Scruggs Nation, Day 14: waiting for the other shoe(s) to drop

From across the Scruggs Nation, information keeps rolling in. Citizens of the Scruggs Nation, we have much work to do today.  Let us prepare for this work by first listening to the greatest song in the history of Earth, La Marseillaise, in perhaps its greatest and most moving rendition, the famous, famous scene from Casablanca. Click here to listen, and enjoy. Buckle up, or if you prefer, as the song says, To Arms, Citizens!

First up on the Scruggs Nation agenda for today is this.  I have had many requests to talk more about P.L. Blake, who he is and what he did.  We can only begin that task today, but a journey of a thousand miles starts with a single step.   

P.L. Blake, the Fred Thompson connection

Remember P.L. Blake, the figure Dickie Scruggs apparently spoke about in the book Assuming the Risk, by Michael Orey, when he referred to "the dark side of the force" aiding Scruggs in litigation?  (We do not know this for sure, because curiously Blake’s name does not appear in the book). Do you remember a couple days ago we saw in the Scruggs deposition in the Luckey case — a deposition defended by admitted attempted briber Tim Balducci — that Scruggs agreed to pay Blake the emperor-size sum of $50 million?  Click here to see the trial transcript that discusses payments to Blake (start at page 43 of the pdf and read to the end, Blake is mentioned on page 46 of the pdf, page 510 of the transcript).

Blake was involved in controversy in the early 1980s over his PLB grain company.  Below is a paragraph from a decision of the Mississippi Supreme Court, Blake v. Gannett, 529 So.2d 595 (1988) that explains:

PLB Grain owned one of the largest, if not the largest, grain storage facilities in the United States. It had contracted with the Commodity Credit Corporation (CCC) to store 21.5 million bushels of grain. In order to receive the contract, PLB had indicated to the CCC that it had a net worth of at least $5 million. The surplus grain stored for the government by PLB under the CCC contract became a national story on October 18, 1983. The controversy involved the quantity and quality of the grain stored by PLB Grain. Texas officials charged that the quality of the grain had deteriorated substantially. USDA officials claimed that it had not deteriorated. Later, in 1984, CCC determined that there were quality and quantity problems with the grain stored in PLB’s elevators. State FmHA officials knew that Blake had an interest in a Texas grain storage facility, but did not know the exact nature of that interest. Information concerning PLB Grain was never included in FmHA loan applications.

Click here to see a copy of Blake v. Gannett and read for yourself. The paragraph quoted is at 529 So.2d 599 — for those not familiar with how to read case law, look for the purple numbers embedded in the text, they show you the page of the case reporter. When you read this case, look just below the headnotes for the names of the attorneys — you will note that Blake’s attorney was Fred D. Thompson, of Thompson & Bussart, Nashville, Tenn., of Senate Watergate counsel, movies and TV and presidential candidate fame. The case involved allegations that the Clarion-Ledger, owned by the Gannett corporation, had libeled Blake in investigative stories.  The newspaper was exonerated.

We can see from the 1984 Washington Post story below that Thompson was Blake’s lawyer for a long time.

Grain Storage Firm Found in Default On U.S. Contract — By Ward Sinclair Washington Post Staff Writer
546 words
29 September 1984
The Washington Post
(Copyright 1984)

The Agriculture Department yesterday found a Texas grain elevator firm in default on a grain-storage contract that President Reagan’s campaign press secretary helped the firm to win in 1982.

The firm, PLB Grain Storage Corp., owner of the nation’s largest grain elevator in Plainview, Tex., failed to meet a USDA deadline to produce 1 million bushels of missing government-owned corn stored there or pay about $3 million for it.

After weeks of unsuccessful negotiations with the company, the USDA found it in default on its federal contract, which could lead to revocation of its license by the state and further wrangling about PLB’s government debt.

The elevator, owned by P.L. Blake of Greenwood, Miss., has been at the center of political controversy since last year when Texas Agriculture Commissioner Jim Hightower charged that corn stored at PLB had deteriorated and should be given to drought-stricken ranchers.

Blake is represented by Nashville attorney Fred Thompson, Republican counsel for the Senate committee that investigated the Watergate scandal more than a decade ago. Thompson and farm lobbyist Jim Lake, now press secretary for the Reagan-Bush reelection campaign, helped PLB win its long-term federal-storage contract in 1982.

Thompson acknowledged that Lake assisted PLB two years ago but denied reports in the Agriculture Department that Lake had played a role in trying to arrange a settlement in the government’s latest contretemps with PLB. Efforts to reach Lake for comment were unsuccessful.

State and federal officials believe that the grain, part of an original 22.5 million bushels, is missing because of PLB "operating deficiencies" — failure to handle it properly and prevent moisture shrinkage.

PLB could lose a long-term USDA storage contract extending to 1986 and worth $3.6 million per year to the firm, even though the government has little grain stored there now.

The Texas Agriculture Department padlocked the elevator two weeks ago after confirming a reported shortage of about $3.1 million in corn stored there by the Commodity Credit Corp. since President Jimmy Carter’s partial embargo on grain sales to the Soviet Union.

U.S. Agriculture Secretary John R. Block denied that the grain had deteriorated and resisted Hightower’s efforts to win release of the corn to assist ranchers who needed feed grain to replace forage destroyed by drought in south Texas.

Others, such as Sen. Lloyd Bentsen (D-Tex.) and House Agriculture Committee Chairman E (Kika) de la Garza (D-Tex.) jumped into the fray and with legislation directing use of the grain for ranchers.

In the current flap, PLB has until mid-October to show cause before Texas authorities why its elevator license should not be revoked. Thompson said that PLB will appeal the USDA’s default ruling and indicated that resolution of the dispute could be months away.

PLB is one of dozens of elevators receiving federal money for storage under long-term contracts negotiated by the Reagan administration, even though they have no grain in their bins.

A House subcommittee chaired by Rep. Glenn English (D-Okla.) recently charged that the government has lost at least $20 million through the long-term agreements.

True, just because you are someone’s lawyer doesn’t necessarily mean anything.  But then again, maybe it does.

Blake: other political connections

Let’s get in the Wayback Machine and look at another news story involving Blake.

Newspaper: Anderson Didn’t Report Free Trips
23 September 1989
The Associated Press Political Service
(Copyright 1989. The Associated Press. All Rights Reserved)

GULFPORT, Miss. (AP) _ A Jackson newspaper reports that 5th District congressional candidate Tom Anderson didn’t report free air travel worth thousands of dollars while a House staff member and later as a U.S. ambassador, as required by law.

The Clarion-Ledger of Jackson said it had obtained Anderson’s executive branch disclosure reports showing he listed only two of at least 18 flights he made between October 1982 and June 1984 on airplanes owned by Greenwood businessman P.L. Blake’s DeWitt Corp.

Anderson, a Republican, was legally required to file the reports annually as chief of staff to then-Rep. Trent Lott and as ambassador to the Eastern Carribean. The reports specifically say "gifts of transportation" totaling more than $250 from any one source in one year must be reported.

"You will find that in my executive financial disclosure that I made while I was (ambassador) in Barbados, that is listed," Anderson said on Wednesday, insisting that all 18 trips were reported.

The Clarion-Ledger said it obtained the reports from Washington Thursday and then tried again to contact Anderson about the discrepancy. Anderson released a statement through his press aide on Friday after 11 written questions were sent to his campaign office, the newspaper said.

And as the Luckey trial transcript shows, Scruggs, before the big payments to Blake, had made loans to Blake despite the fact he was in bankruptcy and had no collateral to give on the loans. 

Q: Did he did he [sic] give you any collateral?

A: Other than his enormous network of political connections in the state and otherwise, no, he didn’t have any — he didn’t give me any collateral for it, no, but he did sign a note every month. 

(Page 53 of the pdf).

Scruggs also testified at the trial that Blake’s value was that he gave routine intelligence on what key members of Congress were doing through his relationships with people such as Sen. Joe Biden, now, like Thompson, also a presidential candidate. (See pages 54-55 of the pdf).  In the pages of the transcript I cited, you will also see Tom Anderson mentioned.

By the way, this week Peter Lattman reported in the Wall Street Journal Law Blog on a connection between Sen. Biden and Steve Patterson and Tim Balducci. 

Patterson has been a player in Mississippi Democratic circles for some time. Early in his career, he worked for John Stennis, the longtime U.S. senator from the state, and later served as a Mississippi Democratic party chairman. In 1996, his political ambitions were derailed when he resigned as Mississippi state auditor after pleading guilty to a misdemeanor charge of filing false documents to avoid paying county taxes on car tags.

Most recently, Balducci and Patterson had thrown their weight behind the 2008 presidential campaign of Sen. Joseph Biden, whom Mr. Patterson got to know while working for Sen. Stennis. Indeed, Balducci had a Biden bumper sticker on his red Ford truck, according to someone who rode in it. Their bet on Biden was that he wouldn’t win the presidency but would become Secretary of State under a Hillary Clinton administration, according to two people familiar with their thinking.

I love that phrase — according to two people familiar with their thinking.  If what prosectors say about Patterson, Balducci, Scruggs and the others is true, what indeed were they thinking! 

Balducci as wannabe 

We have seen indications that Dickie Scruggs’ friends have begun to paint Tim Balducci as a deluded hayseed off on a lark of his own in his admitted bribery attempt of Judge Lackey, like some idiot at a Star Trek convention walking around with a toy phaser, wearing pointed ears, speaking Klingon, demanding more Romulan ale and speculating on Capt. Kirk’s childhood in Iowa. It remains to be seen whether Scruggs’ defense team, which according to PACER records now officially includes superstar lawyer John Keker and his team of all-stars, will continue to play this theme or have the sense to discard it as sounding utterly foolish, a kind of the-dog-ate-my-homework defense.  

Walter Olson has a wry look at attempts to play the wannabe card at Overlawyered, where he refutes efforts to portray Balducci as a "clueless newbie, a mere Timothy Tiptoes."    

Attacks on Judge Lackey’s credibility

I do not know if Judge Lackey has any damaging episodes in his past, but in talking to those who know him, I hear he will be a formidable and credible witness.  You may remember the Wall Street Journal interview by Ashby Jones and Lattman with Lackey, and Keker’s attack on Lackey as some kind of publicity seeker, implying he might be a nutjob who is trying desperately to manufacture his 15 minutes of fame at age 73. In contrast to this portrait, I hear very good things about Judge Lackey — a fair, compassionate jurist of integrity — who will fare much better with a northern Mississippi jury than, as one source memorably put it, "San Francisco lawyers in $3,000 suits with Fleet Street shoes." 

UPDATE: I should point out this Clarion-Ledger story by Jerry Mitchell that follows up on the FBI raid Tuesday on Joey Langston’s offices.

Ashland lawyer Anthony Farese, a friend of Langston and who is representing Scruggs’ son, said the documents seized Monday were unrelated to the Katrina case but did involve an attorney fees dispute in which the Langston firm represented Scruggs.

He would not specify which case but said it was an old case in which New Albany lawyer Tim Balducci, indicted with Scruggs in the case, "was the one who did the work," Farese said.

Balducci has not been associated with the Langston firm for more than a year, Farese said.

"It’s important for the public to know that neither the Langston firm nor any of their principals or their employees are accused of any wrongdoing," Farese said.

This would seem to be a reference to the Luckey case, but one can’t be sure.  Frankly, I’m not paying much attention to lawyer spin about why the FBI raids an attorney’s offices after Langston himself, during the FBI raid on the Scruggs law offices two weeks ago, famously said they were there to look for a particular document from a particular Katrina case, but didn’t find it.  Kind of made it sound like they were there to investigate a report that the firm didn’t have low-flush toilets or something. Turned out to be a little more than that.




Filed under Industry Developments

10 Responses to Scruggs Nation, Day 14: waiting for the other shoe(s) to drop

  1. Great work! Here’s a little commentary from Sid Salter in the Clarion-Ledger.

  2. Amazed

    I have a few words to say about Judge Lackey. I have attended court in Judge Lackeys courtrooms a few times. Three words come to my mind when I think about what best describes the man. Fair, Honest, Humble. I think the “City Slickers” from SF may have a lot of trouble here in North Mississippi. This is salt of earth country. Most residents here are hard working, fair, honest , humble people. Thats the Jury Pool. I wouldn’t want to be in front a jury here with those types of Lawyers. Mr. Scruggs son Zack has the right idea for a lawyer.
    Hire a Local firm that everyone would want to represent them if they were in trouble. Farese, Farese & Farese. They have have a good rep as a tough as nails criminal law practice.

  3. Justus

    You should work for the FBI – that’s a very good job of investigating and “connecting the dots”, which escapes most people. Congrats on the post!
    Question – It seems obvious from what you’ve found that there is a Scruggs-Blake-Thompson connection as well as a Scruggs-Blake-Biden connection. If either Thompson or Biden obtain a cabinet or other high-level post appointment after the election, what are the odds that the criminal investigation and prosecution of Scruggs would fade away?

  4. Beau

    Hopefully by the time Thompson or Biden would be in such a post the criminal case vs Scruggs will be finished. A better question is if Scruggs is sitting in a prison cell in January 2009 doing his time (if he is convicted that is), what are the odds that the outgoing president would pardon him like Clinton did to some of his friends, etc?
    David, excellent work on your investigation and write-ups you have given us all. Keep up the good work.

  5. newshound

    This is incredibly interesting. Please keep up the good work for all of us here in the west central part of Mississippi.

  6. Not At All Surprised

    I’d be willing to bet the “Scruggs Map” is woefully incomplete. Someone should be looking for Limited Liability Companies (“LLCs”) where people close to Scruggs, such as his bookkeeper, are identified as the Managers. The LLC Manager can then designate others as “agents for the LLC.” Not to be confused with “agent for service,” the LLC agents can bind the LLC, sell its assets, take out mortgages, etc. at banks using the LLC’s assets as collateral. The LLC agents are usually not identified in any public documents. It’s a way to make “loans” to friends, etc. without reporting the loan or income.

  7. mslawyer

    ok, I’ll supply another piece of the puzzle. My bet is that the “other case” being investigated is not the Luckey case, but yet another lawsuit by yet another lawyer over asbestos fees back in 95 or so and not settled till 2006. Check out William Roberts Wilson vs Richard Scruggs filed in Hinds Co. Circuit Court.

  8. Ironic

    “All Things Considered, December 12, 2007

  9. MDC

    Re: Why is P. L. Blake worth $50 million? “The wheels of justice grind slowly… but need lubrication to grind your way.”