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Sunday, February 24, 2008

Courts - Justice Dept. no-bid contracts with John Ashcroft and the Indiana twist

This NYT story from Jan. 10, 2008, reported by Philip Shenon, first brought the Zimmer settlement connection to my attention:

WASHINGTON — When the top federal prosecutor in New Jersey needed to find an outside lawyer to monitor a large corporation willing to settle criminal charges out of court last fall, he turned to former Attorney General John Ashcroft, his onetime boss. With no public notice and no bidding, the company awarded Mr. Ashcroft an 18-month contract worth $28 million to $52 million.

That contract, which Justice Department officials in Washington learned about only several weeks ago, has prompted an internal inquiry into the department’s procedures for selecting outside monitors to police settlements with large companies.

The contract between Mr. Ashcroft’s consulting firm, the Ashcroft Group, and Zimmer Holdings, a medical supply company in Indiana, has also drawn the attention of Congressional investigators.

A Times story Friday, Feb. 23rd reported:
The House Judiciary Committee disclosed Friday that it was considering subpoenaing former Attorney General John Ashcroft to testify about a contract worth at least $28 million that was steered to his consulting firm by the Justice Department. * * *

Democratic lawmakers are investigating the circumstances of the no-bid, 18-month monitoring contract, worth $28 million to $52 million, that was awarded to Mr. Ashcroft’s consulting firm to oversee a settlement between the Justice Department and Zimmer Holdings, a large medical supply company in Indiana. The settlement resolved criminal charges that had been brought by the United States attorney in New Jersey, Christopher J. Christie.

Today Stephanie Salter of the Terre Haute Tribune Star has a column titled "What’s John Ashcroft doing in Indiana? Making millions." The long column begins:
TERRE HAUTE — Until the past year, an august northern Indiana company, Zimmer Holdings, was pretty much going about business as usual: manufacturing a broad array of medical devices, such as hip and knee replacement implants, expanding operations in the United States and 25 nations, and racking up annual sales of nearly $4 billion.

Then Zimmer, with headquarters in Warsaw, got into some hot water with the federal government.

After a two-year investigation of the orthopedic implant industry, a criminal complaint was filed in U.S. District Court in New Jersey, where Zimmer does business. The complaint charged Zimmer and four other companies (two more from Warsaw) with “conspiracy to commit violations of the federal anti-kickback statute.”

Specifically, the feds said the companies provided what a U.S. attorney called “exorbitant” fees to doctors and other health-care consultants to exclusively choose, use or endorse their products for their patients.

Posted by Marcia Oddi on February 24, 2008 09:48 AM
Posted to Courts in general