Editor’s note: Desi Canela, a former Express-News journalist, is in Gulfport, Miss., for the federal fraud trial of San Antonio attorney Mikal Watts and six co-defendants. She is blogging as an unpaid observer who supports Watts and his team. Look for daily updates at www.mikalcwatts.com.
There have been some strange moments in the federal fraud trial of San Antonio plaintiff’s attorney Mikal Watts and six co-defendants who worked for or with his law firm on the lawsuit that grew out of the 2010 British Petroleum oil spill in the Gulf of Mexico. None was more strange than an exchange Monday afternoon between U.S. District Judge Louis Guirola Jr., the trial judge, and Asst. U.S. Attorney Jerry Rushing, the lead prosecutor.
Rushing announced the government’s decision to rest its case only to be rebuked by Judge Guirola who, in so many words, refused to let Rushing rest and instead suggested outside the hearing of the jury that Rushing and other members of the prosecution team regroup and find more evidence to present.
“Mr. Rushing, frankly, I did not expect (your) response, and I didn’t – ordinarily a case that took this long, you may want to give that some thought,” warned Judge Guirola, after sending out the jury. “Now that the jury is out, do you want to take some time to, well, to gather yourself and discuss among your confederates just exactly what you intend to do? Because from this point forward, there are some serious matters that the court will need to take up, and I want to be sure that you’re ready to do that.”
Rushing, the lead prosecutor, has served as a last-minute substitute. He was assigned the case following Asst. U.S. Attorney John Dowdy’s abrupt and still-unexplained resignation on Saturday, May 15, two months before the trial was set to open here in Gulfport, Miss. Dowdy, of Jackson, Miss. spent nearly five years building the case and preparing for trial. Neither the 28-year veteran prosecutor nor the U.S. Attorney’s office have offered a substantive explanation for that turn of events.
Rushing, who presented more than 80 witnesses over three weeks, tried to rest the government’s case Monday afternoon after presenting his final witnesses, six U.S. Secret Service agents assigned to financial investigations. Their combined testimony seemed to weaken rather than strengthen the government’s case as Watts, who is defending himself, and attorneys for the other six co-defendants undertook a kind of tag team approach on cross-examination to punch holes in their testimony and the reliability of the data they used to assemble the charges.
When the trial resumed Tuesday morning, Rushing announced the government’s decision to drop five more of the 73 counts leveled against the defendants rather than try to produce more evidence. He then moved successfully to rest the prosecution’s case. Earlier, Judge Guirola dismissed 22 of the original 95 counts of the indictment on July 18. The defendants still face 66 counts.
The 2010 Deepwater Horizon oil spill was the worst environmental disaster in U.S. history. Eleven oil rig workers disappeared, their bodies never recovered. Five million barrels of crude oil poured into the Gulf of Mexico, damaging environmentally sensitive shorelines, shutting down the seafood industry, and wreaking economic havoc on the Gulf Coast economy. The catastrophe has cost BP approximately $62 billion in losses, by the company’s own estimates.
Watts was part of a larger team of lawyers set to try the civil lawsuit against BP on behalf of tens of thousands of individuals and businesses financially harmed by the oil spill. Watts conducted numerous key pre-trial depositions of senior BP executives.
BP, in turn, accused Watts of submitting phony claims in 2013. Days before the civil trial was set to open, an army of 80 U.S. Secret Service agents raided Watts’ San Antonio law offices, forcing him to withdraw from the trial team. The civil trial was postponed indefinitely, and criminal indictments followed in October 2015.
Watts, his brother David, Wynter Lee, Eloy Guerra, Gregory P. Warren, Thi Houng “Kristy” Le and Thi Hoang “Abbie” Nguyen were indicted on 95 counts for allegedly inventing and submitting 40,000 false names of claimants said to have suffered financial losses as a result of the oil spill.
Mikal Watts’ defense of himself and his brother will focus on his misplaced trust of his fellow defendants who, jurors were told, had done credible field work signing up claimants in at least one other major lawsuit in the aftermath of Hurricane Katrina. Watts and fellow San Antonio criminal defense attorney Mike McCrum told jurors that Watts paid out $10 million in fees and expenses to the defendants who provided the 40,000 names and did not question them because of their past work.
Watts is expected to begin his defense Wednesday by taking the witness stand himself and offering jurors an uninterrupted narrative before Rushing can cross-examine him. He has said it will take one week to present his defense, after which lawyers for other defendants will present their respective defenses.
Top Image: From left: Nueces County-Court-at-Law Judge Terry Shamsie, Mikal Watts, his mother State District Judge Sandra Watts of Corpus Christi, criminal defense attorney Mike McCrum, and Texas political consultant Christian Archer leave the courthouse in Gulfport, Miss. Photo by Desi Canela.