folo

This draft post I did in late April of ‘08 might as well come out of the tank now . . . I haven’t tried it but am willing to bet the C-L link no longer works; that’s okay: looks like I probably quoted everything juicy.

With a h/t to emyMac, I can tell you that Jerry Mitchell of the Clarion-Ledger greeted the dawn with:

Federal prosecutors pointed Tuesday toward political operative P.L. Blake as a behind-the-scenes figure in Mississippi’s unfolding judicial bribery scandal.

Blake – who has not been indicted in the case – has emerged in court documents as the man who bizarrely earned $50 million from the state’s tobacco settlement by clipping newspapers and assessing political activity for the lawyer who championed that settlement, Dickie Scruggs.

The revelations came during Tuesday’s hearing in Oxford for former State Auditor Steve Patterson, who pleaded guilty to scheming with Scruggs to bribe Circuit Judge Henry Lackey to rule in Scruggs’ favor in a lawsuit against the wealthy trial lawyer. …

Mitchell notes that P.L. Blake has some history with bribery schemes, having pled no contest and forked over a $1.5 million fine in 1988 for offering bribes to Mississippi Bank officials to shine especially brightly ($21 million in about 40 loans and renewals) on him, his wife, and their companies — after which, the bank failed. Fred Thompson managed to keep him out of prison that time.

I believe we’ve seen this 1997 story (pdf) before, but it’s a good reminder (h/t JC) that Blake and Patterson — and trouble — go back a long way: Interestingly, Patterson worked at Mississippi Bank back back in the 70s. Even more interestingly, during the lead-up to his scandal-forced resignation as state auditor in the late 90s, the Clarion-Ledger found records of his calling Blake 73 times.

Their new joint-venture in trouble, said Assistant U.S. Attorney Bob Norman in court yesterday, involves a bribery scheme that

all started in March 2007 when those indicted “discussed ways and means of attempting to corruptly influence Circuit Judge Henry Lackey … Knowing that Timothy R. Balducci and Judge Lackey had been friends for many years, Richard ‘Dickie’ Scruggs asked Balducci to explore ways of corruptly influencing the judge.”

Norman said Balducci met with Lackey and told him he would consider it a “personal favor” if the judge ruled in Scruggs’ favor. Norman said Balducci also promised that when Lackey retired he could be paid for the use of his name on the Balducci law firm’s letterhead.

Norman said the judge “tested the co-conspirators’ intent by asking for $40,000 in cash in exchange for an order in favor of the Scruggs law firm.”

In a Sept. 28 telephone call secretly tape-recorded by the government, Patterson told Balducci his wife had just gotten off the phone with Blake, who had met with Scruggs, Norman said.

After talking to Blake, Patterson told Balducci that Blake “knows it’s going to be 40,” Norman said.

Picture Judge Lackey’s face as Balducci delivered his “personal favor” line.

Anyhow, Mitchell reports that on October 10 Patterson was on the phone to Balducci about when “that order” was going to be signed because “P.L. needed to know.” On October 16 (Mitchell says Balducci will testify), Dickie Scruggs told Balducci in a meeting with others, “I know you have talked to P.L., and I have talked to P.L. Everything’s fine. Y’all are going to be covered.”

Well … covered, definitely; fine, not so much. Speaking of covered, recall jim’s first contribution to folo, noting that the ‘06 Mississippi State alumni directory identifies P.L. as president of Dewitt Corporation. But emyMac, nosing about at FindLaw last night, found a 2001 Alabama Supreme Court case identifying someone else as Dewitt’s president. emyMac also recalls that the real first name of Scruggs Katrina Group partner “Sparky” Lovelace is Dewitt. Since mother’s-family-name-used-as-given-name is common among Southerners, that makes an interesting coincidence (and probably no more).

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The Eagle’s webmaster has finally put up the Friday edition. I was hoping for a look at Tim Balducci but instead we get this photo that makes me wonder about the barber schools in North Mississippi (if any). Anyhow, here you go . . .

Former Mississippi state auditor Steve Patterson (right) with attorney Hiram Eastland as he enters U.S. District Court for sentencing this morning. Patterson appeared light-hearted before being sentenced, asking the photographers taking his photo: “Where were you when I was running for office?” Photo by Bruce Newman.

2/13/09 – Last two judicial bribery defendants sentenced
Alyssa Schnugg
Staff Writer

The last two defendants in what’s been branded the Scruggs I judicial bribery case were sentenced to spend 24 months in federal prison for their roles in the scheme to bribe a circuit court judge.

Timothy Balducci and Steven Patterson both appeared before U.S. District Court Judge Neal B. Biggers this morning at the Federal Courthouse in Oxford.

Both men pleaded guilty a year ago to a charge of conspiring with Richard “Dickie” Scruggs, his son and attorney Zach Scruggs and his law partner Sidney Backstrom to bribe Circuit Court Judge Henry Lackey with $40,000 for a favorable ruling in a lawsuit against the elder Scruggs involving legal fees in Hurricane Katrina related litigation.

During Balducci’s sentencing hearing, U.S. Assistant Attorney Bob Norman told the judge that his department had never seen such “complete cooperation” from another defendant. He said Balducci’s help has opened the doors to other investigations of corruption and that the Scruggs case got as far as it did because of Balducci’s assistance.

“His cooperation was immediate,” Norman said. “He’s doing the best he knows how to do to right the wrong he has done.”

Biggers agreed but reminded Balducci he was the “bag man” in the case.

“You carried the money,” he said. “You talked the judge into going along with what you wanted to do.”

Balducci told Biggers and the court that he was “profoundly sorry” for what he had done.

“All I can do now is try to make things as rights as I can,” Balducci said.

Norman also reported that Patterson has cooperated with the government, albeit to a lesser degree than Balducci.

Patterson was called a “minor” participant in the case, although he received the same sentence as Balducci.

Before he was sentenced, Patterson said he was embarrassed and humiliated.

“If God gave me a choice to live carefree in paradise the rest of my life, or to choose to go back two years ago and change my actions, I would not hesitate to enlist to do the latter,” he told Biggers.

Both men will report to prison on March 25. The government asked for the later reporting dates because their testimony may be needed when the grand jury meets in the March.

The saga began on Nov. 27, 2007, when FBI agents raided Scruggs’ office on the Square. The next day, the five men were indicted.

On Dec. 5, 2007, the day of his arraignment, Balducci pleaded guilty to the bribery charge.

It was later learned that Balducci had been working with the government in building its case against Scruggs and the others.

But it was also Balducci who got the ball rolling. In trying to gain favor with Scruggs, during a meeting with the other defendants in March 2006, he told the famous trial attorney that he could use his friendship to corruptly influence the judge to find in favor of Scruggs in the lawsuit Jones v. Scruggs.

After Balducci approached Lackey and suggested that if Lackey would find in favor of Scruggs, he would give Lackey a place in his law firm after Lackey retired. Appalled, Lackey told the FBI about the conversation. For six months, Lackey allowed his office and telephone to be tapped. In September 2006, in another meeting with Balducci, the subject of money came up and Balducci offered Lackey $40,000. It was later discovered Scruggs was providing the funds.

Balducci was approached by the FBI in November 2007 and he began cooperating with the government and wore a wire tap himself on the day the money was given to Lackey.

Scruggs was sentenced in June to spend five years in a federal prison in Kentucky. His son is serving a 14-month sentence in Forrest City, Ark., and Backstrom is serving 28 months in Forrest City.

Earlier this week, Scruggs was sentenced to seven years in prison for his role in a bribery case involving Hinds Circuit Court Judge Bobby DeLaughter, which came to light during the Lackey case and through testimony of Balducci. The sentence will run concurrent with his original five-year sentence.

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Of all the defendants in this case, Steve Patterson delivered the most churlish statement, showing an unwillingness to recognize the degree to which he is the author of his own fate. If the government had not agreed that he is a minor participant in the crime, his statement at sentence could have been a problem for him.

He said that he’d been waiting over a year for this moment. “The contempt that I once had for this case I no longer have. I have had to endure whispers in the community… endure exaggerated and often wrong press coverage. I stand here today embarrassed, humiliated, and fearful. … I am an embarrassed man with much to be embarrassed about. [Here my notes don't sufficiently convey the degree to which his regret was in terms of his personal embarrassment and his perception that he's been treated unfairly by onlookers in the community and press.]

“If I had a choice to live in … paradise or go back and redo the mistakes and stupidity, I would redo what I did. I have had an opportunity to relive what I did and what I didn’t do and it’s what I didn’t do that bothers the most. In the end I did the right thing. I faced up to my responsibility fully and cooperated fully.”

He had a long rhyme from his Grandmother and a quote from Winston Churchill…

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At the end of Steve Patterson’s sentencing, when the issue of report date was about to come up, one of Patterson’s lawyers (Christi McCoy) stated that the prosecution had said that they would be needing Mr. Patterson’s testimony at the March grand jury. The judge noted that the prosecution could use hearsay testimony, which Mr. Norman acknowledged, but made clear he would like to have the live witness. There was an effort made to determine the date (March 23rd) and the court accommodated the request with a March 25th report date.

The issue was raised again in Balducci’s sentencing, and the same report date was set.

It seems that there are further investigations for which these two men are needed before the grand jury.

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Per a text message to YourLiesHaveLies (unconfirmed), Judge Neil Biggers has slapped former Mississippi state auditor Steve Patterson with two years in prison, three more on supervised release, for his role in Scruggs I.

UPDATE: Several hours later, no published report I’ve seen mentions anything but the two-year sentence and $150,000 fine for Patterson. So I assume the “three-year supervised release” part is erroneous.

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The sentencing is tomorrow before Judge Biggers for Tim Balducci and Steve Patterson. Both entered pleas to the same offense, with a max of 5 years and no agreement as to sentence. The sentence is totally up to the judge. The government agreed to move for downward departure with Balducci and to consider such a motion if Patterson substantially cooperated.

There is no question that Tim Balducci’s cooperation was critical to bringing in Scruggs. His cooperation was comparable to Langston’s in that respect, but it’s doubtful that Balducci had as much to tell as Langston. He came in first but was caught red-handed. Balducci is comparable to Langston in some ways, except that he does not have an agreement that sets a maximum (Langston did) and is not before Judge Mills.

There is no public evidence of meaningful cooperation by Patterson. He had already entered his plea during the Scruggs motions hearings, yet there was no hint of him as a potential witness, unlike Balducci and Langston.

I think the judge will view both as in this scheme up to their eyeballs; I cannot see them viewing Patterson as a fringe player to any great degree. I think I’m recalling Patterson saying he was a fringe player in a sentencing letter; if he takes that tack, it could have an adverse effect before Judge Biggers.

In Balducci’s plea agreement, the government acknowledged that he had already substantially cooperated within the meaning of Section 5K1.1 and that if he continues cooperating, the government agrees to file a motion for downward departure. (Note the comparison with Scruggs’s agreement to cooperate in the case this week, where it is in the government’s discretion whether they’d file one– they hadn’t agreed to file one).

The Balducci plea agreement provided: “There is no agreement as to the sentence to be imposed, which will be in the sole discretion of the Court subject to the Federal Sentencing Guidelines….”  Both parties reserved the right to speak at sentencing.

Patterson agreed to cooperate. The government agreed that if they determined that his cooperation reached the level of substantial assistance, the government would file for a downward departure. The sentence was in the sole discretion of the court.

Where does that leave all this? I think Patterson has to take a slightly worse hit than Balducci, particularly if there is no “invisible” cooperation. Patterson had a chance for well over a month to come in and didn’t, and then when he did, it didn’t matter much. The judge may not know the full details about that, but will have a sense of it. Once Balducci was tapped, he flipped 180 degrees and probably made a start to making this new case. So clearly, Balducci does better than Patterson. I don’t think the guidelines much matter here  (I haven’t got them with me, but this must guideline out about like Langston did, and that pointed toward a sentence at the max. I could be wrong about that).

So one question is whether it matters much to compare sentences between judges. Does the 3 years for Langston (which was partly the result of a binding plea at 36 months) matter in evaluating Balducci’s time? How does that compare to the 28 months for Backstrom (whose cooperation has been about as invisible/ineffective as Patterson’s– the judge essentially stated he’d not cooperated at sentencing– and who had a binding plea agreement that capped his time at 2 1/2 years)? How much less does Balducci get for flipping first? How much worse does he get for leading the charge in the effort to bribe Judge Lackey? I can’t see Balducci doing worse than Backstrom, but can’t see him being much better off than Langston.  Patterson should be at Langston or worse…

That all ends up too complicated for me to feel that I can make a good prediction. I really can’t see them getting the same as Scruggs, who got the max at 5. I’m going to say 1 1/2 (maybe 2?)  years for Balducci.  Three for Patterson, unless he’s done some cooperating that is invisible and hasn’t made public radar. I’d say 4 for Patterson, but I’m puzzling out the 28 months for Backstrom.

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Anita Lee writes:

To bribe Circuit Court Judge Bobby DeLaughter, Dickie Scruggs exploited two vulnerabilities, according to court records: DeLaughter’s close friendship to former Hinds County District Attorney Ed Peters and “his known ambition to become a federal judge.”

The Scruggs legal team’s strategy to bribe DeLaughter is outlined in court records filed with Scruggs’ guilty plea Wednesday in federal court to one count of mail fraud. Scruggs will serve seven years in prison. In exchange for the plea, U.S. Attorneys agreed not to indict Scruggs but have indicated others will be charged, partly due to his cooperation. …

Neither DeLaughter nor Lott’s name were mentioned in the court records. Neither has been charged with a crime and prosecutors indicated no further involvement by Lott, who joined Sen. Thad Cochran in recommending Sul Ozerdon for the judgeship.

Other members of Scruggs’ team in the fee dispute were New Albany attorney Tim Balducci and non-lawyer Steve Patterson, a former state auditor. The court records say it was Patterson who recommended the attorneys contact Peters to try and sway DeLaughter.

But read the eight-page Information-and-Factual-Basis for yourself, here.

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Our friend Paul Quinn’s piece in the C-L on the pre-sentencing letters for Tim Balducci and Steve Patterson is one you don’t want to miss — not only for the text, but also for the accompanying video of Paul’s interview with Judge Henry Lackey.

Judge Lackey has recused himself from the JPC’s investigation of Bobby DeLaughter, due to “my involvement in the beginning of the whole inquiry.” He believes “the perception would be that I could not be fair — and he’s entitled to a fair hearing. He surely is.”

The story proper makes riveting reading.

A sheriff, a mayor and a former homeless man are among more than two dozen people writing a federal judge seeking mercy when former state Auditor Steve Patterson and Timothy Balducci are sentenced next week in a judicial bribery scandal that brought down trial lawyer Dickie Scruggs.

Patterson himself wrote the judge along with his son, family, friends, insurance agents, a minister and a former law partner of both defendants.

The two people who wrote about Balducci asked that he get the harshest punishment possible. …

In his letter, Patterson quotes from the novel The Trial. But “unlike Kafka’s character, I do dwell on my own shortcomings and freely admit to my own effort to recover the money spent on this splendidly foolish endeavor. Because of my poor judgment, my wife, my two boys and mother have already been punished disproportionately and continue to suffer anxious days and sleepless nights for fear of a future without a husband, a father and a son. Their pain is pure torture to me.” …

Attorney Richard Babb, who wrote after being solicited by Patterson, said though he has forgiven Patterson, he felt like a victim in the fiasco. He had worked in the same firm with the men.

“I had left a secure job in Ripley for what I believed a better opportunity,” Babb of Tupelo wrote. “Thus, while the public has watched these events unfold with a sort of morbid, but detached, fascination, for me it was much more personal. In one fell swoop, I was thrown out of the job, lost a salary upon which I was totally dependent and lost my health insurance. … My personal conviction is that the better and higher road is to forgive.”

Patterson’s son, John Calvin Patterson, described how the indictment affected his father.

“During this time I have witnessed my father change physically. Because of the stress of this ordeal, his hair is now nearly all gray; and it pains me to no end to watch him shaking nervously as he attempts to eat.” …

More there. By comparison, Patsy Brumfield’s story in the DJournal pales, except for its first two sentences:

You would have thought disgraced and disbarred attorney Timothy Balducci could have gotten at least one sympathetic letter to U.S. District Senior Judge Neal Biggers Jr. before Balducci’s sentencing Feb. 13.

He didn’t.

Patsy does have another story, though, listing the letter-writers for Patterson and offering a number of excerpts.

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Kingfish at Jackson Jambalaya takes us back in two ways today– back to a post he did a year ago, and back to October of 2006, when Judge DeLaughter was running for reelection and reported a contribution of $2,500 from Steve Patterson. It’s the largest contribution on that linked campaign finance report.

Kingfish doesn’t note the timing– it was in October, just two months after DeLaughter had lowered the boom on the Wilson v. Scruggs plaintiffs, as a result of the scheme entered into between Patterson, Langston, Peters, Balducci, and Scruggs. Judge DeLaughter had completed demolishing Wilson’s case in August of 2006.

At this point, Patterson would have been just on the verge of setting up shop with Balducci in New Albany.

Department of odd ironies– the same day as Patterson’s contribution, DeLaughter got $1,000 from Johnny Jones’s firm. Jones had (I think?) been dropped as one of Scruggs’s lawyers in Wilson the end of the prior year.

Here’s Kingfish’s post.

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Well, as noted in the prior post, another shoe has dropped, only not quite where we expected it.

Roberts Wilson, victim of the Ed Peters/Joey Langston scheme in Wilson v. Scruggs before Judge DeLaughter, has sued Scruggs in a civil case in the federal court in Northern Mississippi. He’s also sued Peters, Steve Patterson, Tim Balducci, Zach Scruggs and a series of John Doe defendants.

The case has been assigned to Judge Biggers, who handled Scruggs I. I have to assume the plaintiffs lawyers will be pleased by this.

But more amazingly, his complaint names Judge DeLaughter and a “former United States Senator”– which can only be Senator Trent Lott– as participants in a conspiracy to defraud Wilson in the Wilson v. Scruggs case.

The complaint alleges that Scruggs’s law firm and the conspiracy were racketeering enterprises– essentially alleging that Judge DeLaughter and the unnamed senator were part of a racketeering organization.

To understand the suit, you have to understand the Wilson cases–his claim ended up being split between multiple courts. There was a claim before the state court (and Judge DeLaughter) for asbestos fees, and a claim before the federal court for constructive trust, that the non-paid asbestos fees were used by Scruggs to fund his tobacco litigation, and therefore Wilson was entitled to a share of the tobacco fees.

Since all of these cases are called Wilson v. Scruggs, as is the new one, it’s going to be hard to keep them all straight.

I suppose we are lucky that the other lawyer who sued Scruggs over asbestos fees was not named Wilson.

First interesting issue is that Zach is sued. When the facts in Wilson were to be 404b (other crime) evidence in Scruggs I, there was an argument made by Zach’s lawyers that the evidence should not come in or Zach should get severance because he had nothing to do with the bribe in that case. While the US Attorney seemed to accept that in responding, I noted at the time that he’d written Johnny Jones (one of his father’s lawyers) an email that they could win the case with a brief written on a napkin.

Second interesting thing is that Joey Langston is not sued. It was noted in the government’s 5K motion for Langston, I think, that Wilson had settled with Langston.

The complaint notes that Balducci resides in Monroe County (where I think his wife’s family lives).  The case is in federal court because of diversity jurisdiction (Roberts Wilson lives in Tuscaloosa).

Some nice language:

Wilson relied on the words, verbal and written, of the Hinds County Circuit Court to have been rendered by an officer sworn to impartiality and wholesomeness and not a corrupted, bribed individual. …

Wilson relied on the robe and seat behind the bench as a representation by the Hinds County Circuit Court that the judicial officer sitting there was impartial and not a corrupted, bribed individual…

It’s signed by Charles Merkel and includes as counsel Vicki Slater and Bill Kirksey, all lawyers who represented Wilson during the last stage of his case before DeLaughter.

Here ’tis.

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