FBI: Scruggs paid 2 men to persuade AG
Associated Press
Wed February 27, 2008
Area: Jackson, MS
JACKSON, Mississippi - A prominent attorney embroiled in a judicial bribery case paid two associates $500,000 to convince Mississippi's Attorney General not to file criminal charges against an insurance company, according to court records.
Plaintiffs lawyer Richard "Dickie" Scruggs, who sued State Farm Fire and Casualty Cos. soon after Hurricane Katrina in 2005, was afraid the company "was not going to settle the civil cases" if the attorney general's office filed criminal charges, according to an FBI report filed Monday in the bribery case.
Attorney General Jim Hood would not answer questions Tuesday about an alleged meeting with two men the court filing says were paid to persuade him not to file charges. It's not clear exactly when the meeting took place, but was likely in the weeks before Hood reached a settlement with State Farm in January 2007.
Hood issued a statement through a spokeswoman saying he made the decision not to file criminal charges after three days of grand jury hearings.
"I made my decision that there was insufficient evidence to uphold a conviction of State Farm on evidence we had at the time ..." Hood said. "I am too hardheaded to be influenced by outside forces - I do what I think is right for the working people of Mississippi."
John Keker, an attorney for Scruggs, did not return calls or an e-mail seeking comment.
In 2005, Hood was pursuing a criminal investigation against State Farm over what he claimed was the company's fraudulent practices in denying homeowners' insurance claims after the hurricane.
Scruggs agreed to pay attorney Timothy Balducci and former State Auditor Steve Patterson "if they could get Hood to relent on indicting" State Farm, according to a 2007 report written by FBI Agent William Delaney.
The FBI report, entered into federal court records in the bribery case against Scruggs and two associates, is based on an interview with a confidential source, apparently Balducci.
Scruggs, his son Zach and law partner Sidney Backstrom are accused of trying to bribe a judge to get a favorable ruling in a dispute over $26.5 million in legal fees from a mass settlement of Hurricane Katrina insurance lawsuits. The three have pleaded not guilty.
Balducci and Patterson have pleaded guilty to conspiring with Scruggs and the others to bribe the judge in the dispute over fees that Scruggs and his associates eventually won in the lawsuit against State Farm.
Balducci and Patterson are cooperating with the federal investigation.
A judge on Tuesday ruled that he will allow evidence of prior bad acts, particularly that Scruggs allegedly tried to influence at least one other judge when the trial begins March 31.
The FBI document was filed Monday as part of a defense motion introducing a potential witness. It says Balducci accompanied Patterson, who had a long-standing relationship with Hood, to a meeting in which the lawyers allegedly asked Hood not to charge State Farm.
"Hood later agreed not to indict," the report said.
Patterson and Balducci were "paid a fee totaling $500,000 over a period of time to assist with the State Farm settlement," said Patterson's attorney, Hiram Eastland Jr., in an interview with The Associated Press.
However, Eastland could not confirm that Balducci and Patterson tried to persuade Hood to withhold criminal charges against State Farm.
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