The Fall of the House of Zeus

by Curtis Wilkie

  A week later, Lackey finally found Balducci by telephone at his New Albany office. On a wry note, he inquired, “You made it back from the ivory towers?”

  “I have,” Balducci said. “I been up there tending to good government, judge.”

  They joshed with each other for a moment more, then Lackey lowered his voice and asked, “Are you where you can talk?”

  “Yes, sir, I am.”

  “Well, I’ve got something to say to you, and it may shock you,” the judge said. He sighed audibly and continued. “I’ve been thinking about this thing with Mr. Scruggs and them, and I want to help ’em any way I can.” He drew a deep breath again. “I don’t know what my future holds. I don’t know how long I’m gonna be able to hang in here and do what I need to do. What I’m gonna say is what I’ve never said to anybody before. I want you to understand that because I trust you.”

  Balducci, who had been punctuating each of Lackey’s sentences with “yes, sir” and “right,” underscored the expression of trust. “You can. You well should, judge. This is, as I like to say, dead man stuff.”

  Lackey snorted a laugh and began to talk elliptically about his target. “I don’t know him, you know, and I don’t know what his reaction might be one way or the other.” To be sure Balducci understood, Lackey added, “When I say ‘his,’ I’m talking about Mr. Scruggs.” This introduced Scruggs’s name to the FBI recording.

  “Right,” Balducci said.

  “I know he is a very powerful man, and apparently extremely sharp. Sometime I’d like to meet him. But let me cut to the chase.”

  “Sure,” Balducci said, who employed another idiom. “Put the corn on the ground.”

  “If I help ’em, would they help me?”

  “I think, no question that would happen. Yes, sir.”

  “We’d have to work something out down the road,” the judge said. “But I think that’s absolutely in the cards.”

  “Listen,” Balducci said, taking charge of the situation. “I’m the one that needs to handle that.”

  Fumbling for words, Lackey said he did not want Steve Patterson brought into the plot. He trusted only Balducci. He implied that some action needed to be taken soon because Grady Tollison was putting pressure on him to resolve the Jones case. “Talk to your man. Whatever you need to do. Holler back at me.”

  “I can tell you I know that I can get that done,” Balducci replied quickly. “I mean, you wanna just leave that to my discretion? Or do you wanna give me some kind of ideas of what I need to do?”

  “I’m not talking about a mountain,” the judge said. “Just kind of help me over a little hump I’ve got.”

  “I gotcha.”

  “It’s my making, my hump, and I can’t blame anybody else but me.” Suggesting that he had fallen into hard financial straits, he talked wistfully of his country practice of law, the job he had given up to become a judge.

  “That’s all part of the world,” said Balducci. “I understand all of that, judge. And that’s no problem.” He said he would drive over to see Lackey before the week was out. If he could get a favorable ruling for Scruggs, whatever the cost, it might provide the binding for a stronger relationship between the Patterson-Balducci operation, in its infancy, and one of the most recognized trial lawyers in the land.

  Listening to the conversation afterward, the federal prosecutors in Oxford felt a surge of accomplishment. This was the breakthrough they had worked toward for months. The old judge had laid down the bait, and his young friend had taken it.

  The development was particularly satisfying to Tom Dawson. He had been contemptuous of Scruggs even before the investigation began. Now, with Hailman’s retirement, Dawson’s title as first assistant U.S. attorney effectively put him in charge. The sting operation had the potential to turn into the dream of any prosecutor: building an ironclad case against a famous figure.

  A decade earlier, Dawson had been on the team of independent prosecutor Kenneth Starr during the Whitewater investigation that led to President Clinton. Dawson had been recruited from his job in Oxford to take a temporary position, and he spent eighteen months on the case. He helped edit the papers used in the impeachment, yet it was Starr and his chief deputies who got the headlines, and Dawson returned quietly to the U.S. Attorney’s Office where he had spent most of his career. Now only a year from retirement himself, Dawson saw the Scruggs case as his crowning achievement.

  He had grown up in Meridian, Mississippi, where his father served at a naval air station. Law had not been in his future plans when he attended Southwestern at Memphis and graduated from the University of Southern Mississippi. Dawson majored instead in chemistry, but took the law school admission test as a lark with his fraternity brother Sam Davis. They both wound up at the Ole Miss law school, and forty years later both were back in Oxford—Dawson as a federal prosecutor and Davis as dean of the law school.

  Dawson’s first job had been with the Meridian law firm of Tom Bourdeaux, one of William Winter’s closest friends, and Dawson’s first brush with serious politics came in support of one of Winter’s campaigns. However, Dawson’s personal politics grew more conservative over the years. Interviewed for a place at the U.S. Department of Justice during the Nixon administration, Dawson admitted that he had probably “lost a case in every court of record in Mississippi.” His prospective employer liked that response, for he felt that good lawyers learned from losing. Dawson spent three years in Washington, specializing in white-collar crime, then came back to Mississippi in 1975 to take a job in the U.S. Attorney’s Office in Oxford. Other than his Whitewater assignment, he had been there ever since. He liked the camaraderie, comparing it to a legal M.A.S.H. unit, where humor could be found in serious business.

  Dawson preferred the role of the “bad cop” in interrogations. He could look intimidating, a bit like a character from the Old West. He was bald, but retained a fringe of long hair that fell close to his neck to complement a closely sculptured beard.

  Even with the Scruggs investigation at an early stage, Dawson began preparing for the showdown. He kept separate files for a possible cross-examination of Scruggs or a closing argument at a trial. In his research, he uncovered an item he intended to use. It came from remarks Scruggs had made five years earlier during a panel discussion about legal venues. The event had been sponsored by Prudential Financial, and Scruggs delivered a lecture on his concept of “magic jurisdictions.” Describing the convergence of politics and law and how it augured against impersonal corporations, he said:

  The trial lawyers have established relationships with the judges that are elected. They’re state court judges; they’re populists. They’ve got large populations of voters who are in on the deal. They’re getting their piece in many cases. And so, it’s a political force in their jurisdiction, and it’s almost impossible to get a fair trial if you’re a defendant in some of these places … The cases are not won in the courtroom. They’re won on the back roads long before the case goes to trial. Any lawyer fresh out of law school can walk in there and win the case, so it doesn’t matter what the evidence or the law is.

  Dawson savored the opportunity to challenge Scruggs in the courtroom. As he directed the investigation with deliberate timing, he wanted to be sure that every element was put in its proper place. And useful tidbits kept coming with almost every wiretapped conversation.

  Despite Lackey’s admonition not to talk of the situation with Steve Patterson, Balducci immediately told his partner of the judge’s suggestion of a bribe.

  “How much?” Patterson asked.

  Balducci said he didn’t know yet, but planned to meet with Lackey in a couple of days.

  “Find out how much he wants,” Patterson instructed his partner.

  Fixing the case would be worth the risk if it succeeded in currying favor with Scruggs, because Scruggs represented the font of fresh infusions of money. Lackey’s overture had come during a time of growing desperation over the future of their new law firm in New Alba
ny. Though Balducci had spoken confidently to Lackey of the influential connections that he and Patterson had made, of the important names that had been lined up for the firm’s letterhead, of his own satisfaction in reaching this plateau in his profession, he and his partner were in financial distress. Their money had virtually run out, squandered on private planes to impress others and payments to secure audiences with potential clients. Even the $500,000 that Scruggs had paid the two men, in $100,000 increments, over the summer for interceding with Attorney General Jim Hood was gone.

  Law firms in Mississippi were oozing money. In the wake of the tobacco settlement, literally millions and millions of dollars circulated in the hands of a loose network of lawyers—so much money, in a poor state, that it was crazy. Patterson and Balducci had dreamed of cashing in on a bonanza through Scruggs, but it had not yet worked out that way. Meanwhile, the money that constituted their grubstake had seemed to vanish, and their operating funds were perilously low.

  Still, the two men kept up an appearance of stability. Showing no signs of trouble, they flew to Washington and Jackson to make alliances with influence peddlers and lobbyists. They stayed in fine hotels and dined in expensive restaurants. They even traveled, in separate trips, overseas. If they were to share in Scruggs’s windfall, it was essential to live like Scruggs.

  Scruggs was their ultimate meal ticket. If he could be persuaded to lend his name to their initiatives, it would serve as a message to the world that Patterson and Balducci were members in good standing in the big leagues and legitimate players at the table when the big licks were divided.

  So it was vital to stay in Scruggs’s good graces, and against that backdrop, Balducci soon paid another call on Judge Lackey.

  The conversation between the judge and his friend opened on a strange note. Patterson had undergone surgery the day before to reduce his weight, and Balducci described the procedure in clinical detail. Patterson’s health was good, he said, but he had been “grossly obese” for years and hoped to lose one hundred pounds as a result of the operation. The doctors had cut the size of his stomach—“they pinch off a portion of it”—to ensure that he could not eat as much. On doctor’s orders, Balducci’s partner had been kept on a liquid diet for two weeks prior to the operation. The diet was necessary “to shrink your organs, to shrink your stomach, shrink your liver, your pancreas and your gallbladder and all that” so the surgeons “could get in there and maneuver easier.”

  “I’ll be darned,” the judge remarked, amazed at the wonders of modern medicine.

  Balducci then waxed philosophical about the essence of law. He said he had once been given a piece of wisdom by Jack Dunbar, the Oxford attorney who represented Scruggs in the Luckey and Wilson cases. “Jack’s sort of a scholar and a gentleman of the law, and he told me something that stuck with me. He said: ‘The law typically is what it ought to be.’ And, you know, I found that to be true.”

  “Yeah. Yeah,” the judge agreed. Then Lackey offered his own curious parable.

  “My father-in-law had this old black gentleman that worked for him. He was just like a member of the family, you know. Burley couldn’t read and write, and it wasn’t his fault. It was the system’s fault because he was bright as he could be. They were feeding the hogs one day and Burley asked him, ‘Mr. Henry, who named the hog?’ And he said, ‘Well, Burley, I don’t know who named the hog. Why?’ And Burley said, ‘Well, whoever named him, named him just right ’cause he eats just like one.’ ”

  The two men laughed. They were dancing around the purpose of their meeting, as though neither wanted to bring up an unpleasant subject.

  Lackey eventually steered their conversation to the business at hand by thanking Balducci for coming.

  “Shoot, Judge, I’m glad to listen,” Balducci said, warming to his mission. “You and me, we tight now. There ain’t no other way to put it now. We gonna figure out what we need to do here. Ain’t no problem. I want you to tell me—because I understood what you said on the phone the other day. You’re in a position where you need a little help. I wanna help. But I got to have some kind of parameter to operate in, Judge. I need to know where we are.”

  “What I need—and it may be more than Mr. Scruggs or whoever would even consider—but to get me over a hump, I need forty,” Lackey said.

  The judge had chosen the figure on his own. Forty thousand dollars was a substantial amount, but not outlandish. A favorable decision might save Scruggs millions, but the country judge was reluctant to call for a larger payoff for himself. To ask for a million in tribute would put him in the company of high-rolling trial lawyers who dealt with big money, and Lackey had no interest in joining their ranks. So he opted for a reasonable figure. In Mississippi, $40,000 was still more than many people earned in a year.

  “You need it pretty soon?” Balducci asked.

  Lackey said he faced a deadline for his debts in nine days, on October 1. If it were inconceivable to raise that much, he said, “I could probably get done what I need to get” with a partial payoff. “Then the remainder by the first of November.”

  Balducci told him it should be no problem, but he needed to figure out a way to get the money to the judge. “Are you gonna have to have it in cash?”

  “I would like to have it, Tim.”

  “Just let me take care of it,” Balducci said. “It’s fine.”

  “I don’t want a nickel from you,” the judge said.

  “That’s not what it’s gonna be. I’m gonna get you the help you need, and we gonna take care of it.”

  “To show my commitment,” the judge said, “just bring me the order that he wants signed, and I’ll sign it.”

  “That’s fine. That’s fine.”

  “I’ve been wishy-washy in this, and other things have been bothering me,” Lackey said, moving their intimate talk to his thoughts of retirement.

  “I wanna talk to you,” Balducci said. “I wanna lay the corn on the ground. What are your plans, Judge? What are you thinking you’re going to do? How much time you got left in your term?”

  “Three years. But with my health situation, my defibrillator, and my pacemaker, I don’t see me going to the end of the term.”

  Balducci indicated that he understood the politics behind Lackey’s decision to resign. The judge would wait until the completion of the 2007 election, coming up in six weeks, in order to ensure that his place on the bench would be filled by an appointment made by Lackey’s fellow Republican, Governor Barbour, who was gliding to reelection.

  “I really haven’t given that much thought, to tell you the truth,” Lackey said. “I’ve been having more physical problems than I’d like to admit. It’s impacting a lot of things, and I hate to be in this position.”

  The judge’s words prompted Balducci to return to the idea of bringing Lackey into his firm. “I’m not encouraging you,” the younger lawyer said. “I’m not doing anything. I’m not trying to sway you. I’m not doing any of that. I’m just asking, as I have said before. When you make the decision for yourself, for your health or for whatever reason—that you’re tired of fooling with it and you’re tired of living the rat race of it—when you make the decision to lay down that gavel, I want you to join our firm, if you will, of counsel.” Balducci masked his financial difficulties. “We’ve got a great, great deal going right now.”

  Lackey considered the offer. “It would be fun,” he said, “because you’ve got some fun people working with you.”

  “Zeus” ascending—a young Dick Scruggs, in flight gear, as a navy pilot. (photo credit i15.1)

  “If I get the same response … I won’t call again.”—After being rebuffed in previous attempts to get a date with Diane Thompson, Dick Scruggs persevered and eventually married her. (photo credit i15.1)

  “The King of Torts” and his court—Dick Scruggs (seated, center) surrounded by Democratic state office holders following 1995 elections. They include Lieutenant Governor Ronnie Musgrove, who would become governor (seated, left);
Attorney General Mike Moore (standing, far left); auditor Steve Patterson (standing, second from left); and insurance commissioner George Dale (standing, far right). (photo credit i15.1)

  The aftermath of the “Mardi Gras massacre”—The reconstituted Scruggs law firm, featuring (from left) Dick Scruggs, Sid Backstrom, and Zach Scruggs. (photo credit i15.2)

  “Commander for life.”—U.S. Senator Trent Lott not only rose to become leader of Senate Republicans, he also presided over a vast network of his Sigma Nu fraternity brothers. (photo credit i15.2a)

  “To hobnob with celebrities”—On the high seas off New Zealand, Dick and Diane Scruggs host the sailing champion Dennis Conner on their yacht, Emerald Key, during the America’s Cup competition in 2000. (photo credit i15.2)

  “This thing’s heading our way”—Despite efforts to batten down his house against the storm, Scruggs saw his mansion on the beachfront in Pascagoula torn apart by Hurricane Katrina in 2005. (photo credit i15.2)

  Flow chart of tobacco fees—To follow the money distributed by Scruggs from tobacco litigation, one must navigate this complicated trail that leads (lower right) to quarterly payments of $468,450 to P. L. Blake (through DMG) and $1,016,593 to Joey Langston.

  Claiming “reprehensible conduct” by Scruggs—Grady Tollison, a rival of Scruggs’s with offices on Oxford’s square, attended a press conference where Scruggs’s indictment was explained. (photo credit i15.3)

  “They believe I’m the weak link.”—Sid Backstrom, who resisted early efforts by the prosecutors to cop a plea, heads toward federal court to plead guilty. (photo credit i15.4)

  “So you were judge, jury, and executioner.”—Charles Merkel, one of Scruggs’s fiercest opponents, accused Scruggs of making improper and unilateral decisions that affected his former partners—and Merkel’s clients. (photo credit i15.4)