Hood’s public remarks this week, combined with the information from that FBI report about the dinner with Patterson and Balducci and the facts that emerged from the Alabama contempt prosecution all provide interesting grist for the mill. I’m still trying to figure out what exactly happened in December 2006 and January 2007, when Patterson and Balducci had one or possibly two meetings with Hood.
Here’s what Hood said in the
Hood turned to the FBI memo, and said that if you look at the statement the FBI writes down, what is unsaid is more important than what was said. There is no statement that money was offered to Hood, which you know would have been in the statement if it had been. Repeated the public defender remark: "Tim Balducci was a public defender up there, knew I was a hard-nosed prosecutor, knew if they’d offered me money they would have been indicted. "
He was asked if he was threatened with opposition supported by Scruggs if he didn’t help. "I did not know Patterson and Balducci were working for Mr. Scruggs. They were kind of sending messages back and forth. I would not let them come into meetings. " He said he would not meet with State Farm’s people in
Here’s my quote from the FBI interview memo with Balducci on that meeting:
Balducci further explained, prior to this March 2007 meeting [with Scruggs], the Scruggs Law Firm (SLF) was trying to settle some Katarina [sic] Insurance cases with the State Farm Insurance Company (SFIC). SLF and SFIC were near a settlement, however, Dickie Scruggs (DS) learned that the Mississippi State Attorney Generals office had threatened to indict SFIC due to some impasses between the Attorney General’s office and SFIC. SFIC was not going to settle the civil cases with SLF, if the company was going to be indicted by the Attorney General’s office. DS asked Steve Patterson (SP) to speak with Attorney General Jim Hood since SP and Hood had a longstanding relationship. DS offered to pay Patterson Balducci $500,000 if they could get Hood to relent on indicting SFIC. Balducci accompanied SP to a meeting with Hood and Hood later agreed not to indict SFIC. SLF eventually settled with SFIC and that settlement yielded approximately $26 millions in attorneys fees. DS reneged on his pledge to pay Patterson Balducci $500,000, but later agreed to pay Patterson Balducci $100,000 per month over five months. The SLF first paid Patterson Balducci $100,000 in March 2007 and eventually paid the entire $500,000.
So here are a couple of questions, very simple ones: When was that 2-3 weeks or a month that Hood didn’t speak to Scruggs’s side? And when did Patterson and Balducci (whose firm started for business January 1, 2007) meet with Hood? If anyone has any documents or evidence about what happened in the negotiations involving State Farm, Hood, and Scruggs or Scruggs Katrina Group between December 13, 2006 and January 17, 2007, I would appreciate it.
I want to start with facts that are pretty well established. On Friday, December 8th, when the injunction was entered in the Renfroe case, Scruggs called Hood about it and they ended up speaking on Hood’s cell phone. Reading Scruggs’s testimony carefully, it seems that it was during this conversation or one later that weekend that the idea came up of sending the documents to Hood. Scruggs refused to say in his testimony in the contempt hearing whose idea it was, and it is not entirely clear whether it was during the first conversation or in one later that weekend.
Hood’s testimony about all this in
If you think I’m exaggerating just how weird his testimony is, check out the excerpt Rossmiller reproduced here.
So I’m going to assume that as of the weekend of December 9-10th, Hood and Scruggs were still working pretty close to hand-in-glove.
On December 11th (Monday) the injunction took effect when a bond was posted.
On December 12th and 13th, Hood’s assistant A.G. had email correspondence with Scruggs about the document hand-off. (Hood’s testimony on this, also in the excerpt linked above, is just as weird, but it makes clear that while he did not read the correspondence, he was aware of i’s content– that Schloemer first asked for the documents and then on the 13th made clear she wanted it to be ok with Judge Acker).
So I would have to assume from all of this that the cooperation between Scruggs and Hood was ongoing as of December 13th. The two-three weeks or a month they were out of touch had not commenced. The meeting with Balducci and Patterson had not occurred.
Now comes a gap; I do not know what happened between December 13th (Wednesday) and January 17th. Presumably, the negotiations between State Farm, Scruggs, and Hood were hot and heavy given what occurred between January 17th and January 23rd. Here’s something that may have occurred in the gap: When did State Farm get subpoenaed to the January 17-19 grand jury hearing? Is this gap the 2 weeks or a month Hood wasn’t talking to Scruggs?
On or about January 17th, the grand jury hearing occurred. On January 18th, Don Barrett sent the email to State Farm’s national lawyer. I described it in an earlier post. Barrett wrote:
"Your proposal to Hood is fair ".If Hood lacks the wisdom to go through with this deal, it would be in State Farm’s best interest to proceed just with us, and we offer to do that. " He notes a settlement without Hood "vastly reduces the change Hood will go forward with an indictment. " "It may well be that Hood has become wary of ethics issues and has decided he has to put some distance between the civil litigation and the criminal investigation. Going forward with us now solves that problem. " "That Hood may fail his state is not your fault or ours. "
In the interview this week, Hood says that his prosecutors told him that on Friday of that week, he got emails from the prosecutors that they did not have the proof for a prosecution. That would have been January 19th (which is also the date of the show-cause order Judge Acker entered in the Renfroe case…). The Woullard settlement was announced the following Tuesday, on January 23rd. On that day, Hood wrote the letter to State Farm that the prosecution was dropped.
So it is clear that by January 17th, the train was about to leave the station on the State Farm settlement, with it totally unclear whether Hood was on board. On January 23rd, Hood had boarded the train (later events would reveal that, absent three major players –Renfroe, Judge Acker, and Judge Senter –the train was not going to have a successful trip).
It is also clear that on December 13th, Scruggs and Hood were playing ball but (given Barrett’s letter) on January 17th, they weren’t. I’m going to have to assume that the breakdown didn’t occur right away because a couple of things had to occur first– negotiations with State Farm had to get off to a meaningful start, and then it had to become clear that the Hood grand jury investigation, which was looming, was going to be a real problem. It then had to become clear (to Barrett at least) that Hood was way off the same page as the Scruggs group.
I’m also now beginning to assume that Hood may have been telling the honest truth that there was at least some period he was not talking to Scruggs– and thus Scruggs sends his $500,000 messengers to try to reel him in. Finally, I’m leaning stronglytoward thinking that Hood met Balducci and Patterson in the first two weeks of January.
I am having trouble making stronger assumptions about what occurred. Anyone else out there with suggestions, documents I’ve missed, or the like? Help!
NMC, I think that leaving off one part of the Barrett letter is a mistake. “Your proposal to Hood is fair and your letter is great. I THINK THAT TODAY IS THE DAY. I THINK HE WILL TAKE THE DEAL. However, if Hood lacks…”
Has something taken place (ie the “influential dinner”) that would lead Barrett to believe that “Today is the Day. I think he will take the deal” on January 18? If Barrett has been notified by Scruggs, Patterson and/or Balducci that Hood was receptive to their message at the meeting, this would indicate his confidence in making that statement.
Also, I still say that Scruggs made an offer to Patterson and Balducci to get Hood to drop the criminal case, for which Mr. Tightwad would pay them $500,000. They WERE paid $500,000. Hood DID drop the criminal case.
Conjecture, I realize, but connecting the dots in my mind…
I share the conjecture in your next to last paragraph. You’re right that the sentence I omitted is suggestive, although I’m not sure it supports as strong a conclusion as you place upon it.
Here”s a question: what are the chances that the AG has some sort of log of appointments that would tell us exactly when this meeting occurred? I”m right on the brink of a Public Records act request to the A.G.’s office for that and some other things.
today is the day might mean something if it came from anyone but don Barrett. Barrett is a big talk with not a lot of substance. See e.g. Jones v scruggs
I just have to doubt that he would have that recorded, but I’m all for your inquiry. Speaking of… whatever became of the ideas surrounding how to get the SF settlement agreement unsealed since Hood was sued in his capacity of MS AG?
It’s an odd statement to make though, Confounded. What would make him say that about Jan. 18?
NMC,
(1) What would you need to jump down offa that brink and into the soup? (I realize that would mean there goes your anonymity, so would maybe some of our folks care to join you for solidarity-and-good-government’s sake?)
(2) I’d love to know which other things, unless the element of surprise might be important.
Great post, by the way, NMC
.
Lookit that — My Thoughts has discovered invisible cyber-ink!
OR… realized that my #8 post was from my lack of good reasearching, as NMC’s comment held the answer… AND… my lack of knowledge on how to “delete” my stupidity.
OR… it was the transcript of my secret converation with Hood last night, wherein he revealed ALL the juicy details of the “dinner”… not the least of which is the location: Sonic!
I’ve just done another post about all this.
Just an observation: These work-out-the-chronology posts are a real BEAR to write!
NMC, The DJournal editorial today was on Hood. Good read.
Here it is: EDITORIAL: Hood’s inaction
What would come between Scruggs and Hood? The first and most obvious guess would be money. After all, they were working so well together, then all of a sudden they are not speaking? You’re right, it does not make sense at all.
But how do you prove it? It will take somebody like Backstrom or Blake to reveal it and evidently, Dickie appears to have them sealed up tight for now. Hopefully Joey can tell them something or they found something in their office search.
Stories were fed to the Sun Herald by “a source familiar with the negotiations” in order to put public pressure on Hood to sign off:
State Farm close to tentative agreement to settle more than 600 Katrina lawsuits
By ANITA LEE
8 January 2007
The Sun Herald (Biloxi, MS)
State Farm Fire & Casualty Co. has tentatively agreed to reopen thousands of Hurricane Katrina homeowner claims in the three Coast counties and to settle lawsuits more than 600 policyholders have filed against the company through the Scruggs Katrina Group, according to a source familiar with the negotiations.
Terms reached by the Scruggs clients are undisclosed. The second part of the agreement is a class-action process for other Coast policyholders who want to settle their claims without going to trial. State Farm has set aside a minimum of $50 million to resolve these policyholder claims, with no maximum set.
Attorney General Jim Hood must sign onto the agreement before it is finalized. Hood is suing State Farm and other major insurers in state court over their refusal to cover Hurricane Katrina claims involving wind and water damage.
Hood’s office also has an ongoing criminal investigation into State Farm’s handling of Katrina claims.
The source said State Farm would expect the civil and criminal matters to be dismissed before agreeing to any settlement. Hood also has been involved in negotiating the class-action portion of the case.
Criminal probe a sticking point; Most attorneys favor settling, moving on
By ANITA LEE
10 January 2007
The Sun Herald (Biloxi, MS)
State Farm Fire and Casualty Co.’s potential settlement of Hurricane Katrina cases on the Coast is getting mixed reaction because one condition is an end to Attorney General Jim Hood’s criminal investigation of the company’s claims handling practices.
“I think any agreement that will result in the policyholders’ claims being paid is a good thing, regardless of how it comes about or what prompted it,” Oklahoma attorney and State Farm adversary Jeff Marr said Tuesday. “The reality is, that’s what we all wanted in the first place. Had that been done at the outset, there would be no criminal or civil litigation.”
Closer to home, the prospect of settlement outraged some attorneys preparing lawsuits against State Farm.
Chip Merlin of the Merlin Law Group, who represents policyholders, summed up the feelings for this group: “In general, people who are under criminal investigation should not be in a position to pay the government money to stop the criminal investigation.”
The proposed settlement would apply to 640 clients of the Scruggs Katrina Group who have filed lawsuits against State Farm. In addition, the insurer would put up a minimum of $50 million to revisit the claims of policyholders in three Coast counties who can opt in or out of the deal.
The policyholder whose name appears first on the list of Scruggs’ State Farm clients hopes the settlement goes through.
“Anyone who’s opposed to it should come to my (FEMA) trailer and look up the beach and down the beach,” said Dr. Wesley McFarland. “The people here are dying. They’re literally going to the graveyard and the rest are leaving town. These people can’t rebuild.”
Hood will not discuss the negotiations, but a source familiar with the situation acknowledges he would have to drop his own civil lawsuit to recover Katrina damages for Coast policyholders and the criminal investigation.
Judge Senter’s verdict in Broussard v. State Farm now online
By ANITA LEE
18 January 2007
The Sun Herald (Biloxi, MS)
A federal judge’s opinion in the first Hurricane Katrina slab trial sent a clear message to State Farm Fire and Casualty Co. that wind damage must be covered unless the company can show water caused the loss.
U.S. District Court Judge L.T. Senter Jr.’s opinion in the case, Norman and Genevieve Broussard v. State Farm, is now available online. Although a jury heard the breach of contract case, Senter decided after both sides had presented evidence that he needed to rule because State Farm had failed to present legally sufficient evidence for the jury to decide the case in the company’s favor.
The jury awarded the Broussards $2.5 million in punitive damages, finding State Farm’s behavior malicious or grossly negligent rather than a simple mistake.
Meanwhile, a criminal investigation of State Farm continues, with a grand jury empaneled through Friday in Jackson County. The office of Mississippi Attorney General Jim Hood is leading the investigation.
No word has been released on the status of negotiations between State Farm, Hood and attorneys with the Scruggs Katrina Group, who are representing 640 policyholders.
Sources familiar with the negotiations have said the 640 policyholders would settle on confidential terms, State Farm would set aside a minimum of $50 million to pay claims of other policyholders who want to opt into the settlement and Hood would drop the criminal investigation, along with a civil lawsuit he filed against insurers shortly after the hurricane.
In the opening act of the Natchez hearing, Asst AG Ed Snyder said that he did not present the case to the grand jury in January 07, but was there to observe and critique the case. That is the veteran prosecutor mentioned by Hood.
I think the problem with the AG’s case in January 2007 was that it was too dependent on the testimony of the sisters. They would have had a stronger case after the FAEC emails came out in April.
I don’t think the reason for any “discourse” between Scruggs and Hood was in fact money. I think, and possibly Barrett’s letter may shed a little light on this as well, that Hood wanted to be a “Mike Moore-like” hero… as Moore was in the tobacco litigation…. Hood wasn’t really the star of the SKG litigation or settlement. I honestly believe that he sees himself, or rather wants to be seen as, Super Prosecutor. I think that he meant it when he said he wasn’t so crazy about being AG, but preferred his old DA job. I think he’s in waaaay over his head with all of these large lawsuits (MCI, Katrina, etc) and all he knows is prosecuting. But Mentor Mike blazed this trail of supposed glory and he wanted that for himself. He wasn’t going to get it by settling with State Farm, but he probably thought he would if he, in some David & Goliath fashion Fought the Evil State Farm (not to imply that they weren’t in fact committing wrong at all) and all of the Coast praised him for saving them. I think that Scruggs probably recognized that he had a problem on his hands in that case. Barrett seemed to have recognized that in his letter. I don’t think Scruggs would have offered him money (though not sure about that, or at least direct cash, rather than campaign cash)… and thought his leverage with Hood would be in scaring him with the threat of financing Hood’s replacement.
Again… just my thoughts.
I admit that I am puzzled as to exactly what happened in the meeting(s) between Hood, Patterson and Balducci.
But, the fact that Hood sputters so bad, and dances around so much, whenever he is asked about it, is what I like to call a clue.
My Thoughts nailed it in the 2:58 post.
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