THE INVINCIBLE MAN

The Sun Herald  |  March 30, 2008

 By Anita Lee

 Mar. 30, 2008 (McClatchy-Tribune Regional News delivered by Newstex) --

Scruggs 'never thought he could be touched and he got touched'

Former state Supreme Court Justice Chuck McRae Dickie Scruggs blinked back tears as he rushed from the federal courthouse in downtown Jackson.

 He had just testified against a fellow attorney who was like a brother, Paul Minor.

 Scruggs and Minor had grown close as they built multi-million dollar law practices on the Mississippi Coast, Minor in Biloxi and Scruggs in Pascagoula. They belonged to that exclusive club of attorneys envied for their private jets and political connections.

 Yet Minor and Scruggs had spoken little, if at all, in more than four years. They exchanged smiles as Scruggs took the witness stand in March 2007. When asked about their relationship, Scruggs testified that he and Minor worked together on cases, socialized, doted over each other's children. "I could go on," Scruggs helpfully told the jury.

 Their friendship's demise began in July 2002, when federal bank examiners discovered a curious loan Minor secured, then extended several times, for a Coast judge. The FBI started asking questions. Minor soon visited Scruggs' office in a panic.

 "I prefaced that conversation by telling Paul Minor that I had spoken with federal and state investigators in Jackson shortly before that," Scruggs calmly told the jury. "I said, 'Please don't tell me anything that you don't want me to have to tell them truthfully.'"

 Scruggs was investigated, too. But federal prosecutors in Mississippi's Southern District did not charge him in the judicial bribery case when Minor, state Supreme Court Justice Oliver Diaz Jr. and two lower court judges were indicted in July 2003. Minor's attorneys claim Scruggs' political connections biased the investigation, an allegation federal and state investigators have always denied.

 The Mississippi Bar and state Judicial Performance Commission failed to step into the void, even though court statements implicated Scruggs in unethical and possibly illegal cash contributions to the Diaz campaign in 2000.

 "I would think if that was known to the bar's general counsel that that would be something that would have to be investigated," said the bar's current president, Robert Bailess of Vicksburg. "The bar is a self-policing profession.

 "If you have knowledge someone has committed a violation of rules of professional conduct that would reflect on their character or ethics, the attorney has a duty to report it to the appropriate authority, which would be the bar."

 Diaz, acquitted in 2005 of accepting bribes from Minor, returned to the bench.

 Many still believe Scruggs' political connections saved him. Apparently, they also fed feelings of invincibility and entitlement that finally led to his professional downfall and heaped more shame on Mississippi justice.

 A mere two days after he testified against Minor, Scruggs met with associates in his Oxford office to discuss how they might unethically influence a state court judge in a lawsuit filed against his firm. Their conversation grew into a conspiracy captured on tape by the North Mississippi judge, who in the fall took Scruggs' $40,000 as a confidential informant for the FBI.

 "I think anybody who would experience that kind of protection or fortuitous circumstance would be emboldened by it," said Clarksdale attorney Charles Merkel, Scruggs' opponent in several long-standing and bitterly fought lawsuits. "I think he developed an air of invincibility, of somehow being above the law."

 Loans for judges

 From a distance, Scruggs witnessed Minor's public humiliation through two trials and, in the interim, imprisonment when Minor's alcoholic escapades led the judge to revoke his bond in 2006.

 From the time charges were filed, Minor's defense cried "selective prosecution." Scruggs' brother-in-law is U.S. Sen. Trent Lott, who recommended Southern District U.S. Attorney Dunn Lampton for his job.

 Mississippi's chief law enforcement officer at the time, Mike Moore, was a close friend who steered lucrative tobacco litigation to Scruggs in the 1990s. Moore's office also helped with the judicial bribery investigation.

 Moore delivered Scruggs to the back door of the federal courthouse when he testified before the federal grand jury that indicted Minor two months later. Moore, whose black BMW SUV the media spotted, said he just happened to be on his way to work and had talked with Lampton about ensuring Scruggs reached the courthouse early.

 Lampton questioned Scruggs, as a cooperating witness, before the grand jury.

 Moore later claimed that he was not involved in aspects of the investigation that included Scruggs and Lampton removed himself from the case, acknowledging a conflict where Scruggs was concerned. The Justice Department's Public Integrity Section took the lead at two trials, although assistant U.S. attorneys from Lampton's office also represented the government.

 In July 2005, Minor's attorney stood beneath the vaulted ceiling of a federal courtroom in downtown Jackson. Curious attorneys ducked in and out as Minor, Diaz and the other two judges were tried for the first time.

 Scruggs name came up frequently, although prosecutors did not call him to testify.

 Scruggs was the "architect" of loans that he and Minor extended to judges, Minor's attorney said in court. Justice Diaz' wife, Jennifer, told the FBI that Scruggs met with her at Mary Mahoney's Restaurant in downtown Biloxi to talk about loans for her husband's 2000 campaign.

 According to Jennifer Diaz, Scruggs told her, "If Mr. Minor doesn't live up to his obligations, I, Dickie Scruggs, will withhold money from him and make him do it." Scruggs was ostensibly referring to tobacco settlement funds owed to Minor.

 The government was well aware, Minor's attorney said, that Scruggs' longtime secretary met with Jennifer Diaz and gave her a bag of cash for the campaign, saying more money would be forthcoming if names could be found for the campaign finance disclosure forms.

 The secretary had already testified that she did what Scruggs requested, no questions asked. Minor's attorneys wanted to call her back to the stand after reading Jennifer Diaz's statement, but they decided it might be dangerous.

 Apparently, prosecutors drew the same conclusion. They did not call Diaz , even though a plea agreement compelled her to cooperate and testify truthfully.

 The jury heard all about the $75,000 loan Minor had secured for the Diaz campaign.

 Oliver Diaz also used a Biloxi condominium owned by Minor and Scruggs. Prosecutors, however, failed to prove Minor had bribed Diaz. He had not voted in any cases where Minor was the attorney. Minor and Diaz were acquitted, but the jury was unable to reach a verdict on charges against Minor and the two lower court judges.

 The jury did not consider an $80,000 loan Scruggs guaranteed for Diaz in 2000, or how Scruggs paid off the loan through a third party. During this time, appeals were pending before the Supreme Court in legal-fee disputes between Scruggs and other attorneys.

 In one of those cases, Diaz joined a unanimous opinion in Scruggs' favor. Rendered in December 2001, the decision sent the dispute back to Jackson County, where Scruggs wanted it. Even so, attorney Merkel of Clarksdale prevailed in the lower court.

 At Minor's 2007 trial, a second jury convicted him and the two lower court judges. Minor is serving 11 years in federal prison.

 'Teflon with Trent'

 A former associate of both Scruggs and Minor referred to them as Silk and Sandpaper, Scruggs being the silk.

 In court, a tailored suit draped over a tall, lean frame completes the multi-millionaire's polished demeanor. During Minor's legal ordeal, Scruggs was busy jetting to and from the Coast, where he represented policyholders against insurance companies after Hurricane Katrina. As always, he employed a public relations firm and enlisted politicians in the fray.

 His son, Zach Scruggs, began to take center stage, too, occasionally handling the incessant media calls and court appearances. Their biggest case, 640 policyholders vs. State Farm, turned out to be their undoing. Once again, the dispute involved legal fees.

 Former Attorney General Mike Moore, Scruggs' old friend from his days in Pascagoula, participated in negotiations with State Farm, as did Moore's protege, current Attorney General Jim Hood. In 2006, State Farm was on the defensive. The company claims Hood's threat of criminal prosecution, based in part on State Farm records Scruggs obtained from whistle-blowers, forced the company into a settlement with the policyholders.

 Two days after Hood settled his differences with State Farm, the insurance company began the wire transfer of $26.5 million in settlement fees to the Scruggs Katrina Group of attorneys. A Jackson law firm in the Scruggs Katrina Group felt shortchanged, suing over the settlement money in North Mississippi.

 Scruggs testified March 13, 2007, in the Minor case. On or about March 15, 2007, federal investigators learned, Scruggs and other attorneys started what became a conspiracy to bribe Circuit Court Judge Henry L. Lackey in North Mississippi.

 The nation's leading newspapers, along with those in Mississippi, have run stories since the federal government in November indicted Scruggs and four associates, including his son. The drumbeat intensified as one after the other entered guilty pleas. Dickie and Zach Scruggs were the last to confess.

 The investigation has wound its way south. Yet another attorney, Joey Langston of Booneville, confessed that he attempted to bribe a Hinds County Circuit Court judge on Scruggs' behalf. The state Supreme Court on Friday suspended the judge, Bobby DeLaughter, pending a Mississippi Commission on Judicial Performance inquiry.

 The Mississippi Bar and the Commission on Judicial Performance are fully engaged. The bar has formed a task force on ethics, while the commission has filed formal charges against the guilty lawyers, two of whom have already been officially disbarred.

 It remains to be seen how many of Dickie Scruggs' supporters will rally when he is sentenced in federal court in Oxford. The date has not been set.

 Minor watched friendships evaporate after he was charged with judicial bribery. Scruggs' family still believes he did nothing wrong and hopes his friends will stand by him.

 One who stood by Minor was Chuck McRae, a former Supreme Court justice from Pascagoula who frequently attended both of Minor's trials. McRae, a maverick who has his own history with the Judicial Performance Commission, remained in Jackson to practice law after he left the bench. He never liked Scruggs.

 "He always had the mindset of 'I'm going to beat you, crush you, but I also want to know in advance that I'm going to do it,'" McRae said

 The way McRae sees it, Minor got more time for influence peddling than Scruggs could receive for an outright bribe. Scruggs pleaded guilty to conspiracy to commit fraud, which carries a maximum penalty of up to five years in prison and a $250,000 fine.

 "There is a lot of irony. And he would have gotten away with it but for that attitude that he was Teflon with Trent. He lost that Teflon," said McRae, referring to Lott's resignation two days before Scruggs was indicted.

 "The irony is that he never thought he could be touched and he got touched."

 Like so many lawyers, McRae is angriest for another reason:

 "Our church is our profession and he is destroying our church. But it needs to be cleaned up and, thank goodness, the feds are doing it."

 Task force

 A Mississippi Bar Association task force has been formed as a result of the state's latest judicial bribery scandal. The Bar Task Force to Strengthen Confidence in the Legal System is asking for public input. Comments, suggestions and recommendations can be mailed to Task Force, The Mississippi Bar, P.O. Box 2168, Jackson, MS., 39225-2168; or e-mail info@msbar.org. Deadline to comment is April 7.

 Newstex ID: KRTB-0021-24119725