Wednesday, December 5, 2007

The Defense of Dickie Scruggs

The week since the indictment of Mississippi tort lawyer Dickie Scruggs and four other defendants for allegedly trying to bribe a state court judge to rule in their favor in a dispute over $26.5 million in attorney's fees has had enough twists and turns to qualify for the first few chapters of a John Grisham potboiler.  Speaking of whom, the well-known novelist is a friend of Scruggs, and in an interview with the Wall Street Journal (here) described the indictment as "a boneheaded bribery scam that is not in the least bit sophisticated."  Those writers sure know how to turn a phrase, don't they?  Grisham's comment does contain a kernel of Scruggs' likely defense to the charge: "If I was going to bribe a judge, I'd do a whole lot better job of it than this."

One twist in the case was the fact that a key codefendant, Tim Balducci, the payer of the bribe, was not arraigned with the other four defendants in the case, leading to speculation that he was a cooperating witness.  Then, on December 4, Balducci appeared and entered a not guilty plea to the indictment.  If he had been cooperating in the case, the U.S. Attorney's Office likely would have had him plead to a separate criminal information and not be charged in the main indictment.  At least that's the usual way of proceeding, so it does not appear at this point that Balducci is cooperating, although he could down the road.

The indictment (available below) quotes extensively from various conversations among the defendants, which in addition to Scruggs and Balducci include Scruggs' son, another attorney at the Scruggs law firm, and Balducci's non-lawyer partner, Steven Patterson, a former Mississippi State Auditor [NB: How is it that Patterson and Balducci are partners in a firm that includes a law practice when Patterson is not a lawyer?  Mississippi Rule of Professional Conduct 5.4(b) provides "[a] lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law."  Just wondering]  The speculation about Balducci's cooperation was based on the indictment's quoting of conversations between the defendants.  It is possible that Balducci gave a proffer to the government in the hope of striking a deal, but that never occurred and any proffer agreement should prohibit the government from using his statements directly against him.  Another possibility is that the government had a wiretap on the telephone in Balducci's firm.  A number of the conversations appear to be telephone calls to or from Balducci and Patterson and others in the conspiracy, and that may be the source of the information.

If there are recorded telephone conversations on top of videotapes of the meetings between Balducci and the state judge, something that has already been disclosed, then the defense will have to begin by attacking any ambiguity in those conversations.  That would be one component of what I suspect will be a two-prong legal strategy: first, throw Balducci under the bus as someone who lied to Scruggs and the others to carry out his own (delusional) bribery scheme, and then argue that someone as smart as Scruggs would never concoct a "boneheaded bribery scam" with the scheming Balducci. 

The first step is to portray -- or demonize -- Balducci as a misguided sycophant who wanted to curry favor with Scruggs in order to jump on his gravy train.  Then, assert that Balducci lied to Scruggs and the others in order to win a favorable ruling in the attorney's fee dispute -- a variant on the Richard Scrushy Defense in the HealthSouth prosecution.  This is a delicate maneuver, of course, because it requires Scruggs and the others to come across as gullible enough to fall for the entreaties of Balducci.

The second phase is to castigate the bribery scheme described by the government as a product of Balducci's imagination.  The fact that there was any documentation for the payments shows that Scruggs and the others thought Balducci was on the up-and-up because who in their right mind creates a paper trail for a bribe?  This is the flip-side of the gullibility argument, that if this really was a bribery scheme then Scruggs would have done a better job of hiding it.  That argument is dangerous, however, because it risks having the jury conclude that Scruggs was really using Balducci as a cut-out to hide the scheme, and the "boneheaded" paperwork was part of a grand plan to hang him out to dry if necessary. 

This type of argument essentially says to the government (and the jury) that "if you could find it, I couldn't have been doing anything wrong because I would have hidden it better."  Pointing out how much smarter you are than the investigators could be problematic, and recall that one of the seven deadly sins is "superbia," i.e., pride but also sometimes translated as hubris.  Offering intelligence as a defense to charge may backfire.

Balducci is certainly the linchpin of the case, and the defendants and their supporters have already begun to attack him.  We haven't heard anything yet from Balducci, and his lawyer would be smart to keep him quiet for now.  As it turns out, his lawyer for the moment is none other than Tim Balducci, who has to avoid validating the adage that a lawyer who represents himself has a fool for a client.  Staying quiet for now is his best defense, because his conversations with the state judge certainly put him in a bad light. (ph)

Download us_v_scruggs_indictment_nov_28_2007.pdf


UPDATE: The AP reports (here) that Balducci pleaded not guilty at a hearing at 1:30, then at 4:00 the same day pleaded guilty to one count of conspiracy and has been cooperating in the investigation of Scruggs et al. (plea agreement available below).  Indeed, Balducci's cooperation has already qualified as substantial under Section 5K1.1 of the Sentencing Guidelines and the government will move for a reduced sentence so long as he continues to assist the prosecutors. 

The procedure here is rather strange.  Balducci was not arrested, so the prompt appearance requirement of Federal Rule of Criminal Procedure 5 does not apply, and Rule 10, which governs arraignments, does not have any time requirements.  Why have a defendant plead not guilty, only to turn around and plead guilty?  It could be as simple as the U.S. Attorney's Office not having the paperwork ready, but it is yet another twist in the Scruggs prosecution.  The post above was written based only on Balducci pleading not guilty.  With him cooperating, the defense strategy of demonizing him remains the key. (ph)

Download us_v_balducci_plea_agreement_dec_4_2007.pdf

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Tracked on Dec 5, 2007 3:29:35 PM


An item in the WSJ law blog may answer the question you raise on the switch from a guilty to a not guilty plea: "...we checked in with the U.S. Attorney’s office down in Oxford. A spokesman there told us that the Balducci two-step actually went according to plan. Magistrate judges, he said, typically handle initial appearances and arraignments, at which time an initial plea must be entered. Thing is, magistrate judges can’t enter felony guilty pleas — those can only be entered by Article III judges. 'So the only plea you can enter in a situation like this is a not-guilty plea,' said the spokesman. 'The plea at that point is just a formality, but it’s the way it’s done.'"

Posted by: Walter Olson | Dec 6, 2007 6:35:01 AM

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