Insurance Law

Scruggs Nation, Day 48: looking ahead, and looking way ahead

By David Rossmiller

A common sentiment among many of the people I have communicated with in Mississippi is hope, hope that despite the embarrassment of the ongoing investigations and revelations, a new and better future awaits.  I think this accounts for much of the vehemence that we are seeing as more allegations come to light -- a desire to storm the Bastille, and tear it down so that no stone is left standing on another.  In this view, a good chunk of the state's legal and political system has long since fallen into the hands of an oligarchy that operates as a law unto itself while perverting the authority and means of the state, simultaneously using this power for its own ends to steamroll opposition while maintaining a surface appearance of legitimacy to cover its tracks and allow itself to function with impunity. 

Particularly galling to those who hold this view is that they not only feel abused, they feel intimidated into having to pretend that they do not know they are being lied to -- or denied any recourse, which works out to the same thing -- thereby facilitating their own disadvantage and perpetuating and strengthening the corruption they feel exists.  After all, one who lies to deceive us is a dangerous person.  But exponentially more dangerous than the liar who seeks to fool us is the liar who will lie to our face, knowing that we know he is lying.  This person we tend to see not merely as an opportunist or one who deceives for gain, but as a principled opponent of the truth.  This is because this second kind of person does not merely seek to outwit us with deceit, but robs us of dignity and self-worth by rubbing it in that we can do nothing to stop him and had, in fact, better support the pretense of truth or pay a heavy price.

I have been thinking about this and pondering this for a very long time now, and I hope I am accurately expressing and summarizing what I am hearing. I cannot count the number of times folks in Mississippi have expressed what to me is a surprising amount of fear of being found out to have spoken out, even in private to me.  Now, as many of you know, I grew up on a farm in a very rural area, so I am no stranger to the pressures of conformity in a fixed social order.  From the time I started Sunday School when I was 3 to the time I graduated from high school at 17, I went to school with the same bunch of kids, and in fact, many of us went to college together as well.  Until I moved away to Phoenix when I was 24, small town life in North Dakota was all I knew, I had never been anywhere else.  Yet I know that my experience with a fairly rigid social structure is very different from the problems people are telling me about in Mississippi -- I never had any feeling whatsoever that the system was corrupt, rigged or designed to benefit a few to the detriment of all others, merely that a lack of economic opportunity forced a continual migration of the most talented that led to a loss of social dynamism.  In fact, North Dakota was and remains an almost fanatically egalitarian place in which displays of power or wealth are viewed as gauche to the point of exclusion from polite society.  The culture of Portland, Oregon is somewhat similar when it comes to egalitarianism, and I see no evidence anyone in Portland believes the legal or political culture is corrupt. I am lucky, I guess, in that I have operated my entire life without fear of opening my mouth and without any feeling that the dealer could cheat without penalty.  So I have had some learning to do. 

I am not saying this accounts for all the reasons people want to remain confidential -- obviously simple prudence dictates not wishing to get sideways with employers or colleagues, and also obviously one's access to information tends to dry up when one brands oneself as the town crier.  Also, many people rightly recognize the complete story remains to be told, that they are supplying just a fragment, and do not want to be seen as vouching for the ultimate conclusion.  But a good bit of it is, and I lack a better phrase, fear of specific powerful cabals.  Certainly, in my prior career as a journalist, I was no stranger to the concept of someone wishing to remain anonymous to promote a given self-interest at low risk, but that has been notably absent from the overwhelming majority of communications I have had here.  Instead, I detect a lack of immediate self-interest and a strong desire to promote the commonweal, the public good.

So that brings me back to the original point -- hope. Mixed with hope is a sort of demoralizing gut feeling that in the end the whole thing will be just like getting all excited about turning a corner in the road during a hard journey on foot, and then seeing the destination is still a hundred miles away. One reason folks are hanging back, people have told me, is they don't believe the feds will really get to the bottom of this: a few people will go to jail, some pleas will be entered, and they'll call it a day.  How likely is this to be the reality? We know that all human endeavors, including investigations, face a point of diminishing returns -- at some point, the tracks become obscured by time, the targets too entrenched and the evidence not quite substantial enough to warrant continuing in light of the resources expended.  So a few weeds get pulled out of the lawn, but they spring right back up again when the lawn guy drives away. So where will it all lead and how far will it go?  That question remains to be answered, and a lot of hopes and fears are riding on that answer.

In saying all this, I hope it goes without saying, I do not hold myself out as an expert or authority of any kind, I am merely someone at a distance trying to hold a mirror up to nature, to report what I see and hear.  I myself do not know the answers to very much, I am merely attempting to ask the right questions.

With that said, let's once again face the new day and survey the landscape of the Scruggs Nation. 

-- Alan Lange at Y'all Politics has written an open letter to AG Jim Hood, "Jimmy, we have a problem," urging Hood to leave his bunker and get out and enforce the law, in effect, to put the General in Attorney General.  An excerpt (the hyperlinks in the excerpted text don't actually work, you will need to visit Alan's post for those -- also, the links are that funny purple color here because I read them before excerpting his post):

I know it’s a tough deal to find out that people close to you have done wrong. You must be enormously disappointed – not to mention embarrassed. But this is the gig you signed up for, General Hood. Remember, justice is supposed to be blind (or at least significantly vision impaired). The confidence in our legal system has been shaken to its very core, and you have the ability to help make it right. The trust that these people, who are so close to you, have admitted to violating is so very basic that they deserve the same prosecutorial vigor that you seem to save only for people who committed crimes 30 years ago. This is here and now. Like Operation Pretense (which was also led by the feds due to weak leadership in Mississippi), this could help define your legacy as an Attorney General who actually fought corruption versus empowering it, like you seem to be doing at this point.

Now I am not a lawyer, but I have a bit of legal advice. I know within the federal system, an “independent special prosecutor” is often used in matters of this type. I can’t think of a better time or place. Appointing someone with the legal authority to chase these folks down wherever the trail may lead seems to be imperative. Your office may actually have some conflicts as there is at least some evidence that there has been some coordination between some of your campaign contributors under federal indictment and your office. Plus, you have taken a LOT of money from these guys in your campaigns (I mean a LOT of money!). It's almost like they knew you would never prosecute them. Since those campaign contributions, you provided some safe harbor to Dickie Scruggs with your previously unannounced and since unmentioned “confidential informant” language that you used when he developed some contempt issues with Judge Acker in Alabama. Plus, Courtney Schloemer and some investigators in your office have had some conversations with federal grand jury witnesses that just so happened to be paid consultants of Dickie Scruggs in his civil matters. While not per se illegal, it could be interpreted as having the appearance of impropriety, which I know someone as sensitive to legal accuracy and public sentiment like you would never want. All of this is not to mention the fact that your mentor and friend Mike Moore, has been working with your office simultaneously on State Farm grand jury matters and the Scruggs litigation team, according to the Lee Harrell deposition.

Put simply, you seem to have a conflict. Plus, you don’t seem real enthusiastic on taking on the role of the “tough as nails” top law enforcement officer of Mississippi in this particular instance.

It’s time to appoint a special, independent prosecutor so that we can pursue state charges against those that have admitted guilt on federal charges and those that might admit guilt or be found guilty later. The integrity of our state judicial system depends on it.

-- That Jerry Mitchell story in the Clarion Ledger that I linked to yesterday? Shocking, even though it's pretty much along the lines of what I've been hearing for a long time.  Just seeing it in print, all in one place, however, brings a different feeling than hearing parts of it over time.  Still, it doesn't feel like all there is to know. This part of the story leaves me with questions:

In his statement to authorities, Langston said he helped Scruggs try to influence Circuit Judge Bobby DeLaughter, who heard the case.

DeLaughter, a former assistant district attorney under Peters, has repeatedly said he took no bribe. "The hardest part of this is not being able to defend myself, but I just can't comment on it," he said Saturday.

About a year after the lawsuit was filed, the Internal Revenue Service disallowed some of Wilson's deductions on his income tax filing, causing him to owe taxes, said his attorney, Vicki Slater of Jackson.

Despite being in bankruptcy, Wilson paid 100 percent of those taxes, she said.

The state Tax Commission talked of pursuing a case against Wilson, but the Bankruptcy Court blocked any action, she said.

In 2001, Scruggs' attorneys took some of Wilson's accounting documents received through discovery to Peters, then Hinds County district attorney, asking Peters to pursue a tax case against Wilson.

Later, one of Wilson's lawyers met with Peters, and Slater said Peters told that lawyer that a "high-ranking public official" asked him to prosecute Wilson.

Peters could not be reached for comment.

Wilson did nothing to warrant criminal prosecution, Slater said. "All of this was to help Scruggs in his lawsuit."

In 2005, a federal judge ordered Scruggs to pay Luckey more than $17 million.

Wilson's case wound up back in Circuit Court before DeLaughter.

Scruggs' attorneys expressed concerns DeLaughter's former law partner, Bill Kirksey, was involved in that lawsuit and decided to hire Peters, according to statements Scruggs' lawyers have given federal authorities.

Peters asked for $50,000 in cash for his services, according to the statements, and because Langston didn't have $50,000 in cash, Balducci supplied it.

But Scruggs' lawyers never listed Peters as an attorney of record in the case. According to statements, Peters was eventually given a total of $1 million to influence DeLaughter in the case. The statements show DeLaughter did not receive any of that money.

What was done with the money then? How was it paid, in what increments and over what time?  Was this designed from the start as something where the money wouldn't go any further?  If so, what was the plan to influence the judge's decision? The story later mentions Trent Lott (I am  assuming, without evidence to the contrary, that if this scheme in fact occurred that Lott was duped into doing what he did) making a courtesy call to DeLaughter about a possible federal judgeship.  But what about the timing? Was the timing of the call such that it plausibly could be even considered an inducement?  We don't know -- the story says the DeLaughter decision adverse to Wilson happened in early 2006, but not when the call was made.  Also, the story doesn't say what role if any Peters may have played in getting Lott to make the call.  So, again, what was the money paid for?  This is supposed to be a week full of revelations.  Let's hope we find out some of the answers.

One more point, and then we can sit back and await developments.  Remember on that tape Tim Balducci said to Judge Lackey about all the "bodies" that were buried? Well, the plural of a word can encompass anything from two to infinity.  If it turns out that what we are hearing is actually what happened in the Wilson case, not to diminish the investigation at all, but it still strikes me as low-hanging fruit.  So many other threads remain.  One question that keeps running through my mind: what in the world did Dickie Scruggs agree to pay P.L. Blake $50 million for?   We know he agreed to pay it, because he himself testified that he did. But no explanation yet adds up as to why and what for.

Full post as published by Insurance Coverage Law Blog on January 14, 2008 (boomark / email).