AG candidate in federal court -- as the defendant

But, in this case, Ken Hodges is the defendant, not the prosecutor.

Hodges is being sued for alleged abuse of power in a case involving a powerful South Georgia hospital system and two men who dared to criticize it.

Hodges was the Dougherty County district attorney whose investigation led to criminal charges against the two men, charges that were dismissed by a judge on three separate occasions.

Now, Hodges, one of the two Democrats running for attorney general, is being sued in federal court for violating the civil rights of one of the men he tried to convict.

And, in a final twist, Hodges is being represented in court by the man he hopes to replace. Because Hodges was acting as a state prosecutor, his defense in this case is being handled by the office of Attorney General Thurbert Baker, who is running for the Democratic nomination for governor.

The hearing Thursday morning is on Hodges' motion to dismiss the case, and it comes just six months before the July primaries, in which he'll face state Rep. Rob Teilhet of Smyrna in the Democratic contest. Two Republicans -- Cobb Commission Chairman Sam Olens and former U.S. Attorney Max Wood -- also have filed to run for attorney general.

U.S. District Court Judge Louis Sands originally denied Hodges' motion to dismiss in March.

Suit accuses Hodges of false prosecution

The case, and the overarching story, reads like a legal thriller: threats of violence, powerful interests fighting against private individuals, and potential impact on statewide politics.

While Hodges and the attorney general's office would not comment for this story, Hodges in the past has maintained that he did nothing improper.Charles Rehberg's suit essentially accuses him and another prosecutor of filing criminal charges that they knew to be based on fabricated information.

Also named in the suit is a Dougherty County investigator. The defendants in the suit, which was filed in 2007,  argue in court filings that they are entitled to immunity from prosecution because they were acting in their official roles as prosecutors and investigator.

But Rehberg said Wednesday that Hodges "initiated a false prosecution as a favor to his friends. In my opinion, that is the very definition of political corruption."

Hospital information leaked

The saga began in 2003 when a series of anonymous newsletters began showing up on the fax machines of business and political leaders in Albany. The missives detailed insider information on the operations of nonprofit Phoebe Putney Health System, the largest hospital group in southwest Georgia. The faxes culled information from public records to describe the system's executive pay structure, its political and business connections and its financial holdings.

The hospital system, before turning to Hodges, hired former FBI agents as private investigators to hunt the faxers' identity. Later, Rehberg said those ex-FBI agents confronted him at his office, blocked his pickup and threatened him and his family.

Phoebe Putney ultimately asked Hodges' office to investigate who was sending the faxes. In doing so, Hodges used grand jury subpoenas to acquire phone records that led to Rehberg, a local accountant, even though no grand jury was investigating the case. Rehberg and Dr. John Bagnato, a surgeon, admitted to sending the faxes in an effort to expose what they said was Phoebe Putney's failure to fulfill its charitable obligations as a tax-exempt entity.

Hodges provided the information gathered through the subpoenas to Phoebe Putney, which the hospital system used to file a civil suit against Rehberg and Bagnato -- a suit that was ultimately dropped. Rehberg then countersued Phoebe Putney, and that case was settled out of court for an undisclosed sum.

Rehberg and Bagnato took their information to Mississippi litigator Richard Scruggs, who used it as a catalyst for a series of lawsuits filed against hospital systems across the country.

Before the first criminal indictment was filed in late 2005, Hodges recused himself after The Atlanta Journal-Constitution wrote about the case. Baker replaced him with Kelly Burke, the prosecutor in Houston County. Burke brought the case to a grand jury three times, and he, along with Dougherty County investigator James Paulk, are all defendants in Rehberg's lawsuit.

Hodges' decision to run for attorney general elevated the case from a localized matter to one of statewide import. While still a prosecutor in Albany, Hodges received political contributions from Phoebe Putney executives and individuals connected to the hospital system, and his wife was hired as public affairs manager at Phoebe Putney's hospital in Albany.

Since leaving the prosecutor's office in Dougherty County, Hodges has gone to work for the Baudino Law Group, which represents Phoebe Putney. According to records Phoebe Putney must file with the Internal Revenue Service, the hospital system paid Baudino more than $8 million for the fiscal year ending July 31, 2008, the most recent data available.

Rehberg, meanwhile, said he's been dealing with a damaged reputation.

"I'm a CPA. I depend on my good reputation to make a living," he said. "A simple Google search will show that I have been indicted three times. Most people will never learn that it was all false. This is a scar on my reputation that I may never be able to repair."

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