Tuesday, November 27, 2007

An old article that doesn't quite belong on The Nagin Files

Times-Picayune (New Orleans)

June 17, 2005 Friday

Quartet may be just tip of the iceberg;
Letten expects to charge additional people soon

BYLINE: By Martha Carr, Staff writer


LENGTH: 1383 words

Strap in, this ride is just getting started.

After 3 ½ years of speculation about where the City Hall probe might lead, acting U.S. Attorney Jim Letten said Thursday that the indictments of Stan Barré and three others in the Johnson Controls investigation represent only one facet of a multilayered probe into contracts issued under former Mayor Marc Morial, and that his office is barreling ahead with several others.

"This investigation is by no means over," Letten said. "While I cannot tell you where it may lead or speculate about that, I can tell you that we do anticipate further charges against other individuals -- hopefully in the near future.

"We're in this for the long haul."

The indictments of Barré and former New Orleans property management director Kerry DeCay come just days after federal prosecutors told a jury in Cleveland that another Morial department head, former housing director Vincent Sylvain, accepted a $2,500 bribe from New Orleans business executive Gilbert Jackson in 2002.

Sylvain, who has proclaimed his innocence, has not been charged with a crime, but former prosecutors speculate he could be indicted later or is already cooperating with the federal government in exchange for leniency. Others suggested the government has not indicted Sylvain because it doesn't have the evidence.

While Justice Department rules prohibit Letten from giving details about ongoing investigations, he made it clear Thursday that the Johnson Controls part of the City Hall probe is far from over, especially as it relates to the company's project manager, Terry Songy.

"He has not been charged at this time, and I stress . . . at this time. I can't go any further than that right now," Letten said.

Other investigations

There's also plenty of evidence that the federal government is moving on other fronts as well. Among the investigations that have heated up in recent months:

-- A probe into Metro New Orleans Transit Inc., a company owned by Morial's uncle, investment banker Glenn Haydel. Metro held a lucrative management and consulting contract with the Regional Transit Authority during Morial's eight years at City Hall. The contract was canceled in late 2002 by the Nagin administration amid suspicions that the company had bilked the RTA out of hundreds of thousands of dollars with the help of then-RTA Chairman Robert Tucker, another Morial ally.

During the past two years, federal investigators have interviewed several RTA officials and requested mountains of records relating to Metro's work. Just this week, RTA executives were summoned to the U.S. attorney's office for follow-up discussions, sources close to the probe said.

-- A probe into two high-dollar consulting contracts awarded to Urban Strategies owner Pat Bryant by then-Sanitation director Lynn Wiltz. Investigators recently issued new subpoenas, recalled grand jury witnesses and asked questions at the South Shore Marina about docking fees that Bryant paid for Wiltz's boat slip.

While it appears the Wiltz-Bryant probe does not have direct ties to Morial -- neither were part of his inner circle -- Letten's office has shown interest in several other companies that did business with the sanitation department during Morial's tenure. Last year, federal investigators subpoenaed business records from Metro Disposal owner Jimmie Woods, who holds part of the residential trash pickup contract, and Reginald Walker's company Moss Creek Development, which held a contract to recycle office trash. Walker's indictment Thursday is not related to the recycling contract.

Other Morial insiders who have been touched by the far-ranging probe include Morial's brother, Jacques Morial; lawyer Roy Rodney; longtime political consultant Bill Schultz; Sam Kogos, a fixture on many of the city's and School Board's lucrative insurance committees; and Ray Valdes, a financier who handled several large-scale lease deals for the Morial administration.

Valdes, who concocted the financing deal the city used to pay $33.7 million in upfront costs to Johnson Controls, was not named in Thursday's indictment. Letten would not say whether he is a target of the investigation.

Birth of a probe

The City Hall contracts probe got legs in mid-2002, around the time Cox Cable executive Ray Nagin was elected mayor and began criticizing bloated contracts issued by his predecessor.

At the time, the newly minted mayor invited the FBI and the New Orleans Police Department to sift through city records left behind by Morial, many of which the feds carted off, including records related to Johnson Controls and other controversial sanitation, housing and economic development contracts.

Shortly thereafter, the feds indicted three low-level city officials, the most notable being Wallace Schief, former chief engineer of the property management department who accepted bribes from a businessman in return for steering work to his company. All have been sentenced, and their crimes appear unrelated to current investigations.

Then, in late 2002, agents subpoenaed records from Johnson Controls.

About a year later, in the fall of 2003, the feds issued a subpoena to the former law partners of Rodney, who was the closest thing to an in-house lawyer for members of Morial's inner circle. The partners of the firm, now known as Bordenave, Boykin and Ehret, complied, handing over boxes of Rodney's business, political and legal records.

Not long after that, four additional members of Morial's inner circle -- Barré, Haydel, Tucker and Woods -- were ordered to haul their company records to the grand jury. Their dramatic procession into the Hale Boggs federal building, with some of the city's top defense attorneys at their sides, was the first visible sign of the widening scope of the probe.

The biggest bombshell of all exploded in February 2004, when federal agents took a battering ram to the front door of Jacques Morial's French Quarter home.

The early morning raid was decried as politically motivated by Morial's attorney, Pat Fanning. A group of powerful black ministers promptly expanded on Fanning's critique to condemn the U.S. attorney's office, then-U.S. Senate candidate David Vitter, Nagin, the Bureau of Governmental Research and the Metropolitan Crime Commission. Letten, a white Republican, was accused of racial bias, which he dismissed as an attempt by his targets to distract the public from the fact that the politically well-connected were feeding at the public trough.

At the time, with no cases ready to roll, Letten had to ask residents to trust that his office wasn't merely on a fishing expedition. Now, 16 months later, Letten is finally showing his hand.

Edwards-caliber effort

The indictments, coupled with Letten's comments Thursday, suggest the City Hall investigation comprises a series of related probes rather than one overarching conspiracy.

Some of the cases "relate to one another, some overlap, some don't," Letten said Thursday. All, however, are related to what FBI chief Jim Bernazzani described as a "network" of opportunists who used City Hall contracts for personal gain.

Leading the prosecution are two of Letten's highest-ranking prosecutors, his first assistant Jan Maselli Mann, who heads the criminal division, and Robert Boitmann, a senior lawyer in the office who has handled several public corruption and fraud cases. Combined, they have 53 years of federal trial experience. They are joined by prosecutors Brian Klebba and Jon Maestri.

Bernazzani wouldn't discuss how many of his agents are working on the City Hall investigations, but several lawyers involved in the probe said they haven't seen this type of combined federal effort since the successful prosecution of former Gov. Edwin Edwards. They also noted that there has never been a comparable crackdown on a mayoral administration in the city's modern history.

Letten said he is prepared to commit whatever it takes to successfully complete the probe.

"We will be relentless in going after corruption in the city for the purpose of not only punishing those who take advantage of the city and its citizens, but also to establish a level playing field for deserving, honest business people," he said.

. . . . . . .

Staff writer Frank Donze contributed to this story.

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