JACKSON — State Auditor Phil Bryant has issued a demand letter for recovery of the $14 million in legal fees paid by MCI to two law firms in the wake of the state's $110 million settlement with MCI in a 2005 tax fraud case.
Booneville attorney Joey Langston confirmed the demand for recovery from Bryant in a Monday e-mail exchange with this reporter while he was on an anniversary trip to Italy with his wife. Bryant also confirmed the demand letter in a telephone interview on Wednesday.
Bryant and Langston both said that Bryant's demand letter was issued months ago, and Bryant said his investigation into the matter began “almost a year ago” when his office issued a review of the MCI settlement on Oct. 19, 2006.
Bryant said he sent Attorney General Jim Hood a copy of the demand letter to Langston and a copy of a legal complaint he asked Hood to file “if necessary to recover the fees.”
“I think the state is on firm ground with this demand,” said Bryant. “The law requires that this money go through the appropriations process.”
But Langston said the settlement gave him “far less in fees than the contingency fee contract” he had in hand with the state prior to negotiating the settlement.
The Langston law firm in Booneville and the Lundy & Davis law firm in Lake Charles, La., negotiated the settlement with MCI/Worldcom — the telecommunications giant that failed in the Bernie Ebbers scandal and costs investors billions and employees their retirements.
MCI was represented in the final settlement negotiations by former attorney general Mike Moore. The state was represented by Langston and his current legal associate Billy Quin, who at the time the case was settled was associated with the Louisiana law firm.
The Langston and Lundy & Davis law firms were hired as outside counsel to represent the state by Jim Hood. Langston has been identified as one of Hood's largest campaign contributors, a reality that Langston doesn't deny.
The final settlement saw MCI give the state $100 million cash and a substantial amount of WorldCom's downtown Jackson real estate. It also earmarked $4.2 million for a Children's Justice Center at the Jackson Medical Mall and paid $14 million in legal fees.
Bryant said the state had already recovered the $4.2 million earmarked for the justice center. Bryant said Wednesday that he had not sought publicity about the demand letter to recover the legal fees as well, saying, “I didn't call a press conference about it.”
For Democrats and trial lawyers, the questions of the day about ethics in politics and public service have been whether Republican Gov. Haley Barbour's blind trust is legal and whether Barbour has been honest with the voters about his relationship with his former Washington lobbying firm.
But for Republicans and the business/medical communities, that subject is going to change to Hood, Langston and big state legal fees going to trial lawyer campaign contributors of the attorney general.
Both ethical debates are more political in nature than legal. Both just happen to be peaking six weeks out from the election. And the Legislature refused to make these actions illegal less than six months ago in the 2007 session.
