And yet still more on the Scruggs indictment

A few observations and follow-ups on this immensely strange, sad spectacle.  Once again, I’m going to break this post up into sections so you can get where you want to go more quickly.

Scruggs Katrina Group internal warfare: an Al Haig moment?

As the entity formerly known as the Scruggs Katrina Group dissolves into a Mississippi version of the War of the Roses, an e-mailer in the state writes to compare attorney Don Barrett’s letter to the courts yesterday to Al Haig’s infamous "I’m in control here" speech after President Reagen was shot in 1981.  Barrett is one of the lead lawyers of the entity formerly known as the Scruggs Katrina Group, which kicked out the Scruggs Law Firm on the basis of disreputability in light of Wednesday’s judicial bribery indictments.  Barrett sent a letter to courts where SKG Katrina cases were filed saying the Scruggs firm would be withdrawing from representation of Katrina policyholders.  Click here to see his letter, as well as Scruggs’ — I have to hand it to him — rather simple and elegant reply saying that he’s not going away.  The problem remains, however, whose clients the clients are. 

Here’s a link to an AP story on the controversy, including some quotes from Joey Langston, Dickie Scruggs’ attorney.

Who was the "insider" in the FBI’s investigation of the alleged Scruggs bribery conspiracy?

I think I’ve got the question right: who, rather than if.  If you read the indictment and see the verbatim quotes of statements made to Judge Lackey, you have to conclude he was wired.  [UPDATE: the Wall Street Journal interview with Judge Lackey referred to below, by Ashby Jones and Peter Lattman, says that the judge’s office was wired by prosecutors with audio and video recording devices]. Also, the frequency in the indictment of references to the content of specific telephone conversations as overt acts in support of the alleged conspiracy forces the rather obvious conclusion that the FBI had tapped one or more telephones at the Scruggs firm.

But certain paragraphs in the indictment aren’t easy to explain unless one of the alleged co-conspirators was cooperating with the FBI, either by being wired or by reporting back to agents and prosecutors what had happened.  Here’s a copy of the indictment so you can follow along if you care to.

As you read through the indictment, you might note that there is no mention of a specific overt act by Dickie Scruggs until paragraph 16.  Then, on October 18, Scruggs allegedly called Steven Patterson and discussed Timothy Balducci coming by the firm to drop off an order obtained by a purported bribe, and pick up a "package" consisting of $40,000 and false documentation providing Balducci with a cover story for the payment — it was supposedly for legal services rendered to the firm.  That paragraph can be explained by a phone tap.  But paragraph 17 can’t — it alleges Scruggs prepared a $40,000 check and the fake documents.  OK, you say, the check had his signature on it, maybe, and the FBI search of the firm’s hard drives showed who created or ordered the creation of the fake documents.  Perhaps.  But paragraphs 21 and 22 recount conversations between, first, Balducci and Zach Scruggs and Sidney Backstrom, and second, between Balducci and Dickie Scruggs.  Moreover, paragraph 21 contains a direct quote.  Unlike other portions of the indictment, no mention is made that the conversations occurred over the phone, and we should therefore conclude this omission is significant.  So was Balducci himself wired at this point, or otherwise cooperating with prosecutors? A logical possibility.  It would be too difficult to wire the offices of the Scruggs firm — how could you know where any conversation might take place? 

Likewise, although it is certainly possible that an employee of the law firm (Balducci was not a member of the firm but rather an attorney with his own firm) was working as a confidential informant for the FBI, this would seem to be perhaps unnecessarily risky.  First, it would be difficult for a staffer to insert themselves into these sensitive conversations, decreasing the value of such an insider.  Second, why risk tipping off the alleged conspirators through an insider’s mistake, when prosecutors had an obvious choice of an insider — Balducci — and substantial leverage to force him to cooperate? Third, the FBI already would have had plans to raid the firm’s hard drives where it could nail down what documentation it lacked.  Still, while a second insider would seem to be unnecessary, one cannot rule this out.  Time, as always, will tell. 

A couple links you should follow.

Here is an excellent post by Walter Olson at Overlawyered with a ton of interesting and vital links — some of which come back to Insurance Coverage Law Blog — thanks for the shout out, Walter. 

Check out this story in the Oxford (Mississippi) Eagle. [This link went bad rather quickly, after one day, and I couldn’t find the story back. Ce’st la vie.]  I was really impressed by this story.  Not only does it give some great details on the debate over the size of Scruggs’ bail, it gives a pretty good perspective on the irony of Scruggs’ current predicament.  It also mentions that Balducci, as of the writing of the story, was the last co-conspirator remaining in lock-up.  Maybe that means something, maybe it doesn’t.

As I write this post, I’m at home and don’t have my subscription information to the Wall Street Journal online, so I can’t tell you all that this story says.  But from the two paragraphs I can tell you it is a must-read interview with Judge Lackey, the man who the conspirators allegedly tried to bribe.  An excerpt: 

The Mississippi state court judge who prosecutors say was offered a bribe in a case involving high-profile plaintiffs’ attorney Richard "Dickie" Scruggs said he experienced a "shock that I can’t put into words" when first approached.

In an interview recounting the episode, Judge Henry Lackey said the overture came from another lawyer he knew, Timothy Balducci of New Albany, Miss. "My first thought was: What kind of character flaw has he discovered in me that would lead him to think that I would do something like this?" said Judge Lackey, 73 years old. "I was furious. I mean, this strikes …

I mean, come on, you’ve gotta find a way to read the rest of that, don’t you?  I know I will as soon as I get to work.

UPDATE: The story gives a great account of Judge Lackey’s thinking, including a delay of several days in contacting authorities because, he said, he struggled with the implications of this on Balducci’s career and his wife and family.  One of the most fascinating parts of the story is an attack on Lackey by Scruggs’ attorney, John Keker, who is also representing him against criminal contempt of court charges brought by special prosecutors in an unrelated proceeding in Alabama.  Here’s how the story quotes Keker:

"I find it remarkable that this high-minded government witness is talking to the national media, and it makes me wonder if he is interested in notoriety rather than seeing that justice is done.  I’ll say this — he sure as hell didn’t get bribed by Dick Scruggs or anyone else in his law firm."

Keker may want to re-think this kind of attack on Lackey.  Keker is representing Scruggs, a man known for his flamboyant use of media to pursue his own ends in litigation, and there is nothing inherently wrong with Lackey talking to the Wall Street Journal or anyone else. What is wrong is the alleged bribes offered to the judge, not the judge speaking out about it.  Also, it appears that later in the story Scruggs himself spoke to the WSJ — note the words "In an interview, Mr. Scruggs said" followed by a quote from Scruggs about the controversy with Don Barrett about who represents the Scruggs Katrina Group clients.  What is Scruggs doing talking to the national media about some family feud with Barrett at a time like this?   

Lastly, for this post anyway, I know I promised yesterday to link to some Trent Lott-related material that, to me, casts doubt on theories of his nefarious involvement in Katrina-related matters and therefore on theories that his resignation announcement has some unstated premise or motive.  I don’t mean to be coy about this, but it will take some time to present this information at the level of quality I expect from myself, and I am a practicing lawyer with finite time.  So that will have to wait until next week. 

UPDATE: You know that dumb feature on the Today show, Where In The World Is Matt Lauer?  Maybe someone needs to have a feature called Where In The World Is Mississippi AG Jim Hood.  For a man who loves his media time, he’s been awfully quiet this week — all this sensational stuff going on, and Hood hasn’t said peep about his "confidential informant" Dickie Scruggs.

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3 Responses to And yet still more on the Scruggs indictment

  1. Scruggs indictment, day two

    David Rossmiller at Insurance Coverage Blog (who’s also a co-blogger of mine at Point of Law) continues to be the must-read source on this sensational story and its fast-breaking developments. He’s posted a PDF of…

  2. Anderson

    Of course the feds flipped Balducci – it would’ve been a waste of time indicting Scruggs otherwise.

  3. pip

    Guess who else is missing? Mr. Minor – his phones have mysteriously been disconnected…