From Midnight to Guntown

by Hailman, John

  False political rumors flew. Some asked why Attorney General Jim Hood did not prosecute the case in state court. Being himself an elected official, funded by the very legislators he would be investigating, there was no way any state attorney general anywhere could have done that job. Also without basis, veteran state representative Tommy Reynolds was accused of somehow having improperly influenced the deal because it ended up in his district. Others accused Steve Holland, who in private life has a funeral home in Tupelo, of having another one near the plant. Similar rumors made the rounds about numerous other politicos. None of them proved true.

  From Day 1, my main doubt about criminal wrongdoing by public officials was that every one of them had a strong political interest in the project succeeding, not in helping it fail. Also, there was no sign that any official ever got any money. From the outset it was obvious Richard Hall was the problem. He simply did not know what he was doing. He lacked product; he lacked a market; and the equipment in his plant wouldn’t work.

  In a classic example of this fiasco, he bought huge vats to convert cow’s blood into dog food, that dry red-looking kind that says “contains real beef.” His employees then bought the wrong chemicals. Instead of flowing through big pipes for conversion to dog food, the giant vats of blood clotted, shutting down the whole system. Shoveling out barrels of dried cow blood by hand was vastly expensive and wasteful.

  Richard Hall Jr. also had no reason to want the project to fail. The project was clearly not a bust-out scheme where a con man gets people to invest lots of money in a project and then runs off with it, having never intended for it to work in the first place. Hall was the exact opposite. He had invested every dime he owned in the project, including his retirement savings and that of his wife and his parents. He even invested his mother-in-law’s retirement in the plant, a prospect any husband would shudder to contemplate. When it hit the fan, both families lost all their retirement savings.

  But those mistakes were not all. With supreme confidence that the project would succeed, Hall failed to provide any salary for himself as president of the company. It was when Hall began to see that the project was failing that the crimes began. Hall began cooking the books by skimming money to pay back his family their life savings before it all collapsed. He persuaded a sympathetic Sean Carothers to add an illegal one-half percent to his contract and pay it over to Hall so Hall would have something to live on. Hall, a super salesman, also persuaded Carothers to hire Hall as a consultant for his own company. Carothers did not get a dime for helping Hall skim, his own legitimate profit being entirely guaranteed by the state. He went along with Hall only to try to save the project. I hated prosecuting Sean Carothers and told him so. Earl Smith, Jesse Bingham, and Bill Delaney, the FBI case agent from Jackson assigned to work full-time on this case to help the short-handed Oxford office, quickly uncovered Hall’s schemes. Hall went to prison for eight years. Sean Carothers pled guilty and also went to prison briefly.

  A good, bright man in a terrible spot, Carothers told us during our investigation that he had observed other things seriously amiss with the project which did not involve him or Richard Hall. When the state finally realized Hall was not competent to run the project, it had brought in, under somewhat suspicious circumstances, a big management firm from Atlanta called The Facility Group to audit and supervise Hall. When we asked their high-priced attorneys to help us gather the project records, the law firms stalled. At first we thought the lawyers might just be running their meters, i.e., billing the clients for all the hours they could bill in order to make more money from the case, a sad but common problem in corporate law practice.

  As the records finally began to roll in, however, Earl Smith spotted a classic pattern. The Facility Group employees were billing the Mississippi Beef job for more hours than they could possibly have worked, sometimes for more hours than there were in a day. It was a classic corporate scam. The Facility Group was working simultaneously on other projects and billing both the other clients and the state of Mississippi for the same hours. I assigned that new part of the case with its new set of suspects to AUSA Chad Lamar, who did a beautiful job of digging through row after row of boring file cabinets full of deceptive documents.

  Attorneys for some of the company executives came over from Atlanta, confidently planning to steamroll us country boys with their money and political muscle. Their expensive power points had the opposite effect, convincing us that their clients were nothing but slick crooks bleeding the state. The key moment was when Facility Group’s arrogant tasseled-loafer vice president, Nixon E. “Nick” Caywood patted Chad Lamar on the shoulder and told him as he went out our door, “Chad boy, next time you need to get yourself a real case.” Chad knew he already had a real case, and I watched with real pleasure several months later when Caywood was sentenced to federal prison along with another vice president and the company president. As the U.S. Marshals took Caywood away, Chad patted the V.P. on the back and said, “Sorry, Nick. Guess this was a real case after all.”

  The case had other light moments. At Caywood’s sentencing, he boldly asked to be given no prison time but instead to do community service by giving free financial advice to Mississippi’s community colleges. Chief Judge Michael Mills pronounced himself “astonished” at such cheek and gave Caywood a prison sentence instead, saying, “I don’t think we need to put you at Hinds Community College making decisions.”

  In contrast to the attorneys for the corporate president and other executives, the attorneys for the Facility Management company itself took a much more successful negotiating approach. Stressing the hundreds of people who would be put out of work if we indicted the company itself, which could be forfeited and put out of business, they offered instead to make restitution for some of what Mississippi lost. Richard “Rick” Dean, my old friend and former U.S. Attorney and U.S. magistrate for Atlanta, along with my old friend and colleague James Tucker of Butler Snow in Jackson, led this approach and it worked. For a prosecutor, having worthy opponents not only makes life easier, but it gives the job a sense of extra satisfaction when you can convict the guilty and avoid collateral damage to innocent bystanders at the same time.

  The most troubling aspect of the case was its political campaign contribution angle. The Facility Group’s executives had been required to make the maximum personal political contributions legally allowed to Governor Ronnie Musgrove’s campaign, hoping to keep him happy. Prosecutor graveyards are filled with the bodies of ambitious, idealistic young prosecutors who thought they would make a name for themselves by going after politicians over campaign contributions involving public sector contracts. Such cases are usually lost, especially on appeal, because so many deals that look and smell illegal are technically legal under our lax election financing laws. In this case we got lucky.

  A cooperating employee told us how the deal worked from the inside. Top executives of the company had told the junior executives to contribute the maximum possible amount from their personal bank accounts in Georgia to the campaign of Governor Musgrove in Mississippi. That was legal. The deal became illegal, however, when the company kicked back, or reimbursed, the executives for those “personal” political contributions with corporate money falsely labeled “bonuses.” Earl Smith made the computations and found the bogus bonuses were in the exact amount, to the dollar, of what the executives were required to give Governor Musgrove. They even added enough money to the “bonus” checks to cover the extra federal income taxes the executives had to pay on the bonus income they did not really receive.27

  Understandably, there were probably very few Mississippi citizens who understood what happened. Some people reasonably questioned how the Georgia executives could be guilty of illegally giving Governor Musgrove the money while he was not guilty and not prosecuted for receiving it. The answer is simpler than it sounds. We grilled Musgrove hard, “reamed” him would be more like it, and were convinced he was innocent and did not know the company had kicked back to its
employees their political contributions. They of course had every reason not to tell Musgrove what they did. Although totally innocent, Musgrove probably suffered politically when the guilty pleas came out regarding the illegal campaign contributions. We stressed in every legal pleading and press release that Musgrove was innocent, but the aroma of the deal probably hurt him in his run for the U.S. Senate against Roger Wicker, but we honestly felt we did all we could to treat him fairly.

  The Mississippi media were apparently as conflicted as we were. Respected editorial writer Sid Salter did a humorous piece on the situation entitled “Musgrove Steps in a Cow Patty.”28 Having started down the slippery slope of mentioning the press, I find myself compelled to praise the calm and fair reports made over the years by beat reporter Arnold Lindsay of the Clarion-Ledger, who was never shrill and always got each story right. The Clarion-Ledger even-handedly opined in an editorial that the real problems lay in the weak and confusing campaign finance laws themselves.29

  In retrospect, probably the best thing to come out of the Mississippi Beef fiasco was the series of brilliant editorial cartoons by Marshall Ramsey in the Clarion-Ledger, some of which are reproduced here as illustrations. I never thought I’d see a cartoon as bitingly insightful as the Operation Pretense cartoons by Mark Bolton twenty years earlier, also reproduced here, but Ramsey equaled them. His cartoons alone were almost worth all the laborious hours we put in on Mississippi Beef. Almost.

  It was during the Mississippi Beef case that the thought of retirement began to look attractive. I began wanting to get up later, take naps after lunch, and take weekends off instead of writing briefs and preparing witnesses for trial. It was time to hang it up. On August 31, 2007, I accepted the offer of a two-year fellowship at the Overby Center at Ole Miss for the main purpose of writing these memoirs of our trials. Chad Lamar took over the Mississippi Beef prosecution and did a superb job getting convictions of the Georgia executives and their companies. The beef plant building itself was later sold to another food company and is doing well, but the beef plant civil cases are ongoing and probably will be for years to come.30

  Dickie Scruggs: The Dark Side of Robin Hood Is Revealed When His Merry Men Sue for a Bigger Share of the Loot31

  One morning I was minding my own business and looking forward to lunch when I received an unexpected phone call from Judge Henry Lackey, an old friend of many years standing. I’d known Henry since he was a general practice attorney who represented most criminals of note in Calhoun County, some thirty miles south of Oxford. A dry county legally, it has such counties’ typical problems: People like to drink but are compelled by loyalty to their preachers to vote dry. When I heard my caller was Henry, I assumed he was calling to discuss a nice little gift he’d sent me earlier: a box containing a fruit jar full of excellent wine whose label proclaimed in French that it was produced from mures sauvages (wild blackberries) raised on La Grande Riviere (Big Creek) by “cousin” Henry Lackey, “bon vivant” (one who knows how to live well). A formal letter had accompanied the wine:

  I am somewhat disappointed to find that in preparing your treatise on wines you failed to include at least a chapter on my Vin de la Grande Riviere, Vintage 2006. I am enclosing a sample for your cellar which I am certain you will wish to make the focal point of your next opulent dinner. It is made from the choicest berries, gathered only by young maidens trained from birth by the Monks of Banner [author’s nota bene: a nearby hamlet not renowned for its cuisine].

  Yours truly,

  Henri Lafayette LaKey

  It was actually an excellent, delicious dessert wine. Henry would never have given me a bad wine, even as a gag. It was not his style.

  I’d learned Henry’s style when I was prosecuting and he was defending some of Calhoun County’s most colorful characters. One case involved his old client Wendell Blount, whose Uncle Eli I’d also prosecuted. Eli, a gun trafficker, kept his coffin open on his front porch ready for him to die, like a character out of Faulkner. Wendell, however, had another man’s death more in mind. After a bitter dispute with his former friend and business partner, Jim Earl Aron, a wealthy timber merchant and car dealer, Wendell was indicted for hiring a hit man from Louisiana who had allegedly shot and tried to kill Aron but merely crippled his shoulder. In a famous state court murder trial, the jury acquitted the shooter. Wendell was not charged, but generally found guilty in the mind of his community. The jury foreman informed the local TV channel that the jury had invoked the time-honored Mississippi defense: Aron “needed killing.”

  My situation was a little more complicated. I was investigating Aron for conspiring to have Blount killed as revenge for the failed hit while secretly insuring Blount’s life with several six-figure life insurance policies to sweeten the pleasure of Blount’s death. If you’re going to have your enemy killed, why not make a little on the side? To complicate matters further, I was simultaneously investigating Blount for drug smuggling and a variety of frauds. In the end, I could never prove the serious charges on either one, but convicted both of other felonies and called it a day. To reduce his sentence, Blount later became a valuable witness for U.S. Customs by testifying against some pretty dangerous fellow prisoners. Unfortunately, when he finally got out of prison, his car struck and killed a young Dutch tourist riding a bicycle on the Natchez Trace, and my office convicted him of vehicular homicide while impaired by narcotics prescribed to lessen the pain of cancer. Blount jumped bond, was caught, and will now spend the rest of his life in federal prison.

  With that case as an example of Henry’s experience with challenging clients, very little in life surprised Henry Lackey. A modest man and natural storyteller, Henry knew and got along with all kinds of people instinctively. When he was appointed and later elected circuit judge, Henry’s life experience in Calhoun County was invaluable to him as a trial judge. He never sought higher office. He later served as head of the state bar ethics and disciplinary committee and was highly respected for his judgment in difficult and sensitive cases. Henry was, in short, an unusual and admirable character, and I always looked forward to spending time with him.

  I’ll never forget one day when I had a small group of prosecutors and judges from Tunisia visiting me in Oxford. I had been wonderfully entertained by them twice on teaching missions to exotic Tunisia and feared their reciprocal visit to Oxford could never be as interesting as the Kasbah in Tunis. Then Henry stepped in. I was supposed to take the Tunisians to a federal trial one day, but at the last moment the case settled. On a hunch I walked them down to the beautiful old state courthouse in the center of the Square, the one immortalized by William Faulkner.

  A big civil trial was in progress. Billy “Dog” Brewer, the beloved Ole Miss football coach and former star player, was suing the university over his firing in the wake of an NCAA recruiting scandal. As I ushered the robed and turbaned Tunisians into the courtroom, I suddenly remembered which trial was going on. The atmosphere was electric. Coach Brewer’s attorney, Jim Waide, was vigorously cross-examining Ole Miss chancellor Robert Khayat. The case was highly personal. Brewer and Khayat had been not only friends and teammates on Ole Miss’s last national championship football team, but Brewer had been the holder for Khayat, the placekicker, about as close a relationship of trust as can be imagined. When Khayat acquiesced in Brewer’s firing, a deep and lasting enmity had erupted. That was the scene I walked into with the Tunisians.

  When Henry saw us, he waved to me and beckoned us forward. “Ladies and gentlemen, the Court believes we all need a break. We’ve been working hard, and I see a friend I need to talk with.” Back in his chambers, Henry entertained the Tunisians with tales of colorful trials, as I translated, sprinkling them with folk insight highly appealing to the Tunisian love of anecdote. I had always enjoyed Henry’s company but never realized till that moment the depth and subtlety of his humorous insights into human nature. He was a regular Balzac with his colorful stories.

  We spent nearly forty-five minutes with him in cham
bers as he answered the Tunisians’ every question about life as an American judge. They were reluctant to leave and later told me it was the most impressive thing they saw about the justice system in America, which they had already visited from New York to California. Henry was too modest to realize what a terrific impression he made on them. He was just being Henry and was wisely taking a little time to let his litigants cool down before continuing his trial.

  Getting back to his phone call, Henry said he needed to come see me. I told him I’d be in all week. He said he was free right then and could be in my office right after lunch. I told him to come on. He did not say what he wanted to talk about, but indicated it was serious. I thought he was kidding and expected another wine gag. The receptionist told me shortly he was downstairs. In retrospect it’s hard to believe it, but we spent the first ten minutes joking about old friends and old cases and his fine blackberry wine. Then he asked if he could close the door.

  The visit turned serious and Henry got right to the point. “John, something terrible has happened. I don’t know what to do or where to turn, but I thought of you and all those corruption cases you’ve had on lawyers and supervisors and sheriffs and all the rest.” He proceeded to tell me what had happened. “You may not know this, but I’m very close to Tim Balducci. He has been like a son to me.” I knew Balducci by sight but had never gone to trial against him. All his cases with me had pled guilty, and you don’t really get to know a lawyer from such brief contacts. “When Tim and his first wife divorced, I was there to help and counsel him. Ever since then, he has come to me for advice. His new wife and children are like family to me.” This deeply personal and emotional Henry was very different from the jovial, philosophical Henry I had known. But I still had no idea what had happened.

  Henry continued: “Tim has come to me and said some things he shouldn’t have. He just flat out asked me to decide a case in favor of a friend of his. He tried to use our friendship to influence me. Even worse, at the end of our talk, he offered me a job with his new law firm.” Henry was visibly shaken, and it worried me. I knew he was over seventy, but his jovial demeanor had always made him seem younger and healthier and sort of invulnerable. Now I suddenly saw him as a victim and clearly suffering. To calm him, I asked him to tell me details. Instead he said this: “John, when Tim said those things to me, I first wanted to throw up. Then I wanted to take a shower.” Henry became visibly angry, which seemed to improve his mood. He no longer looked despondent. He wanted to act. Again I asked him to tell me more.