A year later, Scruggs singing instead of fighting

Victoria Johnson Hoggatt Feb. 17, 2009, 3:00pm


ABERDEEN, Miss. (Legal Newsline) - Famous federal prisoner Richard "Dickie" Scruggs was expected to enter a second guilty plea related to a second Mississippi judicial bribery scheme on Feb. 10, and he did, in a dark suit and leg irons.

The stark image of Scruggs in an orange prison jumpsuit, handcuffed and shackled as he left the federal courthouse in Aberdeen was a contrast of shocking proportions. The "Scruggs I" guilty plea hearing about 11 months earlier was attended by Scruggs' private jet pilot.

Now he's traveling via the U.S. Marshals' service.

Once one of the wealthiest and most prominent mass tort lawyers in America, Scruggs pleaded guilty to use of the mails to further a scheme "to deprive the citizens of Mississippi of the honest services of a circuit judge."

That judge was Hinds County Circuit Judge Bobby DeLaughter, who was arraigned in the conspiracy Thursday, and pleaded not guilty to five counts.

The main currency of value to Scruggs in his immediate predicament, that of a 62-year-old man facing seven more years without parole, is knowledge of his own criminal acts and those of others, and his new-found willingness to testify.

U.S. District Judge Glen Davidson made it clear on the record that testimony by Scruggs against co-conspirators makes a difference. The maximum for the one-count offense to which Scruggs pleaded guilty was a 20-year sentence and a $250,000 fine.

Instead, a seven-year sentence adds 2 1/2 years to the five he was currently serving.

U.S. Attorney Jim Greenlee said that Scruggs was now cooperating with the government, a change from last year when he fought charges for several months.

Indicted in late Nov. 2007 on charges that he offered Lafayette County Circuit Court Judge Henry Lackey $50,000 in exchange for a ruling that would have sent a dispute with a business partner to arbitration, Scruggs and his legal team, led by San Francisco's John Keker, fought back for months.

It wasn't until March, when electronic information from evidence seized from his downtown Oxford office during an FBI raid was finally returned, did Scruggs throw in the towel and plead guilty.

In between, Scruggs' attorneys argued that no evidence from wiretaps ever implicated him, and that the warrants authorizing the surveillance should have not been renewed.

They also argued an FBI agent intentionally misled the Court when he applied for those extensions. In late February, U.S. District Judge Neal Biggers ruled that wasn't the case.

Different in the two cases were the ultimate targets. Scruggs was the main prize last year, with investigators sending Balducci to Scruggs wearing a wire, hoping to get Scruggs on tape authorizing an extra $10,000 for Lackey.

In Scruggs II, though, his testimony will likely be used against DeLaughter, and speculation among bloggers following the saga continues about the role of former U.S. Senate Majority Leader Trent Lott, Scruggs' brother-in-law.

Scruggs and attorney Joey Langston pleaded guilty to tempting DeLaughter with a recommendation from Lott for a federal judgeship in return for favorable rulings in Scruggs' dispute with a former partner in asbestos litigation.

Lott recommended someone else for the spot.

At Scruggs' sentencing Tuesday, prosecutors alluded to other matters that Scruggs' assistance had been useful in. Federal prosecutors granted Scruggs immunity from any further criminal charges as part of his plea deal.

And prosecutors went so far to grant Scruggs' request to ask Davidson that he recommend to the Bureau of Prisons that Scruggs be moved to Arkansas, where his son Zach and former partner Sidney Backstrom are imprisoned, saying that Scruggs was needed in the instigation /prosecution of other matters.

Scruggs gained notoriety when his work helped lead to the 1998 Tobacco Master Settlement Agreement, which has an estimated worth of $246 billion for the 52 participating territories and states. Mississippi is not one of them, but has its own separate agreement.

The case, and Scruggs' work, was depicted in the Al Pacino/Russell Crowe film "The Insider."

More than 20 years ago, William Roberts Wilson, Alwyn Luckey and Scruggs each had their own stake in a group Scruggs started to file asbestos cases. Wilson and Luckey eventually sold their interests in more than 2,300 asbestos cases in agreements that were interpreted differently by all parties, and the two filed suit against Scruggs. Wilson filed his in 1994, and it dragged on for 12 years.

Luckey was awarded $17.5 million in his dispute with Scruggs after a trial in front of U.S. Magistrate Judge Jerry Davis, but Wilson received only a $1.5 million payment because DeLaughter's interpretation of the contract showed no remaining balance owed to Wilson, and that a trial would have been merely for bragging rights.

A special master, though, had recommended Wilson be awarded $15 million.

In a civil suit filed in January, Wilson alleged a conspiracy that involved Scruggs, his lawyers in the dispute, DeLaughter, former state Auditor Steven Patterson, former Hinds County District Attorney Ed Peters and an unnamed former U.S. Senator.

Federal prosecutors say Scruggs gave Peters $1 million to influence DeLaughter, who worked for Peters when he was Hinds County district attorney.

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