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Fight over MCI legal fees continues in Miss. court

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

Mississippi taxpayers.

"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

campaign.

"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

unfounded.

"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

funds."

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

million.

"The auditor could win the battle and lose the war," Krutz

said.

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

Mississippi.

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

law."

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.)

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