In what should be viewed as an open outrage, U.S. Attorney Christopher Christie has announced that his office had awarded a windfall contract of $52 million to the firm of his former boss, John Ashcroft. The contract is highly unusual on a number of points — and should be the subject of a congressional investigation.
First, Ashcroft just recently created Ashcroft Group Consulting Services, but was suddenly viewed as the best of the litter by Christie to handle the contract. Second, he is receiving a massive $52 million for a $311 million settlement — an exceptionally high ratio of settlement dollars to fees. Third, Ashcroft is the only one of the monitors who charged BOTH a flat fee and an hourly fee.
Making this sweetheart deal all the more obnoxious is the fact that Christie is seeking to end a probe into kickbacks by leading manufacturers of knee and hip replacements, he touted the agreement as a groundbreaking development for consumers and the industry.
Ashcroft was and remains a highly controversial figure. He was widely viewed as an enemy of civil liberties and an extremist on a variety of legal questions. His career is not one that would immediately draw universal approval from the bar or the courts. The deal is part of a long trend in the Bush Administration of enriching Bush loyalists with public funds or positions.
Putting aside the appearance of raw cronyism, the contract itself is obscene and should raise serious questions about Christie’s continuance in his position.
The contract involves a settlement reached by Christie’s office:
Disclosed in SEC filings, the arrangement calls for Zimmer Holdings of Indiana to pay Ashcroft Group Consulting Services an average monthly fee between $1.5 million and $2.9 million. The figure includes a flat payment of $750,000 to the firm’s “senior leadership group,” individual legal and consulting services billed at up to $895 an hour, and as much as $250,000 a month for expenses including private airfare, lodging and meals. . . . The $311 million settlement, announced in September, ended a two-year federal probe into allegations that the firms paid surgeons millions of dollars to use and promote their knee and hip replacements, a violation of Medicare fraud statutes.
Four of the companies signed agreements in which they admitted no wrongdoing but agreed to pay the government between $26 million and $169 million. Zimmer paid the heftiest settlement – more than double any other company. A fifth defendant, Stryker Corp., avoided paying any settlement.All the companies agreed to hire a monitor to ensure they comply with the law and a set of reforms imposed by the prosecutors. Besides Ashcroft, the other monitors tapped by Christie are David Kelley, former U.S. attorney in Manhattan; Debra Yang, former U.S. attorney in Los Angeles; David Samson, former New Jersey attorney general, and John Carley, a former attorney for the Federal Trade Commission and later Cendant Corp.
In addition to pulling Christie into a committee room to answer for this obscene deal, Congress needs to look into these contracts which are often secret and ripe for abuse — as in this case. Former SEC Chairman Richard Breeden billed $300,000 to oversee the Worldcom deal.
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