Prosecutors Used "Sex Scandal" to Intimidate Key Witness in Siegelman case

Federal prosecutors told a key witness in the Don Siegelman case that he could be implicated in a sex scandal, and they apparently used that revelation to coerce desired testimony from him.

That explosive charge, involving former Siegelman aide Nick Bailey, is included in an affidavit from Tuscaloosa, Alabama, businessman Stan Pate.

Andrew Kreig reports at Huffington Post that Bailey now works for Pate and has told his boss about pressure tactics federal prosecutors used against him. Pate's affidavit is included as an exhibit in motions for a new trial recently filed by Siegelman and codefendant Richard Scrushy.

Pate states in his affidavit:

The "stick" that the government used with Nick was to threaten, expressly or implicitly, actions that would profoundly affect his personal life. I particularly remember that Nick was visibly shaken by a call he received at the office one day, when I was present, in which he was called by one of the prosecutors working on the Bobo case. (Nick said at the time, and since, that it was Matt Hart.)

The Bobo case, filed in Birmingham federal court, involved charges of health-care fraud against Siegelman, former chief of staff Paul Hamrick, and Tuscaloosa physician Phillip Bobo. Federal Judge U.W. Clemon dismissed key components of the case, causing prosecutors to drop it. That led to the trial against Siegelman and Scrushy in Montgomery on bribery charges, resulting in their convictions.

What did prosecutor Matt Hart say that caused Bailey to be visibly shaken? Kreig provides the story:

"Nick was told that the government was working to prevent the publicizing of an alleged sexual relationship between Nick and Don Siegelman," Pate wrote. "Nick also told me that one of the agents working the Siegelman/Scrushy prosecution asked him whether he had ever taken illegal drugs with Governor Siegelman or had a sexual relationship with him. These comments had a dramatic effect on Nick, and, in my observation, added significantly to the pressure he felt to go along with whatever the prosecutors wanted him to say."

Pate saw firsthand the impact the government's tactics had on Bailey. In his affidavit, Pate states:

The government's requirements of Nick and the approach they used had a profound effect on Nick. I watched him sit in his office day after day, like a student trying to become a teacher's pet, trying to think of things or people that might interest the government in hopes that doing so might help him avoid a prison sentence. But there was a balancing element in Nick's approach. He made it clear to me that he was trying to give the government what he thought would be valuable targets and information and thereby protect his friends and family and reduce his own punishment.

The Siegelman/Scrushy motions for a new trial include a report from Investigative Group Internationl (IGI), which is headed by former Watergate prosecutor Terry Lenzner. IGI says it was hired in April by "counsel for the defense."

An affidavit from IGI Vice Chairman David Richardson focuses heavily on Bailey and contradictions between his current statements and his trial testimony. In the affidavit, Richardson states:

Mr. Bailey told us that he did not believe Governor Siegelman had been bribed by Mr. Scushy; that he did not believe the governor had made a commitment to Mr. Scrushy to appoint him to the CON Board in return for his contribution to the Alabama Educational Lottery Fund; and that he did not believe that Governor Siegelman worried even for an instant that he ever would have to repay out of his own pocket the loan he had personally guaranteed--which was allegedly the personal benefit that the governor got as a result of Mr. Scrushy's contributions to the Educational Lottery Fund.

What is next in the Siegelman case? Kreig says things are heating up:

The gloves are off. Expect to hear much more about this case in the national media over the next few weeks, with 60 Minutes again working to stay in the lead.