Grassley, Cornyn Seek Details on Obscure Third Party Litigation Financing Agreements
WASHINGTON - Senate Judiciary Committee Chairman Chuck Grassley and Senate Majority Whip John Cornyn are examining the impact third party litigation financing is having on civil litigation in the United States. In letters to Burford Capital, Bentham IMF and Juridica Investments Ltd., three of the largest commercial litigation financing firms, Grassley and Cornyn requested details regarding the cases they finance, the structure and terms of the agreements they've entered into and their returns on investment. The Senators also sought information on firms' general practices, such as whether the court or interested parties are made aware of any third-party agreement.
"Litigation speculation is expanding at an alarming rate. And yet, because the existence and terms of these agreements lack transparency, the impact they are having on our civil justice system is not fully known. The information we requested today will help us better understand this industry. It's vitally important to our civil justice system that litigation decisions aren't unduly influenced by third parties," Grassley said.
"Third party litigation financing pumps millions of dollars into our justice system, and the current lack of oversight makes it difficult to track this money's influence on the actions of litigants and the outcomes of litigation. These letters will give us insight into where this money is going and will help us craft effective protection to keep the civil justice system honorable and fair," Cornyn said.
Commercial lenders finance the cost of civil litigation in return for a portion of any recovery, but typically, neither the existence nor the terms of such agreements are disclosed to the court or opposing party. Third party litigation financing is estimated to be a multi-billion dollar industry, but it is largely unregulated and is subject to little oversight, fueling concerns that such agreements distort the civil justice system.
Links to the signed letters can be found below:
Letter to Juridica Investments Ltd.
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Grassley Probes Record Lack of Confirmed Watchdog at State Department
WASHINGTON - Sen. Chuck Grassley today asked the State Department and a lead agency watchdog group to provide all records that would document how and why the State Department went more than five years without a permanent inspector general. Grassley cited several examples in which a later, permanent inspector general found the lapse compromised agency oversight.
"Every agency needs a permanent, independent inspector general," Grassley said. "The position is too important to assign to a placeholder. An acting inspector general doesn't have the mandate to lead, and he or she might not be able to withstand pushback from an agency that doesn't want to cooperate with oversight."
Grassley said going for more than five years without a permanent inspector general at the State Department is "egregious." That covers the entire four-year tenure of Secretary Hillary Clinton, the only secretary of State to have served without a single permanent inspector general overseeing the department since the creation of that watchdog position in 1957.
"The Obama Administration should answer for why it allowed that to happen," Grassley said. "There's been no transparency on the reason for the lack of an appointment for so long. We'll never know the extent of the damage to good governance caused by this lapse, but it's fair to say some of the problems exposed lately probably could have been prevented with a permanent inspector general in place."
The White House allowed the position to be "temporarily" filled by an individual with demonstrated close ties to the officials he was charged with overseeing. The work of the subsequent, Senate-confirmed inspector general provides insight into some of the problems that arose from the previous unusual arrangement. The permanent inspector general reported that aides to Clinton contributed to an "appearance of undue influence and favoritism" in departmental investigations of three allegations: that the U.S. Ambassador to Belgium allegedly solicited a prostitute; that a department manager allegedly engaged in sexual misconduct and harassment; and that Cheryl Mills, then chief of staff and counselor to Clinton, allegedly unduly influenced an investigation of an unauthorized release of communications concerning a nominee for a U.S. ambassadorship.
Grassley cited an example in his own investigation where a permanent inspector general might have investigated thoroughly and shielded whistleblowers who alleged they were retaliated against for reporting to an acting inspector general sexual misconduct at the U.S. consulate in Naples. Also, the permanent inspector general for the State Department and the permanent Inspector General for the Intelligence Community have recently uncovered problems in the way Clinton handled emails containing classified information, Grassley said.
Grassley sought correspondence and information from Michael E. Horowitz, chair of Council of the Inspectors General on Integrity and Efficiency, and Secretary of State John Kerry. Grassley is a long-time advocate for agency inspectors general.
His letter is available here.
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Grassley Adds to State Department Questions Amid Newly Disclosed Emails
WASHINGTON -- Sen. Chuck Grassley is continuing his inquiry into State Department personnel practices amid newly disclosed emails showing the intersection of official actions and private business involving a top aide who was working for the State Department as a Special Government Employee, an outside firm, Teneo, and the Clinton Foundation at the same time.
"How can the taxpayer know who exactly SGEs are working for at any given moment? How can the ethics officer at the State Department know?" Grassley wrote to Secretary of State John Kerry and similarly, in a letter to the top aide, Huma Abedin.
Grassley pointed out that in a letter to the Department of State on July 5, 2013, in response to a Grassley inquiry, Abedin wrote: "I was not asked, nor did I undertake, any work on Teneo's behalf before the Department (and I should note that it is my understanding that Teneo does not conduct business with the Department of State). I was also not asked, nor did I provide, insights about the Department, my work with the Secretary, or any government information to which I may have had access."
Grassley wrote that emails newly disclosed through a Freedom of Information of Act lawsuit regarding a trip to Ireland by Clinton include State Department, Teneo and Clinton Foundation employees and so "raise a number of questions about the intersection of official State Department actions, private Teneo business, and Secretary Clinton's personal interest in fundraising for the Clinton Foundation and related entities."
Grassley asked a series of questions to try to shed light on the State Department business that intersected with Teneo and Clinton Foundation business.
"The bottom line has always been and still is whether the taxpayers are well-served by agency practices and spending," Grassley said. "No one will know for sure until the State Department is more transparent about how it operates."
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