Three On Your Side Investigates: Emerging Faces in Federal Bribery Cases - - Jackson, MS

Oxford 01/16/08

Three On Your Side Investigates: Emerging Faces in Federal Bribery Cases

By Marsha Thompson

Dickie Scruggs managed to delay the inevitable Wednesday as he appeared in federal court in Oxford. A flurry of new discovery motions were heard, and in the end the judge agreed to postpone the trial.

The multi-millionaire trial lawyer whose fortune was built on asbestos and tobacco lawsuits emerged from the courthouse with his California law team with little to say.

Defense attorneys say federal prosecutors used tainted evidence against Scruggs and maintain Scruggs was not aware that attorney Timothy Balducci had allegedly offered to bribe a circuit judge.

Scruggs, his son, and law partner Sidney Backstrom have pleaded not guilty to judicial bribery charges, but a house of cards is in the offing:

Balducci is the first to cop a guilty plea to conspiring to bribe a Lafayette County circuit court judge -- $40,000 allegedly in exchange for a ruling favorable for Scruggs. Scruggs reportedly stood to give up $26 million to other Katrina litigation lawyers.

Next Scruggs' former attorney, Joey Langston -- whose law office was raided by the FBI -- flips. He pleads to federal charges, admitting conspiracy to influence a judge in a separate scheme.

On Tuesday former state auditor Steve Patterson cops a guilty plea, cooperating with federal investigators while admitting he was a "co-conspirator" in connection with the Judge Lackey bribe. In Patterson's words, "The cat was out of the bag."

Another connection: Court papers indicate Langston and Patterson allegedly tired to influence a different state judge in a 1994 case. Scruggs stood to lose millions in asbestos litigation money. You may recall Balducci's infamous words during a taped conversation with Judge Lackey: "Over the last five or six years there are bodies buried that (Scruggs) and I know where they are."

Langston admits to federal investigators between 2006 and July 2007 he, Patterson and former Hinds County district attorney Ed Peters allegedly split $3 million to sway Hinds County Circuit Judge Bobby DeLaughter. Langston was after a favorable ruling for Scruggs -- $15 million reportedly on the line.

In 2005, a federal judge ruled one lawyer in the asbestos attorneys' fee battle with Scruggs was due more than $17 million. About a year after that, Judge DeLaughter ruled the other law partner was due no more than the $1.5 million Scruggs already had paid him.

Patterson, Scruggs, Peters and DeLaughter are not charged in this emerging federal case.

Court documents reveal a new behind-the-scenes player with a troubled past. We dug up archive files from 1988. The Clarion-Ledger headline: "Greenwood man must pay $1.5 million to FDIC." That man is P.L. Blake. The federal charges were conspiracy to induce Mississippi Bank officers to take $500,000 in bribe money. In return, Blake got some $21 million in preferential loans. He also got off with three years probation and a $5,000 fine.

Fast forward to 2008. Blake's name surfaces in federal court in Oxford again Tuesday. He is allegedly one of the participants in on Judge Lackey's judicial bribe case. He is not indicted, but is reportedly well-connected to Scruggs.

Court documents reveal Blake allegedly received $50 million from the massive tobacco settlement. His job reportedly was clipping newspaper articles and monitoring political activity for Scruggs. 

Blake's is another face in a complex web of scandal linking some of Mississippi's most powerful and politically connected players.

Scruggs' trial is now set for March 31. The court papers unsealed Wednesday indicate that Scruggs plans to blame Balducci and the judge for attempting to link him to wrongdoing.

Scruggs' attorneys argue that Lackey, who reported the bribery overture to authorities and cooperated with investigators, "created the alleged crime by suggesting, urging and constructing a bribe." 

To support their argument, Scruggs' lawyers cite several passages from a series of conversations between Balducci and Lackey that investigators taped without Balducci's knowledge. 

In the court papers, defense attorneys say Balducci "specifically distances Scruggs from the process" when he delivered $20,000 in cash to Lackey on September 17, 2007.  Later, according to Scruggs' lawyers, Balducci tells Lackey that Scruggs is "not involved in a direct manner, doesn't want to be, doesn't need to be. You take comfort in knowing this is between you and me."

Defense lawyers say prosecutors didn't mention those exchanges when they asked for permission to wiretap phones usedd by Balducci and Patterson.

During the hearing, Scruggs' attorney John Keker didn't mention any plans to seek a dismissal of the charges against Scruggs, Scruggs' son and law partner Zach, and Scruggs associate Sidney Backstrom, who is also a lawyer.

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