folo

The Daily Journal reports that Sid Backstrom wants to be punished on the basis of his financial benefit and participation in the Lackey bribery case, rather than how the prosecution thinks he should be.

In a 16-page objection, Backstrom’s attorneys say the government is wrong to claim:

- Backstrom supervised or had control over co-defendants, former New Albany attorney Timothy Balducci and former state Auditor Steven Patterson.

- The “benefit” of the bribe is about $5.3 million – “benefit” being what the co-defendants would have gained with a successful bribe of Circuit Judge Henry Lackey of Calhoun City.

- Backstrom was more than a “roll up the sleeves worker” for Scruggs, a leader in the conspiracy and that he drafted an e-mail order for Balducci to give to Lackey.

The short AP report adds, “Backstrom claims he merely answered to Scruggs and performed tasks at the direction of Balducci.” (And the C-L’s version, linked here, reruns that photo of the careworn look on Sid’s face the day he pled.)

Now Dickie being Dickie, the immediate question that pops into my mind is whether Sid would have seen a whole $5 of the eventual haul, had not a certain wiretapping taken place . . .

Thanks to It’s All Good for the heads-up.

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After some jostling and status conferencing, the court ordered that both parties produce a witness list by June 9th, and that there would be a hearing on this motion on June 19th (is there a Folo-er who can be the fly-on-the-wall at that hearing? Surely someone would like to be in New Orleans that day). The court’s order requiring witness disclosures also required that the parties describe what the witnesses were going to say.

The government is still holding their cards. Possibly in an attempt to keep this week’s drama at high level of intensity, Perdigao filed his witness list on Wednesday, the day after he filed a civil suit that prompted this series of posts and that will be the subject of the fourth in this series.

Before going into the details, I’ll recap a bit. Perdigao was a partner at the Adams and Reese law firm. While there, he represented an individual named Guidry who turned state’s-evidence to testify against Edwin Edwards in the bribery case in which he was convicted. Guidry was the government’s primary witness (and the briber in the bribery scheme). Perdigao now asserts that he was involved in helping Guidry through that process, with assistance that included setting up off-shore places to hide assets. Perdigao also claims to have observed Guidry’s involvement in other criminal activity, such as bribing Congressman William Jefferson to influence the U.S. Attorney to minimize Guidry’s jail time.

Recall that Jefferson is the guy was storing thousands of dollars (now alleged to be bribe money) in a home freezer.

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New Yorker writer Peter Boyer has an article in the May 9th issue titled “The Bribe.” It’s not among the New Yorker’s online offerings, so y’all will have to wait for the US Mails for me to post an account. The WSJ law blog describes some of the piece:

The New Yorker on the Mississippian: The New Yorker magazine today has a ginormous feature on Scruggs. For Scruggs hounds (like us) who’ve been following the saga all along, reading time is best spent on the last few pages. The reporter, Peter Boyer, turned up some nice details about how the bribe went down. The infamous Timothy Balducci didn’t set out to bribe Judge Lackey, though he eventually did, Boyer writes. And even P.L. Blake made a cameo in the whole affair. Our favorite details: When the feds nabbed Balducci and tried to enlist him in nailing Scruggs, AUSA Tom Dawson told him, " "The only question is, will you see your children graduate from high school.’ Balducci did not hesitate. "What do you want me to do.’ " Balducci then went on to give a "dazzling performance, " according to a defense team member, in getting Scruggs to make the ultimate incriminating statements, on the government’s wire.

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That meeting between Jim Hood and Patterson and Balducci keeps coming up, most recently in an interview by Anita Lee of Attorney General Hood in the Sun Herald last Friday. In comments, ThirdSouth asked whether Hood’s current account is consistent with his Natchez testimony. Going back through it all, I’ve learned some things from the various accounts of the meeting, but there are still a lot of loose ends.

Here’s what I’ve learned. If the AP story is right, the meeting happened in late December 2006 and not early January 2007. And, at that time, according to Anita Lee’s story, Langston did not yet know Balducci was leaving. One interesting sidelight is that, in the Anita Lee story, Hood really does link the settlement with State Farm and the grand jury proceeding. The linkage that his side previously tried to pretend away seems to me explicit in this interview.

Next, in the two interviews, Hood openly acknowledges talking to both about the State Farm cases, and says that he thought they were fishing for information about them. In the testimony in the hearing in Natchez, Hood ducks and weaves and then says: “I remember having dinner on one occasion with Mr. Balducci and Mr. Patterson, but that conversation was about they were leaving the firm that they were presently — that Mr. Balducci was presently with. They didn’t convey any threats to me about settling the case or anything like that.”

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Here’s the whole story, from Alyssa Schnugg at the Oxford Eagle. A link to the site will come later:

Assistant DA says Lackey’s testimony was true

Hood denies Scruggs threatened to fund opponent

By Alyssa SchnuggStaff Writer

What would a good legal thriller be without some "he-said-she-said " to throw into the mix of intrigue, corruption and accusations?

But in the infamous judicial bribery case involving Richard "Dickie " Scruggs and four others, there appears to be a case of "he-said-he-said-he-said. "

On Tuesday, Circuit Court Judge Henry Lackey testified during a civil lawsuit hearing against Scruggs that Assistant District Attorney Lon Stallings told him in March 2007 that Attorney General Jim Hood told him that Scruggs, through former Attorney General Mike Moore, had promised him if he did not go along with the settlement in a legal dispute between State Farm Fire & Casualty Co. and Scruggs over the insurer’s handling of homeowner’s claims, that Scruggs and Moore would find a candidate who would run against him.

Hood has denied Moore ever made such a threat to him.

"No, Mike Moore never approached me with such a message, " Hood said Wednesday in an e-mail to The EAGLE. "Judge Lackey was right to turn the case over to the federal government which has the wiretap authority that the state lacks. "

Lackey’s testimony Tuesday came during a civil hearing for a lawsuit filed by a Jackson law firm, Jones, Funerburg, Sessums, Peterson and Lee. The lawsuit alleged Scruggs and the others conspired to "freeze out " the Jones firm and offered it a "ridiculously low figure " for its work on Katrina cases. The firm claims Scruggs is withholding money the firm is owed for working on Hurricane Katrina insurance-related litigation. It’s the same case in which Scruggs pleaded guilty to conspiring to bribe Lackey for a favorable ruling.

Scruggs, his son, Zach Scruggs, law partner Sidney Backstrom, former New Albany attorney Timothy Balducci and former state auditor Steven Patterson were indicted in November and have pleaded guilty to charges related to the federal bribery investigation. They are awaiting sentencing.

Circuit Court Judge William Coleman ruled in favor of the Jones’ firm Wednesday. A hearing is set Nov. 12 to decide how much Jones will be paid by the members of the former Scruggs Katrina Group.

Threats denied

Moore said that recently published reports claiming that Stallings had text messaged him to assure Moore that Lackey’s comments about his threatening Hood’s position were untrue. Moore said the text message he received earlier this week came from his associate, Lee Martin.

Moore also denied threatening Hood in any way.

"Never happened, " he said this morning. "First off, I wouldn’t threaten someone to run against (Hood). I’m the one who got him to run to begin with. He’s been my friend a long time. When his second campaign came around, we helped run his campaign … If anyone is trying to do anything negative against (Hood), they’re gonna be on the other side of me. I’m on Jim’s side. "

Moore, who is representing Zach Scruggs in the bribery case, said he worked as an unpaid "facilitator between all the parties " in the legal battles that followed Hurricane Katrina, which hit the coast in August 2005. Moore said he did advise Hood, but never pressured him to do anything on behalf on Scruggs.

"As far as what Judge Lackey said, the information is wrong, " Moore said. "Maybe he’s confused. Maybe someone else is doing that stuff. Maybe Steven Patterson. I prosecuted and removed (Patterson) from office. He doesn’t like me much. Whatever those boys are saying, they aren’t talking to me about it. "

Patterson was removed as state auditor after admitting to filing papers to avoid paying car taxes.

Backing Lackey

For his part, Stallings — upset about media reports claiming he made the story up and that he sent a text message to Moore on Tuesday during the hearing saying he never made that comment to Lackey — told The EAGLE Wednesday he was "really hurt " reading the statements in the newspapers.

"I grew up in Calhoun City and have known Lackey since I was a child, " Stallings said. "The last thing I’d want people in Calhoun to think is that I would have done that or said that about Judge Lackey. He told the truth. A few details got confused, but the thrust of his testimony was correct. "

Stallings said Lackey had come to him in March, shortly after being approached by Balducci who appeared to be trying to corruptly influencing Lackey by asking him to side with Scruggs in the Jones v. Scruggs lawsuit and offered Lackey a position in his law firm after Lackey retired.

"(Lackey) was upset about it and asked me why someone would think he’d do something like that, " Stallings said. "He suspected Scruggs was behind it … I told him we had an investigator that we’ve used in voter fraud cases that would wire up and send in there. "

Stallings said Lackey didn’t trust the Attorney General’s office to investigate the case since Hood, Moore and Scruggs were friend.

"I told Judge Lackey that I didn’t think Jim (Hood) was as close to Mike (Moore) anymore, " Stallings said. "I told him that to my recollection what (Hood) told me, and that was Mike (Moore) had told him that Dickie threatened to get him an opponent to run against him if he didn’t settle the case. "

Lackey later decided to go the U.S. Attorney’s Office and report the incident.

Friendships may end

Stallings said Hood called him Wednesday, after hearing about Lackey’s testimony.

"I think Jim remembers it differently, " Stallings said. "I consider Judge Lackey, Mike and Jim friends. All of this could end some friendships. "

Hood, a Democrat and former district attorney, was elected to his second term last year. Scruggs was one of his biggest campaign contributors.

Moore, a popular Democrat who served four terms as attorney general before going back to private practice, had a close relationship with Hood and Scruggs.

Scruggs, the brother-in-law of former U.S. Sen. Trent Lott, was one of the most prominent lawyers in the country. Moore, acting as attorney general in the 1990s, hand-picked Scruggs to lead the legal assault on tobacco companies that resulted in multi-billion dollar payout.

This is not the first time allegations have surfaced that Scruggs sent messengers to tell Hood how to handle cases against State Farm.

An FBI report made public in February said Scruggs paid $500,000 to two men now entangled in the bribery investigation — Balducci and Patterson — to persuade Hood not to file criminal charges against State Farm.

Scruggs, who was suing State Farm on behalf of storm victims, was afraid that the insurer "was not going to settle the civil cases " if the attorney general’s office filed criminal charges, according to the FBI report based on Balducci’s statements.

Hood has acknowledged meeting with Patterson and Balducci around Christmas 2006, but said he was not influenced by them.

Meanwhile, the sign on the Scruggs Law Firm door on the Square has been taken down. A receptionist answering the phone said the firm was "apparently not closed " since someone was still answering the phone. However the receptionist referred any questions to John Keker in California who is representing Scruggs in the criminal procedure. Keker decline to comment about the status of the law firm.

(The Associated Press contributed to this report.)

–alyssa@oxfordeagle.com
Alyssa Schnugg

Staff Writer

Oxford Eagle

662-234-4331 Ext. 245

 

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Observation: the comments on Folo are worth reading.

Yesterday, Judge Lackey testified that he did not go to Atty Gen. Jim Hood with the bribery case because assistant district attorney Lon Stallings recommended against it. The implication was it was not safe because of the pressure Hood was under from Scruggs. Stallings told Lackey that Mike Moore had carried a warning to Hood that he should cooperate with Scruggs about the Katrina cases.

In the Daily Journal today, Patsy Brumfeld had a courtroom interview with Mike Moore, who accused Judge Lackey of fabrication (er, confusion) or lying, stating that Lon Stallings had sent him a text message denying Judge Lackey’s sworn testimony, and saying that Stallings had recommended Judge Lackey take the case to Jim Hood.

There was a fair amount of discussion about Stallings. I commented:

Lon is probably pretty torqued by the situation this puts him in between the head law enforcement officer in the state and one of the three judges he appears before, with both being from almost the same place Lon is from.

Oxford’s intrepid reporter Alyssa Shnugg aparently had a talk with Lon Stallings this afternoon, and it will be in the Oxford Eagle tomorrow. And this is what she has said:

Anyway, the long and short is, I talked to Lon. He said Lackey was truthful, although a few details were off and that he NEVER text Moore and doesn’t even know how to text message and was very hurt reading the reports this morning. He was very open and said friendships will be broken over all this.

I will have it done in the AM and will send it over as soon as it goes to press.

Everybody needs to watch the Eagle tomorrow for the next big scoop here…

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Anita Lee reports:

Attorneys are discussing what changes are needed to restore confidence in Mississippi’s legal system after five of their own pleaded guilty in a judicial bribery case and a federal judge on the Coast cited several law firms for breaching legal ethics in Katrina insurance cases.

“I can’t imagine anything worse than attempting to bribe a judge,” said Gulfport attorney Donald Dornan, who spoke as a private attorney and serves on a task force the Mississippi Bar recently appointed to improve public confidence in the legal system. “It’s as bad as it gets. We should not sugarcoat it. We should not try to rationalize it or justify it. It is bad.”

He added, “I think when the public sees that we’re cleaning up our own house, that will restore some measure of public confidence.”

The task force members have agreed to speak publicly about their findings through the report they hope to issue by early fall.

I didn’t know until now that only three staff lawyers police the Mississippi Bar’s 6,700+ membership, but so Anita reports. She also quotes incoming president Rodger Wilder of Gulfport, “Some people would say, ‘You need to have appointed judges,’ ‘You need to have stronger campaign-finance laws.’ I think that’s something we need to study systematically and have some discussion as to what would be best.”

The story includes sidebars on the memberships of the Bar’s post-Scruggs task force and Committee on Professional Responsibility, as well as a link to Judge Senter’s order disqualifying the SKG-KLG crowd in McIntosh.

Comments, Peanut Gallery?

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Anita Lee reports (h/t partial coastal):

Attorney Zach Scruggs apologized to the state Supreme Court and to his fellow attorneys and Mississippians for his role in a judicial bribery case, saying an earlier objection to disbarment was meant to give him time to straighten out his clients’ affairs.

“If I were Zach Scruggs and I was hoping for probation, I would sure try to be contrite,” said Matthew Steffey, a Mississippi College law professor who found Scruggs’ initial objection counterproductive in light of his upcoming sentencing in the criminal case.

In a document filed Wednesday with the court Scruggs said he will not fight suspension, but still sees merit in his request that the court dismiss disbarment proceedings against him. He and his father, attorney Dickie Scruggs, are arguing the Mississippi Bar prematurely requested their disbarment after they pleaded guilty in the judicial bribery case. …

Zach Scruggs’ attorney, the bar’s former general counsel Michael Martz, said in the document filed Wednesday his client “is truly and humbly sorry for his actions.”

He further said Zach Scruggs, 33, “takes full responsibility for his acts and is prepared to accept the full consequences from all of the courts involved and the Mississippi Bar.”

Okay, foloers, ya buying? Boy just hadda straighten out his clients’ affairs, right? Right?

UPDATE: And from the DJournal, one for our “Just to be gooood ‘n’ suuuuure” file:

OXFORD – Lawyers would say it was moot, but disbarred attorney Joey Langston of Booneville has 30 days to show why he shouldn’t be disbarred by the U.S. District Court of Northern Mississippi.

According to records filed Wednesday with the Oxford court, Chief Judge Michael P. Mills informed Langston the federal court will consider doing the same thing that the Mississippi Supreme Court did March 20 – disbar him, which means he will lose his privileges to practice law there. …

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Do you folks remember Sink the Bismarck (or the story it’s based on)? It’s about the pursuit and sinking of the German battleship Bismarck during WWII. There’s this moment when they finally know where the Bismarck is. Royal Navy planes come down and drop torpedo bombs and disable the rudders on the ship. It’s just sitting there at this point– can’t maneuver, can’t bring its guns around. A Brittish destroyer goes in and sends in torpedoes and down goes the Bismarck.

And, I might note, as anyone who say Titanic knows, when a ship that big goes down, anything nearby gets sucked into the vortex and goes down with it.

It seems to me that the remnants of Scruggs and lawyers who worked with him are having one of those days.

And State Farm didn’t send in just a destroyer for the kill here — it sent in a whole aircraft carrier group.

Today, State Farm’s lawyers at Butler, Snow let loose their barrage in the Rigsby sisters’ qui tam lawsuit. This is the action where the Rigsbys say that the federal government was defrauded by the handling of the flood insurance claims. Scruggs along with Todd Graves and others from Kansas City are handling this case (that would be the same Todd Graves-and-others who represented Zach Scruggs in the bribery case in North Mississippi). Judge Senter is the judge.

So up to this point you have had these events:

• Judge Coleman (in Jones, Funderburg v. Scruggs) rules that all the Scruggs Katrina Group joint venturers are liable for sanctions for Dickie’s entry into a conspiracy to bribe Judge Lackey.
• Cornered by State Farm in an injunction hearing that’s going really sour, erstwhile SKG ally Jim Hood cries uncle and cuts a secret deal that almost assuredly lets State Farm permanently off the hook for state charges in handling Katrina claims.
• Co-venturers Dickie Scruggs and Sid Backstrom plead guilty to conspiracy to bribe Judge Lackey and co-venturer Zach Scruggs pleads guilty to not disclosing a felony relating to that.
• Judge Senter (yes, the same one) rules in McIntosh v. State Farm last Friday that the cash payments to the Rigsby sisters are improper and, without even getting into the document theft, he’s going to disqualify Scruggs and everyone connected to him for participating in a joint venture that bribed witnesses. It’s interesting to note that Mike Moore did not hang around waiting for this to happen — he bailed as these motions were being filed in January.

The only torpedo that seems to have missed the battleship was the contempt proceeding in Alabama, which died a quiet death recently when the time for appeal ran on its dismissal in late February.

So did State Farm just file an answer? Not quite. Today, they unleashed a barrage — (more…)

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Updated as noted below. Updated entries have bold-faced dates.

Yesterday, as I was trying to sort out why Judge Senter chose to disqualify the Katrina Group lawyers at this point, I started putting together a chronology of events related to disqualification, setting them in a timeline with events in various State Farm cases (Shows, McIntosh, State Farm v Hood, Renfroe & Co. v. Rigsby, the bribery attempt and others).

These cases center around pursuit of State Farm over Katrina insurance claims and various fall-out from that. I’ll provide a small cast of characters here, all familiar to regular Folo-ers. The Rigsbys are sisters who had been working for E.A. Renfroe & Co., adjusting claims for State Farm from Katrina losses. Sometime in the Dec. 2005-Jan. 2006 time-frame, they took thousands of pages of documents relating to adjusting those claims and gave them to Dickie Scruggs, who intended to use them as evidence of State Farm fraud in adjusting claims. Dickie Scruggs was working with a group of law firms called the Scruggs Katrina Group in pursuing State Farm. At the same time, Mississippi attorney general Jim Hood had a civil case against State Farm and other insurers about the Katrina claims and was starting up a criminal grand jury investigation against State Farm.

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