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Wall Street Journal

MARCH 5, 2008
The Dickie Scruggs Tapes

Federal prosecutors are rolling out their bribery evidence against tort baron Dickie Scruggs, and the drama includes wiretaps, secret meetings and code words. But the most intriguing news may be that Mississippi Attorney General Jim Hood is now looming larger in the case.

Mr. Scruggs, his son Zach, and law partner Sid Backstrom are accused of bribing a state judge. The government has now released files in response to Mr. Scruggs's demand that federal Judge Neal Biggers dismiss the case. Judge Biggers took one look at the evidence and told Mr. Scruggs to get ready for trial.


At issue is a dispute that state Judge Henry Lackey was overseeing between Mr. Scruggs and a rival firm over $26 million in fees. Lawyer Timothy Balducci (who has pleaded guilty) has testified that Dickie Scruggs dispatched him to convince Judge Lackey to rule in a way that was favorable to the Scruggs Law Firm. Judge Lackey felt a bribe had been implied and began working with federal agents. Balducci began wearing a wire for the feds.

According to FBI notes released by the defense, Balducci says he agreed to visit Judge Lackey because he was involved in a separate Scruggs plot to influence Mr. Hood. According to Balducci, Mr. Scruggs was concerned that Mr. Hood would criminally indict State Farm Insurance, which could have imperiled Mr. Scruggs's civil claims against the company.

The FBI notes say Mr. Scruggs asked Balducci's partner, Stephen Patterson, to approach Mr. Hood about backing off State Farm. Patterson (who has also pleaded guilty) had known Mr. Hood for years, and Balducci had been retained by Mr. Hood to do state business. "[Dickie Scruggs] offered to pay Patterson Balducci $500,000 if they could get Hood to relent on indicting [State Farm]. [Balducci] accompanied [Patterson] to a meeting with Hood and Hood later agreed not to indict [State Farm]," say the FBI notes. Mr. Scruggs "agreed to pay Patterson Balducci $100,000 per month over five months." But by then the Lackey case had reached a boil, and Balducci worried that Mr. Scruggs wouldn't pay him the entire $500,000 unless he agreed to try to influence the judge.


Mr. Hood recently admitted under oath that he had met with Balducci and Patterson. But he's denied he was influenced and last week insisted that "The decision on whether to indict State Farm Insurance Company was based solely on the advice of senior prosecutors in our office . . . I am too hardheaded to be influenced by outside forces -- I do what I think is right for the working people of Mississippi." Mr. Scruggs's attorney did not return our phone call.

Mr. Hood's close ties to these characters nonetheless raise questions about his prosecutorial judgment on issues that go well beyond State Farm. The AG was asked recently why his office wasn't prosecuting the alleged bribers (including lawyer Joey Langston, who has pleaded guilty in a separate bribery case). He admitted that his connections to the accused meant that going after them would be "like prosecuting a relative." Those ties include lucrative contracts that he's awarded to those lawyers, who in turn have lavished him with campaign donations.

Meanwhile, the feds have also released the Balducci wiretaps that led to the original bribery indictments. The transcripts are a rich insight into the ethics of the trial bar, and we've published excerpts. Readers can find more at the Mississippi blog yallpolitics.com.

The wiretaps appear to show Balducci reporting to Mr. Scruggs about a legal ruling that Judge Lackey had yet to file, and giving Mr. Scruggs the opportunity to modify the judge's language. Balducci then appears to suggest that the judge wants a further $10,000 because he's "more exposed on the facts and the law," and Mr. Scruggs agrees to "take care of it."

The two then discuss work Balducci could ostensibly do for Mr. Scruggs to account for the $10,000 he would receive to cover the bribe. The transcripts contain similar discussions between Balducci and Zach Scruggs and Mr. Backstrom, including an exchange in which Mr. Backstrom seems to joke that he "didn't hear" three minutes of conversation in which Balducci discussed the bribe. In another conversation, Balducci talks about delivering "another bushel of sweet potatoes" to the judge.

This is quite a spectacle, and it may get better. Defense attorneys are threatening to call as witnesses Mississippi Senators Thad Cochran and Trent Lott, who is Mr. Scruggs's brother-in-law. The case has also expanded to include the possible bribery of yet another state judge. Zach Scruggs recently asked to be tried separately from his father, but his request was denied.

It'd all be great fodder for John Grisham, if the novelist weren't such an apologist for Mississippi tort lawyers. Like the Milberg Weiss and Bill Lerach indictments, this prosecution is showing everyone how the pillars of the trial bar really do business.

Printed in The Wall Street Journal, page A16

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