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United States Congressman Lamar Smith's FEC reports show that he has received thousands of dollars in contributions from Kinetic Concepts, Inc. (KCI) PAC, a medical device company owned by Republican mega-donor James Leininger.

Leininger made nearly $100 million from selling off KCI stock, while Texas Employees Retirement System (ERS) purchased 80,000 shares of this risky stock.  Within a year of the purchase a jury ruled against the company in a high-profile patent infringement lawsuit. 

Despite KCI's stock dropping consistently in the months leading up to the ruling and warnings from the company that investing in its stock involved a high degree of risk, ERS continued to purchase KCI stock aggressively at this time. The fact that Bill Ceverha, a paid lobbyist for a Leininger-funded entity called Texans for Educational Excellence, is an ERS board member makes this situation seem particularly dubious.

Texas employees and retirees lost millions of dollars, as KCI's stock lost 40% of its value after the lawsuit on Friday, August 4.  State Representative Lon Burnam has questioned Leininger's "pump and dump" tactics and the coincidental connection between Leininger and former Leininger lobbyist and current ERS board member Ceverha.

John Courage, Smith's opponent in TX-21, challenged him to return Leininger's money.

"Smith needs to send a message to Texans that his loyalties lie with them, rather than with dishonest, corporate donors who line his pockets," Courage said. "Smith needs to stop giving into the influence of incumbency and show Texans it is time to end the culture of corruption."

Lamar Smith, who serves as the chairman of the House Judiciary subcommittee that deals with intellectual property and patent law, has been associated with Leininger and KCI for nearly a decade. 

The people with whom one associates speak volumes about who that person is, and John Courage stands with Texans.

Texans deserve to know the truth about the deal that took place between Leininger and ERS that caused the retirement system to lose millions of dollars, and to rest assured that their congressman will not be indebted to Leininger.

Meredith Adams, John Courage for Congress

Originally posted to Meredith Adams with John Courage for Congress on Mon Aug 14, 2006 at 02:45 PM PDT.

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Comment Preferences

  •  I'm shocked, SHOCKED.... (2+ / 0-)
    Recommended by:
    roses, bustacap find sleazy corporate dealings among republicans. Last republican to not engage in corporate-donation circle-jerking, please turn out the lights.

    "I told them on Inauguration Day. I said look into my eyes: no new enhancements." - President Johnny Gentle (Famous Crooner)

    by Johnny Gentle Famous Crooner on Mon Aug 14, 2006 at 02:38:43 PM PDT

  •  Why am I not surprised? As a former 'constituent' (4+ / 0-)

    of Lamar Smith's--and totally unrepresented by him--until the recent re-re-redistricting, I can say that the citizens of District 21 need a true representative in Congress. That would of course be John Courage. Texans couldn't ask for a finer man to represent them.

  •  Strong campaign finance laws & reporting (1+ / 0-)
    Recommended by:

    This is precisely why you need strong campaign finance laws and reporting. Smith, Leininger and Ceverha don't want you to see the connection. They would prefer getting away with their little scams with no one  knowing about them.  This is a disgrace! Lamar Smith should be calling for an SEC investigation into the stock sale scam perpetrated on the people of Texas and the hardworking Texas State employees who have lost value in their pension.  All so that Leininger could make off like a bandit with their money.

    Smith should absolutely give the Leininger money to charity and disavow himself from it.  Or otherwise he's just as guilty as Leininger.

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