On a warm afternoon in May, near the beginning of a long white-collar trial, Richard Scrushy’s lead attorney, Art Leach, began probing the nature of the government’s investigation, as it related to the man who was on the stand, the prosecution’s star-witness, Nick Bailey. White collar cases can be tedious because there is no dramatic moment where the murder weapon is produced, there is no riveting testimony from the clever guys in the crime lab, where it is shown how physical evidence is linked to the defendants. The facts in a white collar case are centered around documentary evidence, conflicting vantage points and the reliability of stories told by eye witnesses.
The task of authenticating documents can be a long drawn-out process, and as for the eye witnesses, it is a matter of reviewing the statements that they made to investigators. Although the confessions of defendants are sometimes taped, the FBI never records the interviews of witnesses. Instead, they take notes, FBI 302 forms, and these notes are the FBI agent’s interpretation of statements made in witness interviews. This methodology is designed to prevent the defense from pointing out discrepancies between the testimony of a witness, during a trial, and the earlier statements made by the witness. In this way, the witnesses always maintain a high level of deniability because any discrepancy can be dismissed as an error in note-taking. (The prosecution made liberal use of this technique in the Birmingham-HealthSouth case, but the defense was able to counter-capitalize because since there were so many cooperating witness-defendants, the defense could point to the sheer volume of alleged mistakes in note taking.)
So in the midst of this process, with Nick Bailey on the stand on that day in May, Leach used a typical attorney gambit which was designed to establish that the accuracy of earlier statements should take precedence over the later statements of a witness. Leach asked, “And in terms of your memory of these events, would you testify to this jury that your memory was better on June 30 of 2003, or better today [May 6, 2006]?”
And Nick Bailey answered unequivocally, “My recollection of these events are better now than they were then, Mr. Leach.” When Leach acted surprised and taken aback by his response, Nick clarified, “My recollection of the events around the delivery of this check is better now than it was then.”
If the long drawn out investigation, and dual indictments of Siegelman had not already raised eyebrows, the first red flag went sailing up the pole that day. Set aside everything that has been said or has come to light about a possible political prosecution. Set aside the big-name political figures who are supposed to be involved in the affairs of Alabama. Set aside everything that is known or thought to be known about the HealthSouth trial, in Birmingham. Because on that day in May, early in the trial of Richard Scrushy and Don Siegelman, it looks like something is up. It looks like something funny is going on. Is Nick Bailey really a marvel of medical science? It doesn’t seem fair that his memory improves over time while the rest of us have to suffer from the deterioration of time and age.
The headline that came out of the recent 60 Minutes report, and that has been widely picked up and circulated by the media, is Nick Bailey’s revelation that his testimony was shaped and coached by his FBI handlers. He was not only coached as to what he would say on the stand—all witnesses have some of that—but he was encouraged to write out his testimony and to make improvements on it. With the 60 Minutes report, we now know that Nick Bailey was telling Art Leach the truth, about his memory, and we can finally reconcile that jarring day in May. His memory really did improve as it was aided, conditioned, bolstered and laid out by the FBI. But there are a couple of other things that underpin these recent revelations. It came out during his testimony that Bailey was in possession of the FBI 302 notes, pertaining to his interviews. This would allow him to review these notes and presumably refine them. Because of this possession, the attorneys could have had the court categorize this situation under the legal term ‘adoption,’ meaning that the witness accepted the notes as being his true and accurate statements. However, the government surprisingly did not oppose the use of the 302s and had them placed into evidence. My legal sources have told me that not only would this be unusual, but that the government would never allow the adoption of FBI notes without vigorous opposition. Never. Allowing adoption would take away the one-off layer of deniability the notes afford the prosecution. So why did they allow it this time? Two things come to mind. 1) They wanted to cut off further probing into the nature of those interviews; and 2) They knew—absolutely knew—that Nick Bailey’s 302 notes would be an exact match for their version of events because they wrote the story.
As yet another flag goes sailing up the pole, a close reading of the transcript reveals other indications that something is up with the investigation, as it relates to star-witness Nick Bailey. When Leach asks about a discrepancy between his testimony and something that was documented in a 302, Bailey says, “According to the 302, that is correct.”
In another exchange, Leach asks Bailey about Scrushy not taking Siegelman’s initial call to the Governor’s office, and Bailey says: “That sounds familiar.” Leach says, “Isn’t it true you told the FBI that?” And Bailey responds, “Again, it sounds familiar.” Leach finally asks him directly, “Is that a statement that’s in one of the 302s that you’ve got possession of?” And Bailey answers: “Yes, sir, it could be.” It is a telling moment because it appears that Bailey is relying not on his memory—as would be expected of a witness—but on the information that is contained in the 302. Typically, a witness will tell an attorney that the 302s are just the FBI agent’s interpretation of what was said in the interview, and that the memory of the witness on the stand is what should count. Bailey doesn’t do that and we now know why.
The appeal process is grinding forward and it looks like the two sides have something to say, but both Don Siegelman and Richard Scrushy have been incarcerated for over nine months, and if Siegelman is denied his release bond, both of them could be in prison for up to two years before the appellate decision is handed down. When the star witness declares, in open court, that he is a marvel of medical science, the issues on appeal are much more than trivial technicalities—but possibilities that range closer to willful obstruction and prosecutorial misconduct, and two years is a long time for people to be imprisoned under these circumstances. So is one day.