America’s Lawyer E21: A top military contractor can avoid paying a $35 million dollar penalty for providing faulty materials to the military – we’ll explain the legal loophole that got them out of trouble. An entire Mississippi town spent more than a week without safe drinking water thanks to a series of failures following catastrophic floods. We’ll have the details for you. And a Russian oil executive that criticized Putin fell out of a hospital window last week – something that has become very common for critics of the Russian leader. All that, and more is coming up, so don’t go anywhere – America’s Lawyer starts right now.
Transcript:
*This transcript was generated by a third-party transcription software company, so please excuse any typos.
Michael Bixby: Hi, I’m Michael Bixby in for Mike Papantonio and this is America’s Lawyer. A top military contractor can avoid paying a $35 million penalty for providing faulty materials to the military. We’ll explain the legal loophole that got them out of trouble. An entire Mississippi town spent more than a week without safe drinking water thanks to a series of failures following catastrophic floods. We’ll have all the details for you. And a Russian oil executive that criticized Putin fell out of a hospital window last week. Something that has become very common for the critics of the Russian leader. All that and more is coming up. So don’t go anywhere. America’s lawyer starts right now.
A major military contractor provided faulty bulletproof vests to the military, but they got to avoid a large penalty thanks to a very odd legal loophole. Ring of Fire’s Farron Cousins joins me to talk about what’s happening along with many other issues. Farron, thanks for joining me here.
Farron Cousins: Thank you.
Michael Bixby: So, what we have here is, is Honeywell. They manufactured faulty product that was supposed to be used to protect our military and they don’t have to pay anything. What on earth is happening here?
Farron Cousins: Right. This is a very weird story because obviously Honeywell is one of the top military contractors in this country and they’re making bulletproof vests, let’s prevent US troops from getting killed. But there is a long line of different companies in involved in the production of these bulletproof vests and Honeywell was just one piece of it, basically. So when it became revealed that, uh-oh, all of our tests showed that these things would fail under high heat, the material would degrade. It basically wouldn’t stop bullets if it got hot and, and it stayed that way, not just while it was hot, it would totally degrade the material and they knew it. So they get hit with a false claims act from the Department of Justice said, you knew you gave us faulty materials. We’re gonna fine all of these companies along the way. And Honeywell said, well, hold up though. There’s a little piece of this law that says if you’ve already fined these guys, I can actually subtract that from what I owe and now I don’t have to pay. And that’s you, you know, way more about the law than I do. I’m just trying to distill it down to it’s basics, but it’s, it’s ridiculous that they’re like, well, these guys already paid the fee, so I’m good to go.
Michael Bixby: That’s exactly right. And so you’re talking about the pro tanto legal rule, which basically is a contribution rule that says, hey, if they’ve already paid for the value of the damage that’s been occurred, these other people in line, these other companies, these other two or three, or however many other people are involved, if they’ve already paid, we don’t have to pay. And here’s the thing about this that to me, is just, I think is absurd in my opinion, is that look at when was this case first filed, 2008, George W. Bush was president when this case was filed. And what, what’s, what happened here, qui, it’s a qui tam false claims act. It’s fraud on the government. So they’re selling a knowingly defective product and they’re basically saying, well, the damages aren’t that much. I think the whole idea is crazy here. Something that’s being used for a military people. It’s, it’s bulletproof vests. Are there people who died as a result of this? And they’re wanting to limit their damages to just a few million dollars here. I think the loss of the deterrent effect, I mean, you think about this is that basically what this does is motivates companies. You say you get sued in 2008, it’s like, let’s just hold ’em off. Let’s delay this thing for 14 years. And as long as these other companies or somebody else gets bled out and they get taken care of, we’re not responsible at all. They get completely off the hook.
Farron Cousins: Right. And, and right now I think Honeywell is facing some civil lawsuits. So there’s at least some kind of damage that people suffered due to the defectiveness. But the civil suits, what I read $500,000. I mean, half a million dollars is what they might end up paying when they should have had to pay 35 million just to the government.
Michael Bixby: Right.
Farron Cousins: Before the civil suits. And like you said, we don’t necessarily know right now if people did die from the defects, clearly there were some injuries. But this is terrible, right? You put on that vest, you’re over there serving in the military.
Michael Bixby: Yep.
Farron Cousins: You expect this is going to do something to protect me. I mean, that saved my life completely, but I am more protected with this. And Honeywell knew along with these other companies here, that it wasn’t true. Their own documents like, concealed testing data is what they call it in the DOJ filing. They concealed it, they covered it up. And that’s pretty much what we see, whether it’s the pharmaceutical industry or these military contractors, coverups across the board.
Michael Bixby: Right, and what you’re gonna see from this is people champing at the bit to say, this is fantastic. Are you kidding me? We, this aids the strategy of minimizing liability, minimizing responsibility. This says to the companies that, hey, you know, first of all, a lot of times when you commit fraud, you’re not gonna get caught. I mean, that’s the reality is that most of the time, these people don’t get caught in these cases. And if you do get caught, we’ve got a series of loopholes. You, you can delay, maybe you won’t have to pay. We can minimize what the damages are because somebody else’s responsible. And I think it completely removes the deterrent effect. I think what you’re gonna see is more companies being emboldened by this and, and, and taking further action that just harms consumers, harms people in the military, harms the government and harms everyday people.
Farron Cousins: Absolutely.
Michael Bixby: Starbucks CEO Howard Schultz gained an extra $1 billion, with a B, during the pandemic and now he’s fighting union efforts at his stores. Now we might categorize this story here Farron, under things that are not shocking. Tell us about what happened here with Starbucks new CEO.
Farron Cousins: Right. So Schultz, you know, he’s been the CEO of Starbucks for many years, and then he left. He said, I’m taking a step back. I’m gonna be kind of just behind the scenes guy. But then during the pandemic, obviously still owning most of the company, he gets a billion dollars, but they also saw something else happen. They saw people working under these horrendous conditions finally band together and said we deserve better. So there’s been a huge unionization push at Starbucks stores across the country and they’ve been wildly successful. So then the current, or I guess former now Starbucks management came back and said, Howard, you gotta come back and help us here. So he says, all right, I’ll come back and I’ll tell you what, I’m gonna be paid a dollar a year. That’s my yearly salary.
Michael Bixby: That sounds, that sounds really reasonable.
Farron Cousins: Yeah. Look at, look at how generous I am.
Michael Bixby: This is good nature.
Farron Cousins: A dollar. And he starts busting up all these stores, ignoring the fact that he got again, close to a billion dollars in just the last 12 months and acting like he’s the hero. I only get paid a dollar. I don’t know what you’re talking about folks. It’s disgusting. He’s closing stores. They’re firing union workers. They, they’ve accused one store of actually kidnapping a manager because they all confronted him about their union efforts. And so Starbucks said, no, you kidnapped him. It’s, it’s crazy what Howard Schultz is doing here. But that’s why he was brought back. He has the power. He has the money.
Michael Bixby: Right.
Farron Cousins: And he’s trying to kill these unions.
Michael Bixby: And, and that’s what, that’s what’s been noted. That that’s one of the things that he was noted for is that, hey, he has the ability. He’s been very successful in fighting off these unions. I, I feel like though, this is the sort of the end of a Scooby-Doo episode, right? Where, you know, you pull the mask off and hey, who was, who was conducting all these efforts? Who is part of this strategy? And it’s like, this is the most unshocking thing in the history of the world, of course, this is exactly what it is. But if you look at the complaints and you see what they are, I mean, they range from, from very significant to minor. But you see a pattern here, right? When you see them offering these stores and, and not offering other stores, essentially punishing the people who’ve chosen to unionize. When you see they’ve got hundreds right now, I think it’s over 200 complaints that have been issued about basically violations related to these union type activities. So this is not like, oh, there’s one bad apple. What, what this reveals to me is a con, coordinated effort. I mean, does that raise bigger concerns for you overall with what, what they’re, what they’re doing here?
Farron Cousins: Oh, I think absolutely. And they know, like you’re saying, they know exactly what they’re doing. They’re pitting stores basically against each other and they’re saying, oh, this non-union store, we’re gonna come in, everybody gets a $5 an hour raise. But you union store, eh, because you’re union, you have to negotiate with us and oh boy, that’s gonna be a couple of months in the courtroom. So we’re gonna go ahead and give these people raises and benefits, which are not $5 an hour. They’re paltry, small raises. But they’re trying to make the union people and send the message out to the non-union stores that, look how generous we are over here. You don’t want to have to get involved in all these fights and negotiations and, oh, that’s a hassle, but that’s what they’re doing. And that’s again, super small part of it. And we are seeing stores just completely close down because they voted to unionize.
Michael Bixby: Right.
Farron Cousins: So all these people without jobs suddenly.
Michael Bixby: Yeah. When, when, when you get equal bargaining power, the difference, the difference that makes, and, and when it’s just one versus the very large company, you know, you don’t have it, you don’t have it. But when people band together and they, you see the reaction to that because they know what that means. They know what that means. They understand what that means.
The city of Jackson, Mississippi was left without usable water for over a week following severe floods in the state. Farron, this story is, is sad. I mean, the more I read about the human element of this story, the more I read about just human suffering of regular people, people who are middle class, people who are lower, lower class, people who just are trying to make it, I, I think it goes much more than the one week being without water. I mean, this is a much bigger issue. Talk to the viewers about what’s, what’s Jackson, Mississippi facing here.
Farron Cousins: Right now and like you said, for, for quite some time, they’ve been facing a massive water crisis as have many other places in the United States. But Jackson is a little bit unique. We’re talking about the capital city of Mississippi. You do have a large minority population there. And these people have been neglected by the state, which ironic considering that’s where the, the capital is. That’s where all the lawmakers are. But the big floods came through, you know, two weeks ago, basically knocked out their whole water infrastructure. The pumps wouldn’t work. You’re getting raw sewage coming out. People were told, don’t drink it. Don’t shower in it. Don’t get it on your body because this is bad, bad stuff. And then I guess it was late on Labor Day, late Labor Day evening, governor Tate Reeves finally came out and said, okay, the water pressure’s back. We, we’re not totally fixed, but you can actually turn on the tap and stuff will come out. Whether or not it’s super safe to drink or use, that’s debatable, but he said, you got your pressure back.
Michael Bixby: Right. And, but to me what this raises and I think what it needs to draw the focus to is the larger problem because again, I think just, I would encourage people to look at the human element stories here. I mean, you have people talking about spending hundreds of dollars on, on bottles, bottles of water essentially a month, just to be able to have drink, to have drinking water in the United States of America. You, you hear the stories here from people who live in Jackson about, hey, we, the only thing we can use it for is showering and even that we’re having allergic reactions to this. We have stuff growing on us. I mean, this is totally unacceptable. I mean, the, the failure here just seems almost unfathomable. The fact that something like this, this is, should not be a political issue. This should not be something that, that causes any debate. This is just a matter of having basic human necessities met. Something has got to be done here. I mean, what, what can we do? What can we expect to have happen? How do we get this issue addressed?
Farron Cousins: What needs to happen is we have to improve the water infrastructure throughout the country. And this is something obviously with Flint, Michigan, you know, that put it in the forefront. Reuters report or AP report from a couple years ago said, hey, there’s actually 2000 water systems with more lead than Flint, Michigan. Now we have the failures in Mississippi. So this is across the board, you know, border to border, coast to coast, our water systems are not only failing, but poisoning people with lead and other contaminants.
Michael Bixby: Yeah.
Farron Cousins: And I hate to break it down to something so simple, but what we have to do is we have to invest money and it’s gonna take a lot of money, but we have to pull out the old pipes. We have to update the actual pumping mechanisms so that when there is a flood, when there is something, you know, catastrophic happening.
Michael Bixby: Right.
Farron Cousins: They don’t fail. But it takes money and that’s where the politics comes in. Nobody ever wants to spend money.
Michael Bixby: I think it’s the vastness of the issue, which is exactly the important thing is if you’re talking about there’s, there’s as much as 2000 other locations that are as bad as Flint for issues like lead. I mean, we talk about PFAS on here all the time is, you know, there’s all sorts of chemicals that are in the water. And I think projecting forward, this has to be something we address because water supply is projected to be an issue over the next couple and several decades, is that it’s an issue of water. Right now we’re facing struggles overall. The infrastructure issue here and the human toll, I think that should be the focus because when you understand the suffering for the people who are being hit hardest by this, you reach the conclusion that we have to act. We have to act swiftly now in, in a coordinated manner, just as, as a nation. We have to make this problem be, go away. We have to fix it.
An oil executive allegedly leaped out of a hospital window last week, something that seems way too suspicious to be true. Farron, uh, I, I don’t, I don’t even know what to think of this story. Nothing really surprises me anymore. So, an oil executive in Russia of a private, I believe the largest private oil company in Russia, had criticized Russia. Had criticized Vladimir Putin for the war in Ukraine. And lo and behold, it turns out that he just randomly leaped out of a hospital window and died. I, what a coincidence, huh?
Farron Cousins: You know, I, I think he’s the fourth or fifth executive at this point that has committed suicide ever since Russia invaded Ukraine. Pap and I have sat here and talked about most of these issues. So here comes another one, big powerful guy, tons of money, tons of power in Russia, has a heart attack, you know, air quotes on that as well. So he goes to the hospital, they save his life. And then immediately after having his life saved, he allegedly says, great, help me open this window because it’s time to go. No. There is no part of this story that makes any sense. And I think pretty much, at least everybody in America understands, they look at this and they’re like, there’s no way this individual killed himself.
Michael Bixby: It’s almost like a joke.
Farron Cousins: It really is.
Michael Bixby: And they’ve said, how much of a ridiculous story can we make up? And, and, and just spread just total disinformation and just do it with a, with a straight face while everybody knows. I mean, literally everybody knows. Everybody inside, even, even Russia has to know. And just, you can’t take them seriously at this point. And I, I feel like we’ve spent maybe a couple decades, Farron, trying to tell Russia, hey, we, we want you, the world has spent decades telling Russia, just be, be an adult country. Come here together, learn to get through what you’re dealing with. Learn to be normal, create a normal democratic system. We want you to participate in the world stage and they’ve just refused. I mean, they’ve refused at every single turn here. It’s honestly, I mean, there’s an element of this that’s funny. But then there’s an element of this where you, you’re thinking about the people who are suffering from this. It’s not funny at all. And, and again, we don’t, we don’t take Russia seriously because of this, but you see the danger on the global scale, the suffering in Ukraine and then the suffering of, you know, you think of dissidents, how they’re treated in Russia.
Farron Cousins: Yeah.
Michael Bixby: That if you disagree, if you speak out, if you have the boldness and you have any sort of power and you speak out, what’s gonna happen to you. I mean, what what’s gonna happen?
Farron Cousins: Well, we’ve seen this plenty of times. They fall out windows. And that really is something that they, that is almost their go-to method, you know, they’ll, they’ll poison you, sure. But we have seen so many journalists, so many dissidents, so many business people fall out of windows and not only in Russia. We have seen it happen in Europe where these, oh, the Russian was vacationing and gosh darn it, he fell off the balcony because Russians are just the clumsiest people on the planet apparently. But no, they follow them. They track them.
Michael Bixby: Right.
Farron Cousins: This is KGB tactics, which is where Putin came from and they’re still using it today. And that of course is one of the reasons this man is so dangerous over there in Russia, but nobody is safe over there. I, I mean, I hate to paint with such a broad brush, but you have people suffering. They’re, they’re tremendously suffering with this ongoing conflict with Ukraine. The sanctions are killing them. They’re, you know, some we’ve heard reports of people being basically conscripted into service, forced to go over there. Protestors, like if you protested the war, they’ve now drafted you into the military basically. And it’s either that or stay away from the windows because something’s going to happen to you. It’s terrifying.
Michael Bixby: And the, and the interesting thing to me, because this is no surprise that if you were somebody who’s going to speak out in a meaningful way, you, you’re not gonna do it because you’re, you’re literally risking your life.
Farron Cousins: Yeah.
Michael Bixby: But what’s here is, this is somebody who is high up. This is somebody who’s well connected. This is part of the political elite. And it doesn’t, no one is safe. If your opinion is different than that of Putin, if this is different than that of, of the, the party in power, you’re out.
Farron Cousins: Yeah.
Michael Bixby: A leader of the Black Lives Matter group is being sued by other members of the group for allegedly siphoning off of millions of dollars from the Black Lives Matter organization. Farron, what on earth is happening here?
Farron Cousins: Yeah. This, this is kind of a shocking story. This came out just a couple days ago. We find out that, allegedly, obviously everything is alleged right now, but a big lawsuit over the Black Lives Matter Global Network Foundation. So it’s the GNF, they’re the ones who took on the mantle of Black Lives Matter and claimed it as, I guess, an organization.
Michael Bixby: And basically the fundraising arm. So they, they deal with nationally all, all the organization’s money, right?
Farron Cousins: Right. And so then you have the leader of that group, who according to this lawsuit decided, wow, there’s a lot of money in this pot. I think I’d like a new house. I think I’d like to start, you know, acting like a millionaire. And so they’re alleging that about $10 million was siphoned off by this leader. Some of it of course, went to a couple other people, but basically using it as his own personal piggy bank, which to me is not just horrible, legally speaking, it’s disgusting. When you take a group like this and we all know why Black Lives Matter came to be. We’ve all seen the horrifying videos that get posted on social media. We know why this is important. And then to take advantage of that just adds this whole new level of disgustingness to this story.
Michael Bixby: It, it does because you, you can have an organization and there’s many organizations like this, and this is not certainly, this is not the only example that we’ve seen where this happened and we’ll see kind of what the facts lay out. They don’t look good because you have very clear infighting between the organization. I mean, those are strong allegations that are being leveled here. But you can have an organization that has a good purpose, maybe is, is promoting civil justice, is promoting racial justice and things like that. But if, if people are not held accountable, which is, I think what sounds like the concern here is that there wasn’t a level of accountability. Everybody needs accountability, literally everybody. I mean, that goes back to the same thing we just talked about in Russia. When there’s no accountability, what happens? People are just running rampant and doing whatever they want, and this is creating problems. So what, what if, what is being said here turns out to be true, then you have a horrible breach of fiduciary duty. You have somebody who’s been entrusted. Who’s been given this authority to do this, but has taken the money for themselves. I, I mean, it’s, it’s offensive to what the cause means here. And so my hope here is that the truth comes out in this and that if, you know, frankly, if this has actually happened and it’s proven true, I hope that there’s even more justice beyond just civil money coming back into the organization, but something even more
Farron Cousins: Well, and what gets me too is we see this a lot with, with groups all across the board is just the grifters that latch onto it.
Michael Bixby: Mm-hmm.
Farron Cousins: You know, there’s always somebody looking to make a quick buck. And it reminds me when I was a senior in high school, I got a job as a telemarketer. We were making the phone calls to support the, the police department, some state up north, even though we were down here in Florida. So at one point, I only worked there for four days because the whole thing was a scam, but we asked like, well, what percentage of the money we raise actually goes to this police department? And the people proudly told us 10% of what we raise is going to those police. So 90% of these phone calls of, oh my God, you’ve gotta help us. You’ve gotta help the police. They need the money. Only 10% of it was going there. And a lot of us were like, all right, we’re, we’re outta here. The place shut down like two days after that. But there’s always grifters.
Michael Bixby: That’s right. And, and there’s always greed.
Farron Cousins: Yeah.
Michael Bixby: And that’s what you have to be aware of. And, and frankly, this, this is the interesting thing, because we will, and you’ll hear me harp all day on Wall Street and how they, they hide stuff and they do things that are conflicted for their clients. And, and this, this maybe is kind of a theme here is that you can see this, this can be big or small because there’s a lot of other organization. This is not to me, an indictment necessarily of Black Lives Matter, frankly, at all. This is something that you see in other organizations, just like that. There’s quite a few charities and I think people, people don’t understand that. People might give their hard earned money thinking I’m doing something to help people. And then that, that wouldn’t be the only example. And it’s like 10%, 5%, 15% actually goes to the cause and the rest is going into people’s pockets. So it’s a sad thing. It means, people you have to be on the lookout and there needs to be that accountability that we talked about.
Farron Cousins: Yep.
Michael Bixby: A Saudi Arabian woman has been sentenced to 45 years in jail for the crime of tweeting critical statements about the Saudi Arabian government. Farron, this one here again sounds unfortunately a lot like the situation in, in Russia and this is not the first time this has happened. Talk about a little bit about what, how is Saudi Arabia charging people with for, for, for retweeting somebody and they’re putting them in jail for retweeting someone?
Farron Cousins: It, it’s terrorism. That is what Saudi Arabia has now classified these tweeters, as terrorist because it’s, under Saudi Arabia’s counterterrorism law and anti cyber crime law using the internet to tear the country’s social fabric. So they are effectively treating these people as if you are a domestic terrorist, because you got on the little bird app and said, man, things are pretty bad here. They just beheaded a hundred people in the stadium, basically for being political dissidents. And they say, okay, well look, we’re not gonna cut your head off and Pap and I, again, we, we talked about the story where they did behead over a hundred people recently. They said, okay, we’re just gonna put you in jail basically for the rest of your life. You sent out a tweet we didn’t like, you’re in jail for 45 years. Another woman recently in jail for I think 34 years.
Michael Bixby: Right.
Farron Cousins: For a tweet, a tweet and, and you’re removed from society.
Michael Bixby: For a retweet. I, I think that’s what the, that’s what I was reading is that it’s, and there’s still a lot of information that’s not known here, which is part of what’s frankly, even more scary because you hear about the situations that we do have the knowledge of. But somebody, somebody hits the retweet button. Can you imagine, I mean, think about how crazy this is, because you want to think about if this was applied in the United States of America, if we had this type of a law here and we’ve got plenty of things to criticize about what we have going on, there’s plenty of failures here. I mean, we, you know, 80, 90% of the country for tearing apart the social fabric. I mean, the law itself is basically it’s designed as, as a blank check for if we see somebody that we don’t like, if it’s a woman who’s speaking up about women’s rights in Saudi Arabia, if it’s somebody who is going against essentially the, the Royal family, the people who are connected, it’s like, we’re going to call that person out. We are gonna take care of them. And maybe if they’re lucky, they’re not gonna get beheaded, but they’re gonna go away for decades. I, I think it’s unconscionable.
Farron Cousins: Yeah.
Michael Bixby: I mean, I, I, I don’t think that’s a controversial statement for anybody who believes in any sort of any form of free, freedom, democracy at all. What this raises to me, the issue we, you and I have talked about before, Pap’s talked about as well is, you know, what are we doing with this country? Why are we still so cozy with a country that is actively doing this? That’s unrepentant in doing it and just absolutely frankly, destroying people’s lives over nothing.
Farron Cousins: Yeah. We, we get reports every single year when they do the, you know, worst human rights abusers, Saudi Arabia is always right at the top of that list in terms of violating their own citizens human rights and they have been for many, many, many years. And the United States, whether it’s a Democrat or Republican, it doesn’t matter. They look at that and they say, ah, they’ve got all that oil we want, oh, they buy a lot of weapons from us. They’re putting a lot of money in the economy. So we’re gonna look the other way when they’re killing people, when they’re bombing other countries or when they’re throwing somebody in jail for the rest of their life because they retweeted something that they didn’t like.
Michael Bixby: Or, or let’s, let’s take it a step further. When they’re supporting terrorism, we have, you know, Chris Paulos and our anti-terrorism team here at Levin Papantonio Rafferty, we, we are handling those cases that directly involve Saudi Arabia. I just, to me, it seems unacceptable that we would continue, continue to ignore that. Continue to cover our eyes, cover our ears because we want oil, because we want a little bit of money from, from selling weapons or something like that. I, I think we’re at a level where they’re involved or they’re directly responsible for, for terrorism against Americans, against troops, again, who are putting themselves out there in harm’s way. This just seems like something where it’s, it cons, it’s consistent. There’s a pattern just like in Russia.
Farron Cousins: Yeah.
Michael Bixby: It’s not a mistake. It’s not a one time freak accident, but this is the norm there. And, and, and we need to call it out. We need to recognize it and understand just how bad it is, because I think what we see is only the tip of the iceberg.
Farron Cousins: I believe you’re a hundred percent, right?
Michael Bixby: Well, Farron, thank you for joining me on the show today, it was great having you. That’s all for this week, but all these segments will be available in the coming week right here on this channel. And you can follow us on Twitter @AmericasLawyer. I’m Michael Bixby in for Mike Papantonio and this has been America’s Lawyer where we tell you the stories that the corporate media won’t tell you because their advertisers won’t allow them or their political connections won’t allow it. We’ll see you next time.
