Third-Party Risk: Drummond’s Defense; Southern Company’s Failure

Even a jury will understand that doesn’t sound like professional legal services, does it?

Regardless of how one feels about the coal industry, electric utility sector, pollution, or the environment, the issue that will rise to the front of the madness of the alleged suppression of African-Americans in North Birmingham will be the Third-Party Risk of Balch & Bingham.

For Drummond and its indicted executive, David Roberson, Third-Party Risk could be a key defense in his criminal trial which is to proceed next month.

For Southern Company, if they continue to remain silent, Third-Party Risk management (or mismanagement) will be the talk at their annual shareholders meeting in less than three weeks (See our new countdown clock on our home page.)

Last October, days after two Balch partners were indicted, half of Balch & Bingham paying clients for lobbying services in D.C. dumped the firm; in January, ten money-making partners at the firm exited stage-right; and last week, HealthSouth, one of the most important healthcare providers in Alabama, terminated Balch.

Why? After assessing the situation, Balch & Bingham appears to have become a major liability, a risk.

For Drummond, they paid Balch to get sound, responsible legal advice.

Instead, it appears the partners at Balch & Bingham allegedly bribed a politician with $360,000 in funneled money through a Delaware entity; ghost-wrote the politician’s correspondence and declarations; and set-up the scheme to discourage African-Americans from having their toxic property tested by the EPA.

Even a jury will understand that doesn’t sound like professional legal services, does it? Sources close to the investigation tell us that allegedly this was Drummond’s first use of Balch & Bingham as lead counsel.

What bad luck, eh?

And Southern Company’s luck is no better.

Having been briefed last December about the issues surrounding Balch & Bingham’s alleged unscrupulous and criminal behavior; the alleged racist conduct in North Birmingham; and the possible involvement of Alabama Power, a Southern Company subsidiary, in the alleged misconduct,  Jim Kerr, the Chief Compliance Officer at Southern Company declared the company would do nothing.

A complete failure, Southern Company appears to have never assessed the situation on behalf of their shareholders, and now the public is taking issue with Southern’s silence on alleged racist conduct by their third-party “vendor,” Balch & Bingham.

And looking at the Burt Newsome Conspiracy Case, locked and hidden away in a secretive and unconstitutional Star Chamber, Balch & Bingham allegedly was part of a conspiracy that wrongly targeted, falsely arrested, and defamed a fellow competitor, all justified by the right to engage in “ruining a rival.”

If a jury were to hear the facts, the ugly facts surrounding the Newsome case, they, too, would understand that doesn’t sound like professional legal services, does it?

And so would Southern Company’s institutional investors who demand the highest ethical standards and real, tangible corporate social responsibility.

We believe Larry Fink would agree.