Tag Archives: Michael Hough

Gov. Hogan signs forfeiture reform

Gov. Larry Hogan yesterday signed an important package of reforms to forfeiture law in Maryland. Applause to all who helped make this happen, including Sen. Michael Hough, Rob Peccola and Lee McGrath of the Institute for Justice, and Gov. Hogan.

P.S. Some coverage of a January press event in which I participated at the Capitol, calling attention to the case for asset forfeiture reform in Maryland: Frederick News-Post, Maryland ReporterWBAL.

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In miniature, March 7

  • I’ll be discussing redistricting reform in Maryland this evening 5-6 pm on Kai Hagen’s show on WTHU 1450 (Thurmont) (update: audio);
  • After football player collapses on field with heat stroke, resulting in nine-day coma that brings him near death, team doctor refuses to clear him to play again due to re-injury risk; federal court rules for his claim of disability discrimination but Fourth Circuit reverses [Gavin Class v. Towson University, opinion]
  • “Maryland Might Stop Recording Conversations On Public Buses” [Andrew Fleischman, “Fault Lines”]
  • Litigation over historically black colleges and universities in Maryland has dragged on for years [Maryland Reporter]
  • “Maryland Democrats’ plan for matching college savings grants is welfare for the wealthy” [Washington Post editorial]
  • Bill by Sen. Michael Hough would abolish ticket cameras [Danielle Gaines, Frederick News-Post]

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In miniature, June 18

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Maryland False Claims Act, cont’d

I’ve blogged several times in this space about the Maryland False Claims Act, whose passage was narrowly averted in the last legislature, and I’ve noted critics’ concern that its ambiguous language could support private lawsuits challenging the tax bills of Maryland companies, with a verdict or settlement resulting in a percentage payment to the bounty-hunting complainant. Now I’ve got a short piece in Reason tracing where such statutes can lead when loosely worded in a way susceptible to exploitation by clever lawyers: a Philadelphia complainant is using New York’s liberally worded False Claims Act to challenge the federal taxes of a Philadelphia-based financial giant, the Vanguard Group, for what could be a very rich bounty payoff should the case settle. As I point out, “by getting pro-plaintiff laws through the legislature in just a few states — New York liberalized its law four years ago — advocates can set the stage for a nationwide informant push.”

P.S. My earlier writing also drew a two-part (!) indignant response from a plaintiff’s lawyer who makes a business of filing this type of suit. The most hilarious bit is Mr. Kitts’s after-the-fact claim that the unseating of (opponent) David Brinkley by (supporter) Michael Hough constituted some sort of “referendum” on the MFCA. As a resident of District 4 I never did meet a voter during the whole primary season who told me this (alas) obscure legislative controversy made any difference in how they cast their ballot.

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In today’s Baltimore Business Journal

I’ve got an opinion piece on the Maryland False Claims Act, which came near passage in the recent legislative session, in this morning’s Baltimore Business Journal. More on the bill, including its political background, here.

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“Hatchet job disguised as praise for Brinkley”

I have a letter to the editor in this morning’s Frederick News-Post boiled down from a longer blog post that appeared in this space on Friday:

On June 6 you ran a letter to the editor signed by Delegate Sam Arora, D-Rockville, ostensibly praising Sen. David Brinkley as an ally of liberal Democrats.

Any readers who took this letter at face value got fooled. Looked at closely, it was plainly meant to hurt Brinkley, not help him, with conservative Republican primary voters.

Whatever would motivate retiring Delegate Arora, a very liberal Montgomery County Democrat, to do that? Maybe it’s that Sen. Brinkley single-handedly derailed the False Claims Act sponsored by Arora, which would have stood as the major legislative accomplishment of his brief Annapolis tenure (and would have pleased some wealthy trial lawyers, even as it appalled business groups).

I conclude that Arora (1) bears a deep grudge against Brinkley precisely because of Brinkley’s success in blocking Democratic legislation; (2) doesn’t mind doing a favor to Brinkley’s opponent, Delegate Michael Hough, who broke with most Republicans to back Arora’s pro-lawsuit bill.

I also wonder whether Delegate Arora thought up this little stunt all by himself, or had help.

WALTER OLSON
New Market

My Friday post has more backstory about how many of his own liberal allies came to shun Del. Arora for what they saw as double-dealing and opportunism.

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Needle exchange and the District 4 race

Heroin use has been rising steeply in our area: this Frederick Gorilla article has details. Users mostly go to Baltimore to buy their supplies. The state of Maryland already authorizes a needle-exchange program aimed to reducing the rate at which users spread debilitating diseases to each other through sharing injection works. Legislators this past term voted to relax the program’s rules slightly so as to permit exchanges on other than a 1-to-1 basis.

Del. Michael Hough vehemently opposes needle exchange, and has chosen to make this an issue in his primary challenge to Senate Minority Leader David Brinkley (R-New Market). Brinkley believes (as do most experts) that this low-cost way of preventing the spread of HIV and hepatitis will actually save taxpayers money over the long run, aside from its humanitarian impact. I’m a libertarian who’d like the state out of drug issues entirely, but campaigning against this one tiny program strikes me as being like watching the state spend millions treating polio or tetanus and then getting all bent out of shape when it asks to spend thousands on vaccines.

Dave Schmidt, who ran for Alderman last year on the Republican line in Frederick, wrote on his Facebook page:

…Making this about a waste of taxpayer dollars is not only misleading, and dangerous thinking, it is wholesale inaccurate. There is case study after case study that proves that a clean-needle program will not only save lives, but lower the government cost burden over time. There is something fundamentally wrong with the idea that someone suffering from a disease (even if they acquired it voluntarily) should be forced to live an ever increasingly destructive lifestyle because we don’t like what they do. Even if it is despicable in my mind to make this about money, or placing a dollar figure on the life of a fellow citizen, that argument is invalid. This should be about how we care for those sick and unable to care for themselves. Providing a path out, not shutting the door in their face because its going to cost us a dime up front.

For more data, here’s a 2008 report affirming needle exchange effectiveness from S. Robert Lichter’s STATS, the statistical center (often perceived as leaning right of center) at George Mason U. in Virginia and a 2005 paper from the Centers for Disease Control.

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HB 867, the Maryland False Claims Act, and the District 4 race

I’ve been writing and speaking out for years about the evils of the federal False Claims Act and its state-level equivalents, but I certainly never expected the law to wind up becoming an issue in my hometown race for state senator. Yet that’s what has happened in Maryland’s District 4, where as Bethany Rodgers of the Frederick News-Post reported, candidates David Brinkley and Michael Hough have traded charges vigorously on the issue. Del. Hough (unusually for a Republican) crossed over to support the proposed Maryland version of the FCA in this year’s legislative session, but the bill failed on the last day of session when Brinkley, considered a master of the intricacies of the legislative process, used a procedural maneuver to kill the bill single-handedly, bitterly disappointing the bill’s sponsors, liberal Montgomery County Democrats Brian Frosh and Sam Arora, as well as the state’s trial lawyer lobby, which had made the bill a priority.

Del. Hough defended his position on Facebook as follows:

And at Red Maryland, a blog that has endorsed Hough, Brian Griffiths seeks to defend Hough from what he calls “bizarre accusations that he has sided with trial lawyers” in supporting the FCA, though such accusations would seem no more than baldly true (the question is hardly whether he sided with them, but whether he was right to do so). “I have absolutely no idea on what planet it is a conservative ideal to oppose harsher penalties for people who wish to defraud the people out of taxpayer funds.”

So what do these laws do, and why have they turned into a flashpoint for intense opposition from the business community, to the point where the Maryland Chamber of Commerce would vocally oppose HB 867 as “burdensome and unfair” in its provisions and Maryland Business for Responsive Government would treat it as a key vote, to Hough’s disadvantage?

Based on a Civil War era statute but drastically expanded in 1986 into its modern form, the False Claims Act allows freelance informers to accuse entities dealing with the government of fraud, and then pocket a hefty share of the proceeds of a resulting judgment or settlement. To encourage suit-filing, the law awards treble or other multiple damages, attorney’s fees, stiff statutory damages and other enhancers. The model in effect is privatized law enforcement — what could go wrong? And indeed the idea appealed for a time to many modern Republicans, even Ronald Reagan — until actual experience began to show its flaws:

  • The law has made rich various employees who participated in frauds themselves, or who failed to inform higher-ups of their discovery of accounting problems (which of course might have upset the chance of bagging an FCA award for themselves). It has even provided a reason to *not* report fraud too quickly, as in the famous case of a GE employee later accused by chairman John Welch of having “sat back and waited in the weeds so the damages would mount.”
  • While the law has been used against many genuine frauds, it also gets deployed against what many would see as simple differences of opinion in complicated, high-stakes areas of government contracting — reimbursement formulas, overhead rates — as well as against industry customs accepted as normal by the players and not challenged by the government at the time. Because stakes are so high — including treble or other multiple damages — defendants often settle for some fraction of the demand. The law thus incentivizes actions based on gray areas of contracting regulation with high stakes over actions based on definite or classic frauds where recovery will not be large (say, because the fraudster will be bankrupt.)
  • Animal rights activists have used the law to go after a cancer researcher who received federal funds for animal research, supposedly on the theory that he misrepresented the results of his research. That’s one of many instances in which the law is used to pursue vendettas or for extra legal leverage in disputes between private actors — say, between labor unions or community organizers and the companies they attack.
  • A hedge fund was found to have sold short the stock of a target firm (betting that its stock would fall) and then filed a False Claims Act naming the company, predictably bringing about the very stock drop it had bet on.

By the time the business community had begun to mobilize to point out the issues of fairness and practicality at stake, the law had made a group of lawyers immensely rich, and they have formed the nucleus of a powerful lobby with many allies in elected office — mostly Democrats, but also including a Republican here and here — to defend the law and push for its further expansion. By 2009, when another expansion was proposed, Hans von Spakovsky and Brian Walsh of the Heritage Foundation were writing that: “Tort lawyers are about to get another big payoff from Congress and the Obama administration for the hundreds of millions of dollars they contributed to candidates in the last election cycle (over 75% of which went to Democrats). … amendments to the federal False Claims Act that will hurt our economy but make the trial lawyers very happy indeed.” (full report). Inserting FCA-like provisions into the Dodd-Frank bill was a key objective of liberal Democrats, and their success in doing so is seen by many businesses as among the worst features of that law.

The proposed Maryland version would have gone much further — with consequently even greater risk of abuse — than the federal FCA or its various state equivalents. For example, it had a much less usable statute of limitations, meaning that clever lawyers could reach back to sue over long-distant supposed misdeeds. And as the Council on State Taxation warned, because it had vague language that did not exclude tax disputes, it might be seized on to justify suits by Lawyer A demanding a retroactive hike in the tax bill of Company B — plus multiple damages, lawyers’ fees, etc. — and a court might agree to let such a claim go forward.

Del. Hough does not seem to have been very persuasive in convincing Republican colleagues that HB 867 represented the true conservative position.  (Virtually every Democrat voted for the bill.)  Every single Republican member of the Senate joined in siding with Sen. Brinkley’s position against Del. Hough’s, and so did the great majority of Republican delegates, including every other GOP member of the Frederick County delegation. (That includes Hough’s own slate-mate Kathy Afzali, as well as Kelly Schulz and Patrick Hogan.) Of big-time conservatives in the House of Delegates, virtually every one sided with Brinkley’s position over Hough’s, the most notable exception being Del. Michael Smigiel of the Eastern Shore.

Smigiel, it should be noted, has the good excuse of being a trial lawyer in his day job.

 

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Sen. Brinkley’s economic record

I’ve got a letter to the editor in the May 23 Frederick News-Post. I write:

The latest annual ratings from Maryland Business for Responsive Government are out, and both candidates in the District 4 Senate GOP primary get high ratings, at 92 and 83 percent, for supporting free-market, limited-government policies. But it just goes to show how ridiculous it is for the candidate with the lower 83 score — Delegate Michael Hough — to launch a mailer and website attacking the candidate with the higher 92 score — Sen. David Brinkley — as some kind of liberal Obama clone and “Martin O’Malley’s best friend in Annapolis.”

Of the five Republicans in the current Frederick County delegation to Annapolis, Delegate Hough actually has the lowest MBRG rating; delegates Kelly Schulz and Kathy Afzali both scored 100, and Delegate Patrick Hogan, 92. Delegate Hough is entitled to his own opinions, of course, but it ill behooves him to accuse David Brinkley of being some kind of liberal when Senator Brinkley scores higher free-market ratings than his own both for the past year and cumulatively over the full period of his legislative service.

Walter Olson, New Market

 

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