The Fall of the House of Zeus

by Curtis Wilkie

  At intervals during the morning, Langston strolled out to the guesthouse to give the latest news. None of it sounded encouraging.

  Zach persisted in his efforts to locate Backstrom. He left a message on Tannehill’s voice mail, but his calls were not returned.

  Backstrom and Tannehill, along with Frank Trapp, who had driven up from Jackson, were meeting with the prosecutors at that hour. Backstrom told the authorities their offer of five years in prison was unacceptable. He was not prepared to negotiate. To convince Backstrom that his position was untenable, the prosecutors played a number of recordings of conversations between him and Balducci. Two of them, recorded by Balducci earlier in the month while he wore a wire, seemed incriminating. The prosecutors again pressed Backstrom to plead guilty and become a cooperating witness, but he was not persuaded. He thought: They believe I’m the weak link and they think they can break me. With his slight frame and colorless pallor, he knew he might look vulnerable. He knew his indictment was imminent. Still, he refused to make a deal.

  Eventually, an unfamiliar voice, using Tannehill’s cell phone, returned Zach’s message. The caller identified himself as Frank Trapp.

  “Are you representing Sid?” Zach asked. “Are you talking to the prosecutors?”

  Trapp seemed to be intentionally vague. “I’m just getting into this,” he said. “I may need to talk to your lawyer.”

  Actually, Zach had no lawyer. Even as events unfolded, he considered the crisis unthinkable, the prospect that he might be indicted unbelievable.

  Langston, however, had prepared for that eventuality. He summoned Farese to Scruggs’s house. “Tony’s going to be your lawyer,” he told Zach. “It’s a good idea.”

  Farese had been on the defense team, with Langston, for the first criminal trial in which Zach had been engaged, so Zach agreed to the choice. But he was adamant about his innocence when he talked with Farese. “I don’t know what’s going on. But I’m not pleading to anything,” Zach said. “Even if it means one day in jail or ten years, I’m not pleading to anything.”

  Zach seemed overcome with nervous energy and worry. He appealed to his father. “If anything happens to me, I want you and Mom to take care of my family.”

  Recognizing that his son was becoming frantic, Scruggs assured Zach that his family would never be neglected.

  Zach’s mood lifted a bit when Tannehill finally called to say that Backstrom was not cooperating with the prosecutors.

  Around noon, Farese got a call from the prosecutors. Everyone had been indicted. Dick Scruggs. Zach Scruggs. Sid Backstrom. Steve Patterson. Tim Balducci. Federal marshals were being sent to Scruggs’s home to make the arrests.

  “That won’t be necessary,” Farese said. “They’ll voluntarily surrender.”

  · · ·

  The Scruggses and their lawyers rode to the federal courthouse in Zach’s Suburban, with Zach wedged in the back between car seats for his two children. Photographers and television crews, alerted by authorities, were waiting.

  The defendants were processed through the probation office, where they briefly encountered Patterson. He looked at them and shrugged, as if he were helpless to explain their quandary.

  Urine samples were taken, and questions were asked about the men’s net worth. Then they were taken to a cell upstairs where they were stripped of ties and belts and put in shackles. One of the marshals on guard offered a copy of the indictment, enabling them to see, for the first time, the official charges. It appeared clear that Balducci was responsible. He was listed as their co-defendant, but was not in a cell in Oxford with them.

  After fingerprints and mug shots were taken, Dick Scruggs and his son, still handcuffed but relieved of their leg shackles, were led into the courtroom of federal magistrate Allan Alexander. Dick had gone to law school with her; Zach had worked for Alexander when he was in law school.

  In the audience, Zach spotted a woman he recognized as the daughter of his father’s nemesis Roberts Wilson. In a halcyon time, nearly thirty years before, Zach and Elizabeth Wilson had played together on the Gulf Coast when their fathers were partners in asbestos litigation. Now she sat, like an avenging angel, watching the Scruggses’ humiliation.

  Both Scruggs men pleaded not guilty. The prosecutors asked for Dick to post a $5 million bond before he could be released; he was reputed to be a billionaire, wealthy beyond reason from his tobacco windfall. But the magistrate said she had already seen a preliminary report from the probation officers that indicated that Scruggs’s assets fell considerably short of a billion dollars. Instead, she set bond at $100,000. After the prosecutors argued that Scruggs represented a flight risk, Alexander ordered his plane grounded and collected his passport.

  Dispirited by the experience, Dick and Zach and their lawyers regrouped afterward at the Scruggs home with Diane, daughter Claire, and Zach’s wife. Langston and Quin attempted to boost morale by expressing doubts about the strength of the government’s case. Dick vowed to summon every weapon available to fight back, telling the group he would bring in John Keker, the high-powered lawyer from San Francisco who was already defending him in the contempt case in Alabama.

  There were other issues to consider. One of those was the Christmas party the Scruggs planned to co-host in three days with Marla and Lowry Lomax, their old friends from Pascagoula who had moved to Oxford earlier in the decade. Invitations had been mailed and catering arrangements made. After talking with the Lomaxes, they decided to go ahead with the party. It would be a demonstration of resolve.

  But Zach felt beaten down. After he and Amy drove to their own home, he put their children to bed. As they fell asleep, he kissed them, wondering: How many times will I get to do that again?

  The prosecutors, who had concealed the investigation carefully, felt it would be important to go public with a post-indictment press conference to maintain an advantage in the running narrative. As long as the newspaper and television reporters fed on information from the government side, the prosecutors would control the flow of the story. They were assisted by bloggers—virtually all of them critical of Scruggs—who would follow the case, posting pertinent documents on the Internet, developing a wide readership, and, in some instances, guiding the news coverage.

  At the press conference, U.S. Attorney Jim Greenlee elaborated on a few details of the case and denied that Trent Lott had been given any advance warning. “To my knowledge, there is absolutely no connection” between Lott’s resignation and the charges against his brother-in-law, Greenlee said.

  One of those who attended the press conference was not a reporter at all, but Scruggs’s adversary Grady Tollison, who listened with satisfaction as the prosecutors tightened their grip on Scruggs. At one point, Dawson, the lead prosecutor, leaned toward Tollison and whispered, “Merry Christmas.”

  Scruggs’s voice was shut down on the advice of his lawyers. Instead of using his own charms, which he had relied upon in the past to engage reporters, the key defendant was kept on the defensive. Friends who were inclined to side with him wondered why he did not hold his own press conference to pronounce his innocence.

  Despite the crisis, the Scruggses’ Christmas party was carried off with aplomb. Promptly at five o’clock, as light began to fade from the late autumn sky, guests began to arrive. Because the winding driveway was narrow and space outside the house limited, they were asked to park at the foot of the hill, in a university lot usually reserved for campers on football weekends, and to ride the rest of the way in jitneys.

  Inside the high-ceilinged home, tables were spread with an assortment of miniature lamb chops and rich seafood dishes. Bartenders handled drinks at several stations, while attendants passed through the rooms offering hors d’oeuvres.

  There was a temptation for journalists covering the case to compare the evening to one of Gatsby’s parties, but the analogy didn’t really work. Though Scruggs now carried a scent of impropriety, he was neither a stranger to Oxford nor gauche about his wealth. His Ole Miss
background and his generosity since arriving there four years ago had made him welcome to the community.

  Among the first to arrive were Scruggs’s friends from his boyhood in Pascagoula: Khayat, the chancellor, and Sam Davis, the dean of the law school. They were followed by dozens who, if gathered for a still photograph, would have represented a portrait of men and women of influence in Oxford: physicians and ministers; faculty members and businessmen; attorneys and entrepreneurs. Andy Kennedy, the Ole Miss basketball coach fresh from his team’s 85–77 victory over the University of New Mexico a few hours earlier, was there, along with the school’s popular baseball coach, Mike Bianco. Despite their personal agonies, Zach and Amy Scruggs and Sid and Kelli Backstrom made appearances. The only absentees from the guest list were local judges and prosecutors who felt their presence would be inappropriate. The previous December, many of those same officials had attended the joint Lomax-Scruggs Christmas party held at Lomax’s new mansion, never imagining the future events that would disrupt their relationships.

  Dick and Diane circulated among their guests. Occasionally friends gathered Scruggs in an affectionate embrace. His wife, recovering from an attack of Crohn’s disease and the shock of her husband’s and son’s indictments, maintained a smile, but it looked forced and weak.

  As the party gathered momentum, voices grew merrier. When the subject of the government’s accusations came up in conversation, Scruggs expressed bewilderment and innocence. More comfortable topics involved his brother-in-law’s sudden departure from the Senate and the new football coach at Ole Miss. In a nod to the sport’s importance in the region, a television in the exercise room by the pool was tuned to the Southeastern Conference championship game, and some of the guests abandoned the main house to watch it. Since the evening had been planned as an opportunity for friends to see the new house, others wandered through the downstairs rooms marveling at a clothes closet containing what seemed like a hundred suits. Or they penetrated the wine cellar in the basement, where Scruggs was just beginning to accumulate stocks of the best vintages.

  Earlier in the year, he had enlisted the advice of John Hailman, the federal prosecutor–cum–wine critic. He told Hailman he wanted to assemble a selection to rival Lowry Lomax’s wine cellar. At the last Christmas gathering, Lomax’s collection, climate-controlled and bristling with bottles of impressive California vintage and wooden crates bearing labels from France, had generated the buzz of the party. Scruggs had offered to put Hailman “on the clock” to act as his advisor. Hailman dismissed any suggestion of a fee. “We’ll just have fun drinking good wine,” he had said to Scruggs. Hailman envisioned trips to France in Scruggs’s jet; visits to vineyards in Burgundy and the Rhone Valley to choose wines worthy of Scruggs’s cellar.

  That was before Judge Lackey came to Hailman with his troubling story.

  Amid the strained gaiety of the evening, at least one other reminder of the adversaries facing Scruggs lay outside. Behind his house and through the woods, the nearest structure was a brick batting clinic beside the Ole Miss baseball park. It was named for its donor, Charlie Merkel.

  The party was off limits to reporters, but Paulo Prada and Peter Lattman of The Wall Street Journal were on assignment in Oxford, and began pulling together a story with accounts of the evening and comments from several who attended the Scruggs affair.

  “People appreciate him for his support of the community, and we’re all willing to stand by and support him,” said Oxford’s mayor, Richard Howorth. (For his statement, Howorth was criticized in a letter to the editor in The Oxford Eagle later in the month.)

  As a shot in the dark, the reporters called Steve Patterson’s home the night of the Scruggs party. Patterson did not want to talk, but his wife, Debbie, was quite loquacious. “We didn’t know any of this,” she said. “We were in the Holy Land seeking edification and returned home to this mess.” She laid all of their problems at the feet of Tim Balducci, whom she characterized as “a short, midget Italian.” That quote worked its way up the ladder of editors at The Wall Street Journal before the story was published. A top editor, exercising political correctness, took out the Italian reference.

  On Monday following the party, the two reporters decided to make a call on Scruggs at his office. To their surprise, Scruggs greeted them cordially. He said he could not discuss the case, but invited them into his private office for an informal chat. For fifteen minutes, they talked. Seeing his old aviator’s helmet on his desk, one of his visitors asked about his experiences as a pilot. He said he rarely flew anymore. When Scruggs learned that Prada lived in Atlanta, he told of how the military school there had “whipped me into shape.” A photograph of Diane led to questions about how Scruggs had met his wife. She had not been his high school sweetheart, Scruggs said. “She had much better sense than to hook up with me back then.”

  Leaving the law firm, the reporters were struck by Scruggs’s polite reception. But he seemed to them somewhat disoriented and not quite on top of his game.

  Another curious turn occurred the next day, after their article appeared. While they were in Oxford, the reporters had talked with many people who seemed supportive of Scruggs. They began to receive emails from Oxford, some from the same people whom they had seen the week before. These messages now expressed doubts about Scruggs’s innocence—and even resentment of him.

  During the first two weeks after the indictment, Joey Langston served as Scruggs’s primary lifeline to the press. John Keker, the lead attorney on Scruggs’s defense team, preferred not to talk with reporters. So it was left to Langston, a Mississippian, to deal with local journalists and with those who had begun descending on Oxford from across the country. He seemed to speak with confidence and authority. But behind his façade of self-assurance lay growing concerns. Langston knew, as early as the night of the raid on Scruggs’s office, that if Balducci was cooperating with the authorities, he himself would be exposed to criminal charges on a different case.

  Keker had picked up on Langston’s uneasiness from the time he arrived in Oxford. There was something a bit squirrelly and defensive in Langston’s manner, as though he were hiding something.

  The source of Langston’s discomfort became clear to others on December 7, the day the defendants and their lawyers met at Scruggs’s office to review the first piece of evidence handed over by prosecutors in accordance with rules requiring them to do so. The group had been given a recording of the most damaging material: Balducci’s visit to the law firm on November 1 when he was wearing a wire, only hours after his arrest. “Balducci should get an Academy Award for his performance,” Langston said of Balducci’s ability to carry off his undercover assignment.

  The recording represented obvious trouble, but the mood became grimmer later in the day when Farese reported that investigators were digging into a second case. Scruggs was standing on the balcony outside his office, looking out at the old courthouse, swaddled in scaffolding during a renovation project, when Farese said cryptically that the new investigation involved “a case down south.” Since much of the Scruggs litigation dealt with Katrina cases to the south, Farese was asked to be more specific. “They’re looking at the Wilson case,” he said, referring to the Wilson v. Scruggs lawsuit in Jackson.

  Scruggs thought the litigation had been resolved satisfactorily. Following his $17 million setback to Al Luckey and Charlie Merkel, he had taken the Wilson case out of Jack Dunbar’s hands and entrusted it to Langston, who had said he could draw upon his connections in Jackson to ensure that Scruggs would not suffer another embarrassing defeat. Sure enough, a series of rulings in 2006 by state circuit judge Bobby DeLaughter effectively limited Scruggs’s losses.

  DeLaughter had a sterling reputation among members of the bar association in Jackson, a high regard that originated with his performance as a local prosecutor in the office of District Attorney Ed Peters years before. The judge was thought to be irreproachable.

  That evening, Dick Scruggs and his son talked over the
events of the day on the driveway in front of Scruggs’s new home. After the intrusion of the wiretaps, they had developed a sense of paranoia, suspecting that even conversations with their wives might be overheard. While outside, Scruggs talked with Langston by cell phone about the “case down south.”

  Though the prosecutors were crowing about sensational evidence that would implicate Scruggs in a new case, Langston said there was nothing to fear. Judge DeLaughter had never been promised any money, he said, and had relied on the law to make his decision.

  But Langston and Scruggs both knew that Senator Lott had called DeLaughter to ask about his interest in a federal judgeship while he was considering the Wilson case.

  · · ·

  Another alarm was sounded that Friday. Farese mentioned that the government might try to seize the assets of the defendants. He startled Zach by asking for full payment of his $300,000 retainer—as if the Scruggses’ treasury would soon be looted by federal agents. To satisfy his attorney, Zach instructed the firm’s bookkeepers to issue a check. Farese still seemed upset. He fretted that it could not be deposited until after the weekend.

  The next afternoon Zach drove to Holly Springs, halfway between Oxford and Farese’s home in Ashland, to meet his attorney at a gas station, where he was given another disk of the FBI’s recording of Balducci’s visit to the Scruggs Law Firm.

  Farese provided some new intelligence. Steve Patterson might be forced to plead guilty because he had run out of money and could not pay his attorney’s fees. There was one possibility for help, Farese said. Patterson was going to Alabama to meet with someone who might be able to finance his defense.

  P. L. Blake now lived in Birmingham.

  Farese said he had looked closely at the evidence. He told Zach there was nothing to incriminate him. He offered further assurance: “Your dad’s fine.”