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Mixed Fifth Circuit decision in Minor-Teel-Whitfield appeal

The Fifth Circuit has overturned (PDF) that portion of the convictions of Mississippi trial lawyer Paul Minor and two judges based on what is known as federal program bribery, while upholding the trio’s convictions for mail fraud and racketeering based on violations of state bribery law. The latter set of convictions, however, could be undermined should the U.S. Supreme Court strike down as unconstitutional the concept of “honest services” fraud. [ABA Journal, Freeland and more and yet more, Y’AllPolitics; our earlier, extensive Minor coverage]

Harper’s commentator Scott Horton and New York Times editorial commentator Adam Cohen have long defended Minor as the target of a supposed political prosecution premised on “vague allegations”, contending (to quote Cohen) that his crime “does not look much like a crime at all” and is based on things that “everyone” does in the Mississippi legal system. But the Fifth Circuit sharply rebukes this view of the case, laying out in some detail (quoting the ABA Journal) the nature of the corruption involved:

Structured as a short-term “balloon” loan that had to be renewed every six months, after the accumulated interest was paid, “the arrangement allowed Minor to keep Whitfield on a string while Minor held the bank at bay,” states the 68-page opinion, explaining the government’s theory of the case concerning this one judge. Minor directly or indirectly made the vast majority of the payments on the $140,000 in loans to Whitfield, the opinion notes, and little or none of the money apparently was spent on Whitfield’s judicial campaign.

Minor also repaid the $25,000 loan he arranged for Teel, which was deposited into the judge’s campaign account. However, neither judge reported the loans as required on campaign disclosure forms, the opinion states.

Each judge subsequently made rulings in a case that allegedly may have been influenced by their financial relationship with Minor. However, the legally required connection between federal funds the judges received [emphasis added] and their rulings was not established, the 5th Circuit found.

There are indeed plenty of legitimate questions — which hardly raised their heads for the first time in this case — about the armory of powers that federal prosecutors have developed over many years in their efforts to go after state-level corruption. But that this was an episode of grotesque corruption, and that Minor’s misconduct went far beyond anything remotely defensible as politics as usual, should by this point be apparent even to Harper’s and the Times.

War crimes trials? No thanks

Stuart Taylor agrees that the courts are right to rebuke some of the Bush administration’s aggressive war-powers claims, but that doesn’t make it anything other than a “deeply misguided” notion to try its leaders for supposed “war crimes”, let alone encourage other countries to snatch traveling U.S. ex-officials for trial there (“Our Leaders Are Not War Criminals”, National Journal, Jun. 28).

One of the most dedicated enthusiasts for such trials is attorney/controversialist Scott Horton, who writes at Harper’s and Balkinization and is an adjunct faculty member at Columbia Law School; after noticing how often Horton’s output seemed to be in need of fact-checking, I spent a few minutes just for the fun of it stringing together a sampling of such instances which appears here (scroll).

Scruggs scandal developments, February 5

* Pertinacious Scruggs effort to evade deposition by State Farm attorneys results in “testosterone fiesta” of swaggering counsel (Folo; sequel; YallPolitics; Rossmiller); (P.S. Yes, Ted and I independently noticed and posted on this just minutes apart.)

* Remember when Mississippi Attorney General Jim Hood declared his political patron Scruggs a “confidential informant”, thus throwing a most useful cloak of protection over him in his battle against contempt charges? It happens that Scruggs was at almost exactly the same moment donating large sums to the Democratic Attorneys General Association which seem to have passed through like a dose of salts to emerge at the other end as donations to Hood (YallPolitics; earlier on DAGA)

* Attorney Ed Peters, tagged with a pivotal role in Langston-DeLaughter branch of scandal, was formerly high-profile local D.A.; his prosecutorial vendetta against an attorney named J. Keith Shelton comes in for scrutiny in a new series by Folo proprietor Lotus [#5 in series; posts tagged Peters; see also YallPolitics]

* Folo co-blogger NMC, looking into Luckey and Wilson fee disputes (earlier here, here, here), is rattled by the prevalence of hearings-without-notice, ex parte judicial contacts, and other Gothic proceduralisms [Folo];

* Implications or non-implications for civil proceedings of Scruggs’s taking the Fifth [White Collar Crime Prof Blog]

* Adam Cohen of the NYT and Scott Horton of Harper’s claim defendants in precursor Minor-Teel-Whitfield scandal were railroaded on vague charges over not-really-illegal stuff; read pp. 6-9 of the indictment and see whether you agree (YallPolitics);

* For Mississippi, it’s already the most far-reaching corruption scandal in a century, aside from the question of how much bigger it might get [Jackson Clarion-Ledger]

Earlier Scruggs coverage on our scandals page.

Scruggs indictment X

A few odds and ends:

Two rumors previously passed along in this space have been denied by relevant parties. The attorney for indictee Sidney Backstrom specifically denies that his client is considering a plea deal with prosecutors, contradicting speculation from Scott Horton that we passed along the other day (more). We also cited Sid Salter of the Jackson Clarion-Ledger on reports that federal agents searched attorney Joey Langston’s home as well as law offices, but Salter talked with Langston’s mother who says that isn’t so (more).

Lotus/folo has some speculation on what it might mean, as to the way the investigation developed, that the dates in the indictment switch back and forth between “on or about” and precise dates. Also on the timeline of the investigation and prosecution, Alan Lange at Y’All Politics has further thoughts on the post-election surfacing of the prosecution’s case.

Finally, former AG Mike Moore, a longtime mentionee on this site and deeply connected with Scruggs through the tobacco episode among other involvements, had at first been considered a likely candidate for the Lott Senate seat, but has now changed his mind and prefers to spend time with his family (Y’All Politics).

P.S.: As for the question, “why would a lawyer so rich do such a thing?”, Great Red Spot is reminded of a cynical quote from Monty Burns of The Simpsons: “I would trade it all … for a little more.”

Scruggs indictment IX

Yes, it seems there were wiretaps. Defendants will be seeing evidence from the prosecution momentarily which might (or might not) be the trigger for further flipping and early plea deals, if such there will be.

There is enormous curiosity (e.g.) about P.L. Blake, to whom Scruggs says he paid $10 million (and tens of millions more in future payments) for vaguely described intelligence services aimed at swaying political influentials during the tobacco caper. Per a 1997 account posted at Y’All Politics, “Blake pleaded ‘no contest’ in 1988 to a federal charge that he conspired to bribe officials of the now-defunct Mississippi Bank to secure favorable loan terms.” The same article, citing reporting in the Jackson Clarion-Ledger, reports that Blake was in close phone contact between 1994 and 1996 with eventually-disgraced state Auditor Steve Patterson, who after leaving office went into partnership with Timothy Balducci and is one of the five indicted in the current Scruggs affair. Per AP, “Patterson was a banker at Mississippi Bank before his 1984-1987 tenure as head of the Mississippi Democratic Party.”

David Rossmiller, as so often, is out front with a report filling in background on two other controversies involving Blake. One arose from a venture into the grain storage business which landed him in a Texas dispute in which his attorney was none other than Fred Thompson, later a Tennessee senator and presidential candidate. The other arose from his cordial dealings with a former chief of staff to Sen. Trent Lott (R-Mississippi).

Harper’s blogger Scott Horton has now published his take, as is his wont heavily dependent on hush-hush (but no doubt wholly trustworthy) confidential sources who float all sorts of theories about scoundrelly doings by the highly placed. He winds up with a theory that would pull Sen. Lott into it (though with no allegation of criminality) by way of the Acker contempt matter, as distinct from either the Balducci/Lackey bribery attempt or, say, the Paul Minor affair. Of Horton’s many anonymously sourced speculations, the one that caught my eye was tucked into a footnote: “A law enforcement official I interviewed, who for professional reasons asked to remain anonymous, told me that Scruggs’s junior partner Sidney Backstrom might take the same road as Balducci.” Now that is news a rumor (more). (Update Tues. evening: Backstrom’s attorney Frank Trapp flatly denies that anything of the sort is in the works: Patsy R. Brumfield, “Backstrom firm on innocence, his attorney says”, Northeast Mississippi Daily Journal, Dec. 12.)

This is probably a good place to apprise readers who aren’t aware of it that 25-odd years ago, while first gaining a footing in the policy world, I worked briefly on Capitol Hill drafting research papers for a committee then headed by Mr. Lott. We only talked a couple of times, I had never set foot in the state of Mississippi at the time, and I’m pretty sure he wouldn’t recognize me on the street, but if you’re a conspiracy theorist about such matters, there you have it.

At Y’All Politics, commenter “lawdoctor1960” has some speculation as to why the remarkable deposition of Scruggs in the Luckey case didn’t get more media or political attention at the time.

Welcome Andrew Sullivan, David Rossmiller, Y’All Politics readers.

Attorney Tim Balducci’s role as deputized lawyer for the state of Mississippi in the MCI and Zyprexa cases is drawing public scrutiny, and may result in pressure for reform of AG outside contracting.

We’ve started a new “Scandals” category for readers who want quick access to coverage of the Mississippi mess, also stocked with some earlier links to coverage of such earlier blow-ups as Milberg Weiss/Lerach, Kentucky fen-phen, the Paul Minor affair, etc. For those who are following Scruggs posts in sequence, be aware that yesterday’s first and second posts fell outside the numbering scheme.

Scruggs indictment, day two

David Rossmiller at Insurance Coverage Blog (who’s also a co-blogger of mine at Point of Law) continues to be the must-read source on this sensational story and its fast-breaking developments. He’s posted a PDF of Jones v. Scruggs, the lawsuit before Judge Lackey by lawyers who say they were cut out of Katrina fees. He also offers some answers to the question posed by a commenter at Above the Law, who asks, “What kind of cheap-o offers a $40,000 bribe to resolve a dispute over $26.5 million in attorneys fees?!” (To begin with, the ruling sought from Judge Lackey would not have disposed of the fee claim, just sent it to arbitration.) Martin Grace scents a ripe irony in the fee-dispute lawsuit, noting that it charged Scruggs with engaging in the same sorts of tactics toward fellow lawyers that he regularly accused insurers of practicing toward their insureds: “lowballing claims and producing fake documents in support of the claims.”

Jeralyn Merritt at TalkLeft writes that Judge Lackey “presumably [agreed] to tape his calls with the defendants. I suspect the F.B.I. also got a wiretap on Scruggs’ or his co-defendants’ phones, since there are several calls described in the Indictment that don’t involve Judge Lackey. Getting a wiretap on a law firm’s telephone is unusual — particularly due to the substantial and cumbersome minimization efforts required to ensure that calls of clients and lawyers unrelated to the criminal investigation are not overheard.” At the Jackson Clarion-Ledger, columnist Sid Salter has more on co-defendants Tim Balducci and Steve Patterson. A PDF of the indictment is here.

The internal cohesion of the anti-insurer lawyer consortium known as the Scruggs Katrina Group (SKG) appears at present to be under extreme pressure. Rossmiller reports that “policyholder lawyers in general tell me they are seething over Scruggs” and in particular that at least some lawyers who have been his allies “don’t want their names and their cases tarnished with the Scruggs name”. On Thursday an extraordinary contretemps developed in which SKG co-founder Don Barrett of Lexington, Miss. sent a letter (PDF) to a judge hearing Katrina cases against State Farm, suggesting that SKG was being re-formed without Scruggs and would take over the litigation with he, Barrett, as lead counsel (Lattman, WSJ). Within hours, Scruggs had dispatched a letter of his own (PDF) saying that Barrett was misinformed, that it was up to plaintiff families to decide who they wanted to represent them, and that many would undoubtedly wish to retain Scruggs (second posts at Lattman and Rossmiller). As of Thursday evening, the Scruggs Katrina Group website has prominently posted the Scruggs letter but not the Barrett one; one might speculate that if some sort of split within SKG is imminent, the website operation, at least, may have maintained loyalty to the Scruggs side.

On the statewide political repercussions, see Majority in Mississippi, Sid Salter at the Clarion-Ledger, and Chris Lawrence at Signifying Nothing, who also quotes Salter in a comment thread predicting: “The next sob story will be that Dickie’s indictment is about Bush administration persecution of trial lawyers and a rehash of Paul Minor’s problems.” Take it away, Adam Cohen and Scott Horton!

On political repercussions nationally, it didn’t take long for the Hillary Clinton campaign to cancel the Scruggs-hosted fundraiser that was to have been headlined by husband Bill Clinton next month (Associated Press, WSJ Washington Wire). The North Dakota political blog Say Anything thinks politicos in that state should return the (rather substantial) sums they have received from Scruggs and colleagues, but one may reasonably assume that such calls will be ignored, just as elected officials have been in no hurry to divest themselves of the booty collected from such figures as felon/mega-donor William Lerach.

Where are Scruggs’s admirers and defenders? One can only suppose that somber music is playing in the corridors at the business section of the New York Times, which has run one moistly admiring profile of the Mississippi attorney after another in the past couple of years. As of 3 p.m. Thursday, the Times’s very restrained story on the indictment was in a suitably inconspicuous position on the paper’s online business page — the 15th highest story in the left column, in fact. The story, by serial Scruggs profiler Joseph B. Treaster, quotes the relatively ambiguous line attributed to defendant Timothy Balducci — “All is done, all is handled and all went well.” — but omits the far more smoking-gunnish “We paid for this ruling; let’s be sure it says what we want it to say.” And things are anything but upbeat at Mother Jones, where Stephanie Mencimer concedes that she finds the indictment “pretty damning“.

More links: Paul Kiel, TPM Muckraker (indictment “devastating… it doesn’t look good for Scruggs”); Legal Schnauzer (defender of Paul Minor distinguishes the two cases); WSJ interview with Judge Lackey (sub-only) and editorial (free link), Rossmiller Friday morning post (certain details in indictment suggest that a conspiracy insider, possibly Balducci, may have cooperated with prosecutors)(& welcome Instapundit, Point of Law, TortsProf, Adler @ Volokh, Open Market, Y’allPolitics, Majority in Mississippi, Rossmiller readers).