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Dickie Scruggs on his property on the Gulf Coast. After Hurricane Katrina struck, he launched another crusade—against the insurance he most exuberant football rally at ment forced the enrollment of the first the University of Mississippi last black student at the university, James yearT occurred four days after the season Meredith, Ole Miss became a national ended, when the school’s chancellor, symbol of white Southern resistance to Robert Khayat, announced the hiring of the civil-rights movement. The U.S. a new head football coach. A cheering Marshals accompanying Meredith were overflow crowd at the school’s Center for pelted with rocks and bottles, and, the Performing Arts welcomed Houston eventually, were targets of sniper fire. Nutt, whom the university had some- Two people were killed, and more than how lured to Oxford from the Cotton three hundred injured, before federal Bowl-bound Arkansas Razorbacks (who troops ended the riots. Burke Marshall, had defeated Ole Miss, as the university the head of the civil-rights division of is nicknamed, 44–8). the Kennedy Justice Department, called For Ole Miss, a relatively small pub- the episode “the final gasp of the Civil lic school in a poor state, a seven-and-a- War.” half-million-dollar deal (as was report- By the time Khayat became chancel- edly given to Nutt) seemed an implausi- lor, the school’s endowment and enroll- ble splurge, and some sensed the hand of ment had seriously declined. Khayat ag- a private benefactor. Khayat acknowl- gressively raised funds, cultivated allies in edged as much in his opening remarks, the academic establishment, and went to pronouncing himself “profoundly grate- work on the school’s image. Rebel flags ful to Dick Scruggs,” whose jet had been largely disappeared from the football used as a shuttle during negotiations. stands, “Dixie” was downplayed, and the Scruggs was arguably the most success- school’s mascot—Colonel Reb—was ful tort lawyer in America, and a deeply banished from the playing field. In thir- interested Ole Miss football fan. Dickie, teen years under Khayat, the school’s as he was called, even by those who’d endowment has quintupled, enrollment never met him, hated to lose; whenever has increased by about fifty per cent, and, an Ole Miss coaching change was ru- along with the old statue of the Confed- mored, fans tracked Scruggs’s plane on erate soldier, a bronze sculpture com- the Internet, for hints about where the memorating James Meredith now holds school was looking. If Houston Nutt an honored place on the campus. needed a deal sweetener, Dickie Scruggs, The transformation at Ole Miss the man who took down Big Tobacco aroused a good deal of opposition, and without conducting a single trial, proba- would not have happened without sup- bly had something to do with provid- port from key alumni, among the most ing it. important of whom was Dickie Scruggs. But Robert Khayat was grateful to Although he is the brother-in-law of the Scruggs for other reasons, too. Khayat former Republican Senator Trent Lott— became chancellor in 1995, with the mis- the two men’s wives are sisters—Scruggs, sion of liberating Ole Miss from its who is sixty-one, is a staunch Democrat, past—a perilous ambition at a place and shares Kha­yat’s progressive vision for where the past was so insistently present. the school. A few years after Scruggs hit Into the nineteen-sixties, Ole Miss em- his first litigation jackpot, in 1993, tak- bodied an idealized antebellum South. ing on asbestos companies, he asked There were plenty of black people on Khayat what he could do for the univer- campus, but they were caring for the im- sity. Khayat, who is seventy, had known maculate green—the magnolia-lined Scruggs for most of his life. He had been Grove—or serving the sons and daugh- his ninth-grade homeroom teacher in ters of the state’s white establishment in Pascagoula, and was on the faculty at their Greek-revival sorority and fraternity Ole Miss Law School when Scruggs was houses. The school’s nickname was itself a student there. The Chancellor told a slave term for the mistress of a planta- Scruggs that faculty salaries in the Col- tion. Students dressed for games as if lege of Liberal Arts were pitifully low, going to church, and cheerleaders tossed and Scruggs immediately made a twenty- bundles of Rebel flags into the stands be- five-million-dollar pledge. After his to- fore the start of each game as the band bacco victory, in 1997, he coaxed his played a rousing version of “Dixie.” partner in that effort, an Ole Miss alum industry. Photograph by Brian Smale. When, in 1962, the federal govern- named David Nutt, to expand his own

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TNY—2008_05_19—PAGE 45—133SC.—live art r 17405_E_alt, critical cut to be watched throughout entire press run, pls pull kodak for color guidance!—#2 page—fixed border per printer’s request contribution. Ole Miss professors have U.S. senators. Professional and personal lived there for four years before going to since received several generous pay in- relationships within this group are easily a military school in Georgia, on a schol- creases. In 2005, the music building, tangled. John Grisham, a friend of arship. Now back in Pascagoula, where across from the Performing Arts Center, Scruggs’s, was a classmate of one of his mother still lived, Scruggs made his was renamed Scruggs Hall. Scruggs’s prosecutors, U.S. Attorney Jim first fortune from the Ingalls shipyard. Scruggs was not present in November Greenlee (and they both sat through In the nineteen-eighties, the growth when Khayat publicly thanked him for Professor Khayat’s class). Barbour, one field for tort lawyers was asbestos litiga- his help in the coaching search. That of Scruggs’s fraternity brothers, was his tion. Inhalation of asbestos fibres had morning, a federal grand jury in Oxford adversary in the tobacco fight. Missis- been linked to dire diseases, and lawyers, returned an indictment charging Scruggs, sippi lawyers keep score, counting each inevitably, had uncovered documenta- his son, Zach, and three other men other’s divorces and courtroom out- tion that asbestos manufacturers knew of with conspiring to offer a fifty-thousand- comes. Scruggs is not the only one of the material’s dangers for decades, with- dollar bribe to a judge in Calhoun City. them to have been portrayed in the mov- out issuing warnings. Workplaces such That afternoon, Scruggs was finger­ ies (“The Insider”), or to pilot his own as Ingalls, where asbestos was used in printed, processed, and arraigned. jet, but he is the only lawyer notable for shipbuilding, produced whole popula- The reaction to the indictment was both distinctions. Many also insist that, tions of sick plaintiffs. Joining the rush of incredulity. Scruggs had achieved rare although Scruggs is Mississippi’s most lawyers signing clients, Scruggs hit upon standing among trial lawyers—as a vi- famous trial lawyer, he never really was a a competitive edge. Standard practice sionary, whose extravagant fee awards al- “trial” lawyer at all. was to sign only clients with medical ev- lowed him to discount, with some cred- “I can assure you he hasn’t tried ten idence of disease (such as an X-ray); ibility, money as his prime motivation. cases to verdict in his life,” Bill Reed, a Scruggs offered to pay the costs of a po- He was said to have scored a billion-dol- Jackson attorney who is one of Scruggs’s tential client’s visit to a clinic, and to ac- lar fee in the tobacco case. Why would closest friends, says. “But he is the mas- cept the case if the tests returned posi- he bother with a tawdry little bribery ter of the deal.” tive. He soon had hundreds of clients. scam? Some speculated that the Bush Scruggs finished near the top of his The problem for Scruggs and other Justice Department was trying to elimi- class at Ole Miss Law, and was recruited plaintiffs’ lawyers was getting their cli- nate a prominent Democratic donor— into the Jackson law firm headed by one ents’ cases into court. In a product-lia- invitations to a Hillary Clinton fund- of his heroes—William Winter, the bility case, the plaintiff had to prove that raiser hosted by Scruggs, featuring an leader of the progressive wing of the the manufacturer knew that asbestos appearance by Bill Clinton, had recently state’s Democrats, and a future governor was harmful or failed to properly inves- been mailed. Others guessed that one of of the state. It was a terrible fit for tigate the danger, and that the plaintiff the indicted figures had been caught in a Scruggs, as was his brief stay at the next was exposed to the material and harmed crime and was trying to win leniency by big Jackson firm he tried. He was, by that by it. The litigation of one case could blaming Scruggs. time, married to Diane Thompson, a take years, and a deep-pocketed defen- “I’m rarely at a loss for words, but I dentist’s daughter from Pascagoula, and dant could extend the process for as am at a complete loss about it,” said Jack he had served five years as a Navy pilot, long as possible, and then settle the case Palladino, the San Francisco private in- flying A-6 attack planes from the decks just before trial. “It would typically cost vestigator, who worked with Scruggs in of aircraft carriers. Within the disciplined more to litigate that one case than you the tobacco wars and came away an ad- hierarchy of the U.S. Navy, fighter-pilot could ever hope to recover for the total mirer. “It can’t be that he needed the culture is a thing apart, attracting the sort damage in the case,” says Danny Cupit, money. I just don’t know what to say of personalities that warrant nicknames a Jackson lawyer who in 1982 helped about it.” like Maverick. Scruggs is inclined to go win the first asbestos case in Missis- his own way, and did. He moved to Pas- sippi, against Johns-Manville. By the cruggs and his classmates at Ole cagoula and opened a law office, in a for- time one case was resolved, hundreds Miss Law benefitted from a custom mer drugstore. more had been brought. “If it took you calledS “diploma privilege,” under which Pascagoula, on the eastern end of three years to get a case up for trial, and the school’s graduates were admitted to the Mississippi Gulf Coast, is an in- there were hundreds of cases being filed the Mississippi bar without having to dustrial town in the most cosmopolitan each year, the court could never keep up pass the state exam. This practice (which region of the state, and it was the near- with that.” ended in the nineteen-eighties) height- est thing to a home town that Scruggs Scruggs found that his cases were far ened the striking insularity of the Mis- had known. He was born in 1946 in down on the court docket, stacked be- sissippi bar, a community of lawyers who Brookhaven, up in the Piney Woods. hind those of Danny Cupit and other mostly know one another, often because (“We were so poor,” he likes to say, lawyers who had filed earlier. Again, he they were vetted by the same contracts “that if I hadn’t been a boy, I wouldn’t devised an edge. He persuaded a Pasca- professor during first-year law at Ole have had anything to play with.”) His goula state-court judge, a populist who Miss. Seven of the nine justices on Mis- father, Tom Scruggs, left when Dickie was sympathetic to the sick workers, sissippi’s Supreme Court attended Ole was five, and his mother, Helen, even- to allow him to consolidate a mass of Miss Law School, as did Governor tually found work as a secretary at the cases, and to split the traditional litiga- Haley Barbour and both of the state’s Ingalls shipyard, in Pascagoula. Dickie tion process into two phases. The first

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TNY—2008_05_19—PAGE 46—133SC. phase would test only the general liabil- egg.” The U.S. Chamber of Commerce legal syndicate, with changing players ity of the manufacturer: was asbestos and big business began pouring money (only some of whom were lawyers) cho- harmful, did the manufacturer know it, into the campaigns of industry-friendly sen as needed for a particular skill or and were plaintiffs exposed? If the an- judges, and into those of politicians connection. swer to each question was yes, then a se- who promised tort reform. Haley Bar- The most important player in Scruggs’s ries of mini-trials would follow, deter- bour made the issue a priority after he informal syndicate was his law-school mining the damages to be paid to the was elected governor, in 2003. The classmate Mike Moore, the attorney individual plaintiffs. This formulation Mississippi legislature passed his tort- general of Mississippi. Moore was an- raised the stakes tremendously for the reform program, which severely limited other Pascagoulan, a crusading prosecu- defendant, because one bad verdict liability. tor who was part of a team of young pro- would multiply across all the cases. gressives swept into statewide office in “This is where the Scruggs approach cruggs did not join the Big Pharma 1988. Moore and Scruggs contrived a was unique,” Cupit says. “The risk to a frenzy. He prefers only “primary means of exploiting the asbestos issue to defendant of having liability imposed on kills,”S he said in a 2002 interview with their mutual benefit. Moore, as the top several hundred cases was a risk that was the magazine Chief Executive. “I don’t legal officer of the state, hired Scruggs, more than that defendant wanted to want to get there after the antelope has on a contingency basis, to press the as- reasonably bear. It created an atmo- been brought down.” bestos industry to pay for removal of the sphere to settle the cases.” The asbestos Scruggs began to formulate his own material from public places. Scruggs pre- companies caved. brand of litigation, entrepreneurial and vailed, and was paid several million dol- Scruggs’s innovation helped to open boldly speculative, of which the actual lars for his effort. the litigation floodgates in Mississippi, practice of law was only one part. The The asbestos model proved useful and the state became a principal battle- strategic manipulation of politics and when Moore, early in his second term, ground in the national political fight over public opinion was just as important to went after the manufacturers of cigarettes. tort reform. Mississippi has an elected this enterprise—“a three-legged stool,” He had received a call from another Ole judiciary, and, as settlement money rolled as Scruggs described it to colleagues. By Miss Law classmate, Michael Lewis, an in, the plaintiffs bar began investing it in exerting pressure at key points, he could attorney in Clarksdale, who proposed the campaigns of plaintiff-minded judges. see to it that defenses collapsed and op- that the State of Mississippi sue tobacco Lawyers would then shop for friendly ju- ponents settled without a jury ever hav- companies in order to recover the enor- risdictions. Jefferson County (pop. 9,740) ing a say. He created a sort of floating mous Medicaid costs and other state costs became so attractive to the tort bar that seventy-three mass-action lawsuits, rep- resenting more than three thousand plaintiffs, were filed there in 2000. The American Tort Reform Association calls such tortious hot spots “judicial hell- holes.” Scruggs called them “magic juris- dictions.” In a panel discussion hosted by Prudential Financial in 2002, Scruggs explained the development: The trial lawyers have established rela- tionships with the judges that are elected; they’re State Court judges; they’re populists. They’ve got large populations of voters who are in on the deal, they’re getting their piece in many cases. And so, it’s a political force in their jurisdiction, and it’s almost impossible to get a fair trial if you’re a defendant in some of these places. . . . The cases are not won in the courtroom. They’re won on the back roads long before the case goes to trial. Any lawyer fresh out of law school can walk in there and win the case, so it doesn’t matter what the evidence or the law is.

The major asbestos companies were bankrupted, and the tort bar turned to pharmaceutical companies, filing law- suits on behalf of clients who were not always legitimately injured parties. “This is what I call the abusive phase,” Cupit says, “or what some others call killing the goose that laid the golden

TNY—2008_05_19—PAGE 47—133SC.—live art a12298 spent on health care for sick smokers. Big Tobacco had for decades loomed as the unattainable prize for trial lawyers: de- A Primer spite the overwhelming evidence of the hazards of tobacco, plaintiffs had never I remember Michigan fondly as the place I go won damages against the industry. To- to be in Michigan. The right hand of America bacco’s principal defense was “assumed waving from maps or the left risk”—the argument that, even if ciga- pressing into clay a mold to take home rettes did cause harm (an assertion the to- from kindergarten to Mother. I lived in Michigan bacco companies did not fully concede), forty-three years. The state bird smokers assumed all risk by deciding to is a chained factory gate. The state fower smoke. That defense could not be used is Lake Superior, which sounds egotistical against a state, which had no choice in the though it is merely cold and deep as truth. matter of paying smokers’ Medicaid costs. A Midwesterner can use the word “truth,” Moore deputized Scruggs to develop can sincerely use the word “sincere.” a Medicaid suit, which Moore filed in In truth the Midwest is not mid or west. Pascagoula in May, 1994. (Scruggs later When I go back to Michigan I drive through Ohio. remarked that it was like having a chance There is of I-75 in Ohio a mosque, so life to be the first man to scale Mt. Everest.) goes corn corn corn mosque, I wave at Islam, The suit’s premise was innovative, but which we’re not getting along with more important was the contribution of on account of the Towers as I pass. two tobacco insiders, who guided Scruggs Then Ohio goes corn corn corn and Moore to the industry’s pressure billboard, goodbye, Islam. You never forget points. The first was Merrell Williams, a how to be from Michigan when you’re from Michigan. former paralegal at a Kentucky law firm It’s like riding a bike of ice and fy fshing. that had been hired by Brown & Wil- The Upper Peninsula is a spare state liamson, the producer of Kool and Vice- roy cigarettes, to review potentially in- criminating internal documents. The Wigand had signed a seemingly airtight the tobacco action in exchange for an ad- material included evidence that the com- confidentiality agreement after he took a vance investment to defray expenses. pany had known of tobacco’s addictive buyout from the company. Scruggs Few agreed. Finally, Scruggs made an and injurious effects for at least thirty offered Wigand his legal services without irresistible offer to a prosperous Jack- years, and had hidden the information charge, and helped facilitate Wigand’s son asbestos attorney, David Nutt, who from the public. Williams clandestinely appearance in a controversial segment of pledged several million to the effort, in removed documents from the firm, and the CBS broadcast “60 Minutes.” return for a share of potential fees equal- ultimately hid them at a friend’s house in Any evidence and testimony pro- ling Scruggs’s. Florida while he tried to find a way to vided by Williams and Wigand in a trial The Mississippi Medicaid case was bring the information to light. But the would certainly be contested as hope- set for trial in July, 1997. By then, the na- theft was soon discovered, and a judge lessly tainted, but, if the Scruggs for- tional mood had become sharply anti- ordered the material sealed and returned. mula succeeded, a trial would be avoided. tobacco, and the industry decided to buy Williams and his documents became un- Scruggs and Moore spent nearly two peace. The case was settled for nearly four touchable (he vainly approached several years travelling around the country, lob- billion dollars, and was followed by set- attorneys and journalists), until he met bying other state attorneys general to file tlements in Minnesota, Texas, and Flor- Dickie Scruggs. Scruggs flew with him to their own tobacco lawsuits. The team ida. Four tobacco companies split the Florida on his jet, and retrieved the pur- also worked the corridors of Congress cost. The tobacco industry eventually loined documents. Williams was out of and the Clinton White House, trying to reached settlements with the attorneys work, and homeless; Scruggs moved him fashion a national tobacco settlement. general in the remaining forty-six states. to the Gulf Coast, found him housing The team had added other lawyers to In all, the industry agreed to pay two and a boat, and paid him thousands of the effort, but Scruggs was paying most hundred and forty-six billion dollars to dollars in what he called “loans.” of the bills, and by 1996 he was begin- the states over twenty-five years, in return “Dick didn’t get where he got by ask- ning to feel the strain. for freedom from future state lawsuits. ing permission,” one Scruggs ally said. “I was risking a career,” Moore re- Scruggs’s fee over twenty-five years is es- “He got where he got by counting on calls. “But he was risking all his money. timated at close to a billion dollars. asking for forgiveness, if he needed to.” And when I say ‘all his money,’ what The second tobacco insider was Jeffrey people don’t know is, he put all his hree days after the federal grand jury Wigand, a former Brown & Williamson money in. I mean, all his money. Mort- indicted Dickie and Zach Scruggs, scientist who also had incriminating in- gaged his house. He was all in.” alongT with their law partner, Sidney formation, and who could serve as an in- Scruggs approached other members Backstrom, and two associates, the terpreter of the Williams documents. But of the plaintiffs bar, offering a piece of Scruggs family hosted one of the biggest

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TNY—2008_05_19—PAGE 48—133SC. lawyer, and it seemed to fit him as neatly as the tailor-made suits he wore. He in case Michigan goes fat. I live now was unfailingly polite, and spoke with in Virginia, which has no backup plan a courtly manner, even in casual en- but is named the same as my mother, counters with strangers. “He thought it I live in my mother again, which is creepy would be a great place to just semi- but so is what the skin under my chin is doing, retire, and start a practice,” Mike Moore suddenly there’s a pouch like marsupials says. “And I’m sure what he thought are needed. The state joy is spring. was that maybe one day he would get “Osiris, we beseech thee, rise and give us baseball” out of the practice and Zach would have is how we might sound were we Egyptian in April, a practice, maybe set Zach up, and do when February hasn’t ended. February something new and different in a place is thirteen months long in Michigan. where they could raise their family and We are a people who by February it would really be nice.” want to kill the sky for being so gray In 2003, Scruggs bought the upper and angry at us. “What did we do?” floor of a building on Courthouse is the state motto. There’s a day in May Square, across from the courthouse it- when we’re all tumblers, gymnastics self, and undertook a major renovation. is everywhere, and dafodils are asked Across the top of the building’s buff- by young men to be their wives. When a man elopes colored exterior, in big block lettering, with a dafodil, you know where he’s from. were placed the words “Scruggs Law In this way I have given you a primer. Firm.” Office assistants tended to the Let us all be from somewhere. chore of finding a parking space on the Let us tell each other everything we can. crowded square for Scruggs’s Porsche Cayenne. After the runway at the small —Bob Hicok local airfield was extended, it could ac- commodate his ten-seat Dassault Fal- con 20. He and Diane bought a prime social events of Oxford’s holiday season, ball weekends; the large pregame tail- piece of property at the edge of campus, a Christmas party attended by more than gate parties in the Grove came to feature separated by a small forest from Faulk­ two hundred people. When guests ar- barbecue suppers served on china with ner’s home, Rowan Oak. The Scruggs rived at the Scruggses’ home, they were silver place settings. Sophisticated young place, a five-million-dollar white man- greeted by Dickie and Diane as if noth- chefs opened restaurants on Court- sion with six columns across the front, ing were amiss. house Square, which also began to at- gave them an address on a newly created “They did a pretty good job of carry- tract high-end merchants. Richard Ho- street—Faulkner Woods Place. ing it off,” one guest recalls. “Diane worth, the current mayor, converted a To most of his colleagues in Oxford, looked a little pained, but Dickie put his former drugstore into Square Books, Scruggs was a welcome addition. His brave face on.” The guest list comprised one of the country’s prized independent generosity to the university benefitted the Oxford élite, who fully understood bookstores, which became the center of all, and his building projects had in- the game. “Everybody was very much Oxford’s vibrant literary culture. Native creased local property values. Scruggs aware, but nobody was talking about it,” writers such as Richard Ford, Barry also had assumed the role of resident pa- one friend recalls. “Everybody was trying Hannah, and John Grisham moved to tron. He lent his plane to an acquain- to make a point of dealing with other town, and the flowering of Oxford par- tance who wanted to attend the Betty things.” By the end of the night, the alleled the renaissance of Ole Miss un- Ford clinic, and to another who needed party had achieved something like actual der Khayat. cancer surgery in Chicago. “Anybody— holiday gaiety. Both of the Scruggs children, Zach anybody—can go in and see Dickie, ask Such evenings were a large part of the and Claire, attended Ole Miss, and him for money, and come out with a reason that Scruggs had moved to Ox- Scruggs began to think of a new phase check,” Moore says. “I mean, it’s really ford from Pascagoula, four years earlier. in his life, even retirement. In Oxford, dumb, how he has done some of that.” The town had changed drastically since he could assume the role of gentleman Scruggs brought a certain élan to town, Scruggs attended Ole Miss, when Ox- and politicians regularly came through ford was a dull, provincial place known Oxford on fund-raising quests (Joe mostly for William Faulkner and the na- Biden, Tom Daschle, Susan Collins, tional ignominy of the integration riots. and Harry Reid among them). The fed- Students nicknamed it Oxpatch. eral charges against Scruggs were sensa- But as baby boomers prospered and tional, and troubling, but the prevailing began sending their children to Ole view was probably best summed up by Miss, they bought apartments and built John Grisham, who remarked to the condos near campus for use during foot- Wall Street Journal, “This doesn’t sound

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TNY—2008_05_19—PAGE 49—133SC.—LIVE spot ART R 17397B, PLEASE INSPECT AND REPORT ON QUALITY Attorney Tom Dawson. Dawson’s office was sensitive to charges of Bush Justice Department politicization of recent pub- lic-corruption prosecutions, most notably the controversial conviction of Alabama’s Governor Don Siegelman, a Democrat, in 2006. Bill Clinton had cancelled his Oxford visit after the Scruggs indictment, and Dawson believed that he needed to make it clear that the case was about cor- ruption, not politics. Dawson’s means of achieving this aim was a provision in the Federal Rules of Evidence called Rule 404 (b), which allowed prosecutors to introduce evi- dence of other alleged crimes in order to demonstrate a defendant’s motive or criminal intent. It is a favorite device of Dawson’s (whose silver Chevy Tahoe, often parked on the square, bears the Mississippi license tag “404B”). Within a month of the raid on Joey Langston’s office, Langston was standing in federal court in Oxford, confessing to having participated in trying to corrupt another judge, on behalf of Scruggs. As Dawson explained it to the judge, Langston had represented Scruggs “I would be an animal-rights activist, but I have allergies.” a year earlier, in yet another dispute over attorney fees, in a court in Hinds County, where the state capital, Jack- •• son, is situated. Langston, working with his then associate—none other than like the Dickie Scruggs that I know. . . . tionship with Dick is such that he and I Timothy Balducci—and a former Mis- When you know Dickie, and how suc- can talk very private about these kinds of sissippi state auditor, Steve Patterson, cessful he has been, you could not believe matters,” Balducci said. “He and I, um, paid fifty thousand dollars to Ed Peters, he would be involved in such a bone- how shall I say, for over the last five or six a close friend of the Jackson judge, in headed bribery scam that is not in the years there, there are bodies buried that, the hope of influencing the outcome of least bit sophisticated.” you know, that he and I know where the fee-dispute case. The judge—disre- [they] are.” garding a special master’s recommenda- he central figure in the alleged Balducci was an outsider in Scruggs’s tion that Scruggs owed the plaintiffs bribery conspiracy was not Dickie Oxford social sphere, where it was as- roughly fifteen million dollars—essen- Scruggs,T or his son, Zach, or even Back- sumed that he was a troubled person tially ruled for Scruggs, saying that strom, their law partner. It was a thirty- who had tried to exploit a peripheral re- he owed the plaintiff nothing further. nine-year-old lawyer named Timothy lationship with Scruggs in order to buy Langston pleaded guilty, and no one Balducci, from the tiny town of New Al- leniency. The Scruggs defense lawyers else has been charged. (Scruggs and bany, about forty miles east of Oxford. soon advanced this notion themselves. Patterson deny any wrongdoing; Peters The government claimed that Scruggs “It’s a situation Tim Balducci did alone,” could not be reached.) had facilitated a conspiracy to bribe a local Tony Farese, Zach’s lawyer, said. “After Many in Mississippi’s bar found this circuit-court judge, Henry Lackey, in the he got apprehended, he decided to twist development even more disturbing than hope of getting a favorable ruling in a law- and turn things around and implicate the original accusation against Scruggs. suit over an attorney’s-fee dispute; but it others that were not involved.” The Jackson judge who had allegedly was Balducci (who was not a party to that The day after those remarks were pub- been influenced was Bobby DeLaugh- case) who approached Judge Lackey, lished, F.B.I. agents raided the law office ter (Ole Miss Law, ’77), a Mississippi promised him a payoff, and delivered the of Joey Langston, Scruggs’s principal at- hero and a jurist uniformly regarded as money to him. The indictment quoted torney. It was a stunning event, given the thoughtful and honest. In the mid-nine- Balducci boasting to Lackey, in a conver- sanctity of attorney-client privilege. The teen-nineties, DeLaughter had resur- sation that was obviously recorded, about raid was engineered by the lead prosecu- rected the cold case against Byron De La how close he was to Scruggs. “My rela- tor on the Scruggs case, Assistant U.S. Beckwith, who had twice been acquitted

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TNY—2008_05_19—PAGE 50—133SC.—live art a13275 by Mississippi juries of the 1963 killing calls, “He would say to me, ‘You know And I did it with just a handful of words, of the civil-rights activist Medgar Evers. what I really feel like doing? I really feel artfully placed.” (Alec Baldwin portrayed DeLaughter in like throwin’ all the money I’ve made in a After the settlement, Johnson wrote the movie “Ghosts of Mississippi.”) Ac- big pile, and just calling everybody up and to Scruggs, suggesting that they meet cording to the Langston plea colloquy, it telling ’em, “Y’all come get what you think to discuss Johnson’s payment. When wasn’t necessarily the money exchange is yours, and just leave whatever you think Scruggs didn’t respond, Johnson drove that had allegedly influenced DeLaugh- is mine.” ’ ” down to Pascagoula, but Scruggs re- ter in the Scruggs case. DeLaughter was Scruggs had promised to distribute fused to see him. (Scruggs, through his known to covet an appointment to the bits and pieces of the litigation’s proceeds attorney, disputes this account.) John- federal bench, and “based on this knowl- as needs arose, sometimes so casually as son filed suit against Scruggs, but edge,” Dawson said, at the hearing, to invite later dispute. He wanted legis- Scruggs had the case transferred to Pas- “Scruggs told Langston to let the judge lation authorizing his hiring, an unlikely cagoula, where it was dismissed. John- know that if he ruled in his favor, he prospect in a state whose governor, Kirk son could of course appeal, but he would pass his name along for consider- Fordice, so opposed the tobacco litiga- says that one day he received a call “out ation regarding the federal judgeship.” tion that he is said to have refused to en- of the blue” from a man named P. L. Everyone knew to whom the accusation dorse the check when Mississippi’s case Blake, urging him to drop the case. was referring—Trent Lott. was successfully settled. In 1994, Scruggs “He’s kind of a dealmaker, so to speak, The families of Lott, the Republican turned to Pete Johnson, a political blue- that nobody ever sees,” Johnson says whip in the Senate, and Scruggs were blood (his uncle and his grandfather had of Blake. “He’s a character. A Deep close. Lott’s Thanksgiving gathering been Mississippi governors) with deep Throat kind of a guy.” that year had taken place at Sub Rosa, connections in the legislature. Johnson Blake had risen from a hardscrabble an antebellum plantation near Pocahon- says that Scruggs promised him ten per childhood in Webb, Mississippi. He tas, Mississippi, which Patricia Lott had cent in any settlement if he could sway played football at Mississippi State, and purchased in 2003. She bought the place lawmakers toward the Scruggs position. then in the Canadian Football League. with a $1.5-million loan from Diane A Medicaid bill was pending in confer- When he returned to Mississippi, he Scruggs, who holds the deed on the ence, and Johnson had friends on the made his way into the political sphere of property. Scruggs would have known committee. Johnson, who was not a leg- the late Senator James Eastland, even- that he could count on his brother-in- islator, or even a registered lobbyist, tually parlaying his connections into law to make a telephone call to De- wrote an amendment to the bill, giving substantial landholdings and various Laughter, and Lott subsequently did Moore the authority to hire plaintiffs’ at- business ventures. In the nineteen- call the Judge. (DeLaughter, whose ser- torneys on a contingency basis. “I just eighties, Blake had a series of financial vice on the bench has been temporarily made several phone calls and told them and legal setbacks which resulted in suspended pending an investigation, has what I wanted to do, and they said, ‘Send bankruptcy and a bank-fraud convic- denied any wrongdoing, as has Lott, us the amendments,’ ” Johnson recalls. tion, but even then he was able to call who says that he customarily made calls “So I sent ’em, and they were inserted. upon powerful friends. One of his crim- regarding potential federal judgeships and never recommended DeLaughter.) Two days before the Scruggs indict- ment, Lott announced his resignation from the U.S. Senate, in order to be- come a Washington-based lobbyist. (“There’s a time for everything and ev- erything—a special time for everything under heaven,” he said.) In Oxford, the DeLaughter development, and Lott’s involvement, cast a new perspective on events. “Trent cited the Book of Eccle- siastes,” Curtis Wilkie, a professor at Ole Miss, and a friend of Scruggs, said. “But it was more like Revelations.”

n his war against the tobacco compa- nies, Scruggs assembled a collection of lawyers,I fixers, cutouts, and whistle-blow- ers, who joined him with the prospect of sharing in the payout. When the bonanza materialized, Scruggs was overwhelmed by claimants who believed that they had his warrant for a share. Mike Moore re- “I broke up with another one. Do you want her picture, too?”

TNY—2008_05_19—PAGE 51—133SC.—live art a13125 inal lawyers was Fred Thompson, and ordered Scruggs to pay seventeen million per cent of that home or business that he was represented in his bankruptcy dollars to Luckey; the Wilson case landed was destroyed by water.” proceedings by Dickie Scruggs, who in the Jackson courtroom of Judge Bobby The insurance companies deter- made monthly loans to his bankrupt cli- DeLaughter. mined that most of the slab cases were ent, sometimes running to thousands of water cases, and, thus, excluded from dollars; ultimately, the debt amounted fter the tobacco settlement, Scruggs full coverage. In instances where struc- to more than a million dollars. fell into a slump. He had more tures were still standing but had been According to Pete Johnson, Blake moneyA than he could spend, and was damaged by a combination of wind and implored him to drop the Scruggs mat- fully stocked with yachts, planes, and va- water, property owners were granted ter. Johnson was inclined to quit the suit cation homes, but he ascribed to his only fractional relief. anyway (he had received a liver trans- brand of law a moral dimension (“It’s not The situation invited a Scruggs inter- plant, and his prognosis was uncertain), often in life that you have a chance to vention, and he was on the coast almost and told Blake as much. “He wrote me a make a mark on humanity,” he said after as soon as the water subsided. His wa- check for a hundred thousand dollars,” the tobacco victory), and looked for the terfront home in Pascagoula had been Johnson recalls. “I said, ‘Do you really next great crusade. It arrived on the destroyed, as had Trent Lott’s. “This want me to take this money?’ And he morning of August 29, 2005, when one was very personal to him,” Mike said, ‘Please. Please take it.’ And that was Hurricane Katrina made landfall on the Moore says. the last time I talked to him.” Mississippi coast. Scruggs set up a toll-free number and Other Scruggs money fights were not Katrina’s peculiar ferocity was its surge, hired a bank of operators to handle the as easily resolved. By 1994, as Scruggs a mass of Gulf water nearly three stories incoming calls. He had signed up Lott as was gearing up for the tobacco litigation, high and six miles thick. Hurricane winds a client, as well as the Democratic con- two of his former partners in the asbestos will smash things up, but water can level gressman Gene Taylor, who also lost his enterprise, Alwyn Luckey and William a whole community and carry it away. home to the storm, and Louis Guirola, Roberts Wilson, had sued him, claiming The Mississippi coast, accustomed to Jr., a federal district judge. Scruggs was that he had cheated them of their right- hurricanes, was unprepared for a surge featured in a long article in the New ful share of fees. Scruggs fought the law- like Katrina’s. More than two hundred York Times, in which he declared, “I’m suits, in a legal battle that lasted a dozen people were killed there, but the storm not going to sit still for this. I’m going to years, wending through several state and also carried a second disaster. Much of bring every organizational and legal skill federal courts. An attorney for the the destruction of the coast was plainly I possess to make these guys do the right plaintiffs, Charlie Merkel, deposed caused by the surge, and standard home- thing under their policies.” Scruggs five times over the years in an owners’ insurance policies do not cover Scruggs announced that he would effort to determine how much Scruggs damage caused by flooding. The federal bring suit against the major insurance made on tobacco, how he spent it, and government offers flood insurance to carriers on the coast, and he assembled a with whom he shared it. When Merkel property owners, but few property own- team, which he called the Scruggs Ka- pressed Scruggs as to why he had lent so ers on the coast had the coverage. Many trina Group. The core members of the much to a bankrupt client—P. L. Blake— properties were destroyed, down to the group were mostly veterans of the to- without collateral, Scruggs replied, “He concrete slabs, and it was almost impossi- bacco battle, including David Nutt, who needed the money.” Scruggs was no more ble to determine whether the damage in once again bankrolled the venture. A forthcoming about what Blake had done these “slab cases,” as the insurance indus- newcomer, brought into the group to de- to earn a piece of the tobacco payment try terms them, was caused by water or by velop legal theories and write briefs for that could reach fifty million dollars. The wind or by both. litigation, was a Jackson lawyer named tobacco litigation was a war, Scruggs ex- “The wind-and-water issue was just Johnny Jones. plained, and he needed people like Blake, absolutely an unwinnable situation,” To some in the group, Jones was a who had “his ear to the ground politically George Dale, who had been Mississip- surprising choice. He had a small prac- in this state and in the South generally.” pi’s insurance commissioner for thirty tice in Jackson, in an old house near the Friends of Scruggs say that the pro- years when Katrina struck, says. “If Capitol, with a casual atmosphere that tracted disputes wore him down, and that there’s a regular hurricane that knocks reflected his style. With longish gray- his family wanted the matters settled. But things down, the insurance company ing hair and the slight squint of a Scruggs refused to surrender any unmer- comes in, pays what it owes, and people smoker, Jones was known, as one col- ited tobacco money. “All the people who go back to their houses. But when there’s league put it, as “an artsy-craftsy sort of tried to get a piece of tobacco, he hated an issue of a water surge, or winds and guy—and he writes, too.” He had little ’em,” an attorney who represented Scruggs water, there is no way to determine the experience in mass torts, and none in in yet another lawsuit says. “He just de- the sort of undertaking in which he was spised ’em. I mean, he was not rational now invited to participate. As a young about them. I don’t think, I still don’t be- lawyer in the mid-eighties, he had lieve, that he would do anything illegal to done some asbestos work with the beat ’em. But he would spend as much as master in the field, Danny Cupit, but it took to beat ’em, even if it would be he was deterred by the administrative smarter to settle it.” A judge eventually nature of the work. When he saw all

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TNY—2008_05_19—PAGE 52—133SC.—LIVE spot ART R 17397C, PLEASE INSPECT AND REPORT ON QUALITY the money that Scruggs and the others were making at it, however, he prom- sketchbook by ROZ CHAST ised his wife, Mary, and the younger partners in his firm that if the right chance came along he would take it. The Katrina project seemed right. “It was just an insurance-company bam- boozle of Mississippians,” Jones says. Jones had spent much of the previ- ous year in close contact with Scruggs, defending him against the fee claims of Alwyn Luckey and Bob Wilson. Al- though Scruggs had been ordered to pay seventeen million dollars in back asbestos fees, Jones protected Scruggs’s tobacco money. When Scruggs asked him to be part of the Katrina group, Jones went to work on legal theories, figuring that four or five cases would need to be tried, and won, before the insurance companies would settle. If things went as Scruggs hoped, Jones’s contribution would be the least important component of the Scruggs Katrina Group’s efforts. Within a few weeks of the storm, the Scruggs group had signed several hundred clients, and was actively pursuing whistle-blowers. By December, Scruggs was ready to test his clout. He went to see George Dale, the insurance commissioner, and his deputy, in Dale’s office in Jackson, and he was blunt. According to Dale, Scruggs said that there was a war coming be- tween the insurance companies and the aggrieved people of the coast, and Dale needed to choose a side. “He proceeded to say, ‘Now, you know that they’re say- ing some bad things about you—they’re referring to you as the commissioner for insurance, rather than as the commis- sioner of insurance,’ ” Dale recalls. Scruggs then laid out his strategy for going after State Farm, the state’s larg- est insurer. He would use the same strategy he had used with tobacco. Dale says, “He said, ‘You also know that I have all this inside information of all this wrongdoing that these insurance companies have done.’ And I said, ‘Well, Dickie, you ought to turn that over to the proper folks.’ ” Dale says that Scruggs told him he’d already gathered some information showing that State Farm wasn’t playing straight with property owners. “And then he proceeded to say, ‘What I want you to do is, I want you to make State Farm put five hundred million in a

TNY—2008_05_19—PAGE 53—133SC.—live art a13326—please pull kodak for final approval fund, which I would administer, and I and hired by Scruggs as “consultants,” at co-sponsored a proposal to strip the in- will pay the claims on the coast.’ To an annual fee of a hundred and fifty thou- surance industry of an antitrust exemp- which my answer was ‘Dickie, I can’t do sand dollars each. tion that had been in place since the that.’ ” (Scruggs denies Dale’s account of Scruggs copied the State Farm mate- nineteen-forties. the conversation.) The meeting ended, rial and passed it on to Jim Hood, a pro- Meanwhile, the Rigsby sisters were and Scruggs left. “And from that point tégé of Mike Moore’s who in 2003 had featured in an ABC News exposé of Ka- forward,” according to Dale, “Dickie’s succeeded him as attorney general. trina insurance fraud, broadcast on the intent was to get rid of me as commis- Moore, who had entered private prac- prime-time program “20/20.” Wearing sioner of insurance, at which he suc- tice, was in close contact with the Scruggs State Farm windbreakers, the sisters told ceeded.” (During Dale’s Democratic- Katrina Group, and was also directly ad- of doctored reports, shredded evidence, primary race last year, Scruggs took out vising Hood. Hood opened a criminal and widespread malfeasance on the part a full-page newspaper advertisement investigation into State Farm. of State Farm. Cori Rigsby said, “Ka- depicting Dale as a pig, frolicking with In August, 2006, the Scruggs group trina was devastating, but so was State insurance companies, under the head- actually tried a case in court, winning a Farm.” (A judge ultimately disqualified line “LIPSTICK ON A PIG.”) nominal victory—an additional payout them as witnesses.) Scruggs did obtain inside information of twelve hundred and twenty-eight On November 14, 2006, in a telecon- about State Farm—volumes of it, deliv- dollars for a Scruggs client from the ference with the other members of the ered to him by Cori and Kerri Rigsby, sis- Nationwide insurance company. More group, Scruggs announced that State ters who were working as adjusters for a important developments, however, Farm had tentatively agreed to a settle- firm contracted by State Farm. The were occurring outside court. Trent ment. The company would pay eighty- Rigsby sisters, who were stepdaughters of Lott and Gene Taylor, the Democratic nine million dollars to settle the claims of a former Scruggs client, claimed to have congressman who had also lost his the Scruggs group’s six hundred and witnessed the firing by a State Farm man- home in the storm, introduced amend- forty clients, and $26.5 million in attor- ager of an engineering firm that had at- ments to the Homeland Security ap- ney’s fees. State Farm also agreed to set- tributed storm damage to wind, rather propriations bill which would require tle a separate class action on behalf of than to water. The sisters, suspecting investigations of the insurance industry. other coast residents, Scruggs said, which fraud, began to copy State Farm files, and, Charles Chamness, the C.E.O. of a na- could produce another ten million to after meeting with Scruggs, started to de- tional insurance trade association, has twenty million dollars for the group. liver the purloined company material to claimed that Lott had threatened him, (That settlement was later rejected by a him. After a large data delivery in June, in a telephone call, with “bringing down federal judge.) 2006, the Rigsbys were fired by their firm, State Farm and the industry.” Lott also Jones had not known about the Rigsby sisters, and he hadn’t been consulted in the negotiations with State Farm. He felt that his small firm had suffered without his services, and he had been ignored whenever he asked for an advance on po- tential earnings. He figured that if the fees were shared equally he and his firm would receive about four million dollars. A few weeks after the teleconference, according to Jones, Scruggs called him to discuss his split. “We’ve agreed to pay you a million dollars off the top,” Scruggs said. Jones says that he was delighted, assuming that Scruggs was advancing him a portion of his share to help him and his firm through the holidays. “I said, ‘O.K., that’s mighty nice, I appreciate that. How are we gonna split up the fees?’ And he said, ‘Well, that’s all you’re gonna get,’ ” Jones recalls. “And I said, ‘No, it’s not all I’m gonna get, Dickie.’ ” Jones wrote Scruggs a letter conveying his disagreement with Scruggs’s reckoning, the first of a months-long ex- change of e-mails and letters aimed at re- solving the dispute. Jones repeatedly urged that the group turn the issue over to arbitration, as provided for in the agree- “Remember when they couldn’t do this sort of thing to you?” ment, to no avail.

TNY—2008_05_19—PAGE 54—133SC.—live art a13197 The settlement was finalized in Janu- Scruggs’s money fights with his former Scruggs firm, and it was suggested that ary, 2007, and in March Jones and his associates, a spectacle to which Jones, Balducci might be able to help, he was partner, Steve Funderburg, were sum- who had defended Scruggs in just such eager to volunteer his services. The case moned to a meeting in David Nutt’s a dispute, would be able to lend reveal- was to be heard by the circuit-court office, to resolve the fee dispute. They ing insight. The Tollison filing charged judge Henry Lackey, whom Balducci were told that the rest of the group had Scruggs and his confederates with nu- had often characterized as a mentor and agreed to vote them out if they didn’t ac- merous infamies, and concluded, “A close friend. Balducci said that he would cept a six-per-cent share, which Jones scheming cabal should not be allowed to have a word with the Judge on behalf of calculated at $1.3 million. succeed.” Scruggs’s position. Jones was despondent, and says that The Jones complaint was filed on In Mississippi’s casual sociality, law- he thought of giving up the law. “I was March 15, 2007, and was still the topic yers see judges on hunting trips and at too stupid to have seen it coming,” he of discussion inside the Scruggs firm cocktail parties, and sometimes visit says. “Who needs a lawyer like that?” In- several days later, when Tim Balducci them privately in chambers. Occasion- stead, Jones and Funderburg decided to and his new law partner, Steve Patter- ally, talk turns to the subject of a case sue Scruggs and the group. Jones recalls son, paid a visit to the firm. The pair pending before the court. Such ex-parte saying to himself, “I’m just gonna make had become an increasingly familiar communication—or “earwigging,” as sure that those guys that I trusted never presence around the firm, a fact that it’s more commonly known—is a tech- practice law again as long as they live.” would have surprised many of Scruggs’s nical violation of ethics standards, but Jones filed suit in Oxford, to maxi- old friends. As state auditor in 1992, it is hardly rare, and is usually harmless. mize the embarrassment that the dis- Patterson had examined Moore’s hiring When Grady Tollison filed the Jones pute could cause Scruggs. To represent of Scruggs to represent the state in the lawsuit, he bumped into Judge Lackey him in the lawsuit, and to write the com- asbestos litigation; Moore, in turn, ran in the clerk’s office, and asked him to plaint against Scruggs, Jones hired Patterson out of office for a car-tag keep the case under seal for a few days, Grady Tollison, who had been practic- scam. Patterson was not a licensed at- to give the parties a chance to settle; ing in Oxford for decades. Until the ar- torney, yet he was now a full partner in Lackey, who didn’t like lawyers air- rival of Scruggs, whom some in the Ox- the Patterson-Balducci firm. ing their dirty laundry in fee disputes, ford legal community considered “a Balducci was later lampooned as a agreed. Technically, Tollison should coast lawyer,” Tollison had been the law- Dickie Scruggs wannabe, and the be- have filed a motion, to which the de- yer on the square. He had bought his spectacled, wisecracking, ambitious law- fendants would have had the chance to building, a historic structure called the yer might not have disputed that por- reply, but in all likelihood they wouldn’t Thompson House, in 1973, with Rob- trayal. He had practiced for a time with have objected anyway. ert Khayat, who was then a young law Scruggs’s ally Joey Langston—an asso- Balducci wanted to influence a professor. Tollison referred to Scruggs’s ciation that introduced him to the world judge presiding over a case in which he new home as “the Taj Mahal,” and of big-money cases and the corporate- had no role, but he did not set out to grumbled about “the jillion dollars’’ that jet life style—but he left Langston at the bribe Judge Lackey. Nor would he Scruggs spent on the building that end of 2006 to start his own firm, trying have had reason to think that Lackey housed his firm. (Tollison’s mood was to create the impression of a politically would have countenanced an illegal not improved when the Thompson connected practice in the Scruggs- overture. House, across the square from Scruggs’s Langston league. He brought in Pat- Henry Lackey was a self-described building, partly collapsed last year.) But terson as a rainmaker, and persuaded “deep-water Baptist,” a deacon in his Tollison’s objections to Scruggs repre- several familiar names in Mississippi po- church, and a member of the state Com- sented something deeper. Tollison was litical and legal circles (including a for- mission on Judicial Performance. He a traditionalist, a former president of the mer governor) to accept “of counsel” sti- lived in the small town where he was state bar who delighted in the practice of pends, using them for letterhead born, Calhoun City, where his parents law—the courtrooms and the juries, the adornment. Balducci and Patterson had owned a Ben Franklin five-and- legal gossip exchanged in early-morning opened offices in New Albany, Oxford, dime store. He made early-morning bull sessions. “I know some trial lawyers and Washington, D.C., and set up an front-porch deliveries from his vegetable who’ve tried hundreds of cases—they’re elaborate Web site that suggested the garden to the local widows. At seventy- my friends,” he would say, making it resources and talent of an established two, he had a full head of white hair, and clear what he thought of the “three- and prosperous firm. In fact, Balducci spoke in a slow, Sam Ervin voice. He an- legged stool” approach to the law. had big startup expenses and few paying swered his own phone, and drove around clients, and what income he had came his circuit in a used GMC Yukon; Lackey n his complaint for Jones, Tollison substantially from the odd jobs that was a firm conservative, but in his court accused Scruggs and his Katrina Scruggs tossed his way. an outspoken Democrat like Grady Tol- cohortI of conspiring to lure Jones into Balducci knew that Jones had been lison could count on a fair shake. the venture in order to exploit his legal squeezed out of the Scruggs Katrina Lackey liked Tim Balducci, and he skills, only to freeze him out on fees. Group, and hoped that he might be knew that his young friend was having Tollison indicated that he meant to pa- dealt in. When the subject of the Jones a difficult time. When Balducci called rade before the court the history of lawsuit came up during his visit to the and asked for a meeting with him to

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TNY—2008_05_19—PAGE 55—133SC. discuss a personal matter, Lackey was Calls and meetings between Balducci with the mysterious P. L. Blake. Ac- happy to oblige. On March 28th, Bal- and the Judge continued through the cording to Patterson’s account, he told ducci met Lackey in his office, and told summer. Balducci had broken the rules, Blake that he and Balducci had taken him that he thought the Scruggs side in and possibly the law, but he hadn’t ex- care of “a problem” for Scruggs (he the Jones case was the right one, and plicitly tried to bribe Lackey. There was didn’t say how) and that it had cost that if the Judge saw it that way, too, it no indication, other than Balducci’s them forty thousand dollars; Blake would do Balducci some good. Later in word, that Scruggs was directly involved. met with Scruggs, and then reassured the conversation, Balducci said that he By September, Lackey had agreed to try Patterson. (Scruggs denies that the knew the Judge meant to retire soon, to press the case another step forward— meeting occurred; Blake could not be and he hoped that Lackey would con- determining, in essence, to solicit a reached.) sider joining Patterson-Balducci on an bribe. Scruggs later issued a check to Bal- of-counsel basis. In a conversation with Balducci ducci’s firm in the amount of forty thou- Lackey felt that the overture was on September 18th, Lackey haltingly sand dollars, ostensibly as payment for grossly improper, possibly even crimi- broached the subject, until Balducci legal work on a Katrina case. nal. He says that he agonized for nearly urged him to “put the corn on the On November 1st, Balducci drove to two weeks about the meeting, consult- ground.” Calhoun City, and delivered the pay- ing another judge and a local prosecu- “If I help them,” the Judge asked, ment to the Judge. As he left Lackey’s tor. He even discussed it with a former “would they help me?” office, he was confronted by F.B.I. partner of Balducci’s, he says, “to see if “I think no question that would hap- agents. The agents produced a portable I could discover what character flaw pen,” Balducci replied. “Yes, sir. No DVD player, and replayed for Balducci they had seen in me to think that I question. Mm-hmm.” a video of himself making a payment to would participate in something like Lackey told Balducci that he’d got Judge Lackey. The agents then offered that.” He felt that he couldn’t take the himself into a fix, and he needed some- Balducci a choice: “You can go to Ox- matter to the attorney general, Jim thing “to just kinda help me over a little ford, or you can go see Tom Dawson,” Hood—“That would be like speaking hump.” He couldn’t quite bring himself the Assistant U.S. Attorney. Balducci, a to Mr. Scruggs himself ”—and finally to ask for money until, in a conversation former public defender, knew that “Ox- he decided to go to Assistant U.S. three days later, he said, “To get, to get ford” meant the detention center. He Attorney John Hailman, in Oxford, me over a hump, I need forty.” said he would see Tom Dawson. an old friend nearing retirement, who Lackey says that he hoped Balducci The agents drove Balducci to the urged Lackey to play it out with Bal- would turn him down. “I just hoped Ethridge Professional Building, down ducci. Lackey agreed to have his tele- against hope that Tim would have said, the hill from the federal courthouse, in phone and office wired for recording. ‘Judge, you misunderstood me, and I’m Oxford, entering the building through a sorry, I didn’t mean to indicate that, and basement door so that they wouldn’t be n May 4th, Balducci faxed Lackey I was just wrong. You forget that, and seen. They escorted him to an interro- a proposed order that would have I’ll go my merry way, and you have a gation room, where Dawson waited. sentO the Jones case to arbitration. By this good day,’ or something like that.” Balducci was told that his life as he knew point, the Scruggs side would have been Balducci replied, “Forty? O.K.” it was over. “The only question is, will happy to have an arbitrator dispose of Balducci was now involved in a brib- you see your children graduate from the Jones matter, an option that Jones ery attempt, and what he did next drew high school?’’ Dawson said. Balducci says he requested more than twenty the Scruggs firm into the crime. He de- did not hesitate. “What do you want me times before he filed suit. On May 21st, cided to pay Lackey out of his firm’s to do?” Lackey telephoned Balducci and said “slush fund” (as Balducci termed it), but Dawson asked Balducci if he would that he needed reassurance: “I just want he needed assurance that he and Pat- wear a body wire, and go back into the to hear you say it again, I guess. You terson would be repaid. Balducci says Scruggs firm. Balducci agreed. and Scruggs only one know anything that he received that assurance from The ruse was that Lackey had re- about this?” Sid Backstrom, at the Scruggs firm. written the arbitration order, and that “Absolutely, Judge,” Balducci replied. (Backstrom denies this.) But Patterson Balducci wanted to have the Scruggs “Absolutely. There is nobody in this wanted to be certain. He believed he team read it before the Judge entered it. world, ain’t but three folks in this world knew how things really worked with Less than three hours after being con- that know that I’ve even seen you. And Scruggs, so, he says, he got in touch fronted by the F.B.I., Balducci climbed it’s me and you and him. And that’s it.” the steps to the Scruggs office, where Balducci went on to say that he didn’t he proceeded to give what one defense- want the Judge to do anything that made team member conceded was “a daz- him uncomfortable. zling performance.” Lackey asked whether Scruggs could Balducci saw Dickie Scruggs almost be trusted. If he played along, Lackey as soon as he arrived, but Scruggs apolo- wondered, might Scruggs try to hold it gized and said he had to take a call. Bal- over him somehow? “He ain’t that ducci spent most of the next hour josh- way,” Balducci responded. ing with the firm’s secretaries, talking

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TNY—2008_05_19—PAGE 56—133SC.—LIVE spot ART R 17397F, PLEASE INSPECT AND REPORT ON QUALITY about the L.S.U.-Alabama game that weekend, and going over changes in the proposed order with Backstrom and Zach Scruggs. “Get it how you want it,” Balducci said, “ ’cause we’re paying for it to get it done right.” Finally, Dickie appeared, and, after apologizing again, he brought Balducci into his office. Scruggs was excited about some satellite photographs he had of damaged homes on the coast— additional evidence, he was certain, of insurance-company liability. Balducci explained that he had a new order from Lackey, and that he wanted Scruggs to approve it. Scruggs looked it over. “That last sentence is not really a sen- tence,” he said. “I think he needs a colon there.” Balducci then posed the question that would decide Scruggs’s fate. The Judge was feeling “a little more exposed on the facts,” Balducci said. Would “Why, Jimmy! Just what I wanted! Grand Theft Auto Number Four!” Scruggs be willing to pay “ ’bout ten or so more?” Scruggs’s secretary interrupted the •• conversation, to say that the governor of Delaware, Ruth Ann Minner, was on grounded, and his request was granted. Lackey—and, when Biggers asked the line. This became a minor issue a few days Scruggs if he agreed with the prosecu- Scruggs said he would call her back. later, when the Scruggs legal team, led by tor’s account, Scruggs seemed eager to “That’s fund-raisin’, it sounds like,” John Keker, of San Francisco, pleaded ofer a dissent. “I joined the conspiracy Balducci said. with the court for permission to use the later in the game,” Scruggs said. “It’s “Shit,” Scruggs remarked. “Don’t plane; the magistrate judge, S. Allan Al- not exactly as the prosecutor allocuted, know who that is.” exander, a former partner of Grady Tol- in that there was no intent to bribe the The two men returned to the criti- lison’s, denied the request, issuing an judge; it was an intent to earwig the cal question: “Do you want me to cover order that included a recitation of com- judge, Judge Lackey.” that, or not?” Balducci asked. mercial-airline fares between San Fran- Scruggs had to be prompted by his “I’ll take care of it,” Scruggs said. cisco and Memphis, seventy-five miles lawyer. “But then later—what about from Oxford. later?” Keker said. “You got to say some- n November 27th, Balducci told his It was clear to the Scruggs team that thing about later.” story to the federal grand jury in Balducci, who was arraigned separately, “I did join the conspiracy after that,” Oxford.O As that secret proceeding un- had become a government witness. Scruggs said. Backstrom pleaded to folded, two of Grady Tollison’s office Patterson made a plea bargain with the the same count. (The following week, workers stepped out to the balcony government, leaving only the Scruggs Zach Scruggs entered a plea of guilty for a smoke, and noticed men wear- men and Backstrom as defendants. to the lesser offense of misprision of a ing jackets and ties going in and out of On Friday, March 14th—just two felony.) the Scruggs firm, carrying boxes. It was weeks before the scheduled start of Upon leaving the courtroom, Dickie an F.B.I. raid. The following day, the the trial—Scruggs arrived at the fed- Scruggs began to prepare for his sen- grand jury reported its indictment of eral courthouse with Diane and his tencing, which is likely to take place Dickie and Zach Scruggs, their partner, lawyer, Keker. Diane wept. Scruggs next month. He had his plane flown Sid Backstrom, Steve Patterson, and worked the room, greeting friends and to Houston, where it was put up for sale. Tim Balducci. That afternoon, Scruggs colleagues, but the months after the in- The Scruggs Law Firm was closed, and surrendered to the U.S. Marshals office, dictment seemed to have diminished the big block lettering was taken down and was fingerprinted, and later ar- him, to a slight, almost wispy presence. from the building on the square, leav- raigned. (He pleaded not guilty.) Tom Then Judge Neal Biggers entered, and ing only the faint imprint of the firm’s Dawson had to recommend a bond, and announced that a plea deal had been name, traced by the sun, on the façade. was stumped—how do you set a bond made. Dawson read the charge that Scruggs also wrote a letter to Chancel- amount for someone as rich as Scruggs? Scruggs agreed to plead guilty on— lor Khayat, asking that his name be He decided to ask to have Scruggs’s jet one count of conspiracy to bribe Judge removed from Scruggs Hall. 

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