Scruggs enters guilty plea in judicial bribery case

By The Associated Press | The Natchez Democrat

Originally published 10:45 a.m., March 14, 2008
Updated 12:07 a.m., March 15, 2008

JACKSON (AP) — Richard ‘‘Dickie’’ Scruggs, the legendary trial lawyer who made Big Business tremble every time he set foot in court, pleaded guilty Friday to conspiring to bribe a judge — a case that will send him to prison and spell the end of his storied legal career.

Prosecutors are asking for five years behind bars for the 61-year-old Scruggs, a multimillionaire who combined a shrewd legal mind and the aw-shucks charm of a Southern country lawyer to extract billion-dollar settlements from the tobacco and asbestos industries, among others.

The giant of the plaintiffs’ bar will lose his license to practice law.

Scruggs and co-defendant Sidney Backstrom both pleaded guilty to conspiracy to defraud the United States for conspiring to bribe a Mississippi judge for a favorable ruling in a legal-fees dispute from a Hurricane Katrina insurance lawsuit.

Scruggs’ law partner and son, Zach, also is charged in the case but did not enter a plea and is expected to go to trial.

Prosecutors said they would also recommend 2-1/2 years for Backstrom.

For months, Scruggs appeared intent on fighting the charges, and many reporters who had closely followed the case were caught off-guard by the plea bargain. Scruggs folded after two of his co-defendants turned on him, one of them secretly tape-recording him for the FBI.

Federal prosecutors refused to comment, and Scruggs’ attorneys did not immediately return calls.

Scruggs’ license to practice law will be revoked, which is standard in the case of a felony conviction, said Bobby Bailess, president of the Mississippi Bar Association. Under the rules, Mississippi lawyers who are disbarred for a felony cannot seek reinstatement.

No sentencing date was set. U.S. District Judge Neal Biggers said he expected to announce a date after he receives a pre-sentence report, which would take 30-45 days.

Court documents show prosecutors will recommend that the judge drop the several other counts against Richard Scruggs when he is sentenced, including mail fraud.

Many industries that have tangled with Scruggs regard him as a buccaneer, a shakedown artist with a law degree.

Scruggs has been ‘‘the bane of Wall Street,’’ and leaders of some of the companies he sued might take satisfaction in his downfall, said Stephen Gillers, a New York University law professor and authority on legal ethics. He described Scruggs as ‘‘an exceptionally prominent American lawyer with astonishing success and wealth from law practice.’’

Lisa Rickard, president of the U.S. Chamber of Commerce Institute for Legal Reform, said Friday that the Scruggs case is the latest example of fraud and corruption among some of the ‘‘pre-eminent lawyers in the plaintiffs’ bar.’’

‘‘There’s an issue here that I think we need to look at whether or not there is something systemic going on. The culture of greed and corruption is troubling among some in the plaintiffs’ bar, with some people sort of winking and nodding at it.’’

Scruggs was indicted along with his son and three associates in November.

They were accused of conspiring to pay a Lafayette County Circuit Court judge $50,000 for a favorable ruling in a dispute over $26.5 million in legal fees from a mass settlement of Hurricane Katrina cases.

Judge Henry L. Lackey reported a bribe overture to the FBI and worked undercover. Two of the men who were indicted, attorney Timothy Balducci and former Mississippi State Auditor Steve Patterson, pleaded guilty and began working with the prosecution. Balducci admitted to the FBI that he paid Lackey $50,000 in cash and says he did so at the behest of the Scruggses and Backstrom.

Backstrom and the Scruggses had said Balducci acted on his own. Court documents show Balducci wore a wire and recorded incriminating statements from Scruggs.

Scruggs — a hard-charging former Navy pilot — is the brother-in-law of former U.S. Sen. Trent Lott, R-Miss., but was a major donor to Mississippi Democrats, including the current and former state attorneys general.

Scruggs is only the most recent big-name Mississippi plaintiffs’ attorney brought down in judicial bribery schemes since March 2007, when Paul Minor — one of Scruggs’ longtime friends — was convicted of charges ranging from racketeering to bribery for providing financial favors to two coastal judges. The two judges were convicted with Minor, and all three are in federal prison.

University of Mississippi law professor George Cochran said Friday that the Scruggs case is a tragedy.

‘‘Keep in mind this is an isolated incident,’’ Cochran said. ‘‘It’s not part of a pattern of practice of the bar, but even isolated incidents can result in very bad consequences not only to Mr. Scruggs in particular but to the bar in general.’’

Bailess, the bar association president, said the judicial bribery cases have been ‘‘a black eye to the legal system in general.’’

‘‘But I have confidence that this terrible thing that’s happened is in turn going to grow into something that is good,’’ Bailess said Friday. ‘‘I believe it is a wake up call for lawyers to do a better job of policing lawyers, and I believe it’s a wake up call for judges to do a better job of policing and disciplining attorneys that are guilty of misconduct.’’

Scruggs, a Pascagoula, Miss., native, helped negotiate the multibillion-dollar tobacco settlement in the 1990s, working with whistleblower Jeffrey Wigand, a former tobacco company scientist. The actor Colm Feore played Scruggs in the 1999 movie about the case, ‘‘The Insider,’’ starring Al Pacino and Russell Crowe.

After Katrina struck in 2005, Scruggs insurance companies on behalf of hundreds of homeowners whose claims were denied. Lott was one of his clients.

Scruggs lives in Oxford and has flown to and from legal engagements around the South in his personal jet. Scruggs is unapologetic for his wealth, saying the money lets him match corporate opponents in ways few other lawyers could afford.

A graduate of the University of Mississippi, he is one of the school’s largest donors. The music department building at Ole Miss bears his name.

He is also is a player in national politics. Bill Clinton was headed to Scruggs’ home for a Dec. 15 fundraiser for Hillary Clinton, but the event was canceled after the indictment.

Scruggs has also made plenty of enemies. One is Mississippi Insurance Commissioner George Dale, who lost an re-election bid last year after 32 years in office.

Scruggs accused Dale of being too cozy with insurers after Katrina, and took out a newspaper ad depicting Dale as a pig covered with pink lipstick by State Farm Insurance Cos. executives. The caption: ‘‘Lipstick on a Pig.’’

Dale suggested Scruggs’ indictment resulted from the same bare-knuckle tactics he used to ‘‘get rid of me as commissioner of insurance.’’

State Farm spokesman Phil Supple on Friday declined to comment on Scruggs’ guilty plea because the matter did not directly involve the company.