• Special Report Main Page

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 Wednesday.

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 said.

"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 agreements.

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.