Reports of New Scruggs Influence Payments Surface in FBI Notes
An FBI report says plaintiffs lawyer Richard “Dickie” Scruggs agreed to pay two associates $500,000 to discourage Mississippi’s attorney general from indicting State Farm Insurance Co.
A confidential source told the FBI that Scruggs feared State Farm would not settle his civil cases if the insurer also faced criminal charges, the Associated Press reports. The source is apparently lawyer Timothy Balducci, who has pleaded guilty along with state auditor Steve Patterson to conspiring with Scruggs to pay a judge $40,000 for a favorable ruling in a fee dispute. Scruggs has pleaded not guilty.
The report is one of two FBI documents that recently surfaced about payments Scruggs allegedly made to people dispatched to influence allies.
The first document says Scruggs promised to pay Balducci and Patterson $500,000 to speak with Attorney General Jim Hood, according to AP and stories in the Biloxi Sun Herald and the Clarion Ledger. Hood did not indict the insurer but said his decision was based on the advice of experienced prosecutors who evaluated three days of grand jury testimony.
“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,” Hood said in a statement. “I am too hardheaded to be influenced by outside forces—I do what I think is right for the working people of Mississippi.”
In an interview with the Clarion Ledger, Hood said he met with Balducci and Patterson around Christmas 2006, but the conversation didn’t influence him and didn’t include a bribery offer. “It was like they were fishing for information more than anything,” Hood said. “I didn’t get a dime, wasn’t offered a dime and wouldn’t have taken a dime.”
“If I knew they were getting paid that much, I would have told them to get out of the office because it just didn’t smell right,” he said.
The Sun Herald says Scruggs and legal colleagues contributed $500,000 to Hood’s re-election campaign in 2007, but that $470,000 of that amount was contributed through the Democratic Attorney General’s Association. Hood said that information was “news to me.”
Meanwhile, the Sun Herald reports in a separate story that a “mystery man” is earning $50 million from Scruggs for his help in tobacco litigation.
The newspaper describes the man, P.L. Blake, as “a politically connected son of the Mississippi Delta who now lives in Birmingham, [Ala.]” In an FBI interview, Balducci described Blake as a Scruggs “bagman” who paid allies during negotiations and lobbying that resulted in almost $1 billion in tobacco fees for Scruggs’ firm, the newspaper says.
