines which ultimately costs the shareholders. The system should operate to ensure it serves the interests of ordinary people, instead of corporate wrongdoers . It’s no surprise that the corporate executives  oppose actual criminal penalties, including jail time, for wrongdoing that would help prevent them from abusing our system for personal profit. We encourage West Virginians to call their legislators and tell them we need more lawyers and prosecutors going after corporate fraud.”

WV CALA encourages every member of the legislature to read books such as Too Big to Jail by Brandon Garrett and Battling Goliath by Kip Petroff to learn more about corporate fraud and wrongdoing in the financial services industry, insurance, and the pharma and medical device industries.”

And that, my friends, is a PR you will never, ever see from this group!!!


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CALA Misleading West Virginians on Job Numbers

Numbers and statistics can be tricky things.  They provide important information and insight into a problem or opportunity.  They can help you compare your position to others.  In the right hands, they can help you assess a situation accurately.  In the wrong hands, numbers and statistics can be twisted and manipulated beyond recognition in order to advance one position over another.  Critical data that conflicts with that position can be left out, leaving a distorted and inaccurate analysis.

Such is the case with the current West Virginia Citizens Against Lawsuit Abuse claim that more than half of West Virginians are without jobs.  The basis for it is a article which states that only 49.8 percent of West Virginia residents are in the workforce—which means 50.2 percent aren’t.  CALA is trumpeting the figure in its advertising campaign attacking our state’s legal and economic climate.

As with most of CALA’s so-called “statistics,” there are some real problems.

The first is that CALA provides no context for the number.  Is it high or low?  What’s the norm?  Standing by itself, the number looks enormous.  But what about the other states?  The actual average for workforce participation in all 50 states and Washington D. C. is 60.14 percent.  That’s just 10.34 percent higher.

CALA also doesn’t bother to mention the fact that the figure is based not on the state’s working age population, but on the state’s entire adult population.  West Virginia’s population is the fourth oldest in the country—and, while the article cites that fact, CALA doesn’t bother to mention it.  According to the 2010 census, 16 percent of our state residents are senior citizens.  Only Florida has a higher percentage of seniors than we do.  Most of these seniors are retired and no longer part of our workforce.  If 16 percent of your adult population is retired, you’re going to have a lower percentage of people working.

CALA doesn’t even bother to mention that in that same article, West Virginia’s unemployment rate is listed as just 6.3 percent.  While that is higher than the national average of 5.2 percent, there’s a BIG difference between an unemployment rate of 6.3 percent compared to the 50.2 percent jobless rate CALA claims we have—a difference of nearly 800 percent.

Of course this isn’t the first time that CALA has tried to use distorted jobs data and big numbers to scare West Virginians into giving up their rights.  Last July, the front group trumpeted that West Virginia was in crisis because we had lost 7,000 jobs in 2013.  What CALA didn’t bother to disclose was that the 7,017 jobs were less than one percent of our job market.  CALA also failed to cite the fact that 4,258 of those jobs — more than 60 percent of them — were government jobs.  Although it is unclear what percentage of those government jobs were federal jobs, the number of federal workers has declined to its lowest level in nearly 50 years.  Those declines, particularly for the postal service, are affecting every single state in the country — not just West Virginia.

The truth is CALA doesn’t care about West Virginia’s economy and job market.  It’s only goal is to increase the profits for the out-of-state, billion-dollar corporate special interests that fund the group and its cohorts.

West Virginia IS on the right track to bring new businesses to our state and grow our economy.  The National Federation of Independent Businesses identified concerns such as taxes, government regulation and quality of labor.  West Virginia has lowered business taxes by nearly $500 million in just six years. The cost of doing business in our state is 14 percent below the national average.  When you look at the CNBC ‘Best States for Business’ report, it shows that West Virginia needs to improve our infrastructure, have more skilled workers available and have an educated workforce for high-technology, 21st century jobs.

The Legislature should focus on ways to continue to build on the more than $20 billion in new investments made in this state in the last decade.

Those are REAL numbers.

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WV CALA’s “Wants” Costs State Millions

It must be nice to get your money from some of America’s largest and wealthiest corporate special interests.  When you’ve got deep pockets like that, you don’t have to worry about piddling little things like tax dollars.  That explains why WV CALA cares so little about costing West Virginia taxpayers millions.  Why else would CALA push for an unnecessary intermediate court while at the same time fighting against a bill that would have help our state recover money stolen through fraud?

One of the items at the top of the CALA wish list is an intermediate appellate court—a proposal that would cost West Virginia taxpayers millions.  It’s estimated that the intermediate court would cost us more than $5 million each year, but that figure represents just the court’s direct costs.  It doesn’t include the additional legal expenses for state agencies such as the West Virginia Attorney General’s office, the West Virginia Public Defender Services, the West Virginia State Tax Department, the Public Service Commission and others.  It would also cost our county governments a lot more for our prosecuting attorneys’ offices.  That $5 million price tag doesn’t come close to what the real cost to taxpayers would be.

What makes it outrageous is that we don’t need it.

  • According to the West Virginia Supreme Court’s 2013 Statistical Report, the number of appeals declined to a 26-year low of just 1,360 cases.  Our appeals have declined more than 60 percent since 1999—according to the National Center for State Courts, this decrease is four-times the national average of 14 percent.  Why spend this kind of money when appeals are declining?
  • Additionally, the West Virginia Supreme Court implemented new rules of appellate procedure, which requires the court to outline in either a full opinion or a memorandum why a case was or was not accepted for appeal.  This guarantees the automatic right of appeal, and it was done at no additional cost to taxpayers.  Even the West Virginia Chamber of Commerce believes that we need to assess the effectiveness of these new rules before establishing a new intermediate court.

At the same time WV CALA is pushing the state to waste money, it is actively opposing the West Virginia False Claims Act, which would help the state recover millions in tax dollars stolen through fraud against the state government.  Under the proposed bill, those who knowingly submitted false claims to state government would have been liable for three times the government’s damages plus penalties. 

The bill’s whistleblower provision would have allowed citizens with evidence of fraud to sue on behalf of the government.  The whistleblowers would report the fraud to private attorneys, who would then use their time and money to build the case for the state.  Once filed, the Attorney General would review it and determine whether to join the private claim.  This would have helped the state uncover fraud and increase its ability to recover monies taken, all at minimal cost to taxpayers. 

More importantly, it works.  A fiscal note on North Carolina’s bill estimated it would recover more than $3 million annually.  A recent federal claim against JPMorgan Chase over bad loans led the U. S. government to recoup more than $500 million.  Another claim against a home-health company had a recovery of more than $120 million.  It is estimated that it has saved billions in federal tax dollars. 

Why would West Virginia not want to do the same? 

WV CALA claims that the bill would lead to more lawsuits.  The only way this would lead to a flood of lawsuits would be if hundreds of West Virginia businesses were defrauding the state and cheating taxpayers.  Unless the business is committing fraud, there is no case.  Unless fraud is rampant, it’s a non-issue.  If it is rampant, the bigger question is why does CALA want it to go unchecked and unpunished?

The truth is that WV CALA does not care about West Virginia, West Virginians or our tax dollars.  The only thing that matters is increasing the corporate bottom lines of its big-money, out-of-state donors.  Put West Virginia first.  Stop WV CALA.

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CALA “Business Roundtables” Not Legitimate Analysis

For several months now, WV CALA has been touting a series of so-called “business roundtables” it held last year.  CALA head Greg Thomas claims that discussions with small business owners at those meetings are proof that they are concerned about West Virginia’s legal system and how it might be affecting their businesses.

This is yet another case of CALA misleading West Virginians on purpose.

While CALA did host those events, they were by invitation only.  If you didn’t have an invitation, you couldn’t go.  It was so extreme that CALA refused to admit a board member of the Buckhannon-Upshur Chamber of Commerce when it hosted an event in the town.  You claim you want to learn about the concerns and challenges West Virginia business owners have—but then you refuse to admit a local business owner who wants to attend?  It’s ridiculous.

The truth is that CALA didn’t want anyone in those meetings who didn’t already support its positions.  What is even more outrageous is that CALA then proclaimed these meetings provided absolute proof that our business owners believe that our civil courts are one of their leading concerns.  You can’t present those discussions as legitimate findings of anything. 

Think about it this way: The WVU Mountaineers play the Oklahoma Sooners at Mountaineer Field on September 20.  CALA decides to conduct a poll to see who fans at the stadium want to win—but only fans wearing red and white are allowed to participate.  CALA then announces that 100 percent of fans at Mountaineer Field want the Sooners to beat WVU.  It doesn’t matter that those fans represent probably less than three percent of the people attending.  It doesn’t matter that WVU fans who want to participate in the poll were told no.  The results are “accurate.”  Fans at the stadium want a Sooner blowout.

Yes, what CALA did is that preposterous.

When you look at independent studies of small business concerns, you get a very different picture.  For more than 30 years the National Federation of Independent Business, the nation’s leading advocacy organization for small businesses, has surveyed its members and issued its Small Business Problems and Priorities study. 

  • The cost of health insurance has been the leading concern for 25 years. 
  • Taxes and excessive government regulation are the other primary concerns. 
  • “Cost and frequency of lawsuits” ranked 71st of the 75 concerns—and dead last among those problems associated with the cost of doing business. 

It has never been a major issue.  It ranked 65th in 2008 and 64th in 2004, but it never even appeared in the study prior to 2004. 

The truth is that CALA doesn’t care about West Virginia small businesses.  If it did, where was CALA when thousands of our businesses were hurt by the Freedom Chemical leak in January?  A preliminary study from the Marshall University Center for Business and Economic Research estimates that the economic impact to those businesses was more than $61 million.  CALA wasn’t there because its only cause is advancing the policy agenda of its financial backers—major corporations and industries seeking to escape liability when accidents like the Freedom leak occur.

West Virginia deserves better than this.

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The Truth About WV Courts

There is a lot of bad information out there on West Virginia’s courts—much of it coming from WV CALA’s propaganda machine.  There is no independent, third-party data to back up CALA’s claims, and some have taken this misinformation for gospel.  Yet, when you look at that independent, third-party data, you get a very different story than the one CALA is telling.

Winston Churchill said, “A lie gets halfway around the world before the truth has a chance to get its pants on.”  Let’s get dressed.

According to the National Center for State Courts, West Virginia ranks 40th among all states and D. C. on the number of civil cases filed per capita.  Washington D. C. and 38 states have higher per capita case filings than we do.  We rank in the bottom 20 percent! (NCSC Court Statistics Project)

This supports the findings in a study completed by Richard Brisbin and John C. Kilwein on our courts that was published in 2007.  They found that “since the 1980s West Virginia courts—the trial court of general jurisdiction—have not experienced a massive upsurge in non-family law civil litigation.”  (The Future of the West Virginia Judiciary: Problems and Policy Options – 2007)

In 2013, the number of appeals filed with the West Virginia Supreme Court declined to a 26-year low of just 1,360 cases.  More than half of these cases are for workers compensation, abuse and neglect and criminal appeals.  (2013 Statistical Report)

The total number of appeals has declined by more than 60 percent since 1999, when 3,569 cases were filed. According to the most recent data from the National Center for State Courts, West Virginia’s decrease is more than four times higher than the national average of 14 percent.

Contrary to what WV CALA claims, these facts prove that West Virginia’s courts are NOT being overwhelmed with lawsuits.  If CALA believes otherwise, fine.  Prove it–but with hard facts that can be verified, not stories or so-called “studies” by other fake organizations created by D. C. PR firms.  West Virginians deserve the truth, not propaganda.

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