The Fall of the House of Zeus

by Curtis Wilkie

  Calls were made to Patterson, who was also unavailable.

  In a coordinated strike, two agents had confronted Patterson at his New Albany office at the same time the raid began in Oxford. Norman Comeaux and Christopher Michaelsen identified themselves, told Patterson of a judicial bribery investigation, and said they had some audio recordings he might want to hear.

  Patterson escorted them to another office a few blocks away, where he listened, with growing dismay, to a telephone conversation between himself and Balducci in which they discussed payments to Judge Lackey.

  Patterson’s hands began to shake perceptibly. The agents said there were other incriminating calls on the disk if he would like to hear them. “Not now,” he said. Instead, he asked about the investigation and the charges he faced.

  Their discussion was interrupted by the voice of a secretary on the intercom: “Steve, Dickie Scruggs calling on line one.”

  “Tell him I’m tied up,” Patterson said.

  His conversation with the agents resumed. He was told he was “a subject of the investigation,” along with Scruggs and others. And he was informed that his partner, Tim Balducci, was cooperating with authorities.

  “Sounds like I need a lawyer,” Patterson said. Nevertheless, he agreed to go to Oxford to talk with the prosecutors first. Riding in the front seat of the agents’ car, Patterson gave an account of his recent trip to Israel. As they approached Oxford, he reminisced about his Ole Miss years, when he had obtained a master’s degree in political science in 1974. He offered directions into town and joked that it represented “my first act of cooperation” with authorities.

  Once hurried, out of sight, inside the U.S. Attorney’s Office, Patterson learned more details of the case against him. David Sanders, one of the prosecutors, told him of the raid going on simultaneously at Scruggs’s office. Sanders also spoke of impending indictments.

  The group quizzing Patterson expressed interest in Attorney General Jim Hood and his predecessor, Mike Moore. Balducci had already told the prosecutors of the $500,000 Scruggs had given to him and Patterson. The payment raised natural questions, and the federal prosecutors already had suspicions about both Hood and Moore because of their connections to Scruggs.

  Although the prosecutors told Patterson he could expect a twenty-year prison term unless he cooperated, he was unwilling to concede guilt. He argued that the case was not nearly as “clear-cut” as the government was portraying it.

  According to an FBI report, Patterson acknowledged that the $40,000 transaction with Judge Lackey constituted a “quid pro quo,” but Patterson said irregular measures had been necessary because he’d heard that someone from Grady Tollison’s law firm had already “earwigged” the judge on behalf of Johnny Jones. He added that another circuit judge in the district, Andy Howorth, was known to be a close friend of Jones and would “trump” Judge Lackey in the case.

  Patterson insisted that “the law” was on Scruggs’s side in the dispute with Jones. To ensure a favorable ruling, a decision had been made to pay Lackey after the judge appealed for money to bail himself out of a personal debt.

  Patterson, who claimed he knew less about the deal than anyone else, was vague when asked about P. L. Blake. He described Blake as a “friend and protector” of Scruggs. Patterson suggested that Blake enjoyed deniability in the case because he had never been given details. Describing his September 27 conversation with Blake, when Patterson sought Blake’s assistance in getting Scruggs to reimburse the $40,000 payment, Patterson said he told Blake the money involved “a problem and it needed fixing.” According to Patterson, Blake reported the next day that the issue with Scruggs had been “handled.”

  After listening to Patterson, the prosecutors emphasized the strength of their case. They played more recorded conversations between Patterson and Balducci. Patterson squirmed in discomfort.

  Dawson, the chief prosecutor, instilled even more dread. He said Balducci feared for his safety and was fleeing New Albany with his family. Patterson’s life could also be in danger, Dawson said.

  Patterson was told it would be futile to ask Joey Langston for help. Langston, they said, represented “every thug in North Mississippi,” and the prosecutors hinted that Langston would wind up tainted in the case himself.

  Patterson asked about the possibility of speaking with Balducci. He was further demoralized after the prosecutors put Balducci on the phone. Patterson could hear his partner weeping. “I’m so sorry,” Balducci moaned. “I fucked up. I fucked everybody. I fucked up everybody’s life.”

  When the conversation ended, Patterson blurted, “Let’s trade.” He asked to talk with John Hailman.

  Patterson and Hailman had both worked for Senator John Stennis in the early 1970s. Patterson held a patronage job as an elevator operator on Capitol Hill; Hailman wrote speeches. Despite their different backgrounds, Patterson never forgot a connection. Only two months before, he had tried to hire Hailman, not knowing he’d helped initiate the investigation.

  Hailman had just retired from the U.S. Attorney’s Office, but he continued to follow the Lackey case. He knew the raid was taking place, yet the call to his home, asking him to come to his old office, surprised him.

  Hailman found Patterson in a penitent mood. The suspect described himself as a bit actor in the bribery case and asked for advice. He told Hailman he was inclined to cooperate with the authorities, but unsure about pleading guilty.

  Patterson was told that if he dealt information to the prosecutors in the hope of winning leniency, he would have to pass a polygraph test during plea bargaining.

  Patterson appeared conflicted. Hailman said he could not represent him, but recommended a couple of lawyers with experience in dealing with the U.S. Attorney’s Office.

  “Which one is the closest?” Patterson asked.

  “Ken Coghlan,” Hailman said.

  Coghlan’s office was on the square, and within a few minutes he arrived to offer counsel to Patterson.

  · · ·

  At Scruggs’s office, Zach placed a call to Backstrom and left a terse message on his voice mail. “The FBI is here. It has something to do with the Jones case. Call when you get a chance.”

  He also called his wife, Amy, to tell her of the raid. He professed bewilderment and told her not to worry. It would not amount to anything.

  His father, genial by nature, attempted to engage the agents in conversation. Delaney said little. Scruggs noticed a bulge under Delaney’s green jacket and thought: These guys are armed to the teeth. Finding Delaney unresponsive, Scruggs turned to others who were more talkative. He discussed old navy days with one of them.

  Zach was not as hospitable. He expressed indignation over the raid and demanded to know on whose authority it was being conducted.

  He grew angrier when he looked out the French doors leading to the firm’s balcony and saw, across the square, members of the Tollison law firm standing on their own balcony watching the commotion.

  Zach’s father was concerned about his son’s arguments with the FBI. It was not helping anything, and it would become obvious later that Zach was sowing seeds of resentment with the federal authorities. He was branded that day as a spoiled, intemperate rich kid, and over the next months federal officials would whisper accounts of Zach’s impertinent behavior to reporters.

  At the same hour, a mile away on the Ole Miss campus, hundreds of students and alumni were flocking to the Ford Center for the Performing Arts, the school’s largest auditorium, to greet the new football coach, Houston Nutt.

  Television news crews and reporters crowded near the orchestra pit, straining for a chance to question Nutt. Every seat in the hall was taken. Dozens of spectators crouched in the aisles or stood in the back of the balcony. The building resounded with Rebel yells and rollicking chants of the school’s cheer, “Hotty Toddy.”

  The chancellor, Robert Khayat, came to the stage with a smiling Nutt and several other university officials. Trying to quiet the din, he began
to thank those who had helped make the event possible. He singled out Dick Scruggs for praise.

  On the coast, Sid Backstrom tried to carry out his arguments in the Katrina case without betraying his inner turmoil. Before leaving Oxford, Rhea Tannehill had suggested that Backstrom retain a seasoned criminal defense lawyer in Jackson, Frank Trapp. During a lull in the legal proceedings on the coast, Backstrom confided to Mike Moore, who was working with Scruggs on the Katrina litigation, that he had been questioned earlier. Not only that, Backstrom said, but the Scruggs firm was under suspicion of bribery.

  To escape the unpleasant presence of the FBI, Scruggs, his son, and Joey Langston strolled around the corner for lunch at a popular Italian restaurant called L&M’s. Though the name was resonant of a cigarette brand or a truck stop, the place resembled a trattoria, with curing meat on display behind glass and a chef who had learned the trade with Mario Batali at his famed New York location, Babbo.

  L&M’s was another example of Oxford’s cosmopolitan lifestyle in the hills of North Mississippi. But for the trio that day, it was an unsettled meal.

  On the sidewalk afterward, Zach tried, without success, to talk with Delaney.

  “Can you tell us what this is about?” he asked.

  “You got any information for us?” Delaney countered.

  “I’m asking,” Zach shot back.

  He spotted Jim Greenlee, the chief U.S. attorney, heading back to his office from a shopping errand for his wife. Greenlee had paused to watch the activity outside Scruggs’s office. To Zach, Greenlee seemed embarrassed. They shook hands, but the prosecutor imparted nothing about the case.

  By this time, news of the raid had spread. A merchant on the square, noticing the swarm of FBI agents, called The Oxford Eagle, and the local newspaper responded by sending a reporter and a photographer to the scene. Calls were also coming in to the Scruggs office from the Associated Press, The Clarion-Ledger in Jackson, and the Sun-Herald in Biloxi.

  Langston decided to hold an impromptu press conference on the sidewalk. He misled the reporters, suggesting that the raid might be linked to Judge Acker’s contempt citation. The agents were seeking some unknown document related to the Katrina litigation, he said. Langston also claimed that Dick and Zach Scruggs were “cooperating one hundred percent.”

  The attorney adopted a philosophical air. “Sometimes, when you are a successful, high-profile attorney, you have to deal with unpleasantries. This is one of those times.”

  FBI agents continued to carry material out of the office. Gesturing toward them, Langston remarked, “I don’t think they will leave here with anything. I don’t think whatever exists is in this building. A search warrant doesn’t mean anyone’s being arrested or that they’ve done anything illegal.”

  Later in the afternoon, once the FBI departed, Langston and his partner, Billy Quin, huddled with the Scruggses in their office suite. Langston had been fishing for information with the authorities. Shut out, he asked his close friend Tony Farese, an attorney with strong connections with the U.S. Attorney’s Office, to see if he could break their reticence.

  Finally, Langston got a call from Tom Dawson, the prosecutor.

  “Can you tell us what’s going on?” he asked Dawson.

  “Your client knows damn well what this is about,” Dawson said.

  Langston insisted that Scruggs knew nothing.

  “Your client knows damned well.”

  “Is he a target? A subject?” Langston asked.

  “I don’t talk in those terms.”

  “Can we talk? Me? Or Dick? Or both?”

  “I guess I could send a couple of FBI agents who would talk with you,” Dawson said.

  Following the conversation from across the room, Zach Scruggs felt, for the first time, a sinking sensation.

  Langston continued to probe. “We’re willing to cooperate,” he said, “but we’re in the dark.”

  Dawson scoffed at the suggestion that Scruggs knew nothing. “The train’s leaving the station,” he said before closing the conversation.

  After hanging up, Langston tried to reassure Scruggs and his son. “I’ve been in several cases with Dawson, and he always says that,” Langston said, explaining that Dawson used a hoary threat—that the prosecutor’s train was leaving the station and that those who wanted to cooperate were already on board and those who refused would be left behind, damned to face trial and prison.

  As late November darkness closed in on Oxford, the group moved to Scruggs’s home, where they gathered in a small parlor with a fireplace, just off the gleaming new kitchen. They were joined by Diane and the Scruggses’ college-age daughter, Claire. Langston, working his phone feverishly, talked with his brother, Shane Langston, a Jackson attorney with his own knowledgeable sources. He passed on a bit of troubling intelligence: not only was Balducci cooperating with the authorities, but the FBI was said to have “everybody on tape.”

  Langston and Quin were still trying to locate Balducci or Patterson by phone when a call came from Ken Coghlan, who had just met with Patterson at the U.S. Attorney’s Office. He reported that Patterson had been given until 6:00 a.m. the next day to make a deal and possibly escape with probation. Patterson had been told, Coghlan said, that there was enough evidence for multiple indictments in connection with an effort to bribe Judge Lackey.

  Langston turned to others in the room and repeated what he had just heard from Coghlan. “They’ve got film of Tim giving cash in a bag. They have Patterson on tape, Balducci on tape. Sid on tape.”

  Backstrom dropped by the Scruggses’ house briefly after flying home on the firm’s jet from his assignment on the coast. It was an awkward appearance. He said nothing about his interrogation by the FBI that morning. Instead, he told Dick and Zach Scruggs that reports of the raid “are all over the news.” He agreed that Balducci was behind the FBI’s action. “I remember Tim saying some crazy stuff,” Backstrom said. He left to go home. Zach could only think of a cliché to describe Backstrom’s appearance: He looks like he’s seen a ghost. And at that point, Zach began to put together some of the pieces of the puzzle.

  Later that night, he called Backstrom and learned of his morning visit by the FBI. Backstrom explained that he had been squeezed by the prosecutors and feared for his future. He and Zach agreed to meet early the next day.

  As more news of Balducci’s betrayal began to trickle in, an ominous realization settled on the assembly of lawyers: the members of the Scruggs Law Firm were going to be indicted.

  They needed nothing more to discourage them. But then Langston shared a telephone call he had just completed with Patterson’s wife, Debbie.

  “Tim is a Judas,” she had screamed. “Tim is a Judas!”

  CHAPTER 20

  Facing the threat of an indictment, Zach Scruggs woke early the next morning. He dressed in a suit and tie, kissed his sleeping children, and set out to find Sid Backstrom, whose behavior had seemed suspicious the day before. Zach wondered if he, too, was cooperating with the federal authorities.

  He drove across town to Backstrom’s residence, located in an upper-middle-class neighborhood known as The Cove, where most of the homes were occupied by young families. He talked briefly with Backstrom’s wife, Kelli, who was tearful and upset. She said her husband had already left for the office. “I’m so sorry about all of this,” Zach told her before driving away.

  He found no sign of Backstrom at their office, either, concluding that he might be meeting with his friend Rhea Tannehill. As he figured, Zach found Backstrom’s car outside Tannehill’s office, yet when he went inside, no one was there.

  Troubled by Backstrom’s absence, he went to his parents’ home, where they were soon joined by Langston and Quin. The lawyers had been trolling for information and had learned from Ken Coghlan that his new client, Steve Patterson, had not yielded to the prosecutors.

  Langston was also getting reports from Tony Farese, who was trying to milk the U.S. Attorney’s Office for any piece of intelligence.
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  There was another dynamic at work that morning that the Scruggs family knew nothing about. From the moment he realized Balducci had become an informant, Langston suspected that he might be pulled into the investigation. After he left the Scruggses’ home late the night before, his associate, Quin, had spoken of the potential for trouble. “You know you’ve got to be prepared against Balducci,” Quin warned him. “You know he’s going to try to save himself. He’s going to turn in big fish, and you’re the biggest fish. You know he’s gonna lie. You gotta assume he’s gonna lie. And you know Balducci’s number one motivation will be to sink you.”

  While the lawyers worked their cell phones, Dick Scruggs and his son sought refuge in the guesthouse beside the swimming pool. For diversion, they watched television. Each local news break contained references to the raid at the Scruggs firm.

  Don Barrett called again. As a principal partner of the Scruggs Katrina Group, he raised questions about the future of the initiative. “What are we going to do?” he asked Scruggs. “We’ve got all these clients.” Scruggs wanted to be rational about the situation, to show no indication of panic. He hoped they could soldier on, but Barrett was not so sure. If Scruggs were indicted, it would be necessary for him, Barrett said, to step back. In his mind, Barrett was already thinking of the letter that would be sent to their clients in a few days:

  “The Scruggs Law Firm has informed us that in the interest of its clients, it has withdrawn from the group of attorneys who represent your claims until legal matters have been resolved, … The Scruggs Law Firm has assured us that they engaged in no wrongdoing, and we are confident that they will be cleared of the charges.”

  Scruggs faced the reality that his law firm would suffer. A few minutes later, his personal prestige took another blow. A representative from Hillary Clinton’s campaign called to say that “it might be better” for Scruggs to cancel the fund-raiser set for December 15. The former president would not be coming.