Scruggs' greed possibly led to indictment

John O'Brien Dec. 3, 2007, 5:00pm


OXFORD, Miss. - Long seen as an advocate for the underdogs who take on large corporations, Mississippi trial lawyer Richard Scruggs has apparently shown a different side to one of his colleagues.

Attorney John Jones, currently involved in a case against Scruggs that led to the indictment of Scruggs, his son and three others, recently told The Associated Press that Scruggs becomes a different person when it comes to money.

"When the money hit the table, everybody's sense of what the cause really was changed," Jones said in the report.

He was speaking of an agreement between Mississippi Attorney General Jim Hood and State Farm Insurance Cos. that settled 640 Hurricane Katrina-related cases earlier this year. The policyholders alleged that State Farm shortchanged payouts, blaming more structural damage on flooding (covered by a federal program) than there was.

The Scruggs Katrina Group received more than $26 million when the settlement was reached. Jones was part of the group, though he began squabbling over how much he was owed. It led to a civil suit in Lafayette Circuit Court, and last week Scruggs was indicted for allegedly attempting to bribe Circuit Judge Henry Lackey.

According to the indictment of a federal grand jury, Scruggs, his son, co-worker Sidney Backstrom and Timothy Balducci and Steven Patterson of Balducci and Patterson, conspired to offer Lackey $40,000 to compel arbitration in the case with Jones.

"The three principals were Scruggs, Don Barrett from Lexington and David Nutt, had pretty much already decided that they were going to take 90 percent plus of the money," Jones told the AP.

"(M)y relationship with Dick is such that he and I can talk very private 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," Balducci told Lackey, according to the indictment.

"The only person in the world outside of me and you that has discussed this is me and Dick... 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."

It is Balducci, according to Portland, Ore., insurance attorney David Rossmiller, who appears to be the one who possibly helped the FBI.

"(A)t least two entries in the list of overt acts in support of the alleged conspiracy are difficult to explain unless Timothy Balducci was either wired or otherwise cooperating with investigators as of late October-early November, if not before," said Rossmiller, a close watcher of the Gulf Coast's insurance situation.

Rossmiller also says Balducci may have been told by the feds to ask Scruggs for more money so that they could gain evidence against him.

"Paragraph 22 (of the indictment) does not list verbatim discussions between Scruggs and Balducci, so we do not know what precisely was allegedly said, but the paragraph does say Scruggs 'agreed to take care of an extra $10,000 payment to the judge and said he would 'hire' Balducci to prepare jury instructions in an unrelated case to cover the $10,000 extra to be paid to the judge,'" Rossmiller said.

"One might infer from the timing that investigators told Balducci to go back to the law firm and make this request for a fake additional payment to Lackey to get further evidence against Dickie Scruggs -- and Zach Scruggs and Backstrom to boot. "

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