Taxpayers $3 Million Short?

Courtesy Stacey Pickering

A demand by State Auditor Stacey Pickering could cost taxpayers $3 million.

by Adam Lynch
August 13, 2008

State Auditor Stacey Pickering filed an Aug. 5 motion in Hinds County Circuit Court for summary judgment in the 2005 Mississippi WorldCom settlement case that could prove costly.

Pickering contends that Joey Langston’s law firm attempted to “bypass the laws and legislative safeguards” of the state when they negotiated a $14 million attorney’s fee with WorldCom during a $126.2 million tax-fraud settlement with the state in 2005.

The defunct telecommunications giant settled with the state in 2005 for close to $126 million. The state got $100 million in cash and ownership of WorldCom’s downtown property, and gave $4.2 million to the Children’s Justice Center—a proposed medical and legal center in the Jackson Medical Mall, which would offer abused children access to medical facilities, forensic tests and prosecutors.

The company also agreed to pay the Langston Law firm $14 million, an amount separate from the cash going to the state. Pickering said the issue before the court is “whether a private law ... firm must obtain payment for public work from funds specifically designated by statute or otherwise subject the amount charged by it to legislative review.”

Pickering says state law demands private attorneys, like the Langston law firm, who were hired as special counsel, to “be paid from the attorney general’s contingent fund or from funds appropriated to the attorney general’s office by the Legislature,” and said he has the right to “seek the return of any funds misappropriated or illegally expended” by Hood.

Former State Auditor Phil Bryant had already claimed the $4.2 million slated in the settlement for the Children’s Justice Center last year—effectively killing the proposed program. Now Pickering wants the lawyers’ fees.

But the freshman auditor acknowledges the AG’s right to compensate outside counsel based upon an agreed-upon contract between the attorney general and the attorney. The contract between Hood and the Langston firm called for a higher fee than the amount with which Langston walked away.

“If Pickering gets his way, the state will have to pay the outside counsel according to the strict wording of the contract,” Hood told the Jackson Free Press. “That would kick their fee up another $3 million.”

Pickering said that is not his problem.

“That’s a decision the Legislature will have to work out. That’s not the auditor’s or the attorney general’s decision. Our position is that these are public funds and that we must follow state law,” Pickering said. “I cannot appropriate public funds. A judge cannot appropriate public funds.”

Both Langston and Balducci pled guilty to bribing judges last year. The contract they signed with Hood, however, is legally binding. “If the Legislature refuses to pay them, then we’ll get sued, and the plaintiffs will have a hard contract to show the court when they drag us in with them,” Hood said.

 
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