AG Hood somber about Scruggs sentencing

John O'Brien Jun. 27, 2008, 3:56pm




JACKSON, Miss. (Legal Newsline) - With a major campaign donor preparing to go off to federal prison for five years, Mississippi Attorney General Jim Hood said Friday justice had been served.

Famed plaintiffs attorney Richard "Dickie" Scruggs has long been a supporter of Hood, and the two were accused of a very close working relationship in Hurricane Katrina cases by federal prosecutors.

Scruggs accepted a five-year prison sentence Friday, more than three months after pleading guilty to a judicial bribery scheme in a dispute over attorneys fees. Fellow conspirator Sidney Backstrom received a 28-month sentence.

"It's a sad day for the judicial system of our state," Hood said. "No one wins in such situations, but by these sentences and the earlier convictions, justice has been served.

"Hopefully, our system has been strengthened, not weakened, and we can move forward to better serve the citizens of Mississippi."

Hood received his share of criticism for not pursuing state charges against Scruggs and another campaign contributor who pleaded guilty to a judicial bribery scheme in January, Joey Langston. Hood has said that prosecuting them would be like charging a member of his family with a crime and deferred to local district attorneys.

Scruggs was hired by then-Attorney General Mike Moore to pursue a case against tobacco companies on behalf of the State, and his work led to the 1998 Tobacco Master Settlement Agreement. It has an estimated worth of $246 billion for the 52 participating territories and states.

After 2005's Hurricane Katrina, he grouped together a handful of law firms to create the Scruggs Katrina Group. The group represented insurance policyholders who believed their insurance companies were misrepresenting the amount of damage done to their properties by wind (covered by the policy) and water (covered by a federal program).

More than 600 cases were settled early in 2007, earning the SKG $26.5 million in attorneys fees. At the same time, Hood, who had sued five insurance companies only weeks after Katrina, dropped a criminal investigation of State Farm Insurance Cos.

An FBI report released this year says Scruggs offered $500,000 to two of his alleged co-conspirators in the judicial bribery scheme to attempt to convince Hood not to indict State Farm on criminal charges regarding Hurricane Katrina claims because Scruggs feared it would put an end to a possible settlement with his Scruggs Katrina Group.

Hood said he is too hard-headed to be influenced by outside forces.

"(State Farm) was not going to settle the civil cases with the (Scruggs Law Firm), if the company was going to be indicted by the Attorney General's office," FBI agent William Delaney wrote.

"(Scruggs) asked (Steven 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."

Meanwhile, John Griffin Jones filed suit against Scruggs, claiming his firm was shortchanged when the SKG's money was divided.

Scruggs admitted that he gave the go-ahead for attorney Timothy Balducci to offer $50,000 to Lafayette County Circuit Court Judge Henry Lackey for a ruling that would have sent the dispute to an arbitration panel. Balducci pleaded guilty in November to the scheme, and his business partner Steven Patterson, a former state Auditor, soon followed.

Lackey contacted the FBI soon after Balducci's first mention of a bribe. Scruggs agreed to a maximum prison sentence of five years, pleading guilty to a conspiracy charge while the other five were dropped.

Son Zach pleaded guilty misprision of a felony, meaning he knew about the scheme but did nothing to prevent it. He will be sentenced next week.

In another criminal case against Scruggs, federal prosecutors said Scruggs and Hood worked closely to preserve confidential documents stolen from State Farm by a pair of sisters who worked at a company that teamed with State Farm after Katrina.

Scruggs was charged with contempt for allegedly violating a Dec. 2006 order from a federal judge that told Scruggs to return the insurance documents.

Instead, Scruggs gave them to Hood, who had sued five insurance companies -- including State Farm -- over their handling of Katrina claims. Renfroe was working with State Farm, which has since settled a lawsuit against Hood, on the claims.

In the indictment against Scruggs, the prosecutors said Scruggs directly gave Hood $44,000 for his campaigns.

The criminal contempt charge was dropped because of a law-enforcement exception in the order that allowed Scruggs to turn the documents over to a law enforcement official, but U.S. District Judge William Acker recently hit the sisters and Scruggs with civil contempt.

He called Hood "a so-called law enforcement official."

"We intend to file a motion asking the court to revise such uncalled-for derogatory conclusions," Hood said.

"The rules of judicial performance do not allow a court to engage in unnecessary attacks on officers of the court, particularly when they are not even parties to the litigation."

In 2007, Scruggs gave $300,000 to the Democratic Attorneys General Association, which also received $100,000 from attorney Joey Langston at the same time. The DAGA later donated $400,000 to Hood.

Hood earned re-election with a win in the November general election over Republican challenger Al Hopkins.

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