JACKSON, Miss. (AP) - After working its way through the federal
courts, a dispute over millions of dollars in legals fees between
the Mississippi auditor's office and two former attorneys is back
before a state court judge.
Former attorneys Joey Langston and Timothy Balducci - who were
disbarred after pleading guilty in an unrelated judicial bribery
investigation - are trying to hang on to $14 million in legal fees
they negotiated with MCI after suing the telecommunications company
on the state's behalf.
State Auditor Stacy Pickering says the money belongs to
"Langston and other attorneys who worked on this case deserve
compensation, but the funds should have been appropriated by the
Legislature," Pickering said Friday in a statement.
But Langston's attorney says the case is more about political
grandstanding than money.
Attorney General Jim Hood, a Democrat, hired Langston and
Balducci to try to recoup unpaid taxes and interest stemming from
the collapse of Clinton-based WorldCom, which emerged from
bankruptcy as MCI in 2004 after a massive accounting fraud.
MCI, which was based in Virginia and was later sold to Verizon,
settled Hood's lawsuit in 2005 and agreed to pay the state $100
million and hand over real estate valued at several million.
Langston, of Booneville, and Balducci, of New Albany, who supported
Hood's political campaigns, negotiated the additional $14 million
payment from MCI.
Republican Lt. Gov. Phil Bryant, however, who was the state
auditor at the time, sued in Hinds County in an attempt to send the
$14 million to the Legislature to be appropriated. Bryant was
running for lieutenant governor at the time.
Langston's attorneys claim Bryant was only trying boost his
"If you look at what happened and the chronology, I don't see
how any reasonable person could reach a different conclusion,"
said Langston attorney, Fred Krutz.
Krutz said the settlement was reached in 2005, but Bryant didn't
sue to get the legal fees back until the 2007 campaign began.
Bryant's spokesman, Mic Bullock, said Friday the accusation is
"It is sad that this individual would make that kind of comment
because this money belongs to the taxpayers of Mississippi and the
lieutenant governor continuities to believe that just as he did as
state auditor," Bullock said.
Whatever the case, Pickering, also a Republican, picked up the
fight after replacing Bryant as state auditor.
"We believe the facts are on our side," Pickering said.
"These funds are taxpayer dollars and Mississippi constitutional
law is very clear that only the Legislature can appropriate those
Krutz, on the other hand, said Langston expects to win in court.
And if he doesn't - and the money is appropriated by the
Legislature - Krutz said Langston will ask lawmakers for nearly $17
"The auditor could win the battle and lose the war," Krutz
Bryant originally sued in Hinds County to get the $14 million
back. Langston then asked a federal judge to step in, and Hinds
County Circuit Court Winston Kidd issued a stay on the state court
proceedings while the federal issues were resolved. A federal judge
kicked the case back to state court.
A hearing had been set for Monday on a motion to lift the stay
and let the case proceed in Hinds County. However, both sides
agreed to move forward and there was no need for the hearing, Krutz
said. Both sides now have pending motions for summary judgment,
meaning they want the judge to issue a ruling in their favor
without having to hear more arguments.
The practice of attorneys general in Mississippi hiring outside
lawyers to sue companies on behalf of the state has been a
politically divisive issue since the multibillion dollar tobacco
lawsuits of the 1990s. That's when former Attorney General Mike
Moore, a Democrat, hired Richard "Dickie" Scruggs, a major
campaign contributor, to sue tobacco companies on behalf of
Scruggs, who is now serving a five-year sentence for conspiracy
in the same bribery scandal that snagged Balducci and Langston,
made hundreds of millions of dollars in the tobacco litigation.
Hood and Moore have defended the use of outside counsel, saying
the attorneys have the expertise and resources needed to take on
massive corporations with deep pockets. Hood has said "every
aspect of the MCI case was handled in accordance with Mississippi
Scruggs was indicted last November along with his son, Balducci
and other associates. Balducci and Langston each pleaded guilty to
trying to influence judges on Scruggs' behalf. They have helped
federal prosecutors in their investigation.
Langston will be sentenced Dec. 16. A sentencing date for
Balducci has not been made public.
(Copyright 2008 by The Associated Press. All Rights Reserved.)