Trent Lott's resignation: Is there more to it? Is Lott about to beindicted in a Mississippi insura

On Monday, Senator Trent Lott (R-MS) announced his resignation,

shocking the political world. After all, he'd just been re-elected

last year - and he'd recently regained a leadership post.

Why did Lott resign? Was he bailing out, like so many Republicans,

frustrated at their new minority status that doesn't show any sign of

changing? Did he resign abruptly because of the impending arrival of

new revolving-door regulations that would have delayed a career as a

lobbyist?

Or was there a scandal about to break?

David Rossmiller is an attorney at Portland law firm Dunn, Carney,

Allen, Higgins & Tongue. He also blogs professionally, writing the

Insurance Coverage Law Blog.

Rossmiller has been aggressively covering the FBI investigation into a

law firm headed up by Trent Lott's brother-in-law and next-door

neighbor, Dickie Scruggs. It turns out that the day after Senator Lott

resigned, the FBI raided his brother-in-law's law firm -- in an

investigation that involves State Farm Insurance, the Mississippi

Attorney General, and Katrina-related fraud. Earlier today, Scruggs

and his son (Lott's nephew) were indicted for attempting to bribe a

judge.

The questions: What did Trent Lott know? When did he know it? Did he

do anything help Scruggs? And did he resign because he knew about the

impending FBI raid and indictment of his brother-in-law and nephew?

The best summary of the speculative "Scandal Theory" comes from

Timothy Noah at Slate.com:

Our story begins in August 2005, when Hurricane Katrina wreaked its

vengeance on the Gulf Coast. In addition to depopulating New Orleans,

this unwelcome weather event had the temerity to knock down Lott's 154-

year-old beachfront home in Pascagoula, Miss., and also the home of

Dickie Scruggs, who in addition to being Lott's brother-in-law was

also Lott's neighbor. Lott filed a claim with his insurer, State Farm,

but State Farm denied the claim, arguing that the culprit was not high

winds, which the policy covered, but rather flooding, which the policy

didn't cover. (Lott had separately purchased federal flood insurance,

but that didn't come close to covering his losses.) Scruggs filed suit

on Lott's behalf.

Scruggs also created a Scruggs Katrina Group to pursue similar

lawsuits and very likely encouraged his friend [Attorney General Jim]

Hood to do the same. ...

Lott, meanwhile, declared war not only on State Farm ... but on the

entire insurance industry. He introduced legislation requiring

homeowner insurers to clarify what their policies cover and what they

don't; he co-sponsored legislation to eliminate the antitrust

exemption for insurance companies; he brought Hood up to Washington to

testify before the Senate commerce committee, of which he is a member;

and he entered internal State Farm e-mails concerning Katrina coverage

into the Senate hearing record.

According to Chuck Chamness, CEO of the National Association of Mutual

Insurance Companies, Lott phoned him last year and threatened

"bringing down State Farm and the industry." It was, complained Wall

Street Journal editorialist Kimberley Strassel, "a ferocious campaign

of political revenge that would make even Henry Waxman envious."

Strassel even called it "extortion," noting that State Farm had

quickly settled with Hood and Scruggs, and paid off Lott. (The

settlement has since come unglued.)

Strassel probably didn't mean to be taken literally, but the question

lingers: Did Lott's uncharacteristically liberal Senate crusade, or

any support he gave Scruggs or Hood, include actions that were

potentially illegal? ...

http://www.blueoregon.com/2007/11/the-portland-la.html