Insurance Law

Scruggs Nation, February 26: what of the Balducci-Patterson-Hood meeting?

By David Rossmiller

There were a large number of filings in the USA v. Scruggs case (Northern Mississippi edition) yesterday, but one thing from these documents stuck out like a sweet potatoes deliveryman in a judge's chambers. Check out this passage from one of the exhibits attached to a supplemental Scruggs brief on the validity of the wiretaps in the bribery case.

[Balducci] further explained, prior to this March 2007 meeting [where the alleged conspirators allegedly hatched their alleged plot to allegedly bribe Judge Lackey] the [Scruggs Law Firm] was trying to settle some Katrina Insurance cases with the State Farm Insurance Company.  SLF and SFIC were near a settlement, however, [Dickie Scruggs] learned that the Mississippi State Attorney Generals office had threatened to indict SFIC due to some impasses between the Attorney Generals office and SFIC.  SFIC was not going to settle the civil cases with SLF, if the company was going to be indicted by the Attorney Generals office.  [Scruggs] asked [Steve Patterson] to speak with Attorney General Jim Hood since [Patterson] and Hood had a long standing relationship.  [Scruggs] offered to pay Patterson Balducci $500,000 if they could get Hood to relent on indicting SFIC. [Balducci] accompanied [Patterson] to a meeting with Hood and Hood later agreed not to indict SFIC. [Scruggs] eventually settled with SFIC and that settlement yielded approximately $26 million in attorney fees. [Scruggs] reneged on his pledge to pay Patterson Balducci $500,000, but later agreed to pay Patterson Balducci $100,000 a month over five months. [Scruggs] first paid Patterson Balducci $100,000 in March 2007 and eventually paid the entire $500,000.

Holy Cow!  This comes from Exhibit 5 to the Scruggs supplemental brief on the wiretaps, a November 12, 2007 report by FBI of information from Balducci.  Do you see what this says? It says that Scruggs paid Balducci and Patterson half a million dollars to get Hood to back off the State Farm grand jury investigation.  And it  implies Hood backed off because of the meeting with Balducci and Patterson.  Why he backed off, this does not say.  But remember at the February 6 hearing in State Farm v. Hood where State Farm's lawyer, Jim Robie, asked Hood about these two threatening him on behalf of Scruggs, that Scruggs would fund a challenger in the Democratic primary if Hood didn't back down and clear the way for Scruggs to collect his fees?  If you don't, read this post I wrote about the hearing.

Seems to me that whole business needs to be explored some more, don't you think? If this is true, doesn't it qualify as some sort of improper influence of a public official? And what about Hood? Is  dropping a criminal investigation under such circumstances -- again, if this is true -- consistent with proper performance of the job of Attorney General?  I sure would like to know if this stuff is true, wouldn't you?  Besides the information about Hood, this is a key document to read to understand the alleged plot to bribe Lackey.

It appears media reports last week on the hearing in this case weren't exactly clear, because I got the impression the motion to suppress the wiretaps and information stemming from them had been decided.  This was not true -- instead, Judge Biggers asked for supplemental briefing on that motion.  Here's a Daily Journal story that says Judge Biggers is due to decide that motion today, and here's all the documents filed yesterday since the last time I updated you on the docket. 

Minute order.

Defendants' response to the government's motion for an anonymous jury.

Government supplemental brief regarding motion to suppress wiretaps.

Scruggs supplemental brief regarding motion to suppress wiretaps.

Affidavit in support of Scruggs motion, and attached exhibits below: 

Exhibit 1.

Exhibit 2.

Exhibit 3.

Exhibit 4, transcript of May 29, 2007 recording of Balducci-Lackey call.

Exhibit 5.       

Exhibit 6.

Defendants' request for a pre-trial conference.

Full post as published by Insurance Coverage Law Blog on February 26, 2008 (boomark / email).