Dickie Scruggs

OXFORD, Miss. - Four days before the issue can be argued at a hearing, the defense team for indicted trial lawyer Zach Scruggs has reiterated the reasons it thinks the judicial bribery charges against Scruggs should be dropped.

Attorney Todd Graves wrote for his client on Monday that federal prosecutors have spun either the conversation caught on a Nov. 1 wiretap or the subsequent grand jury testimony of attorney Timothy Balducci, who has pleaded guilty to the alleged scheme.

Scruggs, his father Dickie and attorney Sidney Backstrom, all of Oxford's Scruggs Law Firm, are charged with offering $40,000 to Lafayette County Circuit Court Judge Henry Lackey in exchange for a favorable ruling in a dispute over at least $26.5 million in attorneys fees earned in Hurricane Katrina settlements.

"The Government could have come forward with other facts or testimony which somehow proves the veracity of its witness' false statements before the grand jury, or which could somehow explain the grand jury's apparent and inevitable acceptance of these repeated misstatements," Graves wrote.

"Instead, the Government has simply tried to spin either the Nov. 1, 2007 transcript, or the contrary grand jury testimony rendered a few weeks later, to make them mesh."

Scruggs says Balducci testified that he informed his alleged co-conspirators that Lackey had demanded $10,000 more than the original bribe at a Nov. 1 meeting, but a transcript of that conversation makes no mention of any money -- just "a cryptic statement from Mr. Balducci that 'I've got to go back for another delivery of uh, another bushel of sweet potatoes down there.'"

Prosecutors say it is clear Balducci was referring to money. Scruggs claims that a federal prosecutor who asked Balducci if he was using the term "sweet potatoes" to refer to money did not sufficiently clarify the issue.

Balducci responded, "I think I did."

"The Government can only mount this tepid defense of its grand jury questioning in the first place because the Court and all the parties now have transcripts of the Nov. 1, 2007, transcript, and can follow along with the Government's explanation of what it was allegedly trying to do," Graves said.

"But a grand juror hearing Balducci's false testimony would not - indeed, could not - understand that Balducci had earlier made the 'sweet potatoes' reference only one time, and did so instead of (in his own mind, apparently), not in addition to, his allegedly specific reference to the $10,000"

Also at issue are any statements Scruggs made in reference to an order being drawn for Lackey to sign.

"Balducci falsely testified that Zach Scruggs 'reacted' to his statement that the Judge was being paid $10,000 for a new order by indicating that '[i]t was not a problem,'" Grave wrote.

"Again, the Government's own transcript of the actual conversation shows this did not happen. First, there is no reaction from Zach Scruggs as to the payment of $10,000 to the judge or the judge's feeling of 'exposure' because those statements were never uttered in Zach Scruggs' presence."

Also, Balducci said Scruggs attempted to help finalize the wording of the order, but Graves claims his client's statements on the transcript display "only his attempts to come to grips with the meaning of the order, not the rendering of any recommendations, requests, or approvals. The Government should have corrected this materially false testimony."

A March 31 trial date is set for all three defendants. Zach Scruggs and Backstrom attempted to sever their trials, but U.S. District Judge Neal Biggers did not grant their requests.

Each faces a maximum prison sentence of 75 years and maximum fine of $1.5 million. The deadline for plea agreements is March 17.

Dickie Scruggs gained much of his fortune in asbestos and tobacco litigation. His work led to the 1998 Tobacco Master Settlement Agreement, which has an estimated worth of $246 billion for the 52 participating territories and states. Attorneys earned $1.4 billion in the settlement.

Recently, criminal contempt charges against him in Alabama were dismissed.

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