Posted on Sun, Dec. 16, 2007

-- P.L. Blake likes to describe himself as a Delta farmer who grew up around politics and built a lucrative consulting business, but he also fended off bankruptcy and criminal bribery charges in the 1980s before he recouped his fortune the following decade through ties to attorney Richard "Dickie" Scruggs.

Blake will earn $50 million, court records show, for clipping newspaper articles and alerting Scruggs to maneuvering in political "cloakrooms," as Scruggs put it, from Mississippi to Washington.

Scruggs managed a transformation of his own over the same two decades, from small-town attorney to polished multi-millionaire.

Scruggs also amassed around $1 billion in legal fees through massive settlements on behalf of clients whose health was destroyed by asbestos and tobacco. Blake advised Scruggs through both battles, offering services Scruggs described as political in nature.

Scruggs' legal adventures were featured in a nationally released book and popular Hollywood movie. Blake remained in the shadows, although his pay suggests he played a major role in Scruggs' success.

The portrait emerging today suggests Blake was spoon fed politics from childhood and strengthened his connections through a college and professional career in football. His first fortune allowed him to buy a basketball team; his second, earned with Scruggs, to enjoy the world of thoroughbred horse racing. Political characters populate his history, from Mississippi's capitol in Jackson to the White House and halls of Congress.

So valuable were Blake's connections that Scruggs has said he will earn $50 million in fees over 20 years from Scruggs' share of tobacco settlements. Mike Moore, who as Mississippi's attorney general guided the tobacco litigation, has said he was unaware Scruggs is paying Blake such a large sum.

Accounts of how Blake earned the money are vague and contradictory.

Even more surprising, Blake and Scruggs were unable to say whether they sealed their business agreement with a handshake or in writing.

Court records also indicate Scruggs sent $10 million in initial tobacco payments to Blake, passing them through intermediary Joey Langston, a Booneville attorney who shared Scruggs' ride to fortune on Moore's tobacco train.

Scruggs "just told me he was going to take care of me," Blake has said. "He might have wrote me a letter or something. If he did, I can't find it and I don't remember one, any agreement that we ever had of what he was going to pay me. But this - this lump sum up front, that was just - he said, 'I'm sending this to you'."

Today, Scruggs faces bribery charges of his own. The FBI also has searched Langston's office, but he has not been charged with a crime. The U.S. Justice Department charges Scruggs, in yet another dispute over attorney's fees, helped concoct a scheme to bribe a North Mississippi judge with $50,000. The lawsuit, filed in March, involves $25.6 million from a settlement for State Farm policyholders over Hurricane Katrina damage.

Coincidentally, the relationship between Scruggs and Blake came to light in a decade-long fracas Scruggs had with two other attorneys over asbestos and tobacco fees.

Attorney Charles Merkel represented one of those lawyers. After Merkel took the case, he said Scruggs sued him and his firm in retaliation, spending "north of $1 million" over about $4,500 in legal fees.

When Blake and Scruggs first met in the 1980s, Blake was on a downward slide after a promising start.

As a young man, Blake played football at Mississippi State University, graduating in 1959. He moved north to Canada to play professional football until around 1964, then returned to his native Mississippi to farm. Blake said his farming operation spread across four North Mississippi counties and beyond the state.

In 1970, he was prospering to the point that he bought a basketball team, the New Orleans Buccaneers, and moved it to Memphis. The team soon changed hands, however.

Through a political connection in the Reagan White House, according to press accounts, Blake secured a $20 million contract to store grain in the largest grain bin in Texas. The government declared Blake in default of the contract in 1984, costing his company $3.6 million.

Scruggs, who graduated from Ole Miss law school in 1976, had established a law practice in Pascagoula. It was also the hometown of his wife and his brother-in-law, Trent Lott, then a U.S. Representative.

In those days, Scruggs was practicing bankruptcy law.

Scruggs said Tom Anderson, who then worked in Lott's office, referred Blake to Scruggs. Blake said he had known Anderson, later a candidate for U.S. representative, for 30 to 40 years.

Blake, facing bankruptcy by the mid-1980s, relied on Scruggs for friendship and legal advice.

Details about their relationship emerged in July 2004, when the two men were compelled to sit down separately for sworn testimony in a federal lawsuit brought against Scruggs by a former partner, William Roberts Wilson. Wilson claimed he was owed money by Scruggs from asbestos and tobacco litigation.

Wilson had been trying for 10 years to find out exactly how much money Scruggs had earned and where it had gone. Ocean Springs attorney Alwyn Luckey, pursuing similar litigation, also had a stake in the case.

Attorneys for Luckey and Wilson questioned Blake for one day, then grilled Scruggs for two.

Scruggs explained in his testimony that working in the arena of public health pitted him against big industries that wielded political force.

He said Blake did not work much on asbestos, but described the older man's value during the asbestos litigation, from around 1983 to '93:

"Mr. Blake has been a - is - has his ear to the ground politically in this state and in the South generally, and he has been extremely helpful in keeping me apprised of that type activity - that might be stewing."

He added: "How it generally works, he has a lot of friends in the Legislature and in the political branch of the government. I think he was part of the organization of Senator (James) Eastland. He's - he's just a, in my judgment, a very valuable listening post."

Blake offered this assessment: "Well, I won't say politics was involved in it. The main thing I done was monitor the - just like I did in the tobacco business, monitor the newspapers, the state Senate and House of Representatives mainly in Louisiana and Mississippi about what - how the politics were playing toward the asbestos cases. I just passed that on to him and gave him my opinion about it, and he made the decision. And what he done, I can't answer."

In the midst of the asbestos litigation, Blake was indicted. The November 1997 indictment charged Blake with multiple felonies, alleging he bribed bank officers with hundreds of thousands of dollars so they would approve $21 million in loans and loan renewals for him and his various companies.

In 1988, the United States Attorney's Office struck a deal with Blake. He was allowed to plead no contest to one misdemeanor charge of defrauding the United States. He also was ordered to pay $1.5 million in restitution. At the time, Fred Thompson of Tennessee, later a U.S. Senator and currently a presidential candidate, represented Blake.

Blake portrayed the federal charges as a mix-up. "I had borrowed money from a bank, and the bank required me to put a member of the bank on my board of directors," Blake said under oath in 2004. "And I was paying my board of directors certain money in the mid '80s."

After the asbestos cases wound down, Blake was back in court over the bank case. He had reached an agreement with federal officials to lower his restitution. In 1994, court records show, the government recommended Blake be allowed to pay only $50,000 "based upon Mr. Blake's current ability to pay such restitution in cash."

The payments were structured in installments of $10,000 to $15,000 over 14 months.

Around this time Scruggs was loaning Blake money, according to Blake's 2004 testimony:

"I sat down and explained to Dickie, and Dickie knew a lot about what I went through and what I was working on, and I just told him I needed monthly income...

"I think it started out, like, 5 or 10 thousand dollars a month. And then some things that he was - said I might could be some help to him in following some - advising him or giving him my opinions about certain matters that it eventually increased, I think, to 15 thousand dollars a month."

COMING MONDAY

Former state Attorney General Mike Moore says Blake provided valuable information in tobacco wars