Forecast gloomy for rainmaker Scruggs

Victoria Johnson Hoggatt Feb. 21, 2008, 12:42pm




OXFORD, Miss. - With overcast skies outside, the prospects of legal superstar-turned-criminal-defendant Richard "Dickie" Scruggs did not appear too sunny either inside a federal courthouse Wednesday.

U.S. District Judge for the Northern District of Mississippi Senior Judge Neal Biggers heard motions tendered on behalf of Scruggs and his two remaining co-defendants, son Zach and law partner Sidney Backstrom, as their prosecution for allegedly bribing Lafayette County Circuit Judge Henry Lackey moved grimly and inexorably forward.

The three are alleged to have offered Lackey $40,000 in exchange for a favorable ruling in a $26.5 million attorneys fees dispute stemming from Hurricane Katrina litigation.

In motions to exclude wiretap evidence and quash the indictment, San Francisco attorney John Keker portrayed Scruggs as the victim of a "created" crime and that federal agents ignored evidence that would exonerate Scruggs.

The dry and delicate dance between defense counsel and the government did expertly succeed in Keker's quest to obtain additional grand jury evidence from the government, and gave the defense a chance to elicit testimony from FBI Special Agent William Delaney, who directed the investigation, and from penitent and disgraced attorney Tim Balducci, so that nothing new happens at trial.

Wednesday's most riveting live testimony was by Balducci, a named co-conspirator who has pleaded guilty to judicial bribery. He was making his first public appearance since agreeing to serve as the Government's witness against his former associate in exchange for leniency.

Balducci, believed to be in protective custody, appeared at the request Keker.

In hearings on the defense's motions, Balducci was vehement in his assertions that he and former Hinds County prosecutor Ed Peters bribed Hinds County Judge Bobby Delaughter on behalf of Scruggs in a lawsuit against Scruggs. He was being sued by his former partners in mass tort asbestos litigation.

Balducci alleges that Delaughter was bribed for a favorable outcome in Scruggs' fight over the mass tort money, by a promise that Scruggs's brother-in-law, former Sen. Trent Lott, would nominate the state judge for a federal judgeship.

Balducci said that three different federal judgeships were open during the time period, and that he Peters secretly wrote the drafts for Judge Delaughter's orders in the case, which settled in 2006.

Having initially denied any culpability, things aren't looking too sunny for Delaughter, either, who is no longer talking.

Federal agents are now investigating whether the alleged promises of assistance to Delaughter was a factor in the remarkable disparity in results in the two lawsuits brought by Scruggs' former partners over their asbestos litigation legal fees.

Asbestos litigation brought by Scruggs and then law partners that began in the mid-1980s proved hugely successful, and then the squabbles began over legal fees. In a case not heard before Delaughter, Scruggs was ordered to pay approximately $17 million in unpaid fees, interest, and damages to Alwyn Luckey.

In the litigation brought by William Robert Wilson, Jr., that was presided over by Delaughter, an expert recommended the court rule that Scruggs owed $15 million.

Delaughter found in his August 2006 ruling that the Scruggs partner was owed only legal fees of $1.5 million. Delaughter was not given a federal judgeship, either.

Lott, a former Senate Majority Leader unexpectedly resigned shortly before Scruggs' judicial bribery indictments were made public.

Saying health concerns did not affect his resignation, Sen. Lott told reporters that the move was to spend more time with family and pursue other job opportunities in the private sector, possibly teaching

Balducci previously surrendered his license to practice law, as did Joey Langston, who has pleaded guilty in the Delaughter case.

Former state Auditor Steven Patterson, a former member of Balducci's firm (though he is not a lawyer) has also pleaded guilty to conspiracy to commit bribery of an elected official, leaving Scruggs and the two others as the only remaining government targets.

Scruggs federal indictment by a grand jury Nov. 28 shocked the legal community, especially in the state of Mississippi. Scruggs has become widely regarded as a national legal wunderkind after winning a $246 billion settlement from the tobacco industry on behalf of 46 states and six territories.

Scruggs, Backstrom, and Zach Scruggs are scheduled to stand trial March 31. The hearing continued Thursday.

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