- The Washington Times - Friday, September 1, 2000

Critics of the government's antitrust crusade against Microsoft have focused on the heavy costs the suit has imposed on taxpayers, consumers and investors.

So far, these expenses include an estimated $35 million spent by the Justice Department; at least $100 billion lost by Microsoft shareholders; and immeasurable losses in innovation and productivity in the software sector.

The latest items to add to the list are the $13.2 million in attorney fees and $1.54 million in expenses being demanded by the 19 state attorneys general (AGs) who joined the Justice Department suit.

In this era of billion-dollar payouts to lawyers, these figures may not seem remarkable. Yet the motion for attorneys' fees and expenses filed by the state attorneys general exposes the political and economic self-interest that motivated the case.

Attorneys General Richard Blumenthal of Connecticut and Tom Miller of Iowa want $400 per hour for their efforts to add totals of $316,000 and $325,000 to their respective state treasuries.

That $400 per hour works out to an annualized salary of $830,000 about 8 to 10 times more than the average AG salary. Mr. Blumenthal claims to have logged 791 hours on the case and Mr. Miller 813.

Based on a 40-hour week, that means they devoted about 20 weeks, almost half a year, entirely to this case.

The AGs and their deputies, who are pledged to uphold the laws and protect residents of their own states, spent huge amounts of time New York Assistant Attorney General Richard Schwartz is claiming more than 4,000 hours billable at $290 per hour and millions in state taxpayer funds piggybacking a national case that the federal authorities were already handling.

The political ambitions of the AGs, often referred to as "aspiring governors," certainly played a role in their eagerness to join the prosecution. As Iowa Attorney General Tom Miller said of the case: "Everyone knew it was high profile. This one was a no-brainer."

Lawyers in the AG offices also had a strong economic motive to get experience with high-tech litigation. "This is the smartest thing I ever did," intoned former New York State Assistant AG Gail Cleary, who worked on the Microsoft case and subsequently jumped ship to a lucrative intellectual property law firm. So far, the AGs have successfully pushed an agenda that satisfies their own narrow interests by attacking the very company that revolutionized personal computer usage as "anti-consumer."

Yet even Frederick Warren Boulton, the attorneys general's star witness who would receive part of $948,000 in "expert fees" they are demanding admitted during the trial that the software sector enjoys "rapid innovation," and that "consumers have been well served by competition throughout this industry."

The AGs exhibit huge hypocrisy by presenting this legal bill to Microsoft. Since the most important constituency for many AGs is trial lawyers, they steadfastly oppose civil law tort reform such as "loser pays," yet apply it readily in this case to force Microsoft to subsidize their legal grandstanding.

Ironically, no matter who the "loser" will be in the courtroom, the verdict on the street already is in. If the AGs and the feds do not recover their costs, taxpayers will have lost millions on a high-tech witch hunt. If the government does win attorney fees from Microsoft, consumers simply suffer through higher prices passed along to them.

Whether the taxpayer or Microsoft ultimately picks up the state AGs' $15 million tab, the result will be the same the American public will once again be forced to pay for the recklessness of those who are supposed to uphold the law.

In politics, apparently, an absurdity is not an obstacle. It's a meal ticket.



Mark Schmidt is director of programs for the National Taxpayers Union Foundation.

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