Hearing gives insight into judge’s involvement

Published 11:07 pm Saturday, February 23, 2008

OXFORD (AP) — For two weeks, Judge Henry Lackey agonized over what to do.

He was pretty sure Tim Balducci had just offered him a bribe and was torn about his next move.

Testimony from Balducci and FBI Special Agent William P. Delaney during a hearing in the federal bribery case against Richard ‘‘Dickie’’ Scruggs and his associates offered the first in-depth look at Lackey’s role in building evidence against the famed plaintiffs attorney.

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‘‘Judge Lackey was terribly troubled by the whole incident,’’ Delaney said. ‘‘He was troubled for two reasons. A, he knew what Mr. Balducci was doing was wrong and at the same time he was conflicted because he didn’t want to get his friend in trouble.’’

Lackey is the key figure in the federal bribery case against Scruggs, his son and law partner Zach, and Sidney Backstrom. All three have pleaded not guilty to charges that include defrauding the federal government and wire fraud.

The judge has not returned multiple messages left by The Associated Press. Testimony last week, however, offered a glimpse of testimony that likely will be offered during a trial, which is set for March 31.

Federal authorities’ description of what led to the charges sounds straight forward: Scruggs and his associates paid a judge $40,000 to rule in their favor in a dispute involving $26.5 million in Hurricane Katrina settlement fees. But the picture was not so clear to Lackey last March as he considered contacting the U.S. attorney’s office in Oxford.

In testimony last Wednesday, Balducci said he first went to Lackey to talk with him about the case involving the Scruggs law firm. He told the judge he thought the case should go to arbitration, which is what Scruggs wanted.

Lackey felt uncomfortable with the discussion.

‘‘He knew something improper had happened,’’ Delaney said. ‘‘He just didn’t know if it was illegal or not.’’

He agreed to help the government find out. He began wearing a wire and recording phone conversations with Balducci from May through September.

Yet even six months after their first conversation, Delaney said Lackey still wasn’t sure there had been a crime. So he finally forced the issue and asked the question. Would Scruggs be willing to pay him to rule in his favor in a dispute over $26.5 million in Hurricane Katrina settlement attorneys fees?

‘‘It took Judge Lackey all summer, from my perspective, to get this thing resolved,’’ Delaney said. ‘‘And to get this thing resolved, he decided he had to ask that question.’’

The answer, according to Balducci, was yes. Balducci has pleaded guilty in the conspiracy and is working with prosecutors to build the case against the three defendants.

Balducci said the idea of going to Lackey was first broached by Zach Scruggs in a meeting at the Scruggses’ downtown Oxford office. The Scruggses knew of Balducci’s close relationship with the Lafayette County circuit judge and hoped to exploit it.

When asked by defense attorney John Keker if he had volunteered to approach Lackey, Balducci responded: ‘‘Volunteered? I don’t know if I’d put it that way. I was asked to and I agreed to.’’

He recounted the meeting later to federal investigators.

‘‘What I said to the agents is we didn’t talk about giving money to Judge Lackey at that meeting,’’ Balducci said. ‘‘We certainly discussed improperly influencing the judge at that meeting.’’

Balducci was startled when Lackey asked for money in a Sept. 18 phone call that was recorded, and went to his office to meet with him three days later to clarify exactly what the judge wanted.

Lackey concocted a story about needing $40,000 to get himself out of a personal bind and asked Balducci if he thought Scruggs would pay the money, the witness testified.

‘‘I said, yes, that I would help him,’’ Balducci said. ‘‘I would get it together and help him.’’

Balducci contacted Backstrom, a lawyer in the Scruggs firm, to see if the elder Scruggs would pay the judge. Balducci was told to go ahead and pay the money.

He testified that he was willing to front the money, but his business partner, former state Auditor Steve Patterson, wanted word from Scruggs. So Patterson, who has also pleaded guilty in the case, contacted P.L. Blake, another Scruggs associate.

‘‘He wanted some direct confirmation because the $40,000 meant a lot to us at the time and he wanted to make sure that if we were going to do this we would get our money back,’’ Balducci said.

Word came back from Blake ‘‘that we would be covered and not to worry about it.’’

Balducci said he and Patterson finally talked directly with the elder Scruggs about the bribe on Oct. 16 in Scruggs’ office.

‘‘Steve and I were there to meet Dick on an unrelated matter and before we even sat down, he brought it up,’’ Balducci said.