A federal grand jury is investigating Walter L. Nixon Jr., chief U.S. District Court judge for the southern half of Mississippi, in an affair that has provided months of titillating grist for a state that revels in political theater and detail.
Since July, the grand jury has been collecting evidence about Nixon's financial affairs and his involvement -- or lack of it -- in cases involving such varied elements as oil and gas leases, drug busts and the sale of an entire offshore island.
The investigation has received heavy coverage in the Jackson Clarion Ledger, Mississippi's largest newspaper, as well as other newspapers and the state's major television stations.
Nixon, who was appointed to the court in 1968 by President Lyndon B. Johnson, comes from an old-line political family from the Mississippi Gulf coast. He is one of only three federal District Court judges in the southern district of the state -- and investigations of federal judges are rare.
The extraordinary security measures that have been imposed at the Hattiesburg federal courthouse -- where Nixon has an office and sometimes presides -- also have whetted journalistic curiosity.
Armed U.S. Marshals block access to the second floor hallway leading to the grand jury's meeting room. Witnesses often use back elevators and arrive in rented cars so their license tags cannot be traced by reporters.
U.S. District Court Judge John V. Parker of Baton Rouge, La., brought in to preside over the grand jury, has imposed a gag order on all federal employes with knowledge of the case and has advised witnesses not to discuss their testimony.
The grand jury was convened last July by prosecutors from the Justice Department's Public Integrity Section in Washington, which investigates and prosecutes public officials on corruption charges. It has held five sessions since then, the most recent in January.
Only fragmentary information about the case has emerged.
One major part of the investigation involves the indictment of a prominent Hattiesburg building contractor, Wiley Fairchild.
In November, Fairchild pleaded guilty to giving an illegal gift to Nixon in an effort to influence a drug case against his son Drew Fairchild. The Fairchild indictment said Nixon received valuable oil and gas leases from Fairchild in 1981 and had collected about $45,000 in royalties from them by the time the indictment was handed down last year.
But Nixon never handled the Drew Fairchild case, and it was unclear what benefit the elder Fairchild hoped to receive.
Nixon was charged with no wrongdoing in the Wiley Fairchild matter and has denied involvement.
The judge said in a statement July 19, "I do not know Mr. Drew Fairchild; I have in no way participated in federal proceedings against other alleged participants with Mr. Drew Fairchild; I have never discussed the Drew Fairchild matter with Wiley Fairchild or any persons associated with Fairchild companies; I never attempted to influence the handling of any aspect of the case; I have had absolutely nothing to do with any phase of the Drew Fairchild affair."
The Justice Department made it clear at the time of the Fairchild indictment that Nixon had not been charged.
In a Sept. 6 press release, Stephen S. Trott, head of the Justice Department's Criminal Division, said, "The recipient's intent may differ from the donor's intent. The indictment alleges criminal intent on the part of the donor but not on the part of the recipient of the gratuity. Therefore, although named in the indictment, Judge Nixon is not a defendant in this case; and this indictment accuses Judge Nixon of no wrongdoing."
Nixon said the oil and gas leases were not a gift. He said he paid $9,500 for them.
Nixon's annual financial disclosure statements show that he obtained the oil leases in February 1981. In his statement last July, Nixon said he purchased the leases from Wiley Fairchild in early 1980, before his son's legal problems occurred. "My total investment was $9,500 plus interest. The papers were delivered to me some months later. I paid what I believed to be a fair price," he said.
"When the purchase was finalized, I reported the details on my financial statements which are open to public inspection. The conveyances to me were duly recorded in the public records. That represents the sum and substance of what occurred. It was a normal and straightforward business transaction," Nixon said.
But Reid H. Weingarten, a senior attorney in the Public Integrity Section, said in a hearing on the elder Fairchild case Oct. 24 that he would attempt to prove that documents indicating that Nixon paid $9,500 for the oil and gas leases were drafted later and "were not contemplated when the transaction was first reached."
"We will allege at trial of the elder Fairchild and will attempt to prove at trial that these notes for payment for the oil and gas leases appeared well after the transaction was consummated," Weingarten said. "The notes amount to about $9,500. And we will say those notes were not contemplated when the transaction was first reached."
The federal indictment, handed down last Sept. 6, said the elder Fairchild transferred the leases to Nixon "for and because of official acts to be performed by Judge Nixon in the future in matters of interest to the defendant." It also said Wiley Fairchild had discussed providing additional leases to the judge.
Government lawyers said during the October hearing that the "official acts" include but are not limited to "matters related to his son, Drew Fairchild, and the drug bust at the Hattiesburg Airport in August 1980."
In that hearing, Weingarten said, "His intention was to effect in the future Judge Nixon's official actions if his son's case came before him and other matters. The government's evidence will go beyond that . . . . If Wiley Fairchild had litigation before Judge Nixon, that would be part and parcel as to the reason why."
Weingarten said at the hearing that Fairchild did not have litigation before Nixon at that time, "but he has potential for it . . . . It is our belief that Wiley Fairchild's intent included the possibility that his son's case would be in federal court, one. And, two, that Wiley Fairchild is a very, very sophisticated businessman with interests that sometimes get into federal court."
The indictment also charged Fairchild with perjury, charging that he made false statements to the grand jury about allegations that he "attempted to conceal from his employes the nature of the transfer of mineral royalty interests and the identity of Judge Nixon as the recipient."
The elder Fairchild's plea bargaining agreement has been sealed by the court, and the perjury charge still is pending. He is scheduled for sentencing on the first count March 5 and faces a maximum sentence of two years in prison and a $10,000 fine.
Drew Fairchild awaits sentencing for his part in an August 1980 attempt to smuggle 2,200 pounds of marijuana into the Hattiesburg Municipal Airport. According to the Clarion Ledger, he agreed initially to plead guilty to federal charges but was never charged in federal court. Drew Fairchild was later charged in state court and pleaded guilty to those charges, but sentencing has been postponed seven times.
Of the five other defendants in the case, three received five-year prison terms and fines of $10,000 to $15,000, one was fined $10,000 and the fifth remains at large after jumping bail.
In his July statement, Nixon said he would make no further comment until the investigation is concluded. But on Sept. 8, after the Fairchild indictment, attorney Bill Goodman, representing Nixon, made another statement saying Nixon "has not done one thing which could be characterized as wrong or improper.
"Any inference that Judge Nixon would receive property so as to act in the future to aid Mr. Fairchild is wholly imaginary," Goodman said. "It is insulting."
In addition to the Fairchild case, the grand jury has received information on several other matters:
* The Jackson Clarion Ledger has reported -- and others have confirmed -- that the grand jury has received testimony from defendants and lawyers involved in a 1975 drug case in Vicksburg, Miss., in which nine defendants, caught with 2,361 pounds of marijuana, all were tried before Nixon and received suspended sentences.
* The grand jury has heard testimony about Nixon's role in the case involving the sale of Petit Bois Island, a 717-acre island south of Pascagoula, Miss., to the government.
The island was bought in 1980 for $100 cash and a $1.7 million note by John R. Stocks, the Tallahassee, Fla., businessman whose latest project is marketing the debris left over from the renovation of the Statue of Liberty.
The federal government, which had announced plans earlier to take the land for a federal park, claimed in court that the island was worth only $330,000. In a 1982 opinion, after hearing evidence on the value of the land, Nixon ordered the government to pay Stocks $6.12 million for the land, along with interest, bringing the total to nearly $9 million.
Stocks has not commented on the investigation. Efforts by The Post to reach Stocks were unsuccessful.
* The grand jury is also looking into Nixon's banking transactions in Mississippi. According to his financial disclosures, Nixon had loans from the now-defunct Mississippi Bank dating back at least to 1978, the first year federal judges were required to file financial disclosures.
The Mississippi Bank went into receivership last May 11 after regulators found losses of more than $16 million in 1983. The FBI and the Federal Deposit Insurance Corp. are investigating the circumstances of the collapse to determine whether any federal statutes were violated, although there is no suggestion that Nixon is a subject of that investigation.
Nixon's disclosures show that he held his largest loans from that bank in 1982, when he owed between $100,000 and $250,000. (The financial disclosure statements show ranges of assets and liabilities rather than exact figures.)