The president's message was that it's important to reduce "unnecessary lawsuits" and that federal securities regulators are in the best position to sue, said Al Hubbard, Bush's chief economic adviser and director of the National Economic Council.

Hubbard said deputy White House counsel Bill Kelley conveyed Bush's perspective to Solicitor General Paul Clement, who represents the government's views before the Supreme Court.

Hubbard said the president communicated his policy views, not specifically what he thought the solicitor general should do.

Bush's role in the case underscores its significance. The outcome of the Supreme Court case could determine whether investors can pursue lawsuits to recover investment losses if they can prove collusion between Wall Street institutions and scandal-ridden companies.

The deadline for siding with investors in the case ended at midnight Monday, and the solicitor general did not file a brief.

The administration will decide in the next 30 days whether to side with the defendant companies or not to participate in the case at all.

The Securities and Exchange Commission voted 3-2 to ask the solicitor general to support shareholders.

Damon Silvers, the AFL-CIO's associate general counsel, criticized Bush's action.

"The president decided that he thinks it's more important to protect his friends than it is to enforce the law," Silvers said.

The issue is whether shareholders can collect damages from investment banks, attorneys and accountants who are thought to have aided in fraud committed by their corporate clients.

The high court's ruling in the case could determine whether the Enron plaintiffs' separate $40 billion lawsuit against the investment banks — stalled by a federal appeals court ruling in March — can proceed.

Thirty state attorneys general sided with investors and referred to the Enron scandal 55 times in a 43-page court filing.

A small Kane County newspaper and its former columnist have accused the biggest names in the state judiciary of violating Illinois citizens' basic constitutional rights.

In the process, the state court system returns to uncharted waters.

The Shaw Suburban Media Group, which runs the Kane County Chronicle, is suing seven Illinois Supreme Court justices, three Illinois appellate court justices and the Cook County circuit court judge who presided over a defamation trial against the newspaper.

It is the latest fallout from the lawsuit Illinois Supreme Court Chief Justice Robert Thomas won against the paper and its former columnist, St. Charles resident Bill Page.

"They filed a frivolous lawsuit in federal court and they should be sanctioned for that," said Chicago attorney Joseph Power, who represents Thomas. "It is absurd."

Thomas, of Wheaton, filed a defamation lawsuit against the newspaper and Page for three columns Page wrote in 2003. The columns accused Thomas of abusing his power to gain support for a friend running for a Kane County judgeship. Page claimed Thomas would agree to reduced punishment for then-Kane County State's Attorney Meg Gorecki - who was facing ethics violations - in exchange for support of his candidate.

Last Nov. 15 a Kane County jury sided with Thomas after a nearly three-week trial.

The federal lawsuit filed Tuesday seeks to have the libel verdict and $4 million judgment, reduced by the trial judge from the $7 million the jury granted, against the paper thrown out. The lawsuit also asks for a ban to be instituted on filing a new lawsuit against the paper while Thomas and the justices remain employed in the state court system.

The lawsuit also asks for attorney fees, an unspecified amount of damages and a stay on the 9 percent daily interest accruing on the judgment while the newspaper appeals.

Essentially, the lawsuit contends the newspaper can not receive a fair appeal of the case because the appellate court judges are under the control of Thomas. Also, unlike other cases, the newspaper cannot appeal for a hearing before the Illinois Supreme Court because five of the current seven justices were witnesses in the case and must recuse themselves, leaving less than the quorum required by law to hear a case.

"In a broader sense, the complaint is precedent-setting because this suit is the first in the nation to challenge the fairness of a personal lawsuit brought by a judge controlling a state court system," wrote Washington, D.C.-based attorney Bruce Sanford. He frequently represents media interests and filed the lawsuit on behalf of the newspaper and Page.

Sanford said the judgment cannot be enforced because it violates the civil rights of the newspaper.

Power said the newspaper had an opportunity to file a request to have Cook County Judge Donald O'Brien, a former defense attorney, removed as the trial judge in the case and did not. It was originally at the newspaper's behest the Supreme Court justices recused themselves.

"You can't have it both ways," Power said.

Sanford contends neither the federal courts nor a state-appointed panel of judges can fix the constitutional problems by hearing the case. The state lacks a procedure for this type of situation, because a similar case has never arisen.

"We have filed this lawsuit with great reluctance as we hoped the state court system would be able to protect our rights. That plainly is not the case," said Thomas Shaw, president of Shaw Suburban Media Group.

The lawsuit questions Thomas' ethical right to file the lawsuit in the first place because justices are expected to put the avoidance of the appearance of judicial impropriety above their personal gain.

Power said Thomas has as much a right to protect his reputation and a trial by jury as anyone else.

Once the defamation case hit the court, the lawsuit contends the newspaper and Page's due process, equal protection and First Amendment rights were violated by allowing justices to refrain from commenting on their deliberations in the Gorecki case because of judicial privilege and having Illinois judges hear a case with their boss, Thomas, as the plaintiff.

The trial judge and subsequent appellate court judges were all selected by the Supreme Court, five of whom are involved in the case, Sanford contended in a news release.

"One cannot doubt the obvious unfairness inherent in asking the inferior judicial officers appointed to this appeal to sit in judgment over a $4 million award to their Chief Justice and to evaluate the testimony of both the Chief Justice and his fellow Justices - their judicial bosses ...," Sanford wrote.

"I have never seen anything like it before. A Chief Justice enlists his colleagues on the bench as his witnesses to help him win a huge trial verdict and then expects the newspaper to be satisfied with its right to appeal within the court system he controls."

Attorneys for the state Department of Education have filed a motion for a new trial to overturn a $7.6 million judgment in a whistle-blower case, despite unanswered questions from a state assemblyman who wants to know where the department is getting the money for its six-year legal battle.
Documents obtained previously by The Associated Press show the department has set aside nearly $4 million to pay private attorneys in a series of cases related to misappropriation of federal money and the related whistle-blower case against former Superintendent of Public Instruction Delaine Eastin.

The ballooning legal costs prompted Assemblyman Michael Duvall, R-Yorba Linda, to request information from the department about who is authorizing the case to continue and from what budget the money is being drawn.

The one-page memo he received in response stated the lawsuit is being paid out of "state general funds appropriated by the Legislature for support of the department." Duvall said it did not address any of his questions and has asked for more details from the Department of Finance and the state controller.

Documents given to Duvall in response this week show hundreds of thousands of dollars in legal payments but do not provide all the answers he was seeking. The AP obtained the documents separately from the controller's office.

They show the Department of Education used hundreds of thousands of dollars from other budgets under its authority, such as specialized after-school programs for at-risk youth.

Hilary McLean, a spokeswoman for schools superintendent Jack O'Connell, said the department spent about $1 million from July 1, 2002, to April 30, 2007, on the case against former department staffer James Lindberg.

The former compliance monitor sued the department, Eastin and department manager Joan Polster in 2001. He claimed to have discovered that millions of dollars in federal money had gone to nonexistent or fraudulent community groups from 1995 to 2000.

He claimed Eastin ignored him when he brought the wrongdoing to her attention and that he was demoted when he persisted. His lawsuit claims he later suffered two heart attacks from the job-related stress, leaving him in a wheelchair.

Federal criminal charges were later brought against operators of adult education programs in Sacramento and Los Angeles. In addition, the department under Eastin agreed to repay more than $3 million to the U.S. Department of Education.

In the Lindberg case, a Sacramento jury in 2002 found the department and both defendants personally liable for his health problems and awarded him $4.5 million in damages. The department appealed the decision, and a new jury awarded the whistle-blower $7.6 million in April.

In the state's latest motion, filed late last month, lead attorney David Cheit argues that the retrial judge unfairly prejudiced the jury and disallowed some evidence that would have helped the state's case.

"The court infected the entire trial with a measure of prejudice that was beyond cure," Cheit wrote in the brief. "The result was an award that can only be explained as the result of passion and prejudice, and which, even more so than the first award, is excessive as a matter of law."

McLean said the department still believes the case is winnable and that it is in taxpayers' best interests to pursue it.

"It's unfortunate that it's taking us so many steps through the legal system to get there," she said.

Lindberg's attorney, Gaspar Garcia, has appealed the state's motion for a new trial.

Duvall said he is frustrated after making repeated requests and receiving what he describes as only vague answers in return. He said he is concerned about how much the latest appeal will cost the state.

"I want to know how much money has been spent, I want to know where it came from, and I want to know why it's not budgeted," Duvall said Wednesday.

Duvall noted that about $2 million was included in last year's budget to pay for legal challenges to the state's high school exit exam, yet none of the money for the Lindberg lawsuit is identified in the state budget.

McLean said such line-item spending is only required when the Legislature or governor set aside money to fight a specific case.

"There are many cases that departments throughout state government deal with that are not specifically addressed in line items in the budget," she said.

Documents previously obtained by the AP show the department authorized the transfer of more than $750,000 starting in 2001 from adult education and special education programs for deaf, blind and other special-needs children to pay for the Lindberg and related cases.

McLean said they were incorrectly coded. The money actually came from the department's general fund, she said.

The new documents released by the controller's office, however, show that the education department moved more money from specific programs to pay private attorneys. That includes:

— $100,000 from the "hate violence/tolerance fund." It was not immediately clear what this program does.

— $65,000 from the High-Risk Youth Education and Public Safety Program, which provides after-school programs for students who have been incarcerated or are first-time offenders.

— $35,000 from the community day schools fund, which serves high-risk youth.

— The source of another $100,000 transferred in the 2005-06 budget year was not specified.

All those funds list an accounting code that corresponds to the state superintendent's office. The department could not immediately respond to questions about those funds, McLean said.

Meanwhile, Garcia, the whistle-blower's lawyer, said he was preparing a motion seeking the court-ordered compensation for Lindberg's mounting legal fees, which he said are likely to total about $600,000.

A spokesman for the Justice Department said he could not comment on matters of pending litigation.

In the appeal case before the Supreme Court, shareholders of Charter Communications Inc. (CHTR.O: Quote, Profile, Research sued Scientific Atlanta and Motorola Inc. (MOT.N: Quote, Profile, Research, accusing them of aiding a scheme to inflate Charter revenues in 2000. A lower court dismissed the case, saying that companies were not liable because they were not primary players in the alleged fraud.

Enron shareholders are closely watching the case because it could affect their own attempt to sue banks, including Merrill Lynch & Co. (MER.N: Quote, Profile, Research, for helping put together financing transactions for Enron before its collapse.

Legal briefs supporting the plaintiffs in the Charter case are due at the Supreme Court by midnight on Monday.

Newman said he and other investor advocates started hearing late last week that the solicitor general would not support the SEC's position.

Wilson's sentence was widely criticized as being too severe, even by members of the jury that convicted him and the author of the 1995 law that put him behind bars.

His case became a cause celebre that grew from local blogs and TV stations to national news shows and editorial pages. Some supporters, including former President Jimmy Carter, have said it raised questions about race and the criminal justice system. Wilson and five other males charged in the case are black, as are the two teenage girls involved.

"As far as I'm concerned, this case is a throwback to Southern justice," said state Sen. Vincent Fort, an Atlanta Democrat.

Wilson, homecoming king of his school who was being recruited to play football at Vanderbilt University, has served more than two years of a mandatory 10-year sentence for aggravated child molestation. He was captured on videotape having consensual oral sex with a 15-year-old girl in 2003 when he was 17.

If the sentence stands, he would also be placed on Georgia's sex offender registry.

At the time of his crime, Wilson would have faced just one year in prison if he had sexual intercourse with the girl. The "Romeo and Juliet" exception in Georgia law also would have allowed him to avoid the sex offender registry.

Lawmakers last year voted to close that loophole. But the state's top court said the new law could not be applied retroactively to Wilson, now 21.

Opponents of Wilson's release said it could open a floodgate for other cases. Georgia prisons currently hold 189 inmates who were sentenced for aggravated child molestation when they were 21 or younger.

Of those, 56 percent were white and 44 percent black, state figures show.

Black community leaders planned a protest outside Attorney General Thurbert Baker's office late Monday. Baker, who is black, is now pushing to keep Wilson in prison, arguing that his sentence is valid.

In his notice of appeal, Baker argued that Georgia law does not give a judge authority to reduce or modify the sentence imposed by the trial court. He said he would seek an expedited ruling from the Georgia Supreme Court. And he noted that a plea deal is on the table that would release Wilson in a maximum of five years and also remove him from the sex offender registry.

Not good enough, said Wilson's lawyer, B.J. Bernstein.

"It is really ridiculous when you consider that we had a judge that just said it is a misdemeanor that carries no sex offender registration," she said.

"It is extremely, extremely disturbing that the attorney general would take this action now."

Bernstein said her office was seeking bond for Wilson, which would allow him to leave prison while the appeal is pending.

The judge's ruling Monday threw out Wilson's 10-year sentence and amended it to misdemeanor aggravated child molestation with a 12-month term, plus credit for time served, and he would not be required to register as a sex offender.

"The fact that Genarlow Wilson has spent two years in prison for what is now classified as a misdemeanor, and without assistance from this court, will spend eight more years in prison, is a grave miscarriage of justice," wrote Judge Thomas H. Wilson, who is no relation to Genarlow Wilson.

"If this court or any court cannot recognize the injustice of what has occurred here, then our court system has lost sight of the goal our judicial system has always strived to accomplish ... justice being served in a fair and equal manner," the judge wrote.

When the judge's order arrived Monday morning, Wilson's lawyers applauded and hugged his mother, Juannessa Bennett, who wiped away tears.

"I just feel like a miracle happened," Bennett said.

After the notice of appeal she looked stricken.

"It's heartbreaking," Bennett said.

Wilson's prominent supporters included Dallas Mavericks owner Mark Cuban, who declared he would boycott Georgia until Wilson was free, and Carter, who wrote a letter in support of Wilson to the state attorney general.

The court battle over Wilson's fate also drew comparisons to the rape charges leveled against Duke University lacrosse players last year, with critics saying prosecutors in both cases overreached.

Wilson was also charged with rape for being one of several male partygoers at a hotel to have sex with another 17-year-old girl, but was acquitted. The party was captured on a videotape that was played for the jury.

The five other male partygoers took plea deals in the case. One of them has been released from prison and is now in college.

Previously, large scientific studies have found no association between autism and vaccines containing thimerosal.

But many parents say their children's symptoms did not show up until after their children received the vaccines, required by many states for admission to school. If they prevail in the courts, the families are entitled to compensation from a multibillion-dollar trust fund.

The first of what eventually could be nine test cases from those claims is the subject of the hearing opening Monday in the U.S. Court of Federal Claims. Three special masters appointed by the court will preside over the hearing, expected to last through June 29.

The court is being asked to decide whether there is a link between autism and childhood vaccines. If it finds one exists, the families could be eligible for compensation under the Vaccine Injury Compensation Fund, a program established by Congress to ensure an adequate supply of vaccines by safeguarding manufacturers from lawsuits. Under the program, people injured by vaccines receive compensation through a special trust fund.

Autism is characterized by impaired social interaction. Those affected often have trouble communicating, and they exhibit unusual or severely limited activities and interests. Classic symptoms of mercury poisoning include anxiety, fatigue and abnormal irritation, as well as cognitive and motor dysfunction.

Monday's case addresses the theory that the cause of autism is the measles, mumps and rubella vaccine in combination with other vaccines containing thimerosal. The preservative, about 50 percent mercury by weight, is no longer found in routine childhood vaccines but is used in some flu shots.

In July 1999, the U.S. government asked vaccine manufacturers to eliminate or reduce, as expeditiously as possible, the mercury content of their vaccines to avoid any possibility of infants who receive vaccines being exposed to more mercury than is recommended by federal guidelines.