Dale out as Insurance Commissioner

John O'Brien Aug. 8, 2007, 2:19pm

JACKSON, Miss. - Democrat George Dale had to overcome a lot of opponents in being elected Mississippi's Insurance Commissioner eight times, but Tuesday he found he couldn't get past his latest -- a trial lawyer.

Dale was narrowly defeated in his primary by Gary Anderson, who received the money and support of nationally known plaintiffs attorney Richard Scruggs. This year, Scruggs has publicly insulted Dale's handling of Hurricane Katrina-related claims and even donated $250,000 to an anti-Dale political action committee.

According to campaign finance reports, the group, Mississippians for Fair Elections, had only two transactions -- the donation by Scruggs and the disbursement of it to a media group that produced anti-Dale advertisements.

"I think Katrina and Dickie Scruggs' money - it was difficult to overcome both of them," said Dale, according to the Sun Herald in Biloxi.

Anderson earned almost 11,000 more votes, garnering 51 percent of the vote. He will face Republican Mike Chaney, who took in 73 percent of the GOP vote, in the general election.

The Scruggs Katrina Group website today offered, "Congratulations to Gary Anderson, Mike Chaney, and the People of Mississippi," adding that, "The citizens of Mississippi defeated Insurance Commissioner George Dale in the Democratic primary on Tuesday."

Dale and Scruggs have butted heads several times this year over settlements with the insurance companies alleged to have intentionally misdiagnosed the amount of damage done to properties by wind damage (covered under policies) and water damage (covered by the national flood insurance program).

Earlier this year, Scruggs designed a political cartoon that depicted Dale as a pig wearing lipstick being made up by a State Farm beautician. Scruggs has criticized the deal Dale made with State Farm to revisit claims, which Dale says mirrors one made by Attorney General Jim Hood that couldn't gain the approval of a federal judge.

Scruggs claims Dale's deal does not provide for proper oversight. Dale also has an agreement with Nationwide.

"Every word George Dale says probably comes from some speech writer in the Mid-Western headquarters of big insurance," Scruggs has said. "They tell him what to say and how to regulate."

Scruggs, himself, could soon be facing criminal contempt charges. Federal judge William Acker had questioned Scruggs about his apparent non-compliance with an injunction issued in early December. Scruggs was ordered to return documents received from two former employees of E.A. Renfroe, Inc., who said they uncovered evidence that the company was unfairly handling post-Hurricane Katrina claims.

After the Dec. 8 injunction, Scruggs delivered those documents over to Hood instead of to the attorneys of E.A. Renfroe, a company hired by State Farm to investigate hurricane-related claims.

Recently, after a U.S. Attorney decided not to pursue the charge of contempt against Scruggs, Acker enlisted two special prosecutors to do so.

Scruggs also has ties to the Attorney General's Office in Mississippi. Scruggs' firm earned $1.4 billion when it was hired by former Attorney General Mike Moore to negotiate the Tobacco Master Settlement Agreement in the late 1990s.

This year, his firm made $26 million when 640 lawsuits against State Farm that made up part of Hood's class action suit against five insurance companies were settled.

A report from The Associated Press said Scruggs stood to make another $20 million if the second part of that settlement had been approved. It grouped together 35,000 policyholders who had not sued yet but still could. Hood is now moving to force State Farm to settle.

Scruggs is also a campaign contributor to Hood.

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