SCRUGGS HEARING: More than what’s in DJ printed edition

OXFORD – Strap on your seat-belt folks, ’cause by the time May 23 gets here, this is going to be the movie that begged to be made:

Monday, Zach Scruggs’ attorneys and federal prosecutors locked horns in Round One of a real prize-fight. We’ll have a good report in Tuesday’s Daily Journal, but I can’t include all this stuff, so thank goodness for the blog!

As the Scruggs-case followers know, Zach wants the federal court to throw out his 2008 conviction and sentence. He pleaded guilty to knowing about but not reporting that a colleague, Tim Balducci of New Albany, spoke illegally to then-Judge Henry Lackey to send to arbitration a legal-fees lawsuit against The Scruggs Law Firm and others involved in Katrina-related insurance cases.

Whew! That’s burned into my mind!

May 23 will be the start of the big-ole hearing in Oxford federal court about whether Senior Judge Neal B. Biggers will throw out the conviction/sentence.

If it’s anything like Monday’s Little Ole Hearing, this may turn out to be the trial that never happened.

Monday, Scruggs’ team wanted to convince Biggers to disqualify fed prosecutor Robert Norman from the government’s team for the May 23 hearing. They insist Norman committed prosecutorial misconduct by lying to the court that Zach was “fully aware” of the side-scheme to influence then-Judge Bobby DeLaughter in another Scruggs legal-fees lawsuit (Wilson v. Scruggs) and by not clearing up false testimony from Balducci to the grand jury that indicted Zach, his famous father, law partner Sid Backstrom, Balducci and former state auditor Steve Patterson.

It was a bit of a verbal slug-fest, shall we say.

The U.S.A. wants to keep Norman because he’s the last one who has actual institutional memory of all the Scruggs cases.

Zach’s team is loaded for bear with former AG Mike Moore, former MO Supreme Court Judge Chip Robertson, Mike Rader and Chris Robertson, who was the man to turn the lights out at The Scruggs Law Firm back in the day.

These guys have got their gloves laced up, Rocky fans!

Monday, they gave us just a taste of what’s likely May 23 – they got after former prosecutor Tom Dawson and picked a bit at a defensive Tony Farese, of famed Farese & Farese defense term.

Let me see if I can walk you through Monday without burning your brain up: (Much of this is paraphrase)

10:08 a.m. – Biggers enters courtroom.

Judge says we’re here to talk about disqualification of Norman, that he might be a witness. But now, I find out the petitioner no longer is interested in that.

Chris Robertson says that depends on several things, but we’re quite serious about putting Norman on the stand.

Biggers: I’m under the impression that’s no longer an issue. (a bit peaved, may I say).

Robertson: We’ve seen several representations from Mr. orman. None is supported by testimony. A choice – remove them from the record or let him testify.

Norman: We anticipated these kinds of attacks. Taking these allegations, there are other people who were present who can testify – Dawson, Joey Langston, others. (About testifying) I think I need to do that, but I have the corporate knowledge to help my fellow government attorneys. There is no prohibition to my testifying. WE believe we should reserve the ability for me to act as counsel and to testify, if need be.

Robertson: On this point, the procedure is fluid. It partly explains the ambiguity you are sensing, we are too. Problematic for a prosecutor to testify. Can’t be an objective witness. WE suggest there are plenty of attorneys to represent thegovernment. (He acknowledges that other witnesses can testify about issues before the court.) He drives home their concerns about Norman’s misconduct with the court about alleged “other bad deeds” (404B) evidence he told Zach was “fully aware” of back in February 2008.

(They argued over whether court rules bar prosecutors from being witnesses, or it if just says “at trials” or “bench trials,” “jury trials,” and so on.)

Biggers: What about other prosecutorial misconduct issues?

Robertson: Says he’s feeling discomfort at alleging misconduct by a fellow member of the Bar, but that’s why the court has adopted rules to deal with that. He says one biggie is Norman’s allowing Timothy Balducci’s false testimony to stick with the grand jury, which indicted everybody in November 2007. This is how the whole process began, the huge public unveiling began. Mr. Norman got this indictment. Balducci said he went to Zach and said Lackey wanted another $10K to compel arbitration. “How did he respond?” Norman asked him. Balducci said, “It was not a problem.” That is what sealed Zach Scruggs’ fate with the grand jjry.

Biggers:Did they already know it was false?

Robertson: Several weeks prior, they had the tape, they had a transcript. He had knowledge. And what about this “sweet potatoes” issue?

Biggers:Who knew that Balducci testified falsely?

Robertson: Undisputed at this point. No question it was false. It’s clear Zach never said anything about $10K or “not a problem.” It’s on Norman to give the grand jury good information. Why didn’t he take a transcript or the tape? He relied on a captive witness, literally scared for his own future. And he didn’t remediate that false statement. And there’s the misrepresentation about Lagnston: On the morning of 2/21/08, Norman was standing right here. You heard no evidence about the Wilson case. You were relying on Norman. He was talking the “other bad acts” evidence per DeLaughter, but he was talking about Richard Scruggs. He included Zach kind of as an afterthought.

Robertson: Norman said Dickie Scruggs wanted to shave the law. To get Balducci and Langston involved. Pay $1 millon to Peters. He’s talking about Richard Scruggs. Norman realizes he’s left out Zach, so he brings the whole thing down on Zach. Says Langston’s testimony would be brief but that it woudl implicated Zach, that he’s fully aware of the Wilson affair. But Balducci told us Zach was not involved with Wilson. He was a prime player but we never heard tht from the government until after Zach served his time.

Biggers: How did you find out?

Robertson: From the Bar complaint against Farese. Langston’s affidavit, also Judge Sanders, Tony Farese. Langston says he exonerates Zach, every time Norman asked him.

* * *

Biggers: That’s a very important don’t, when they knew it, don’t you agree? I’ll be interested in hearing that.

Robertson: Norman says it’s a misunderstanding, a misinterpretation. An interesting theory, except for the Langston and Sanders statements. That’s quite a misunderstanding – how exculpate becomes implicate. Norman says that Zach knew Peters was hired, therefore Zach knew about a felony scheme. His misrepresentatio was to you – you relied on it. When Norman filed the 404B brief (previous bad acts), the Langston testiony did not exist. This threat of 75 years in priso made Zach plead to earwigging.

Biggers:I set a hearing on the motion to reconsider the 404b information from Langston. I never got to hear it. I assumed Langsotn would testify. I wasn’t going to take Mr Norman’s word.

Robertson: The evidentiary record had not changed. We don’t know what pressure was on Langston at the time.

Biggers: Did you ever think for the motion to reconsider, that you had the right to call Mr. Langston?

Robertson: Your honor, we were under the impresison that you were done hearing evidence. Somebody said the train’s leaving the station. We were under severe pressure to resolve everything at this point. We had no indicate to put Langsotn on the stand. WE believed the government’s representatio to what he would testify – like you did. This is sort of an unfortunate chain of events. Now there ar real doubts about whether a man’s liberty was deprived. That’s why this disqualifaciotn rule is in effect. The chain of events compels disqualifaciton.

(10 minute recess)


Norman: By my saying I appreciate the seriouness of the allegations, if this court decides I intentionally mis represented to this court in order to send an innocent man to prison, I could be sanctioned, disbarred. We’ve been told to expect these kind of attacks. I accept that. As for Balducci’s grand jury testimony, at oe point, Balducci misspoke. He said Backstrom and Zach were told Lackey needed another $10K and they said “no problem. Dawson and I realized that this was not directed at Zach or Bachstrom but at Dickie Scruggs. So, I said to Balducci, what about “sweet potatoes,” anto correct the record in my view. Dawson is available to testify about that.

(This is one place where things got interesting. “Sweet Potatoes” were referred to by Balducci when he talked with Zach and Backstrom on 11/1/07. It’s not clear they even knew what he was talking about. The term also is used by Judge Lackey as a code word for the arbitration motion. It’s contested that the grand jury did not understand what “sweet potatoes” meant.)

Biggers; But the issue is that he said these things about Zach and Backstrom.

Norman: It’s referred to earlier in the tapes. Talking about the new order, BAlducci says “everything’s going to be OK.” He said the judge felt exposed but it would be OK. He said he discussed money with them, about sweetpotatoes. Then Zach was present, looking him in the eye and knew what he was talking about. But the exact language referred to Dickie Scruggs, not Backsrom or Zach.

Norman: On the second matter, on Feb. 20-21, 2008, the cour heard a number of motions. Langston was ready to testify that Dickie Scruggs involved himself in another judicial bribery proceeding, DeLaughter. WE felt the 404B was on point and admissable to show the state of mind of Dickie Scruggs hen he went to trial. To show the scheme was no mistake. It was powerful evidence. But the remanining question was what culd the court say to the jury about Zach and Sid, to caution the jury? We hae witnesses – Langston, Dawson, Farese on the way.

Biggers: Give me a proffer, what do you expect them to say?


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