Mississippi could soon settle its 2007 lawsuit against firms that built failed beef plant and cost state US$55M, state attorney general says
April 6, 2012
– Mississippi could soon settle its 2007 lawsuit against the firms that built the financially disastrous beef plant in the Yalobusha County town of Oakland.
Jan Schaefer, a spokeswoman for Attorney General Jim Hood, said the state and Georgia's Facility Group, which was hired to oversee construction of the plant, have reached agreement although a settlement has yet to be submitted to Hinds County Circuit Judge Winston Kidd.
"We have agreed on all material terms but the formal written agreement is still being finalized," Schaefer wrote in an email. "We will release more details when that is complete."
Schaefer declined to release further details. Phil Abernethy, a lawyer for Facility Group, said Hood is still reviewing the document, but says it could be filed next week.
The state's lawsuit alleges that Facility Construction Management Inc., a subsidiary of the Smyrna, Ga., Facility Group, kept the project going even after executives knew it was doomed, so the company could keep bilking the state out of money.
Mississippi Beef Processors LLC closed three months after it opened in 2004, laying off 400 people and sticking taxpayers with $55 million in state-backed loans.
Federal, state and local subsidies for the project totaled more than $71 million. There has been some payoff, as frozen-foods firm Windsor Quality Foods bought the plant in 2007 and now employs 300 people there.
A trial had been scheduled to begin March 19 before Kidd, but never took place. The last public action in the case was lawyers arguing motions before Kidd in February. The Facility Group had asked Kidd to rule in such a way that it would have gutted the state's case, while the state had been seeking to obtain 2004 federal grand jury testimony from the criminal investigation of the plant.
Six people went to jail in that case, including three leaders of the Facility Group — Robert L. Moultrie, Nixon E. Cawood and Charles K. Moorehead. Their company took over after Richard Hall, a Tennessee businessman who originally led the effort, ran into trouble. Hall, whose company collected a $5 million state grant in addition to loan guarantees, was sentenced to eight years in prison after admitting he kept $751,000 in public and corporate funds for himself. Others convicted in the case include a contractor and refrigeration salesman.
Facility Group leaders said they gave illegal campaign contributions to Ronnie Musgrove, a Democrat who was governor from 1999 to 2003. Musgrove had only indirect influence over the project, said he did nothing wrong, and never faced criminal charges. But the fallout from the scandal haunted his failed efforts to be re-elected governor and to win a U.S. Senate seat.
The prime backers of the project were Republican Agriculture Commissioner Lester Spell, then-House Speaker Billy McCoy D-Rienzi, and current House members Steve Holland, D-Plantersville and Tommy Reynolds, D-Charleston.
State Auditor Stacey Pickering eventually recovered more than $550,000 from Facility Group and people who were ordered to pay restitution as part of convictions.
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