The Fall of the House of Zeus (12 page)

The Butler case had been valuable to the members of HALT. The judge in Jones County who presided over the case was considered sympathetic to the plaintiffs and had allowed Motley a great deal of leeway to obtain tobacco industry documents through a legal process known as discovery. To Scruggs, the Butler case had become a “discovery engine,” providing much detail and information to the plaintiffs.

The new conflict had the potential of jeopardizing any settlement with tobacco because it might affect an agreement on immunity.

The Butler case had taken a strange turn. Instead of representing the widow, Motley had been sued by her. Handling Mrs. Butler’s suit was a Jackson lawyer named Shane Langston. His sister, Cindy, though
associated with another law firm, was also a member of the new Butler legal team.

To see if the affair could be resolved, Scruggs turned to the Langstons’ brother Joey. Scruggs knew Langston as a successful attorney who had maintained his father’s practice in the little town of Booneville while his siblings had gone off to more urban locations. Scruggs didn’t know Langston well, but he recalled sending a few asbestos cases his way after Steve Patterson, who now worked with Langston, asked for the business. Scruggs felt he was in position to seek a favor.

“This is going to be a big stink,” Scruggs said of the suit against Motley when he called Langston. Invoking the brotherhood of trial lawyers, Scruggs added, “It takes away our high ground.”

Langston agreed to see what he could do. If he was successful, Scruggs promised to assign 3 percent of his take from tobacco toward a settlement of the Butler disagreement. (According to Langston, Scruggs had made a commitment to him earlier for a 3 percent “contingency” cut of anticipated fees from the tobacco initiative.) The conditions were vague, but some of Motley’s share of the tobacco money would also go to resolve Mrs. Butler’s complaint.

Langston traveled to Jackson to meet with lawyers representing the various parties. He found himself shuttling between different floors of a building, carrying offers back and forth. One of the sticking points was Scruggs’s promise of 3 percent, which had not been sealed with a signature. After some discussion on the phone, Scruggs agreed to meet with Langston at a familiar setting, P. L. Blake’s home in Greenwood, to sign the papers.

A settlement was reached, and the case was sealed by a judge in Jones County, with details of the arrangement kept secret. The deal would lie smoldering for nearly a decade until it was revived in another dispute between Scruggs and an erstwhile friend and associate. This time the antagonist would be Joey Langston.

    
Diane Scruggs had long been troubled by some of her husband’s associates. Coming from a privileged environment, the daughter of a prosperous dentist and the wife of a successful attorney, she detected in Dick’s associates’ character scents of raw greed and uncultured manners that were almost Snopesian in their dimension.

Langston’s effort to horn in on Scruggs’s tobacco money represented an early warning sign to her. She resented Langston’s grasping style—she felt he had been slow to repay a significant loan, $2 million from
Scruggs that Langston described as an “advance” on expenses in Fen-Phen cases. Though Diane considered Langston something of a charlatan, she felt even more uncomfortable in the presence of his associate Steve Patterson.

From the time he sought to indict Dick in 1992, Diane had an aversion to Patterson. She thought him, at best, a boor. She recoiled when Langston and Patterson visited the Scruggses’ skybox at Ole Miss football games, glad-handing Dick and Diane and their guests during halftime breaks. To the elegant Diane, the two men seemed relentlessly on the make for money.

When she complained to her husband, Scruggs brushed off her objections. He liked to invoke an old maxim: Keep your friends close and your enemies closer. He laughed at Diane’s objections and asked her not to say anything unpleasant in public.

She dutifully kept a smile in the men’s presence, but it was difficult.

Diane had questions about P. L. Blake, too. He was something of an enigma. Though she saw him no more than two or three times throughout the years, she recognized his deep voice when he telephoned, and he called Scruggs’s home often. He was invariably cordial and seemed to be watching out for the Scruggses’ interests. (When the planes crashed into the World Trade Center towers on September 11, 2001, he was the first to call to make sure the Scruggses were watching television.) After learning that Scruggs paid Blake thousands of dollars a month, Diane wondered exactly what services he provided. And why would Dick respond to Blake’s summons to come to his home in the Delta to settle business? “If I were working for somebody, wouldn’t it be presumptuous for me to tell the boss to come meet with me?” she asked her husband. “It sounds like the tail is wagging the dog.”

Scruggs laughed at her questions, explaining that Blake had valuable political connections.

    
While various claimants nibbled at Scruggs’s share of the tobacco initiative, solidarity among members of the HALT venture unraveled. Pauline and Mike Lewis were troubled over Scruggs’s tendency to take center stage. He had rushed around the country piling up heavy expenses while making unilateral decisions. Sometimes he seemed to be taking the initiative in uncharted directions. Without consulting with his partners, he spoke for them in public forums and television interviews.

The couple felt Scruggs was taking all of the credit for Lewis’s
groundbreaking idea. To the husband-and-wife team, Scruggs’s conduct amounted to theft of their “intellectual property.” Acting independently, he had used Lewis’s concept—designed for Mississippi—and applied it in cases where he represented other states outside the scope of the HALT alliance. As a result, Scruggs made millions more than the others in the group.

Though the Lewis firm’s share of the Mississippi settlement was $140 million, they never forgave Scruggs for his handling of the case. They concluded that he was nothing more than a megalomaniac, and they joined the ranks of other Scruggs partners who believed they had been chiseled by him.

    
There were other, more bizarre demands on Scruggs’s tobacco funds.

Pete Johnson, the former state auditor who had fixed the legislation to approve contingency fees for outside counsel in state cases, claimed that Scruggs had failed to live up to his agreement to pay him 10 percent of his tobacco fortune. There was nothing on paper, but Johnson insisted he had Scruggs’s word.

Scruggs had paid him $5,000 a month for several months after Johnson got the language inserted in the Medicaid bill, but then cut him off. Before Johnson could reach an understanding with Scruggs, he became gravely ill with a liver malady. Johnson moved with his wife, Scruggs’s cousin Margaret, back to her Delta home in Clarksdale—he thought to die. He decided to spend his final days fighting Scruggs, summoning enough energy to drive more than three hundred miles to Scruggs’s office in Pascagoula in order to confront him. Johnson languished in Scruggs’s waiting room all afternoon and never saw him; he figured Scruggs had escaped through a back door. Still, Johnson persevered.

Johnson obtained a liver transplant in 1996. (Scruggs says he helped get Johnson to Texas for the operation; Johnson insists Scruggs offered no such assistance.) Restored to better health, Johnson sought vindication with a lawsuit, asking for $140 million, which he understood to be 10 percent of Scruggs’s share of the tobacco money. The suit never got traction.

Finally, in 2001, P. L. Blake called Johnson with instructions to come to his home in Greenwood. For years, Johnson had known Blake as a spoke in Eastland’s wheel; any message from Blake carried authority. So Johnson made the hour-long drive through the cotton fields of the Delta, then sat and listened as Blake told him to give up his lawsuit.
It was folly, Blake said. To settle, Scruggs was willing to pay him $100,000. Johnson decided to accept. Blake closed the deal by writing Johnson a check that day for $100,000 from his own account.

The same year, coincidentally, Johnson was appointed chairman of the federal Delta Regional Authority, a Republican patronage position that could be traced to Trent Lott. With the job, Johnson got a spacious office in the abandoned chambers of a federal judge in the post office in Clarksdale, where he proudly displayed the hardwood walking stick his grandfather “Big Paul” Johnson, the governor of Mississippi, had once used to cane a political enemy.

    
There were others. An anti-tobacco activist named Richard Daynard also sued Scruggs and Ron Motley. A law professor at Northeastern University in Boston, years before the Mississippi Medicaid litigation Daynard had founded the Tobacco Products Liability Project to discourage smoking, and had served as a consultant in the case.

In a 2000 lawsuit, Daynard contended that he had made a handshake deal with the two lawyers who agreed to pay him 5 percent of any tobacco fees they collected.

Scruggs dismissed his claim, saying that Daynard was “a bit more mercenary than people think he is.”

But Scruggs yielded in the end. Each quarter, Daynard began to get $100,000 from Scruggs’s tobacco account.

    
A particularly nasty dispute grew out of Scruggs’s arrangement with The Developing Markets Group, the partnership held by John Sears, Joel Hoppenstein, and his brother-in-law’s associate Tom Anderson. Even though Scruggs channeled millions of dollars through the group, they clamored for more. And details of where the money went were murky.

Following the successful conclusion of the tobacco case, Scruggs met several times with Anderson and P. L. Blake to adjudicate issues. Though Scruggs professed later that he was “not sure what DMG is,” it seemed clear to him that Blake had an interest in it. Because of the long relationship between Anderson and Blake, Scruggs assumed the pair had a formal business association. But after an argument broke out over fees, Anderson insisted that Blake was not a part of DMG.

Nevertheless, according to court documents, some of Scruggs’s early payments to Blake were routed through DMG. Scruggs agreed to pay the group $15 million for their services, plus another $1 million a year
for the duration of the tobacco settlement. Blake got $10 million, which amounted to two thirds of the initial payment to DMG, and was guaranteed additional payments from Scruggs of almost $2 million a year. Blake’s $50 million understanding with Scruggs was breathtaking.

Charles Merkel, an attorney who delved deeply into Scruggs’s finances in connection with another lawsuit, found evidence that $10 million to Blake had originally been routed through Scruggs’s friend Joey Langston before finding its way into Blake’s hands. Merkel was unable to reconcile those payments with documents showing that Blake got the money via DMG.

In an attempt to determine how Blake used the money, Merkel succeeded in winning a subpoena for records of Blake’s account at a Greenwood bank.
But U.S. District Judge Allen Pepper sealed these documents against wider inspection. Pepper was a prime example of Lott’s Sigma Nu network.
Back at Ole Miss, Pepper had roomed with Lott and sung with him in a quartet, called The Chancellors, that still performed at Sigma Nu reunions four decades after their graduation.
Scruggs attributed Pepper’s elevation to the federal bench by President Clinton in 1999 as a thank-you to Lott for the Mississippi senator’s refusal to join other Republicans in pressing for Clinton’s impeachment and ouster a few months earlier.

How the pieces of Blake’s tobacco money were distributed would remain cloaked in secrecy.
When Scruggs was asked, during a 2004 deposition, what Blake had done to earn the money, he gave few insights: “Mr. Blake for many, many years had been a confidante of politicians in high places,” Scruggs testified. “I think Senator Eastland was his principal contact, but he made numerous contacts because of the power of Senator Eastland. He knew lots of people, and he was the best person I could come up with to be a listening post for us on any sort of effort … I trusted his advice and his ability to advise us on political forces that might derail our litigation … We spoke almost daily for several years.”

For instance, Scruggs explained, during the tobacco wars, Blake had suggested that Scruggs approach Senator Fred Thompson, who had represented Blake during his earlier troubles in Mississippi. Blake also recommended that Scruggs “make contact with the Lion Hall Group of which Senator Biden’s brother was a member—or maybe his brother’s wife was a member.”

Blake’s explanations, in a separate deposition, were even more feeble. He said he provided Scruggs with pertinent newspaper clippings.

While Blake got $10 million, the remaining $5 million in Scruggs’s
original outlay went directly to DMG.
In addition, Scruggs passed through the group a curious $4.3 million for Americans for Tax Reform, a conservative lobbying organization dedicated to fighting taxes. Its president was Grover Norquist, an influential figure during the rise of the far right in the Republican Party.
The New Yorker
once quoted Norquist as saying that an ideal government would be one cut “down to the size where we can drown it in the bathtub.”

Scruggs’s contribution seemed totally out of character for a man fast acquiring a reputation as an ardent Democrat and advocate, as a trial lawyer, for the working class. When asked years later about the strange gift, Scruggs said it was given to fight a proposed “confiscatory tax” on tobacco fees.

After Michael Kranish, a reporter for
The Boston Globe
, obtained in 2006 a list of donors to Americans for Tax Reform, he found two startling entries from Scruggs’s home state. The Mississippi Band of Choctaws gave Norquist’s group $1.5 million to oppose a proposal to tax profits at Indian casinos. Scruggs’s $4.3 million contribution also showed up. He told the reporter the payment had been made to fight Republican legislation “aimed at essentially de-funding the Democratic Party by penalizing trial lawyers.” No matter that he had given millions to a right-wing activist, Scruggs said. “There is an expression,” he said. “ ‘If you need a thief, take him from the gallows.’ ”