GULFPORT -- Chancery Court Judge Jennifer Schloegel said Friday she will wait to see how a hearing in federal court plays out before she rules on whether the state auditor is in contempt in her court over his failure to produce public records.
And she also stepped back from her order earlier this week that State Auditor Stacey Pickering and the state Department of Marine Resources produce by Monday the DMR records the Sun Herald is seeking, records that Pickering says are part of a state and federal investigation.
The Sun Herald has sued Pickering for access to the records his office seized from the DMR. And it asked the court to find him in contempt when lieutenants in his office defied an Oct. 31 order by Schloegel and whisked the records away to Jackson under a federal grand jury subpoena.
The hearing began Wednesday and Schloegel said she found nothing at the close of that day that kept the state auditor from complying with her order to produce the records. But by Friday, Pickering had filed a motion in U.S. District Court to release the records and for guidance from the court.
She acknowledged that Pickering was working to remove the block so he could meet her order.
Schloegel stopped the civil contempt hearing, in its second day Friday, so all parties could participate in a conference call with Hattiesburg U.S. District Judge Keith Starrett, who is assigned the federal case.
Also participating in the call were attorneys for indicted former DMR Director Bill Walker and his son, Scott Walker, and other DMR managers indicted in the federal investigation of the DMR.
During the call, Starrett said he had concerns about how it would fit into the investigation if his office found the records are public. Those concerns included the defendants' right to a fair trial, if there are any grand jury secrets in the documents, and how disclosure might affect any other "targets" of the grand jury investigation.
Starrett set Dec. 18 for the auditor and the U.S. attorney to get their petitions in and promised a decision on Pickering's request by Christmas.
If Starrett rules the records are public and releases them to Pickering, Schloegel reminded attorneys for the auditor's office that her protective order concerning the records is still in place and that she expects Pickering to bring them "immediately to where I designate."
Schloegel said she wanted to rule on the contempt matter and final judgment all in one.
"I want to consider everything before it goes into appeal," she said.
Packed up overnight
On Friday, Sun Herald attorney Henry Laird argued that Pickering was in civil contempt for defying Schloegel's Oct. 31 order to make the records available to the newspaper.
Instead of complying, Pickering's chief investigative auditor, David Huggins, ordered the records packed up overnight and taken to Jackson on Nov. 4, without being copied for the Sun Herald.
Laird pointed out the dramatic contrast of that quick action -- renting a truck at night and packing 38 boxes of records and a number of file cabinets in it and reaching Jackson by midnight -- to the tangle of delays and considerations that the state presented in order to get the documents from the Bolton Building in Biloxi to the courthouse in Hancock County when Schloegel wanted them.
And Laird said that even though Pickering said he didn't know about the DMR records being taken to Jackson, his chief investigator, Huggins, did.
Pickering claiming he didn't know about the records transport is like a captain abandoning ship and not taking responsibility for a first mate's actions, Laird said.
Assistant Attorney General Melissa Patterson, assigned to the Auditor's Office, took the stand Friday to open the second day of the contempt hearing. She was not in court on Wednesday and Schloegel said she wanted to hear from Patterson.
Pickering was not in court Friday.
Laying out a timeline, Laird said unknown to Patterson, at 7 p.m. on Nov. 4, Huggins gave an order for auditor special agent Chris Lott to take the DMR documents to Jackson. And within hours, he did.
"Stacey Pickering and his office were trying to avoid Schloegel's ruling to copy DMR records when they transported the records to Jackson," Laird argued.
John Corlew, the private attorney representing Pickering, argued that Pickering's Huggins was in danger of contempt in federal court if he didn't comply with the subpoena.
What happened to records?
But Pickering and Attorney General Jim Hood's staff could have filed a motion seeking protection from the subpoena because it was difficult to comply with. They chose to ignore that opportunity, he said.
And because of that, "the public's rights to access of these records has been lost, maybe forever," Laird said. "And what's happened to those records? I have no proof they haven't been tampered with."
The U.S. Attorney's Office was finished with the records as far as the criminal investigation was concerned, and Assistant U.S. Attorney John Dowdy Jr. wanted them removed from the public domain, Laird argued. And the state auditor took his advice.
Laird contended that Pickering would not have been in contempt if he had complied with Schloegel's Oct. 31 ruling, rather than listen to Dowdy.
DMR attorney Joe Runnels suggested that the Auditor's office got the records to Jackson quickly because "they already had practice" and worked out the snags of moving the records from Biloxi to Hancock County in October.
Who knew what?
On the stand, Assistant Attorney General Patterson told Schloegel that in the decision to take DMR documents to Jackson, "I wasn't cut out of the loop, but I wish they would've told me about it."
Runnels, assistant attorney general for the DMR, cross examining Patterson said, "you may not always know what other people know and when they know it, but that doesn't mean you won't" be held responsible.
Patterson said she had no personal knowledge whether DMR had access to the records from January to November, after the state auditor seized them.
She said the first time she ever talked to state Attorney General Hood about them was Oct. 31 at the hearing in Hancock County.
She is responsible for offering legal advice to the 130 employees at the state auditor's office, and talked as if the public records case was not a priority.
She testified that Laird, representing the Sun Herald, emailed her to tell her the DMR records should be copied by Pickering's office before being taken to Jackson and said that the state should satisfy Schloegel's Oct. 31 ruling to copy the DMR records.
Patterson went on to say that Assistant U.S. Attorney Dowdy asked her to draft a letter to the judge about the records being taken and told him, "This puts me in an awkward position."
Laird asked Patterson what the urgency was in taking the DMR records to Jackson in the middle of the night. She said she didn't know and wasn't involved in the decision.
Patterson also said Attorney General Hood's office and Pickering's office had not made any effort during the month prior to Thursday to get the DMR records back.
In earlier testimony, Patterson said it didn't occur to her to file a motion for protection from the federal subpoena.
She went on to say that Attorney General Hood did not consider a motion to quash the federal subpoena because he was working on an appeal of Schloegel's Oct. 31 ruling to make the records public.
Patterson said she didn't know that Lott took DMR documents to Jackson on Nov. 4 until the following morning.
Patterson said she told Lott that the Department of Marine Resources records were to stay in Biloxi but that Lott followed other orders to take them to Jackson.
"All I know is they didn't ask my advice," Patterson said, adding she was surprised to learn Lott had taken them.