Beef plant details may finally emerge

By Patsy R. Brumfield | NEMS Daily Journal

Answers to the seven-year-old Mississippi Beef Plant scandal must wait at least three months longer as the state seeks compensation from the plant’s design and construction contractors.
Monday, Dec. 5, was the date set for civil trial against Facility Construction Management Inc., Facility Design Group Inc., Facility Holdings Corp., and their Georgia executives Robert L. Moultrie, Nixon E. Cawood and Charles K. Morehead.
But Circuit Judge Winston Kidd in Hinds County agreed to delay the start of courtroom proceedings until March 19.
That decision came in the wake of a north Mississippi U.S. District Court order to deny the Attorney General’s Office access to a wide variety of documents and grand jury transcripts its attorneys said were needed to make its case.
When the case finally comes to trial, expect to see current and former well-knowns subpoenaed as witnesses.
Court-watchers speculate the civil trial may be a substitute for the criminal trials that never happened because of plea deals with federal prosecutors.
If this all sounds familiar, it is.
In 2000, under the direction of the Legislature, the state began to fund construction of a beef processing plant in Yalobusha County.
In May 2000, legislators and economic development officials approached Richard N. Hall Jr. about building and operating the plant.
Construction began in 2002, under the supervision of Hall’s Mississippi Beef Processors, with a 100 percent loan guarantee by the Legislature. Thereafter, Community Bank of Mississippi agreed to loan Hall $21 million.
Ultimately, Hall went well over his budget and needed more money. The bank and Mississippi Development Authority brought in Facility Management Group to determine what was needed to compete the project.
FMG said it would take another $14 million, plus a $3.5 million management fee to FMG to be project general manager. The Legislature OK’d the deal.
The plant opened Aug. 23, 2004, and immediately experienced significant financial difficulties. It closed Nov. 17, 2004, Hall defaulted on the bank loans and the bank foreclosed on the plant.
On June 3, 2005, the state paid Community Bank its guaranteed $34,833,105.71.
Hall, construction contractor Sean Carothers and Tennessee businessman James Draper eventually went to jail on federal charges in related schemes to defraud the state.
Moultrie, Cawood and Morehead also went to prison on federal charges related to campaign contributions – “illegal gratuities” – to former Gov. Ronnie Musgrove, although they originally were accused of conspiracy and fraud.
Musgrove was never accused of anything illegal.
When the civil case comes to trial, beef-plant story followers may finally get some answers to what went wrong with the project and why.
Already subpoenaed to testify are outgoing House Speaker Billy McCoy, state Reps. Steve Holland, Tommy Reynolds and Bo Eaton, former Farm Bureau President David Waide, former MDA chief Robert Rohrlack, Agriculture Commissioner Lester Spell and numerous others.
In the meantime, the state’s attorneys must do their own homework to gather the evidence.
But they’ve got bank records, and reports from Mississippi State University’s Extension Service and the State Auditor’s Office.
When the plant closed abruptly, some 400 people lost their jobs and the state was out more than $54 million.
The last defendant to be released from federal prison was Draper, this past March. All of them are on supervised probation for the next few years.
If the trial happens – without a last-minute settlement of some kind – the public may yet get answers so long in coming.
patsy.brumfield@journalinc.com