Mike Cox, a Wayne County prosecutor, has clear ideas about what activities the attorney general of Michigan should target. Prosecuting criminals tops his list, naturally. Another primary mission he ticks off is enforcement of child support payments. The lack of it in Michigan--the state ranks as third from worst in collecting outstanding "deadbeat dad" payments--has Cox, this year's Republican nominee for attorney general, complaining that the present AG has neglected these core chores in favor of running after corporations with showy consumer-protection cases. "There are a lot of attorneys general who got hooked into getting cute stories instead of doing the heavy lifting," Cox says.
Such talk, not surprisingly, has won Cox enthusiastic fans in the Michigan business community. But it's not Cox's get-tough rhetoric that has endeared him to business groups so much as his opposition to pursuing the type of anti-corporate lawsuits that have made state attorneys general into the business groups' fearsome enemies. State attorneys general, including the current occupant of the office in Michigan, Democrat Jennifer Granholm, are building on their high- profile wins combating Microsoft Corp., tobacco companies and Merrill Lynch to join together to take on other Wall Street securities firms, drug companies and environmental polluters.
Clearly, a lot of regulatory action has shifted from the federal government to the states through the efforts of attorneys general pursuing consumer-friendly lawsuits. It's also increasingly obvious that the businesses that are being sued--or fear being targeted--don't like it and intend to do something about it. Business groups are hoping to stop state lawsuits before they start by electing allies and defeating candidates for attorney general who are perceived as hostile toward them and too friendly toward consumers or labor. Accordingly, they are now pouring millions of dollars into attorney general races that in the past they might have ignored. "Historically, at least with the advent of business PACs in the late 1970s, attorney general races were off most business people's radar screens," says Bob LaBrant of the Michigan Chamber of Commerce. Now, he says, "there's greater incentive to get involved in an attorney general race because of the increased involvement of attorneys general across the country in litigation against the business community."
One of the great philosophical divides in American politics lies between those with opposing views of how business should be regulated. There are those who believe that businesses have a right to conduct their affairs with a minimum of interference from state governments, which can only hinder their productivity and profits. There are others who believe just as strongly that conducting business in a state is a privilege that confers with it a number of responsibilities that the state has the duty to enforce. The majority of state attorneys general over the past few years have acted as if they were members of the "privilege" camp, and that's what's fueled the rise of groups such as the U.S. Chamber of Commerce's Institute for Legal Reform, designed to combat what the business sector sees as excessive regulatory activism on the part of the AGs.
Attack ads--$200,000 worth of them--sponsored by the chamber were widely viewed as having tipped the balance in a close Indiana race two years ago. "It was planned perfectly. It just came out of nowhere," recalls Karen Freeman-Wilson, the Democratic attorney general unseated in that contest. Freeman-Wilson served only a short time but had investi-gated tobacco and gasoline retailers and come down hard on nursing home operators. "Certainly I earned their interest," she says of the ad campaign.
Bill Pryor, the attorney general of Alabama, sees the motivating force behind the business groups' involvement in attorney general campaigns as a means of protecting "the free market and the rule of law." Pryor says that many of his Republican colleagues--and that includes Pryor himself--"are more committed to the traditional role of attorney general as chief law enforcement officer. We don't think that the court system ought to be used as a regulatory vehicle."
Republicans have traditionally fared poorly in state attorney general races, winning only about one-third of the time since 1968. To remedy that problem, Pryor helped found in 1999 the Republican Attorneys General Association, a partisan organization run under the auspices of the Republican National Committee. At that time, there were only a dozen Republican attorneys general. Now there are 16, and RAGA is eyeing a half-dozen races that have been left open this year by Democratic retirements. (A Democratic counterpart orga-nization was set up this past summer and hoped to raise $1 million by year's end at dinners featuring current attorneys general.)
RAGA does not take in or disburse money directly, but its efforts have led to huge donations to the Republican National State Elections Committee from businesses that fear state lawsuits. Microsoft, for example, said in 2000 that it gave RAGA $10,000 through the Elections Committee, a figure dwarfed by donations from tobacco companies, insurers and the gun lobby. Pryor considers it important for the Republican Party to recruit competitive candidates for attorney general since so many end up becoming favorites to run for governor and the U.S. Senate. But his main concern, he says, is ensuring that there is a healthy debate over the proper role for attorneys general to play while they serve in that office. "I think it's fair to say that some of the lawsuits filed by state attorneys general have been designed to increase the scope of government, including the revenues flowing to government and regulation of the marketplace," Pryor says. "That should concern anyone who believes our free market functions better with limited government."
Since there are plenty of people who do share that concern, the Republican candidates for attorney general in each of the last two Texas races have each received hundreds of thousands of dollars from donors in litigious industries, including developers and insurance companies. As much as a quarter of their haul came from individuals and PACs associated with a pair of Texas groups founded to combat "lawsuit abuse." In both those races, the GOP candidate was viewed as primarily a pro-business candidate, while the Democratic hopeful had worked as a trial lawyer. "The idea of having a plaintiffs' attorney managing the state's law firm is something we find troubling," notes Jeff Clark, executive director of the Texas chapter of the National Federation of Independent Business, a small-business lobby. As Margaret Justus, spokeswoman for this year's Democratic nominee, Kirk Watson, points out, every season is open season for business to beat up on trial lawyers. Justus posits that Watson's record as a tech- friendly mayor of Austin can help him counteract the hostility his legal career might engender in the business sector. Clark and other Texas business lobbyists aren't buying that argument. Bill Hammond, president of the Texas Association of Business, calls campaign contributions from trial lawyers "radioactive."
But if the business lobby seeks to tar Watson because of the company he keeps, Watson's campaign is questioning the association of his GOP opponent, former state Supreme Court Justice Greg Abbott, with business groups. The leading client of the law firm where Abbott draws his checks used to be Enron, before that company's implosion. Kenneth Lay, the discredited former head of Enron, used to sit on the board of Texans for Lawsuit Reform, which advocates limits on product-liability cases. Watson is also making hay out of the fact that three of the attorneys at Abbott's firm have represented Farmers Insurance Group. Fast-rising homeowners insurance premiums are a hot political issue in Texas, and the state is suing Farmers for alleged price gouging. The Watson camp thinks Abbott would have a clear conflict of interest in the case if elected attorney general. Abbott dismisses the charge as scurrilous, pledging to uphold the law against insurance companies.
Still, there is no question that there are dangers for candidates who embrace business interests too ardently during the current season of corporate scandals. Ohio state Senator Lee Herington, a Democrat, has built his campaign for attorney general on the premise that the state government has become too cozy with business. "Corporations have kind of taken over in Ohio," Herington says. "I think the public is going to get engaged in this campaign and they're going to understand these corporate excesses, and the Republicans are not going to win this race." Whether Herington can turn the tide in a state where Democrats have been shut out of statewide offices in recent years remains doubtful.
Regardless of the success or failure of the Herington campaign, however, big-business regulation is going to remain a mainstay issue of state attorney general elections for the foreseeable future. That, in turn, means that business groups will be contributing to these campaigns in a way that they had not done in the past. "These are generally low-visibility races," says Chad Kniss, who has studied state attorney general elections at the University of Kansas. "If you conclude that the visibility of the races is on the increase and more money is being spent on the AG contests, this is a radical change in the nature of elections for that office."