A Corporate Predator

The Rigsbys’ qui tam claims are now set for trial. State Farm’s favorite strong arm tactic – a slap suit aimed back at the relators as a counterclaim – has been mooted by severance, with all discovery stayed. In a word, the Rigsbys’ qui tam case is now early stage radioactive. For those of you who care to study the pathology of corporate monopolies, now is the time to tune in, lock your dial and follow State Farm’s every move.

You’ll likely see State Farm agents turn up in hometown newspaper photos, handing a giant copy of State Farm’s check to the fire chief, buying the police department some pricey crime fighting device, or donating education funds to the local school board. As trial approaches, the number and frequency of “Good Neighbor” TV ads in the broadcast markets of the jury venire will double. Typically, these ads falsely portray State Farm as a deeply caring protector of America’s families. You’ll see lots of minority face time, puppy dogs, tearful then happy children and so on. Not much different than the “family values” theme some of our best pimp politicians like to market. That’s what you will see; what’s more important is what you won’t see.

You won’t see the “Shred-it” trucks pulling up to State Farm’s and Renfroe’s lawyers’ offices. (They needn’t go to State Farm’s regional or headquarter offices, they have their own shredders and corporate employee operators. In fact, State Farm shredded copies of altered engineering reports and corresponding invoices right there in their temporary Katrina claims office off Pops Ferry Road). Also, you won’t see State Farm’s creepy data managers systematically scrubbing data off the head office’s mainframes and hundreds of work stations. You won’t see this same thing happening behind the walls of State Farm’s and Renfroe’s lawyer’s offices either, or even within the offices of the federal court in Birmingham. You won’t see crooked law clerks scurrying to isolate and delete phone logs or emails proving hundreds of unauthorized ex parte contacts with State Farm’s and Renfroe’s case lawyers. You won’t see the destruction of records detailing communications with FEMA’s David Maurstad or James Shortly, or with FEMA’s shadow manager, Computer Science Corporation (“CSC”), all to get the proof of loss requirements under the flood program waived, and in place within 48 hours of Katrina.

You won’t see these things either. State Farm will tap its brightest strategists like Sheila Birnbaum for razor sharp legal advice. Every political pimp beholding to State Farm in any way, higher ranking the better, will be called upon for influence. There will be a call to arms, and a single imperative will be whispered, but only to the “need-to-know”:

by any means necessary, stop the records of State Farm’s federal flood claim handling from getting in this public court docket.

THIS TIME, THE FEAR TOUCHES STATE FARM’S MACHIAVELLIAN LAWYERS TOO

Remember in 2001 when the Enron imploded, and Arthur Anderson accounting firm systematically destroyed “tons” of documents and computer data to conceal Enron’s crimes. Indicted and convicted for obstruction of justice, Arthur Anderson shredded itself.

If evidence of flood program fraud comes out, or put another way, if State Farm fails to succeed in keeping it concealed, all of the State Farm and Renfroe lawyers who assisted in suppressing evidence of a federal felony, will be at risk as co-conspirators or aiders and abettors, and unable to hide behind their lawyer-client privilege. This has grave consequences for the arrogant lawyer who prided himself on his insider, ex parte influences with various court personnel during Katrina.

Federal racketeering law is scary stuff, and due to new amendments largely brought about by 5^th Circuit judges who repeatedly favored pathologically greedy corporations, the same ones who’ve nearly bankrupted America, it’s gotten even scarier. Under RICO, every letter, every communication of any kind of an interstate nature, including of course email, is a separate offense and indictment count. Typically, mail fraud and wire fraud show up as the grounds de jour in multi-count RICO indictments, but if State Farm’s and Renfroe’s lawyers, or other target persons destroy any evidence in anticipation that State Farm and Renfroe will get busted for federal flood fraud, an indictment will likely include obstruction of justice counts. I know if it were me in the qui tam, I’d have a bucket of industrial strength preservation letters flying out the door tomorrow, to every name on the extended list, and sparing no one. All this is just the federal law side, there’s state law but don’t get too hopeful that our “purchased” legal system will wake up tomorrow with Jesus sharing the pillow, morph to credulity, and crash a corporate fraud scheme that denuded one third of Mississippi’s economy.

HOW WILL SKADDEN AND BIRNBAUM GET US OUT THIS TIME – BUSH AND ROVE ARE GONE

In qui tam cases, the government has the option of spearheading the litigation. In this case, probably because of State Farm’s connections to Bush/Rove, the government stepped aside early and relinquished control to the relators and their private counsel. Knowledgeable people wondered why the government declined to take charge of the case. (Naïve in other respects, they little understood how Gonzales and Rove worked). They wondered how could the US Department of Justice ignore undisputed evidence of fraudulent engineering reports . . . 5^th amendment pleas by key State Farm actors . . . documented perjury by persons dealing with homeland security and FBI investigators? Whatever the reason, the government yielded control of the qui tam case to private counsel, and neither State Farm nor Renfroe was ever criminally indicted. State Farm became so emboldened they sued to shut down an official state grand jury inquiry into Katrina fraud and, trust me on this one, succeeded.

At one point State Farm and Renfroe nearly succeeded in destroying the qui tam case, almost burying the entire body of work proving federal flood program fraud. Through careful forum shopping and media manipulation, State Farm and Renfroe used political corruption within the federal court system itself to terrorize those who sought to expose them for flood program fraud. Thanks mostly to the fact that they found themselves before a specially assigned District Court Judge, Honorable Roger Vinson of Florida, and on later appeal, before the 11^th Circuit (rather than the 5^th), the ploy fell apart.

If the incorporeal façade known as State Farm can be said to “feel” anything, perhaps its greatest fear is that it will one day get hemmed-up in a case where it cannot buy the plaintiff and seal-up fraud, keeping it out of the public court record. Poetic justice being what it is, State Farm and its Machiavellian legal strategists are in a bit of a quandary this time: the qui tam case can’t be settled without the government’s approval . . . and the Bush/Rove ATM machine is out of business.

There will likely be a “Rakoff moment” in the Rigsby qui tam case. Just as the equally corrupt SEC and Bank of America tried to conceal fraud by bamboozling federal Judge Jed Rakoff with a collusive settlement proposal, something similar will probably pop up here.

In the past State Farm has used confidential settlements and suitcases of cash to prevent the public from ever learning the true facts of their frauds. In Oklahoma for example, State Farm went so far as to “purchase” the state court record by inducing plaintiff’s counsel to sign a collusive order to “vacate” the punitive verdict form and alter the public court record. As I’ve said, nothing surprises me anymore. I’m convinced that America’s gone third world but still . . . can any of us imagine a corporation in this country being able to “purchase” jury verdicts out of the public court records?

Perhaps the single most destructive practice in the US civil justice system is the prevalence of so-called “confidential settlements.” Legislatures and courts have the power to declare this pernicious practice illegal on grounds that it violates public policy, and undermines a cornerstone principle (deterrence) of the civil justice system. However, nothing has ever been done because both sides, plaintiffs’ attorneys and corporate defendants alike, want the system to stay as it is. Plaintiffs get their case settled without delay or risk of adverse result, and defendants get to buy bad facts out of the court record, insuring they can never be held accountable for serial wrongdoing. It turns the justice system into blackmail process: money for silence. Every time a confidential settlement is allowed, the deterrent effect of the civil justice system is thwarted and severely undermined.

If corporations are able to commit the same civil wrongs over and over, only to have this history locked away in a sealed record, there is no deterrence value in having a public court record system. The court itself is negatively impacted by litigating similar facts over and over, and re-hashing the same disingenuous motions and defenses. In the end, by using confidential settlements and sealed records, corporate defendants are free to pretend each case presents a new and wholly defensible set of facts, knowing they will never be held accountable for repetitive punitive conduct because their past actions are sealed away. Civil litigation is a triangular relationship, composed of plaintiff, defendant and the public’s interest in preserving an open and public court system. Confidential settlements ruin the public’s interest, and destroy its trust.

Summarizing, to cite an old Katrina adage, “hitch up your britches” . . . I quite agree with that . . . ‘cept this time Boss Hogg, you better “hitch up yo’ britches you corporation loving gov” . . . the predators are now the prey.