From the government’s response to Minor’s appeal, a synopsis of what was proven beyond a reasonable doubt to 12 jurors.
STATEMENT OF FACTS
Biloxi, Mississippi lawyer Paul Minor became wealthy and powerful,
primarily by representing plaintiffs for a contingency fee. Minor operated his own 2
law firm, known as Minor and Associates, and received all the profits this firm
generated. Tr. 3560-62; G146. In the fall of 1998, Minor decided to enrich himself
(and his clients) by bribing John Whitfield, a sitting Circuit Court judge, and Wes
Teel, who became a Chancery Court judge on January 1, 1999. G23.
Both Whitfield and Teel needed money, a situation Minor exploited by
arranging for his own bank to provide them with substantial loan proceeds. Tr. 2159,
2218-19. Although nominally loans to the judges, Minor guaranteed these
transactions and made most (Whitfield) or all (Teel) of the required payments of
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principal and interest. See infra at 10-16, 23-25. In addition, when Teel became the
subject of an unrelated state corruption probe, Minor helped to orchestrate and
finance Teel’s defense. See infra at 25-26.
While Minor & Associates litigated potentially lucrative cases before them,
Whitfield and Teel concealed these transactions, failing to disclose them on
campaign finance forms or economic interest statements. See infra at 16, 26. Minor
likewise employed various ruses, including cash payments, fraudulent documents and
strawman payoffs to keep his payments hidden. See infra at 12-16, 19-23, 24-25. In
the end, Minor repaid all the bank loans through intermediaries, spending at least
$171,226 in connection with two loans to Whitfield, and $26,985 in connection with
a loan to Teel. GRE/4. In addition, Minor spent over $10,000 on Teel’s criminal
defense. See infra at 25-26.
Whitfield and Teel understood that Minor’s largess would have to be repaid,
and both men came through. Whitfield awarded a Minor & Associates client over
$3.6 million in tort damages, an amount the Mississippi Supreme Court later deemed
“so high as to be unreasonable at first blush.” MRE/12 at 16; see infra at 17-19. As
for Teel, he forced through a $1.5 million settlement to a Minor & Associates plaintiff
by refusing to stay a civil case (even though the dispositive issue was pending before
the Mississippi Supreme Court), and then making clear his intent to award punitive
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damages. See infra at 30-33. Because the judicial defendants’ concealed their
relationships with Minor, none of the attorneys opposing him in these cases knew of
his payoffs to the presiding judges. Tr. 2782-83, 3036, 3404-06.
A. The Whitfield Bribery Scheme.
1. Minor Arranges for Whitfield to Receive $140,000 from Peoples
Bank.
In 1994, John H. Whitfield was elected a judge of the Mississippi Circuit
Court. G21. By October 1998, Whitfield was in a personal and financial jam, as he
was divorcing his wife (with whom he had three children) and facing a re-election
battle. Tr. 2063, 3861; GX 28.
Conveniently, Minor stepped forward to assist on both fronts. Tr. 2159-76,
3859-61. First, Minor offered to secure $40,000 to finance Whitfield’s re-election
campaign. Tr. 2159-60; G1(A)2. Second, Minor offered to provide Whitfield
$100,000 to purchase a new home with his girlfriend, Rhonda Hawthorne. Tr. 2159-
60; G1(A)16. Whitfield accepted Minor’s offers even though he had no means of
repaying these sums in the foreseeable future. Tr. 2233.
Minor’s payments to Whitfield were structured as loans through Peoples Bank,
where Minor had over $12,000,000 in deposits. Tr. 2158-2176, 2363. The bank
loaned Whitfield $140,000 only because Minor guaranteed the loans. As one bank
official explained, Minor was “the money” behind the loans, Tr. 2209, which were
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made “simply on the strength of [his] financial ability.” Tr. 2210, 2355.
The $40,000 loan issued on October 12, 1998. Tr. 2373-74; G1(A)2.
Whitfield placed the proceeds in his campaign account and was subsequently reelected.
Tr. 2188, 4006. The $100,000 loan did not issue until November 19, 1998 —
after Whitfield had been re-elected — because Minor informed the bank that Whitfield
“didn’t need” the money until this time. Tr. 2160, 2188, 2185-88, 2374; G1(A)16,
G1(A)17. The loan documents described the purpose of this loan as “down payment
on home.” Tr. 2186-87, 3978; G1(A)16. Whitfield placed the proceeds in
Hawthorne’s account. Tr. 2192, 4006; G1(A)18. On December 31, 1998, Hawthorne
used $61,744 of these funds to make a down payment on a house in Gulfport,
Mississippi which she then shared with Whitfield. Tr. 4008; G3(A)6, G3(A)8,
G3(A)9. Whitfield and Hawthorne spent the remainder on personal expenses,
including credit card payments and $7,364 worth of furniture and blinds. Tr. 4007;
GRE/4 at 5 (chart tracing proceeds of $100,000 loan); G3(A)5.
2. Whitfield Lies under Oath to Conceal the Loan Transactions.
On January 28, 1999, less than four months after he received the $140,000,
Whitfiled testified under oath in his divorce proceeding. Tr. 3864. Whitfield
acknowledged taking out a $40,000 loan to finance his political campaign, but denied
that any other party signed the guarantee, thereby concealing Minor’s role. Tr. 3867-
Whitfield made a few payments towards the $40,000 loan. On April 6, 3
1999, Whitfield repaid $5,000 of this loan using funds withdrawn from his campaign
account. Tr. 2379, 3986-87; G2(A)2, G2(A)3. Whitfield also made a $1,000
payment by money order on this loan on August 2, 1999, Tr. 3990; G2(A)9, G2(A)10;
and a $1,050 payment through a savings account withdrawal on December 14, 1999.
Tr. 3990; G2(A)11, G2(A)12. Finally, on August 3, 2000, Whitfield applied a $500
check from a donor to the $40,000 loan. Tr. 3991; G2(A)20, G2(A)21. Minor
supplied the funds for all other payments on the two loans (including the final payoffs).
See generally GRE/4 at 2 (summary chart of loan payments).
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68; G107a at 13-14. Whitfield also concealed the $100,000 loan entirely, claiming
that he did not contribute any funds towards the acquisition of his home with
Hawthorne. Tr. 3872; G107a at 21, 41-42.
3. Minor Assumes Responsibility for the Loans to Whitfield, Using
Cash Payments to Conceal his Role.
Both men understood that Minor — not Whitfield — was primarily responsible
for repaying these loans. Indeed, as time went on — and Minor and Whitfield
identified an opportunity for Whitfield to “repay” Minor through his judicial office,
see infra at 17-19 — Minor assumed complete responsibility for them.3
The loans were structured — at Minor’s request — as renewable balloon loans,
with accumulated interest and principal due every six months. Tr. 2166, 2374-75.
As a result, Whitfield was periodically reminded of the substantial debt he had
incurred — and of Minor’s on-going role in keeping it at bay.
Although the $40,000 loan became due on April 10, 1999, and the $100,000
loan became due on May 18, 1999, Whitfield made no effort to repay (or extend)
Minor’s office manager obtained the necessary loan documents from 4
Peoples Bank and notarized them, falsely asserting (at Minor’s request) that Whitfield
had personally appeared before her. Tr. 3349-50, 3555-56; G1(A)21.
As noted infra at 24, Minor also made a cash payment on Teel’s loan 5
within a couple of minutes of the payments on Whitfield’s loans.
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either loan. Instead, when Peoples Bank repeatedly attempted to contact him, he
simply ignored it, Tr. 2375-76, 2395, 2452, forcing the bank to contact Minor instead.
Tr. 2375-76, 3343-45. Dale Dorcik Thibodeaux, a secretary at Peoples Bank,
testified that the loans to Whitfield and Teel were the only times she ever had to
contact a guarantor to obtain payment. Tr. 2370, 2410.
Minor arranged to renew the loans on June 16, 1999. Tr. 2176, 2190-91, 4
2387-88, 2393-4; G1(A)10, G1(A)11, G1(A)19, G1(A)20, G1(A)21. Renewal
required a $530 payment towards the $40,000 loan and a $4,500 payment towards the
$100,000 loan. Tr. 2392; G2(A)5, G2(A)6. To obtain the necessary funds, Minor
instructed his office manager, Janet Miller, to cash a $6,500 check on June 25, 1999.
Tr. 2392, 3352-53, 3369; G2(A)4. When Minor made the renewal payments the next
business day, he used cash to disguise that he was their source. Tr. 2377-88, 2390- 5
92, 3988; G2(A)5, G2(A)6, G2(A)7, G2(A)8.
Thereafter, the Whitfield loans fell into a predictable pattern, with Whitfield
avoiding responsibility, and Minor ensuring that the loans remained in good standing.
See, e.g., Tr. 2269-70, 2176-77, 2179-80, 2198, 2394-95. Minor continued to conceal
At trial, Miller (who was still employed by Minor) claimed that she had 6
simply “assumed” that the check was intended to pay back Whitfield’s loan. Tr.
3372. In the jury’s presence, she apologized to Minor and Whitfield, ostensibly for
making this assumption. Tr. 3382-83. Of course, the jury was entitled to conclude
that she was really apologizing for noting the check’s actual purpose in Minor’s
books.
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his role by paying the bank with cash — sometimes funneled through Whitfield. Thus,
in connection with the second loan renewal, Whitfield wrote a check for $5,644.66
on January 27, 2000, to cover the necessary costs, even though his bank balance was
only $471.93. Tr. 3990-91; G2(A)13, G2(A)14, G2(A)15, G2(A)16. After the check
bounced, $5,800 in cash appeared in Whitfield’s account on February 4, 2000, which
Whitfield then used to pay the bank. See Tr. 2179-83, 3990-91; G1(A)13, G2(A)14,
G2(A)15, G2(A)16, G1(A)22, G1(A)23.
The next loan renewal, which took place in September 2000, required
payments totaling $6,900. Again, Minor cashed a $7,000 check on September 8,
2000, to obtain the necessary funds. Tr. 3370, 3991; G2(A)22. Miller noted the
transaction’s purpose on the check stub: “loan interest JW.” G2(A)23. The loan 6
payments were made in cash on September 11, 2000, the next business day. Tr. 3991-
92; see Tr. 2196-98; G1(A)24, G1(A)25, G1(A)26, G2(A)25, G2(A)26, G2(A)27,
G2(A)28.
At the end of 2000, Whitfield left the bench and, with Minor’s help, obtained
a position in private practice. Tr. 4142-46, 4150-52; G22. Although Whitfield’s
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financial situation presumably improved, Tr. 4878, the Peoples Bank loans remained
Minor’s problem alone. Only the means by which Minor funneled money to
Whitfield changed.
Rather than giving Whitfield large quantities of cash, Minor now sent him
checks with cover letters documenting a false purpose. Thus, when the loans were
consolidated and then renewed a fourth time on May 4, 2001, Whitfield made total
payments by check of $15,000. Tr. 2200 (loans consolidated), 3992; G1(A)27. But
the money came from Minor, who sent Whitfield $15,000, purportedly as an
“advance” on an unresolved lawsuit involving Whitfield’s mother. Tr. 3384, 3992;
G2(A)29; see also Tr. 2000-01, 2415; G1(A)27, G1(A)28. Whitfield deposited this
check in his personal account and then wrote a $15,000 check to Peoples Bank the
next day. Tr. 3993-94; G2(A)29, G2(A)30, G2(A)31.
Minor employed a similar ruse for the fifth renewal in December 2001, paying
Whitfield $10,000 on December 5, 2001, for a “position paper” that Whitfield never
wrote. Tr. 3385-3387; G13, G2(A)35. Once again, Whitfield deposited Minor’s
check in his own account and then wrote a personal check for $10,000 to Peoples
Bank in payment on the consolidated loan. See Tr. 2203, 3995; G2(A)36, G2(a)37,
G1(A)29, G1(A)(30).
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Apparently tired of inventing ruses for his loan payments, Minor reverted to
the tried-and-true cash payment method for the final loan renewal, which closed on
June 6, 2002. Tr. 3388. This time, Minor obtained $13,000 in cash by cashing a
$5,000 check and a $4,5000 check on June 3, 2002, and a $3,500 check on June 6,
2002. Tr. 3389-90, 3996; G(2)A39. The consolidated loans were then renewed by
virtue of a $9,500 cash payment and a separate $500 cash payment made on June 6,
2002. See Tr. 2205, 3996; G1(A)31, G1(A)32, G2(A)41, G2(A)42, G2(A)43.
4. Whitfield Files False Financial and Campaign Disclosure Forms.
Mississippi ethics laws required elected officials (including judges) to file an
annual statement of economic interest. Tr. 2477. Although the form did not require
bona fide loans to be disclosed, Tr. 2523, 2521-24, it did require disclosure of private
sources of income over $2,500, including cash and loan forgiveness. Tr. 2483-2488,
2554-56, 2557. Because Whitfield did not intend to repay the $140,000 he received
from Peoples Bank, he was required to disclose this windfall, but did not. Id.; G24.
Nor did he disclose (as either income or loan forgiveness) the large quantities of cash
that Minor provided to pay the principal and interest on these loans. Tr. 2557-58;
G24. Whitfield’s campaign disclosure forms likewise did not identify the funds he
received from Minor. Tr. 2519-20; G28.
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5. Minor and Whitfield Arrange for Payback by a $3.64 Million
Award in Marks v. Diamond Offshore.
Meanwhile, shortly after Whitfield received the $140,000, the two men
arranged to have Whitfield repay Minor by rendering a favorable decision in Marks
v. Diamond Offshore. Archie Marks, a roustabout on an off-shore oil rig, sustained
a back injury while carrying buckets of water. Tr. 3026. Marks then retained Minor
& Associates and sued his employer, Diamond Offshore, under the Jones Act.
Although the Jones Act provided for jury trials, Minor & Associates made an unusual
request for a bench trial and arranged for Whitfield to hear the case. Tr. 3047, 3060-
61.
Circuit Court procedures specified that cases were to be randomly assigned
after the answers were filed. Tr. 3054, 4519-20. Before that time, litigants could
present motions to any sitting judge. In the Marks case, Minor & Associates filed an
ex parte “Motion to Set Expedited Hearing and Case Scheduling Order” with
Whitfield on February 10, 1999, 12 days before Diamond Offshore received a
summons. Tr. 3053-58; GRE/5. This motion asked the court to set a hearing date
in order to establish an expedited schedule and trial date. GRE/5 at 2. The same day,
Whitfield signed a “Fiat” granting this motion and setting a hearing on plaintiff’s
motion for May 3, 1999. Tr. 2054; WRE/7. Because Circuit Court judges did not
schedule trial dates for other judges, the signing of this “Fiat” effectively assigned the
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Marks case to Whitfield. Tr. 3136-37, 3244-48, 4545.
Richard Salloum, Diamond Offshore’s counsel, sought to determine how the
case could have been assigned to Whitfield before his client had even been served.
Tr. 3056-58. The Court Administrator’s answer (which was inadmissible hearsay at
trial), Tr. 3038, 3109, failed to satisfy him that the case had been randomly assigned.
Tr. 3057. Accordingly, Salloum began investigating the relationship between Minor
and Whitfield, Tr. 3058-59, 3063, and, as part of this inquiry, requested Whitfield’s
campaign finance disclosure forms. Id. at 3059. As noted above, these reports did
not disclose the $40,000 loan Minor orchestrated for Whitfield at Peoples Bank. Tr.
3068-69; see supra at 16. Salloum’s other inquiries likewise failed to uncover the
additional $100,000 loan. Tr. 3070, 3304-06.
In early February 2000, while the Marks case was pending before Whitfield,
Minor ensured that Peoples Bank renewed Whitfield’s loans (which were then due
in full), providing Whitfield with $5800 in cash. See supra at 14. The Marks case
was tried without a jury on June 20-22, 2000, about one month before the third
renewal date. G1(A)22. Whitfield found for Marks and entered judgment for $3.75
million, plus interest and costs. Tr. 3072-73; G84. After post-trial motions, Whitfield
reduced the verdict to $3.64 million, but otherwise denied relief. Tr. 3075-87; G82,
G84b, PM-105a. Whitfield entered his final decision on October 3, 2000, just three
The Marks case was then stayed in the Supreme Court, pending 7
resolution of the criminal proceedings against Minor and Whitfield. Tr. 3088-89.
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weeks after Minor had (unbeknownst to defense counsel) once again provided $6,900
in cash to renew Whitfield’s loans. Tr. 3085; G82, G2(A)22, G2(A)23, G2(A)26,
G2(A)27. Had Salloum known about Minor’s financial relationship with Whitfield,
he would have asked Whitfield to recuse himself. Tr. 3086.
Diamond Offshore appealed to the Mississippi Supreme Court. Tr. 3087.
Applying a deferential standard of review, the court affirmed Whitfield’s liability
ruling. MRE/12 at 11. But the court overturned his damages award, finding that “$3
million in compensatory damages, above and beyond purely economic damages, is
so high as to be unreasonable at first blush.” Id. at 16. The court reduced the award
by $2 million to “bring[ ] it within the range of what we consider acceptable for
[Marks’] pain and suffering and loss of enjoyment of life.” Id. at 17.7
6. The Whitfield Bribery Scheme Unravels, and Minor and
Whitfield Attempt a Coverup.
The Whitfield bribery scheme unraveled in July 2002 when bank examiners
uncovered and criticized the consolidated loan. Tr. 2206-07. Peoples Bank
accordingly asked Minor to get the loan paid off. Tr. 2208-09, 2359. Minor agreed,
stating that he had a friend in New Orleans who would pay it off. Id.
Scruggs has recently entered a plea to a federal charge of bribing a judge 8
in an unrelated matter and has been sentenced to five years’ imprisonment.
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Minor had already attempted to get Richard Scruggs, another prominent
Mississippi plaintiff’s lawyer, to act as his strawman on a payoff. Minor and 8
Scruggs were good friends, and Scruggs had agreed to act as the intermediary in
paying off Minor’s hidden loan to Teel. See infra at 24-25. Sometime in 2000,
Minor also asked Scruggs to substitute for him as the guarantor on Whitfield’s loan.
Tr. 3763, 3764-65. Even though Scruggs understood that Minor would repay him,
Tr. 3816-17, 3824-25, and considered Minor “one of my most trusted friends,” Tr.
3776, he refused to help with the Whitfield loan, forcing Minor to locate another
intermediary who could disguise his role. Tr. 3761-65.
Minor turned to the “friend in New Orleans,” a law school acquaintance named
Leonard Radlauer. Radlauer had recently started running into Minor at Martin’s
Wine Cellar in New Orleans, and the two men had discussed Whitfield, a mutual
acquaintance. Tr. 3574-76, 3578, 3626. Minor asked Radlauer to do a favor for him
and Whitfield. He said he had co-signed a loan and owed some money with
Whitfield, and he asked Radlauer to pay off the loan for him “because he [Minor]
wanted to keep it out of the newspapers” that he was repaying a judge’s loan. Tr.
3585; see Tr. 3629. When Radlauer asked Minor whether he was “doing anything
funny,” Minor assured Radlauer that he was not. Id. Radlauer thought the request
All of the transactions involving Whitfield’s two loans are summarized 9
on G1(A)1, G2(A)1 and G3(A)1. See GRE/4.
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“unusual,” but ultimately agreed to help. Id. at 3586, 3630.
Minor arranged the details of the payoff with Radlauer’s secretary. Id. at 3586-
87. On August 27, 2002, Minor wired $125,000 from a non-Peoples Bank account
into Radlauer’s trust account, and Radlauer’s secretary wired $118,652.42 to Peoples
Bank to pay off Whitfield’s consolidated loan. Tr. 2208-14, 2360, 3390-92, 3589-94,
3997-99; G2(A)44, G2(A)45, G2(A)46, G2(A)49, G17, G18, G19. Minor had told
Radlauer that he should keep the difference (i.e., more than $6,000) even though
Radlauer insisted that he did not need to be paid. Tr. 3594-95. 9
To Radlauer’s surprise, the transaction was not complete. While out of the
office one Friday more than three weeks later, Radlauer learned from his secretary
that he had received a package from Whitfield. Tr. 3595. The next day, before he
had examined the package, Radlauer ran into Minor at Martin’s Wine Cellar. Id. at
3575, 3596. Minor, who appeared to be “very nervous” and even “panic stricken,”
made a bee line for Radlauer. Id. at 3597. He informed Radlauer that the FBI might
want to talk to him and stated that “John [i.e., Whitfield] would pay [Radlauer] back.”
Radlauer pointed out that he had not spent any of his own money, but Minor
continued to insist that Whitfield would pay him back. At this point, Radlauer asked
if Minor was asking him to lie to the FBI. Minor denied it, but then continued to
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propose that Radlauer claim that he had actually paid off the loan and that Whitfield
was going to pay him back. Id. at 3598. The conversation ended when Radlauer told
Minor that he would “take care of it his own way” and left. Tr. 3598-99.
On Monday, Radlauer opened the package from Whitfield. Tr. 3600-06.
Inside was a “completely false” promissory note executed by Whitfield in the amount
of $117,013.21, and backdated to August 26, 2002, the day before the loan payoff.
Tr. 3603; G17. Also included was an undated, handwritten note from Whitfield,
claiming that he was “in the process” of arranging to take care of the matter and
would “repay the entire amount, plus interest.” G18. Unbeknownst to Radlauer,
Minor had instructed his office manager to draft this promissory note, calling her at
home on Sunday, September 8, 2002, and having her leave it in his mailbox at home.
Tr. 3394-99; G14.
Radlauer “went through the roof,” realizing now that Minor had not
orchestrated the money transfer merely “to keep it out of the newspapers.” Tr. 3605.
Because the promissory note had been “predated * * * to a time when there was no
such note” and evidenced a non-existent agreement between Whitfield and himself,
Radlauer determined that “all in all, it was a pretty shady thing.” Id. Indeed,
Radlauer now concluded that, in insisting that Whitfield would “pay him back,”
Minor had been offering him $120,000 to lie to the FBI. Tr. 3642-49. Radlauer sent
A few weeks later, after he had been contacted by the FBI, Radlauer 10
returned to Minor the money left over from the loan repayment, indicating that he had
changed his mind about donating it to charity. Tr. 3624-25; G20.
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the promissory note back to Whitfield, along with a letter indicating that he was “not
going to participate in any endeavors that are not completely above board” and
requesting that Whitfield and Minor “leave [him] out of any activities such as these.”
Tr. 3606-09; G19. Neither man responded. Id. at 3610. 10
B. The Teel Bribery Scheme.
1. Minor Secures $25,000 to Finance Teel’s Campaign.
In 1998, Walter W. (“Wes”) Teel, a Gulf Coast divorce attorney, decided to run
for Mississippi Chancery Court. Tr. 2133. Chancery Court is an equity court that
handles matters such as domestic relations, youth court, property disputes and the
review of agency decisions. Id. at 2651, 2559. By October 1998, Teel was facing a
runoff election and needed more campaign funds. Id. at 2133-34. Minor — who had
referred divorce work to Teel in the past — stepped into the breach. As he had done
with Whitfield, Minor offered to guarantee a Peoples Bank loan to Teel for $25,000.
Tr. 2218-20. Teel accepted, and the loan closed on November 12, 1998. Tr. 2218-19,
3999-4000; G(1)B2, G(1)B3, G(1)B4. The loan would not have been approved
without Minor’s guarantee. Tr. 2356. Teel withdrew all but $500 of the $25,000 line
of credit, placing this money in his election fund. Tr. 2220-23, 4005, 4050; G(1)B5,
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G(1)B6, G(1)B7, G(1)B8; see GRE/4 at 3 (summarizing loan history). Teel won and
was sworn in as a Chancellor on January 1, 1999. G23.
2. Minor Renews the Loan, Paying Principal and Interest with Cash.
Like the Whitfield loans, the loan to Teel was structured (at Minor’s request)
as a ballon payment that came due every six months. Tr. 2223. And, like Whitfield,
Teel treated repayment as Minor’s obligation. When the original loan expired on
May 11, 1999, Tr. 2416, Teel made no effort to repay either principal or interest and
failed to return phone calls from the bank. Tr. 2269, 2446, 3398-40. Minor then
arranged to have the loan renewed. Minor made the required payment of $1200 on
June 28, 1999, after cashing a check for $3,000 on June 25, 1999. Tr. 2224-25, 2416,
3400-05, 4001; G1(B)9, G1(B)10, G1(B)11, G2(B)2, G2(B)3, G2(B)4; see GRE/4 at
4 (summarizing repayment history). Minor disguised his role by making this loan
payment in cash. G2(B)3. The payment was made at a Biloxi branch of Peoples
Bank, two minutes before a $4,500 cash payment on Whitfield’s $100,000 loan, and
four minutes before a $530 cash payment on Whitfield’s $40,000 loan. Tr. 2419-22,
3538-39, 3988-90, 4001-02; G2(B)4, G2(A)5, G2(A)7.
3. Minor Repays the Teel Loan, Using Richard Scruggs as a
Strawman.
In February of 2000, when the loan was due again, Minor paid it off in full,
using Scruggs as his strawman. Tr. 3747-3762, 3776. Minor promised Scruggs that
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if Scruggs loaned Teel $27,500, Scruggs would be reimbursed. Id. at 3750-52. After
securing a 30-day promissory note from Teel, id. at 3752-54; G2(B)6, Scruggs sent
Teel $27,500 on February 23, 2000, which Teel used to pay off the loan. Tr. 2227,
3753-60, 4002-03; G2(B)7, G2(B)8, G2(B)9. Minor then reimbursed Scruggs by
check on March 9, 2000. Tr. 3409-11, 4003-05, 3759-61; G2(B)10, G2(B)11,
G2(B)12. Thereafter, Teel never contacted Scruggs about the promissory note or
made any effort to repay him. Id. at 3762.
4. Minor Provides Teel with Financial Assistance in Connection
with a Criminal Proceeding and Investigation.
By October 2001, Teel was under investigation for obtaining reimbursement
for office supplies from the Mississippi Administrative Office of the Courts and then
keeping the money instead of paying vendors. Tr. 2688, 2744-46. At the same time,
two other Chancellors in the same district, Cheif Judge J.N. Randall and Judge Tom
Teel (Wes Teel’s brother), were also under investigation for filing false travel
vouchers. Minor provided valuable assistance to all three men. Tr. 2689-93, 2738-
41, 3415-16. In particular, Minor met with the judges several times and paid a public
relations specialist to advise them. Tr. 2690-91, 3416-23; G97, G98, G99, G100,
G101. He also flew the judges to Jackson, Mississippi on his private plane and had
a waiting limo take them to a meeting with the Mississippi Attorney General, which
Minor personally arranged. Tr. 2691-92, 2740; G16, G139h.
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The other two judges ultimately resigned from the bench in exchange for the
State’s agreement not to prosecute. Tr. 2694-97. But Teel went to trial on state
criminal charges. Tr. 2694-97. After Teel was acquitted, Minor reimbursed his
attorney for $10,000 of the expenses of his defense, sending a check on June 25,
2002. Tr. 2746, 3426-31; G6a-G6c. Teel sent Minor a thank you note right before
this payment was made. Tr. 3547.
5. Teel Files False Campaign and Financial Disclosure Forms.
Like Whitfield, Teel failed to disclose the $24,500 in loan proceeds on his
financial disclosure forms, even though he did not intend to repay the loan. Tr. 2489;
G25. He also did not disclose the cash payment of principal and interest that Minor
made on this loan. Id.; G24. And Teel’s campaign reports did not report the loan
proceeds as a contribution from Minor. Tr. 2514-18; G29.
6. Minor and Teel Arrange for Payback with a $1.5 million
Settlement in Peoples Bank v. USF&G.
Meanwhile, Minor arranged to have Teel repay him by providing a favorable
disposition in a pending Chancery Court case. The case, Peoples Bank v. USF&G,
involved a dispute over insurance coverage. Tr. 2797. Peoples Bank was the
defendant in a class action suit alleging that it had overcharged its customers for
Collateral protection insurance is insurance the bank obtains (and 11
charges to the borrower) when the borrower fails to insure the bank’s collateral. Tr.
2842-43; G51 at 2.
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collateral protection insurance, and the bank’s insurance carrier, United States 11
Fidelity and Guaranty (“USF&G”), declined to defend the lawsuit or indemnify the
bank. Tr. 2227; G48(B). Minor sued USF&G on behalf of the bank, alleging, inter
alia, breach of contract and bad faith refusal to provide insurance coverage. Tr. 2668,
2763-64, 2836-37, 4324; G48(b).
a. Minor Files a Contract Dispute in Chancery Court and
Hand Picks Chief Judge Randall to Decide It.
The Peoples Bank law suit was filed in August 1998, before Teel was elected
to the Chancery Court. Although this was a commercial dispute involving contract
interpretation, Minor chose to sue in Chancery Court, rather than Circuit Court, the
normal forum for such cases. Tr. 2763-65. As with the Marks lawsuit, Minor bypassed
the court’s regular assignment procedures and hand-picked Chief Judge
Randall, his preferred judge.
Randall had been appointed to the court in 1991 to fill a sudden vacancy. Tr.
2655. To get this appointment, Randall had sought out Minor’s endorsement,
knowing that Minor was very close to the Governor. Tr. 2657 (“I understood that if
Paul Minor said appoint J.N. Randall * * * that I would be appointed.”). When
Randall got the appointment, Minor made sure he knew why, summoning Randall to
The “Fiat” signed by Judge Randall was substantially similar to the one 12
signed by Whitfield in the Marks case. Compare WRE/7 with G48d.
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his office to receive the Governor’s congratulatory call. Tr. 2658.
In the Peoples Bank litigation, Minor repeatedly exploited Randall’s ensuing
sense of obligation. Under Chancery Court rules, if a judge ruled on a motion before
anything else had been done in the case, the matter normally was assigned to that
judge. Tr. 2663, 2668. Minor therefore had Randall inform him of what day he
(Randall) would be hearing motions. Tr. 3331-33; G48a. Minor then filed the
Peoples Bank complaint on that date, with an accompanying “Motion to Set
Expedited Hearing, Case Scheduling Order, and for Injunctive Relief.” G48c.
Randall signed a “Fiat” granting the motion and set a hearing before himself on
October 23, 1998, thus effectively assuming control of the case. Tr. 2664-66; G48d.12
Randall had never handled an insurance dispute before and had never seen one
in Chancery Court. Tr. 2670; see also Tr. 2830 (same as to defense counsel), 2837.
Predictably, USF&G’s counsel moved to transfer the case to Circuit Court. Tr. 2765.
Judge Randall granted the motion on November 18, 1999, and the case was assigned
to Circuit Judge Jerry Terry, thereby affording USF&G a jury trial. Tr. 2671, 2828.
Minor got “very upset” about the decision and, in an ex parte conversation,
convinced Randall to take the case back. Tr. 2672-73, 2766. Minor told Randall that
Judge Terry would “cut his nuts out,” Tr. 2673, and claimed that he could show
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through discovery that Chancery Court was an appropriate venue. Id. Thereafter,
Randall transferred the case back to Chancery Court, against his law clerk’s advice.
Tr. 2676, 2673. Although Randall viewed his own decision as “very abnormal,” the
Mississippi Supreme Court subsequently denied USF&G’s interlocutory appeal. Tr.
2766, 2800.
b. Minor Demands that the Peoples Bank Lawsuit Be
Re-Assigned to Teel.
Back in Chancery Court, the case bogged down in discovery. Minor sought
access to all USF&G’s files relating to Peoples Bank’s claim, and USF&G objected
based on attorney-client privilege and work product. Tr. 2676. Randall assigned the
discovery dispute to Teel. Tr. 2678, 2771, 4324; G49, G49A. Teel then entered an
order rejecting USF&G’s privilege claims and requiring it to disclose all of its files
to Peoples Bank. Tr. 2772, 2813, 2830-31; G52.
When Randall learned that USF&G had been ordered to produce privileged
documents, he decided to reconsider Teel’s ruling, id. at 2775, 2680-82, and ordered
Peoples Bank to return all the documents to USF&G so that it could make specific
claims of privilege. Id. at 2775. This setback enraged Minor, who promptly returned
to Randall’s chambers for another ex parte conversation. Tr. 2776. Minor upbraided
Randall, telling him that he had “f***’ed up this case,” and demanded that he reassign
it to Teel. Tr. 2680-84. Although the conversation upset Randall, he quickly
That case began in the federal district court for the Southern District of 13
Mississippi, where Judge Gex concluded that USF&G had a contractual duty to
defend Omnibank, but denied Omnibank’s bad faith claim, thereby precluding
punitive damages. Ramsey v. Omnibank, 215 F.3d 502, 504 (5 Cir. 2000). On th
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complied with Minor’s demand, reassigning the case to Teel the same day. Tr. 2687-
88, 2776-78; G57.
c. Teel Forces a Favorable Settlement in the Peoples Bank
Case Shortly before the Mississippi Supreme Court
Concludes that USF&G Had No Duty to Defend.
Shortly after Randall re-assigned the Peoples Bank litigation, USF&G hired
Wayne Drinkwater to represent it. Tr. 2836. Drinkwater found it unusual that the
suit had been brought in Chancery Court. Tr. 2837, 2839-40. For that reason, he
investigated to determine if there was any relationship between the bank (or its
lawyers) and Teel. Tr. 2838. Drinkwater failed to discover that Minor had paid off
a $25,000 loan for Teel, and neither Minor nor Teel disclosed this fact. Tr. 2838,
3033. Ibid. Had Drinkwater known this information, he might have suggested that
Teel disqualify himself. Tr. 2839; see also Tr. 2782-83.
Drinkwater believed that Omnibank v. USF&G, a case then pending before the
Mississippi Supreme Court, would ultimately determine the outcome of the Peoples
Bank lawsuit. Tr. 2841-46. Omnibank involved USF&G’s decision — under the
same contract — to deny coverage to a different bank for the same kind of lawsuit.
Tr. 2841. USF&G therefore moved to stay the Peoples Bank case until the 13
appeal, this Court certified the contract interpretation question to the Mississippi
Supreme Court. Ibid.
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Mississippi Supreme Court decided Omnibank. Tr. 2846-47; G52A. While
acknowledging that the motion was “well taken,” Teel effectively refused to await the
Supreme Court’s decision, staying the case for only a month and declining to
reschedule the impending trial. Tr. 2847-48; G52A. When the Mississippi Supreme
Court failed to rule by September 1, 2001, USF&G faced an imminent trial. Tr. 2846-
48.
Concerned about some very large verdicts recently entered in Mississippi trial
courts, USF&G tried to settle. Tr. 2852-58. In the meantime, Teel granted summary
judgment for Peoples Bank on December 18, 2001, concluding that USF&G had
violated its insurance contract by not defending the bank. Tr. 2857; G51at 9. Teel
also indicated that that the issues of bad faith and punitive damages would be decided
in the upcoming trial, scheduled for early January 2002. Id. During this period,
Drinkwater was unaware that Minor was assisting Teel with the pending criminal
investigation of his misconduct. In particular, Drinkwater did not know that Minor
had recently escorted Teel by private plane to meet with the Attorney General of
Mississippi. Tr. 2854, 3033-34. Had he known, he would have found this fact “very
Andy Carpenter, the Executive Vice President of Peoples Bank, recalled 14
hearing Minor express concern one day that Teel might be leaving the bench soon.
Minor also stated that they (i.e., the bank) needed to get the lawsuit settled. Tr. 2229.
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disturbing, obviously,” and would have found it hard “to let that pass.” Tr. 2854-55.14
The parties appeared before Teel for a settlement conference on December 21,
2001. Tr. 2859. When, after lengthy negotiations, settlement looked unlikely, Teel
called everyone together in his courtroom. Tr. 2861. He then announced that he was
offended by USF&G’s conduct and stated that his “settlement” figure for the case was
$1.5 million, five times the amount of any actual damages. Tr. 2861-62, 2852, 3032.
Drinkwater had never seen any judge who was to be the finder of fact make such an
announcement during settlement negotiations and found this event “a surprise.” Tr.
2862-63.
Teel’s speech quickly ended the settlement discussions. USF&G offered $1.5
million on the spot, reasoning that it could do no better (and likely would do worse)
if it went to trial before Teel. Tr. 2863-67; G54, G141. Had Drinkwater known of
the financial relationship between Teel and Minor, USF&G would not have settled
for that amount. Tr. 3036. Minor received approximately $500,000 in attorneys’
fees. Tr. 2229, 3414.
After the case settled, Minor presented Peoples Bank with a plaque that
congratulated it on hiring him to “kick [USF&G’s] butt.” Tr. 2229-31; G102a. A few
Minor’s opening statement also contained large amounts of flattering 15
biographical information, most of which was never proven at trial. See Tr. 2047-49;
see also Tr. 2086 (Whitfield notes in his opening that Minor’s father “has been
fighting for the rights of minorities * * * for 50 years.”). Whitfield and Teel made
similar unsubstantiated claims in their openings. Tr. 2073-75 (Whitfield), 2131-35
(Teel).
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months later, the Mississippi Supreme Court adopted USF&G’s interpretation of the
contract. Tr. 2848, 2869-71; see USF&G v. Omnibank, 812 So.2d 196 (Miss. March
28, 2002) (adopted in Ramsey v. Omnibank, 293 F.3d 760 (5 Cir. 2002)).
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