The Fall of the House of Zeus (35 page)

But the biggest international associate they hoped to land was the Swiss lawyer Gabor Ondo, who had represented a subsidiary of the Swiss-based Sulzer Orthopedics in a massive settlement earlier in the decade growing out of hip replacement joints made by Sulzer.

It was a highly complicated case involving thousands of claims and millions of dollars. In a departure from his customary role as a plaintiff’s lawyer in product liability cases, Scruggs had been brought into the litigation on Sulzer’s side as a “resolution counsel.” Using his powers of diplomacy, Scruggs helped convince the various plaintiffs that the firm would go broke, rendering the lawsuits worthless, unless a settlement could be reached.

Scruggs was given $50 million from Sulzer to broker the settlement. He brought in Joey Langston to help complete the deal, giving Langston 25 percent of the fee. In gratitude for his cut, which amounted to roughly $12 million, Langston gave Scruggs a black Thunderbird. (Scruggs noted to his friends that it was a “cheap model.”) He also showered Scruggs with a Rolex watch and a framed letter signed by Clarence Darrow, one of the more famous lawyers in American history. The letter hung in Scruggs’s office.

During the Sulzer negotiations, Langston developed a friendship with Ondo and believed that he might be the entrée to more big licks on the European continent. Balducci had been working for Langston at the time; he didn’t get to share the Sulzer wealth, but he established contact with Ondo and also saw the possibility of a partnership. So he set out to wrest Ondo away from Langson and into a relationship with the Patterson-Balducci-Biden firm.

In mid-October, Balducci flew to Zurich to meet with Ondo. He returned to report to Patterson that he had not succeeded in signing up the Swiss attorney, but he felt they were close to an agreement. Following the debacle over the hip replacements, Sulzer had spun off the subsidiary responsible for the problem and renamed it Centerpulse.
According to a financial statement, Ondo held a position in Centerpulse USA Holding Co. in Houston, Texas, that appeared, on paper, to be worth millions.

Balducci could barely control his enthusiasm. “He’s rich as hell. He’s got a twelve-million-dollar house. He’s loaded with stock redeemed out of Sulzer. He’s a lot bigger fish than I thought of.”

Patterson was doubtful about their ability to form an alliance with Ondo. “Joey has submarined us pretty good with him,” he said.

“That’s true,” Balducci said. “Gabor can’t get his mind around the fact that we busted up” with Langston. “He can’t get it in mind that Dickie’s with us and supporting us.”

Patterson grunted.

“Gabor’s very impressed with the Bidens,” Balducci insisted. “He’s very impressed with that dogshit brochure I got printed up.”

Balducci had gone to Switzerland with a slick twenty-four-page brochure featuring photographs and biographies of all of the associates of the Patterson, Balducci and Biden Law Group. Patterson was billed as the president. Though his home was in New Albany, Mississippi, he was described as a world traveler and “a familiar face on Capitol Hill.”

Balducci used two pages to tell of his attributes as “part of a dynamic legal team” that had recovered $125 million from WorldCom/MCI and as “lead counsel” in other litigation.

Sara Biden’s page said that she “worked closely with both Houses of Congress.” The brochure pointed out that she was married to the brother of Senator Joe Biden.

Former governor Allain, former district attorney Peters, and former attorney general Ieyoub were listed, too.

The brochure gave the firm’s main office address as 818 Connecticut
Avenue in Washington, with branches in Maracaibo, Venezuela; Merion, Pennsylvania; and Oxford and New Albany, Mississippi.

Balducci said Ondo wanted to come to Miami and meet with Patterson and Jim and Sara Biden. “He wants to meet the Big Fish,” he said. “He wants to talk to Dickie. It would be great to have Dickie go to Miami to see him.”

Patterson said it would be equally important to undercut Langston. “You’re going to have to start your dumping on Joey, as bad as I don’t want to do that.”

There was nothing that Balducci would have liked more than to undercut Langston. But he had another concern. “We got to rope Dickie in on this Gabor thing. Gabor asked if Dickie would go on the letterhead as a joint venture partner, and I said, ‘Sure.’ ”

“Which he actually hasn’t,” Patterson said.

    Patterson and Balducci wanted respect for their firm. Judge Lackey fit the profile of the “of counsel” associates they wanted: older, experienced figures with no blemish on their background.
Another older attorney, Norman Gillespie, matched that description, and he came to their attention as coincidentally as Lackey had.

One day in the spring of 2007, Gillespie, a retired seventy-two-year-old former state chancery judge and federal magistrate, called on Patterson. Gillespie was on the board of trustees for Blue Mountain College and out to raise money for the small Southern Baptist school. A native of New Albany himself, Gillespie had heard that Patterson, the son of a truck driver, had moved back to town, acquired a fancy home, and had access to lots of money. Patterson agreed to make a contribution to the school. Encouraged, Gillespie asked if he might help get a donation from Scruggs and Langston, too.

Although Balducci had left Langston’s firm on bitter terms, Patterson still had a somewhat amicable relationship with his old associate. So he accompanied Gillespie and a Baptist minister on the thirty-mile drive to Booneville to solicit a contribution. When they reached Langston’s office, they discovered he was not there. Gillespie left his card and thought that was the end of it. A few days later he was called by Patterson, who told him he was forming a partnership with Balducci and aligning with the likes of Allain and Peters. He asked Gillespie if he would be interested in joining their group “of counsel.”

Gillespie thought about the proposal overnight, then called the next day to accept. He would be paid $1,000 a month and have no real
duties. He would be able to use the Oxford office Patterson and Balducci were renting, second-floor space over a clothing store on the square. But the telephone there was wired to ring in New Albany, and all Gillespie wound up doing in the office was reading his own books and papers. The Oxford office was as hollow as the firm’s letterhead.

    As they plotted to build their firm, Patterson and Balducci sometimes sounded like Abbott and Costello impostors, at other times like characters from Mel Brooks’s madcap comedy
The Producers
.

At least they thought big. At one point, Patterson told Jim and Sara Biden that he was “ninety-nine percent sure” he could convince Martin Luther King III to join the group in some capacity. “He’s a good friend of mine, been involved in my politics in the past,” Patterson said. “He could be of great benefit to us if we get into mass tort stuff, direct mailing. We’d use him where we need him. This is one of the biggest names in the world … This is Gandhi, you know.”

They even tried to enlist John Hailman, the man who initiated the undercover operation targeting the pair.

After thirty years’ service as a federal prosecutor, Hailman had dealt directly with hundreds of lawyers in the state and was highly regarded in legal circles. He would be a logical choice to add cachet to a law firm, and he was already getting feelers about new jobs as his retirement approached.

But when called by Patterson to see if he might be interested in going to work for their firm, Hailman was struck by the monstrous irony of the situation. He had been the prosecutor to whom Judge Lackey took his concerns over Balducci’s request for a favorable ruling for Scruggs. He had urged Lackey to stick to his role of undercover agent at a time when the judge was wavering. In recent weeks, he had listened to the FBI wiretaps that implicated Balducci and Patterson. And now the unwitting pair thought he might like to join their firm.

Hailman was in a clumsy position, but he agreed to meet for lunch with Patterson and Norman Gillespie, whom he had known for years. They were given seats in a corner by a French door, the most favored spot at Oxford’s leading restaurant, City Grocery. Hailman, a connoisseur, took advantage of the wine list, but Patterson, coming off his stomach surgery, was reduced to picking at a salad. Hailman had to draw upon his acting ability, in the same way Judge Lackey had carried out his deception with Balducci. He listened as Patterson described plans for the superfirm. Hailman told his host that it was likely he
would accept a fellowship at Ole Miss, where he taught law part time. Throughout their conversation, the prosecutor was anxious not to give away any hint of the investigation.

The lunch proceeded uneventfully, until Dick Scruggs and other members of his firm walked into the restaurant. Hailman thought Scruggs looked startled when he saw Patterson’s party. The two groups waved at each other. Hailman worried that his meeting had somehow blown the cover of the investigation. But the moment passed.

    
For all of their grandiose schemes, Patterson and Balducci were hemorrhaging money, even while they laid plans with Jim Biden to open a costly operation in Washington.

In their efforts to impress potential clients and associates, the pair had adopted a lavish lifestyle. They borrowed private jets for travel and checked into expensive hotels. Balducci had made a hurried trip to Switzerland to try to bring Gabor Ondo into their fold, and Patterson and his wife planned a trip to Israel.

But by October, only months after they had established their firm with high hopes, Patterson and Balducci were desperate for funds. The $500,000 they’d anticipated from their Texas connection had never materialized. Balducci cursed him repeatedly for his perfidy and called him “a little spic.”

In a bid to recover money they had given a Jackson consultant to obtain an introduction to the new chief of the Mississippi band of Choctaws, Balducci exerted muscle. He was indignant that the payment had not resulted in any contact with the Choctaws, who controlled a prosperous gambling resort in Neshoba County and wanted to build a casino in Jackson County. The prospective casino was the subject of a referendum scheduled the next month in the Gulf Coast county, and Balducci wanted in on the action.

When it was helpful, Balducci could project the manners of a religious man; other times, he sounded as though he watched too much of
The Sopranos
.
He resorted to the cheap gangster approach when he telephoned the Jackson consultant, eschewing pleasantries for a direct opening line: “I want to take you back to a meeting we had in the conference room at the Smoke Shop in Jackson.”

“I remember it well,” the consultant replied.

“Okay. So do I. Where I gave you guys a check and said, ‘This isn’t one of those deals where I give you the money and I hear three or four months down the road that you guys can’t deliver.’ … You didn’t
deliver. That’s okay. But I want my money back, and I’m gonna get my money back, that’s all there is to it … We’re all big boys here. You guys have fucked it up, and now you better fix it.”

“I haven’t fucked up anything.”

“You have fucked up tremendously, son. That’s what I’m trying to tell you. You guys fix this, or it’s going to be a problem.”

The consultant said an associate was to blame.

Balducci interrupted. “I don’t give a shit, because you’re just as liable.”

“You can keep cussing at me, and it ain’t gonna help our conversation at all.”

“You’re right,” Balducci admitted, while making his point again, without cursing. “What matters to me is I hired a consulting firm to give me access to the chief so I could make a pitch to the chief about being retained as counsel. That didn’t happen. That consulting firm didn’t do their job. That consulting firm, frankly, took our money under false pretenses, and I want my money back.”

Shortly after the conversation, Balducci called Ed Peters, the former district attorney in Jackson.

“Ed, I have gotten screwed over by some guys in Jackson on a deal,” he said. “Do you think we can get two boys indicted down there that have screwed us over on some false pretenses and stole some money from us?”

“Uh-huh,” Peters replied. “In fact, there’s a lawyer—the D.A., or the D.A.-to-be. He’s got a couple of them he’s fixing to do the same thing to—that tried to screw him out of a percentage of fees and things.”

Federal authorities listening to the telephone conversation figured Peters was referring to Robert Shuler Smith, the local candidate for district attorney. With Peters’s backing, Smith had already won a Democratic primary and seemed certain of victory in the general election in November.

Balducci said he wanted to come to Jackson to discuss the case with Peters.

“
Perfect,” Peters said. “I’ll have Robert with us when we do. You need to meet Robert anyway. It’ll be good for you.”

    The Mississippi band of Choctaws represented a big target for investment. After struggling for more than a century following the Treaty of Dancing Rabbit Creek in 1830, an agreement with the U.S. government that ceded eleven million acres in Mississippi to the Choctaws in
exchange for fifteen million acres in Indian territory in Oklahoma, the Mississippi band began to flourish late in the twentieth century. Two giant casino-hotels were built on Choctaw land in Neshoba County, complemented by the Dancing Rabbit Golf Club, carved out of rolling woods. The unlikely location began to attract tourists and conventions—and outsiders who wanted a piece of the action.

Jim Biden and Balducci had one long conversation about finding well-connected operators who could link them to the Choctaws. “They could vouch for us as ‘not scumbags,’ ” Balducci quipped cheerily.

Biden agreed. “We’re coming in as problem solvers.”

Problem solvers were needed, Balducci said. “The new chief doesn’t know shit and needs help.”

    
In late October, Judge Lackey attended a judicial conference at the Silver Star Hotel and Casino on Choctaw land, where he met privately in his room with U.S. attorney Jim Greenlee and his chief deputy, Tom Dawson. They were joined briefly by Jim Smith, the chief justice of the state supreme court, who was given some details of the investigation.