Cruz's Work on Case to Be Put in Campaign Crosshairs

Ted Cruz speaking at the state Republican convention in Fort Worth on June 9, 2012.
Ted Cruz speaking at the state Republican convention in Fort Worth on June 9, 2012.

The U.S. Senate campaign of Ted Cruz is bracing for a new round of political attacks after the candidate revealed on his latest ethics disclosures that he continued to perform civil legal work for a Pennsylvania developer who was at the center of a massive judicial corruption scheme known as the “kids for cash” scandal.

The developer, Robert Mericle, pleaded guilty in 2009 to felony charges stemming from what prosecutors said were illegal kickbacks paid to two state judges who sent juveniles into his private detention facilities. Mericle became a star witness for prosecutors and is still awaiting sentencing, according to news reports.

Cruz, a highly paid appellate lawyer, did not represent Mericle in any criminal matter. He represented the developer in an appeal of his lawsuit against Travelers Insurance Co., which refused to pay out any money to help settle scores of civil claims arising from the scandal.

“It was civil litigation over breach of contract,” Cruz told The Texas Tribune on Thursday.

Still, the case is set to become the next flashpoint in Cruz’s GOP runoff race against Lt. Gov. David Dewhurst. Two new polls showed the lieutenant governor is trailing Cruz, and Dewhurst hasn’t been shy about attacking his opponent.

Dewhurst spokesman Matt Hirsch released a statement Thursday evening after news reports surfaced about the Mericle case.

"Ted Cruz should be ashamed of the choice he made to represent Robert Mericle, an exploiter of children for profit," Hirsch said. "It brings into question the integrity and judgment of Ted Cruz, who’s running to represent the interest of Texans in the U.S. Senate."

Cruz campaign consultant Jason Johnson said the attacks are designed to change the subject away from Dewhurst's record and a recent controversy about the deletion of government computer files containing speeches he made.

Johnson said the criticism over Mericle would be "another misleading attack that has nothing to do with reducing the size of the federal government and defending the Constitution."

The runoff election will be decided July 31.

Dewhurst used another one of Cruz’s legal clients, a Chinese tire-maker accused of stealing an American inventor’s blueprints, for his most prominent and sustained attack.

Mericle's name appears on federal disclosure forms that require candidates to name clients for whom they performed legal services worth $5,000 or more.

In the case of the Mericle lawsuit, the 3rd U.S. Court of Appeals last month sided with Travelers, upholding a lower court’s ruling.

The judges said the insurance company had no obligation to make a payout in a “tragic judicial kickback scheme” in which Mericle made payments to judges “in exchange for facilitating the construction of private juvenile detention facilities and then imposing harsh sentences on juveniles in order to ensure the facilities would be used.”

According to news reports, Mericle agreed to pay more than $17 million to plaintiffs who filed civil rights cases stemming from the scandal. In a plea agreement with prosecutors, Mericle pleaded guilty to a charge of failing to report a felony. The two judges who received the payments were sentenced to lengthy terms in federal prison.

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