Three On Your Side Investigates: Hood Pulled into Scruggs Case - - Jackson, MS

Oxford 02/26/08

Three On Your Side Investigates: Hood Pulled into Scruggs Case

By Marsha Thompson

A controversial filing by the federal government in the Richard "Dickie" Scruggs bribery case is raising eyebrows. The FBI document taken November 2, 2007, deals with a confidential informant revealing about an overture to Mississippi Attorney General Jim Hood to drop his case against State Farm. The FBI document outlining cites information given up by attorney Timothy Balducci. The lawyer was arrested Nov. 1, 2007, one day after delivering bribe money to Judge Henry Lackey -- a bribe the government claims was orchestrated by Scruggs.

This information was taken one day after Balducci is busted by the feds. It states that Scruggs learned that the attorney general had threatened to indict State Farm due to some impasses between the AG's office and State Farm. The informant tells an FBI agent State Farm was not going to settle the civil cases with Scruggs if the company was going to be indicted by Hood.

It states that Scruggs asked former State Auditor Steve Patterson to meet with Hood because they had a long-standing relationship. The government exhibit mentions that Scruggs offered to pay Patterson and Balducci $500,000 if they could get Hood to back off the threatened indictment of State Farm. 

Last January in a landmark settlement, State Farm agreed to pay hundreds of millions of dollars to policyholders who lost their homes in Hurricane Katrina. Last January, U.S. District Judge L.T. Senter Jr. rejected the proposed settlement agreement involving nearly 35,000 homeowners.

The confidential informant and Patterson met with Hood. Hood later agreed not to indict State Farm Insurance, according to the feds. That apparently cleared the way for Scruggs' law firm to collect $26 million in legal fees. It was apparently the same $26 million now at the center of a scandalous bribery case that continues to keep Mississippi's judicial dealings in the national spotlight. 

Hood e-mailed this response to WLBT News late Tuesday:

"The decision on whether to indict State Farm Insurance Company was based solely on the advice of senior prosecutors in our office. Several days before the January 23, 2007, settlement with State Farm, after our prosecutors heard three days of testimony before a Jackson County grand jury, the majority of the prosecutors working on this case determined with a high level of certainty that no fact pattern existed that fell squarely within the insurance fraud statute.  I made my decision that there was insufficient evidence to uphold a conviction of State Farm on evidence we had at the time, based upon the advice of a career prosecutor who started in this office in the early 1970s. I am too hardheaded to be influenced by outside forces - I do what I think is right for the working people of Mississippi. As Mr. Balducci was quoted as saying about me on page 49 of a federal wiretap transcript of November 1, 2007: 'He ain't gonna dance with the one who brought him to... the dance.'"

Meanwhile, at the State Capitol, the Mississippi House voted to impose stiff penalties for bribing judges. A bill that passed 122-0 Tuesday says someone found guilty of the felony could be punished by five to 20 years in prison and a fine of at least $25,000 or three times the amount of the bribe.

The bill moves to the senate for more work. House Judiciary A Committee Chairman Ed Blackmon, a Democrat from Canton, says the bill was inspired by current events.

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