Bribery charge: Reads like a Grisham novel

Clarion LedgerMore Coverage on The Scruggs Indictment there is almost too much out there to begin, I will be firing the blog back up pretty soon after taking a little break post election.  We will get deeper into the political ramifications which will be DEEP.  

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One Comment on “Bribery charge: Reads like a Grisham novel”

  1. Justus Says:

    Seems like everyone is distracted about the bribery scandal. I believe in the old “deep throat” advice – “Follow the money”!

    The identity of the “money man” for the Scruggs Katrina Group (“SKG”) joint venture is the most important, but least explored question, relating to Katrinagate. That “money man” is none other than David H. Nutt of the Nutt-McAlister firm according to the SKG joint venture agreement.

    The SKG joint venture agreement also states that Nutt’s firm gets 35% of the legal fees in exchange for funding the venture. That leaves 65% to be split between Scruggs, Barrett and Lovelace, since they kicked Jones out, resulting in about 21.66% for each of them. Thus, the joint venture agreement makes Nutt’s 35% the “lion’s share” of the legal fees by far.

    A little background here. Nutt made the tobacco settlement happen. Nutt became wealthy when he made his first really big money in asbestos with the help of another lawyer named Danny Cupit, and he was not originally in the tobacco litigation. However, Scruggs and his tobacco litigation buddies were almost out of money, so they approached Nutt, who was flush with cash from asbestos. Nutt agreed to fund the tobacco litigation from that point “in exchange for substantial, if not the lion’s share of, the legal fees” that might be recovered. The rest, as they say, is history.

    Fast forward to Jim Hood’s “first” election for Attorney General about four years ago. While several have correctly picked up on the fact that Joey Langston was the top contributor to Hood’s first campaign, no one has yet discovered that Nutt was the second highest contributor to Hood’s first campaign. The facts can be found in the records of the MS Secretary of State. And, while Hood awarded Joey Langston the MCI case, Hood awarded David Nutt and Danny Cupit a case against pharmacy benefit managers for them to pursue on behalf of the State of MS, which could prove even more lucrative.

    The point is, everyone is thinking one-dimensionally, and trying to link up Scruggs and Hood. In reality, the tighter link is really between Nutt and Hood, and since Nutt is the money man in the SKG joint venture, the link is also there between SKG/Nutt and Hood. However, my belief is that Jim Hood has just been used as a pawn by Langston, Nutt and Scruggs for their ploys and power plays, and Hood is just a victim of circumstances.

    Also, if you will check, you will find that a very close and longstanding relationship has existed between Steve Patterson and Bill Jones (not related to John Jones, the plaintiff in the underlying lawsuit). Steve Patterson is a former State Auditor of MS who is a business partner of Tim Balducci. Both Patterson and Balducci were indicted along with Dickie Scruggs, Zach Scruggs and Sid Backstrom.

    Bill Jones is a CPA who works as an in-house accountant for David Nutt, and has worked for Nutt for many years. Bill Jones is also the accountant for the SKG joint venture and reviews and approves the SKG joint venture expenses. Bill Jones and Steve Patterson once worked together at—you guessed it—the State Auditor’s office. Quite a coincidence, huh?

    So, you can see, Nutt (35%) stood to gain more from a favorable ruling by Judge Lackey than did Scruggs (21.66%) or any other SKG joint venturer, and there is a connection between Nutt’s CPA, Bill Jones, and Steve Patterson. There may be nothing to it, but that’s two eyebrow-raisers in my book.

    You can draw your own conclusions as to whether Judge Lackey was being bribed to solely benefit Scruggs, and who all was involved with it. But, if the objective of the reported bribe had been successful, it would have resulted in a benefit not only to Dickie Scruggs’ 21.66% of the attorney fees, but also to Nutt’s 35% of the attorney fees. You do the math on the $26.5 million and figure out who stood to gain how much.

    All of the above also raises the question of whether the $50,000 bribe was an SKG expense that Nutt was funding, and whether SKG/Nutt was attempting to pass along the bribe as a litigation “expense”, and make their Katrina clients pay it as a litigation expense deducted from their Katrina settlements? I’m sure that an audit of the Katrina settlement would prove very enlightening.

    This is just the beginning.

    Justus Kneads

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