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Scruggs contributes large amount in Insurance Commissioner race

By John O'Brien | Aug 1, 2007

OXFORD, Miss. - First, trial lawyer Richard Scruggs insulted Mississippi Insurance Commissioner George Dale in a political cartoon. Now, Scruggs is putting his money where his mouth is.

Scruggs has contributed $250,000 to Mississippians for Fair Elections, a group created to focus on the role played by the state's Insurance Commissioner.

"Big insurance has its voice in George Dale," Scruggs said. "Now, it's time for consumers to have a voice. I am donating this money as an advocate for families who continue to be abused by big insurance."

According to Scruggs, any money spent toward removing Dale from office is money well spent. The two have butted heads as a result of Hurricane Katrina, which led to a slew of lawsuits alleging several insurance companies refused to pay for damaged structures and relied too much on the federal 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 said. "They tell him what to say and how to regulate. Of course they are coaching him now to say he is running against me. But he is not. George Dale is running against Gary Anderson, Mike Chaney and other candidates who want to work for consumers, not the big insurance companies.

"By attempting to divert attention from the real issues in the race, George Dale is once again running from his record as the voice of big insurance."

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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