FOREST - Let's put the settlement Attorney General Jim Hood negotiated with MCI on behalf of the state into a little perspective.
Hood has been criticized for settling for a total of roughly $125 million - a $100 million cash payment, $7 million in downtown Jackson real estate, $14 million in legal fees and $4.2 million in funding for the Children's Justice Center of Mississippi. The latter is a program Hood's office last session sought to be funded by the Legislature but failed to receive the appropriation.
Criticism ranges from the fact that the state claimed $1 billion in back taxes, penalties and royalties over a five-year period to the fact that $4.2 million of the settlement went to an AG-backed program, which is making some people draw parallels to the Partnership for a Healthy Mississippi. Talk radio pundits have even criticized Hood for having former Attorney General Mike Moore present at the press conference announcing the settlement.
Some things are petty, such as the Moore angle. Moore represented MCI in part of the negotiations. He was not there, as some would say, to hold Hood's hand. The former Northeast Mississippi district attorney is plenty able to hold a press conference by himself.
To some, the fact that the state settled for just 10 cents on the dollar seems extremely low. The fact is, however, that bankruptcy settlements never come out good for the ones left holding the empty bag.
For instance, Enron bondholders received a settlement that paid them only 20 cents on the dollar. That's just double the deal Mississippi received. Last year, MCI, formerly known as WorldCom, ended up with a settlement that paid bondholders 35.7 cents on the dollar. That's a bit better than the Enron folks, but it's still a far cry from what they had invested in the company.
States have even less leverage than do bondholders when it comes to negotiating bankruptcy suits. So when a state can get an immediate cash payment of 10 percent, plus attorney's fees plus real estates, perhaps it is not such a bad deal after all.
The most telling sign that the settlement was not that out of line for such negotiations is that Gov. Haley Barbour simply glossed over the criticism in his initial statement, providing it lip service but no real credibility.
"While some people are disappointed to settle this for 10 cents on the dollar, the real question is, 'What do we do with the money?'" Barbour said.
Barbour, along with the State Tax Commission, has said that the AG did not keep them in the loop over the settlement. This criticism has some merit. Still, one must consider that the governor and the attorney general are both elected political officers, and the voters saw fit to elect a Republican governor and a Democratic attorney general. Oil and water don't mix, and neither do Barbour and Hood, who have been at odds over the Partnership money, Medicaid funding and a host of other items.
The relationship between Hood's office and the State Tax Commission is not the best either. Nonetheless, State Tax Commissioner Joe Blount said last week that he would be surprised if the state settled for less than $500 million. Who's to say that statement was not a well-placed, well-timed political ploy?
When you get down to it, what more can Hood's opponents say? Here is a first-term, ambitious attorney general who has just obtained $100 million for a state whose budget has holes throughout it. In addition, he's wrangled some prime real estate in downtown Jackson from MCI. It's a good day's work.
That does not mean, however, that Hood's actions were completely void of political motivation. He undoubtedly has higher political aspirations, and this settlement will play nicely in a campaign. Then again, so will this tidbit for Barbour: "I helped control spending without raising taxes."
It's politics, folks. Everyone has political motivations.
But a $125 million settlement is still a $125 million settlement, politically driven or not.
