The US Attorney who wasn't fired: How Bush pick helped prosecute top Democrat-backed judge
Larisa Alexandrovna and Muriel Kane
Published: Tuesday April 1, 2008

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The Permanent Republican Majority, Part IV: How corporate-GOP interests sought to topple Democrats in Mississippi

Since the deregulations of the Reagan era, the electoral strategy of the Republican Party and the interests of the corporate lobby have become intimately entwined.

Karl Rove – President George W. Bush’s former Deputy Chief of Staff and campaign maestro – capitalized on this alliance in Texas in the early 1990's, when he made campaigning against "activist judges" a cornerstone of Republican victories. He then applied the same technique in Alabama, where he and Republican consultant William Canary began systematically working in 1994 to elect pro-business judges.

As reported in Raw Story’s The Permanent Republican Majority - Part One, Canary reemerged in 2002 as the advisor to Alabama Republican gubernatorial candidate and now governor, Bob Riley. Canary’s wife, Leura, meanwhile, used her position as the US Attorney for the Middle District of Alabama to investigate Riley’s Democratic opponent, incumbent governor Don Siegelman, helping ensure his defeat and leading to his prosecution on bribery charges, conviction, and imprisonment in 2007.

During the mid-90s, a series of state lawsuits against the tobacco industry delivered a heavy blow to American business interests in the South.

Initiated by Mississippi Attorney General Mike Moore, they sought compensation for the costs of smoking-related diseases. Other state attorneys general joined the suit, and eventually the industry was forced to settle, culminating in a Tobacco Master Settlement Agreement that exempted the tobacco companies from liability in exchange for a $246 billion dollar payment and other concessions – the largest settlement in US history.

Alabama, however, refused to join the lawsuits. The decision, by the state’s Republican governor and then-Attorney General William Pryor, led to a political firestorm.

The conflict was a major factor in then-Democratic Lieut. Gov. Don Siegelman’s election as governor in 1998. Almost as soon as Siegelman took office, however, Pryor initiated a series of corruption investigations against him. After the Bush administration took office in 2001, these state probes were elevated to the federal level at the hands of US Attorney Leura Canary. As reported in The Permanent Republican Majority – Part Three, Rove and Canary also helped promote the Siegelman investigations.

In neighboring Mississippi, meanwhile, the tobacco suit had produced several extremely wealthy trial lawyers, who became major funders of the local Democratic Party.

In 2003, a Bush-appointed US Attorney, Dunnica Lampton (above right), brought federal charges against one of those lawyers, plaintiff’s attorney Paul Minor, alleging that he had bribed a Mississippi Supreme Court Justice, Judge Oliver E. Diaz, Jr.

Just as in the case of Governor Don Siegelman in Alabama, when the first trial of Diaz failed to produce the desired result of removing him from his elected seat in 2005, fresh charges were brought almost immediately.

Diaz and Siegelman also shared the ire of tribal casinos. Siegelman’s attempt to introduce an Alabama state lottery to support education initiatives had ruffled the feathers of the Mississippi Band of Choctaw Indians, who saw it as a threat to their interests, while Diaz stood against the Choctaws by ruling in favor of more regulation of tribal casinos.

Diaz himself had previously been the target of GOP-allied business interests during his 2000 election campaign, when the United States Chamber of Commerce ran issues advertising supporting his opponent.

The United States Chamber of Commerce

Despite its seemingly bipartisan name, the Chamber of Commerce has operated as a pro-Republican powerhouse since the fervently anti-regulation Thomas J. Donahue became president in 1997.

“The chamber has become a significant force in state and national politics under Donohue's decade of leadership,” the LA Times’ Tom Hamburger wrote this past January. “Once a notably bipartisan trade association with a limited budget and limited influence, it has hugely increased its political fundraising and developed new ways to spend money on behalf of pro-business candidates.”

Under Donohue, the organization has frequently aligned itself with GOP priorities. Donahue recently announced an intention to play a major role in electing pro-business candidates in 2008, proclaiming, "We plan to build a grass-roots business organization so strong that when it bites you in the butt, you bleed.”

William Canary, the Alabama political consultant who was central to the defeat and prosecution of Governor Don Siegelman, is closely tied to Donohue and the U.S. Chamber of Commerce. When Donohue was president of the American Trucking Association in the 1990’s, Canary served under him as a counselor, political advisor, and eventually Senior Vice President for State, Federation and Intergovernmental Affairs.

Canary and Donohue were also friends. According to two Alabama Republican lawyers recently interviewed by RAW STORY, it was Donohue who recommended that Canary be named president of the Business Council of Alabama, a position he assumed in March 2003. The Business Council is currently the Alabama affiliate of the U.S. Chamber of Commerce, and it has played an active role in Alabama politics since at least 1994, when it invited Karl Rove to the state to work with Canary.

“You know it was Donohue who helped place Billy Canary at the [Council], don’t you?” said one of the Alabama lawyers several weeks ago, during our second trip to Alabama. The attorney asked to remain anonymous for fear of backlash. A second attorney interviewed in Alabama familiar with the events also said Donohue had a hand in getting Canary the job at the Council.

The US Chamber of Commerce did not respond to repeated requests for comment.

Diaz faces pro-business challenge

Keith Starrett ran in the Mississippi Supreme Court judicial election against Oliver E. Diaz Jr in 2000. In the state of Mississippi judges are not allowed to run on a party ticket or represent a party. But it was no secret that Starrett was supported by Republicans and Diaz by Democrats. In the two weeks preceding the vote, the Chamber purchased over a million dollars of campaign ads on behalf of Starrett and three other Republican candidates. Starrett lost the election anyway.

Starrett told RAW STORY Tuesday he had no knowledge of the Chamber running the ads.

"It was a complete surprise to me and when I found out, I asked that they be stopped," he said. "Oliver's [Diaz] comments about Lampton and me [to other publications] being involved in his prosecution is a boldface lie and a pipe dream."

Diaz did not mention Starrett as being involved in his investigation and prosecution to us.

The U.S. Chamber of Commerce refused to reveal their membership list after concern over the ads surfaced. According to Mississippi law, campaign donors must be disclosed, and strict limits are placed on the amount of total contributions an individual, group, or corporation can donate. The state of Mississippi sued the Chamber over the pro-Starrett advertisements and won a ruling on the federal level.

The Chamber, however, had friends in high places. Supreme Court Justice Antonin Scalia granted an emergency appeal to vacate injunctions challenging the legality of the ads.

During that same election cycle, Dunnica Lampton ran on the Republican ticket to represent Mississippi’s fourth Congressional district. He lost. In 2001, the Federal Election Commission fined Lampton’s campaign $5,800 for failure to file campaign finance reports. These fines trigged an accounting audit by the FEC, which cited Lampton’s failure to disclose debts and obligations and receipt of contributions in excess of campaign limits.

Despite the FEC fines, President Bush nominated Lampton to be US Attorney for the Southern District of Mississippi in September 2001.

Lampton took office in November. Early the following year his office began investigations into Diaz, Minor and other Mississippi judges.

A similar nomination-prosecution pattern was seen in Alabama. As soon as Leura Canary – wife of Chamber ally Bill Canary – was appointed the US Attorney for the Middle District of Alabama, she began targeting Democratic governor Don Siegelman.

Starrett made out well after his defeat. In 2005, he was appointed to a federal judgeship for the Southern District of Mississippi by President Bush.

And just as in Alabama, the US Attorney in Mississippi targeted his friend’s Democratic opponent.

The case against Paul Minor and Oliver Diaz

Paul Minor was a prominent Mississippi trial lawyer whose firm made more than $70 million in the late 1990's from the state's tobacco lawsuit settlement. He was also a generous donor to Democratic candidates, contributing more than $500,000 between 1996 and 2003.

It was partly because of the 1997 tobacco settlement that the U.S. Chamber of Commerce spent over a million dollars in 2000 to help elect pro-business judges to the Mississippi Supreme Court, in an attempt to follow the pattern set by the Republican takeover of the Alabama Supreme court led by Karl Rove and William Canary in the 1990’s.

Judge Diaz managed to retain his seat despite the Chamber’s advertising but wound up deeply in debt. Minor helped Diaz raise money to pay off the debts, including signing a loan guarantee. This became the basis for the prosecution of both men on bribery charges.

In October 2002, news of an ongoing FBI investigation of possible judicial misconduct was leaked to Mississippi newspapers just weeks before the upcoming judicial elections. One story, which was typical of the leaked reports, stated, "Federal authorities are investigating whether state court judges took out loans that were repaid by nationally prominent trial lawyers from South Mississippi whose cases the judges handle."

Overnight, donations by lawyers like Minor became "radioactive," and six pro-business Republican judges were elected.

As one Mississippi attorney explained in an interview, “In war, you first cut off the supply lines of the enemy troops.” Minor was the “supply” target because of his large donations to Democratic candidates. Diaz was the “obstacle” to corporate interests seeking to reduce plaintiff cases and keep tribal casinos deregulated.

US Attorney’s conflicts of interest in the Diaz case

In July 2003, Paul Minor, Oliver Diaz, and two former judges – Wes Teel and John Whitfield – were charged with a range of federal crimes based on Minor's loan guarantees.

Lampton claimed during the Diaz trial that he had recused himself from the case and that it was being handled by lawyers from Washington. He later acknowledged that he had not recused himself, although it does seem that the Washington lawyers were taking the leading role.

When Lampton’s office began investigating Diaz, Lampton’s own ties to Starrett should have been enough reason for the US Attorney to recuse himself. Starrett was Diaz’s 2000 opponent in the judicial election, and Lampton and Starrett apparently have been friends as far back as childhood. During Starrett’s investiture ceremony, Lampton discussed their long-standing friendship.

“U.S. Attorney Dunn Lampton, who has known Starrett since they played Little League baseball together, praised the new judge for his tremendous work ethic, compassion and knowledge of the law,” the local Daily Leader wrote in 2005. "He will do everything he can to be fair,” Lampton said. “He does not have an agenda.”

In addition, a relative of Lampton’s, Donna Lampton, was and continues to be the legal administrator for now federal judge Starrett.

Lampton also had an additional reason to target Diaz. In 1998, a case involving his Dunnica’s twin brother Dudley Lampton, was reviewed by the Mississippi Appellate Court. This three judge panel, with Diaz as one of the judges, ruled against Dudley.

Lampton was not available for comment as he is on sick leave from the US Attorney office as a result of a car accident.

Continued on page 2

The Permanent Republican Majority Series and Related Raw Story Articles

Larisa Alexandrovna is the Managing Editor of Investigative News for Raw Story and regularly reports on intelligence and national security matters. Contact her at [email protected]