Gulf Watch: Miss. lawyer behind State Farm settlement indicted for bribery
Richard "Dickie" Scruggs, the Mississippi attorney who became rich and famous by taking on the asbestos and tobacco industries, has been indicted on federal charges of bribing a judge in a lawsuit over Hurricane Katrina insurance claims, the Clarion-Ledger reports.
Scruggs and four associates -- his son Zach, attorneys Sidney Backstrom and Timothy Balducci, and former State Auditor Steve Patterson, who works for Balducci's firm -- allegedly paid Lafayette County Circuit Judge Henry Lackey $40,000 in cash to resolve a dispute over $26.5 million in legal fees in favor of Scruggs' firm, according to the paper. Lackey reported the proffered bribe -- which was to eventually total $50,000 -- to federal authorities and cooperated with the FBI in the ensuing investigation.
TPMMuckraker has posted the indictment from the U.S. attorney for Mississippi's Northern District to its Web site here. Among the damning allegations the indictment contains is this account of a conversation between the judge and Balducci, an attorney who Scruggs allegedly hired for $10,000 to carry out the actual dirty work:
The insurer denies wrongdoing and has sued the Mississippi attorney general to block a criminal investigation into its post-Katrina operations. But just one day before the surprise indictment against Scruggs was handed down, his firm filed paperwork with the court charging that engineering firms involved in claims work for State Farm were financially beholden to the insurer and thus had motivation to minimize the company's losses, the Sun-Herald reports:
Scruggs and four associates -- his son Zach, attorneys Sidney Backstrom and Timothy Balducci, and former State Auditor Steve Patterson, who works for Balducci's firm -- allegedly paid Lafayette County Circuit Judge Henry Lackey $40,000 in cash to resolve a dispute over $26.5 million in legal fees in favor of Scruggs' firm, according to the paper. Lackey reported the proffered bribe -- which was to eventually total $50,000 -- to federal authorities and cooperated with the FBI in the ensuing investigation.
TPMMuckraker has posted the indictment from the U.S. attorney for Mississippi's Northern District to its Web site here. Among the damning allegations the indictment contains is this account of a conversation between the judge and Balducci, an attorney who Scruggs allegedly hired for $10,000 to carry out the actual dirty work:
"On or about May 9, 2007, TIMOTHY R. BALDUCCI had a conversation with Judge Henry Lackey wherein BALDUCCI stated that 'my relationship with Dick [Scruggs] is such that he and I can talk very private [sic] about these kinds of matters and I have the fullest confidence that if the court, you know, is inclined to rule ... in favor ... everything will be good ...' 'The only person in the world outside of me and you that has discussed this is me and Dick [Scruggs].' '... We, uh, like I say, it ain't but three people in the world that know anything about this ... and two of them are sitting here and the other one ... the other one, uh, being Scruggs ... he and I, um, how shall I say, for over the last five or six years there, there are bodies buried that, that you know, that he and I know where ... where are, and, and, my, my trust in his, mine in him and his in mine, in me, I am sure are the same.'"The case has raised new questions about the resignation of Sen. Trent Lott (R-Miss.) -- Scruggs' brother-in-law -- who made his announcement the day before the indictment was handed down. The feds said at a news conference earlier today that Lott wasn't involved in the affair. But as the New York Times points out, Scruggs represented Lott and U.S. Rep. Gene Taylor (D-Miss.) in settlements with State Farm after the company refused to pay claims on their homes, which were destroyed by Hurricane Katrina. Lott and Taylor then championed legislation to investigate how State Farm and other insurers handled claims following the storm.
The insurer denies wrongdoing and has sued the Mississippi attorney general to block a criminal investigation into its post-Katrina operations. But just one day before the surprise indictment against Scruggs was handed down, his firm filed paperwork with the court charging that engineering firms involved in claims work for State Farm were financially beholden to the insurer and thus had motivation to minimize the company's losses, the Sun-Herald reports:
The amended complaint proposed by the Scruggs team says State Farm essentially acted as a "mob boss," with the vendors serving as "hit men" in a scheme to make money. It alleges destruction of documents, perjury, obstruction of justice and fraud.
Labels: criminal justice, Gulf Coast Reconstruction Watch, mississippi, richard scruggs
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Just days befor the Trent Lott/Dickie Scruggs House of card started falling, the Mobile Press Register broke a story on the Department of Energy plan to create a strategic oil reserve in the Richton Salt Dome near Hattiesburg, Mississippi.
The "surprise" DoE plan entails pumping billions of gallons of river water over a five-year period from the Pascagoula River into the salt domes and pumping the resulting brine water from nearly a hundred miles inland to Horn Island, a few miles off the Mississippi Gulf Coast.
Hardly any folks on the MGC were aware of the plan except the entire Mississippi Congressional delegation, Governor Barbour, Miss. Attorney General Jim Hood and a few other "scoundrels" in the Mississippi State government that failed the people by not making them aware of this project. Even Marine Fisheries people say they knew nothing of the plan, but warned that the scheme would create a Dead Zone for fish, crabs, oysters and other marine life in the waters off the MGC. They also predicted serious damage to the river ecosystem in the tributaries that feed into the Pascagoula River.
Not included in the link below is the fact that this DOE plan was made possible by an amendment to the 2005 Energy Bill submitted by Miss. Rep. Chip Pickering, Vice Chairman of the House Energy and Commerce Committee, creating the strategic oil reserve. Not generally know either, is that Governor Barbour has proposed Vicksburg, Mississippi for the site of another such DoE scheme. Not sure if the Corps is part of that plan to dump brine water into the Mississippi River at Vicksburg.
Important to note that Gov. Barbour, Rep. Chip Pickering and his "K" Street lobbyist father-- former Fifth-Circuit Court of Appeals Judge-- have close ties to the Atlanta-based The Southern Company. In fact, critics claim that the language for Pickering's amendment to the 2005 Energy bill was framed by the legal staff of the The Southern Company law offices in Atlanta, including the language for the repeal of the 1935 Public Utilities Holding Company Act.
http://www.gulfcoastnews.com/GCNspecialReportGovtbySubterfuge111107.htm
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