Tag: corruption

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Jury Begins Deliberations in Edmund Ford Trial

“The tapes are not married to anybody. The tapes do not
have a plea agreement.”

With those words, federal prosecutor Larry Laurenzi wrapped
up the government’s case Tuesday against former City Councilman Edmund Ford,
whose fate is now in the hands of the seven women and five men on the jury.

During six days of testimony, prosecutors presented
videotapes of four payments from undercover informant Joe Cooper to Ford.
Laurenzi said Cooper was merely “a tape recorder” and his criminal record and
desire to cut a deal with prosecutors should not distract jurors.

“Joe Cooper is not the proof,” he said.

Laurenzi pointed out that Ford and Cooper get right down to
business with a minimum of small talk – and without the profane language of many
of the Tennessee Waltz tapes featuring Ford’s brother, former state senator John
Ford.

“He (Edmund Ford) had to accept the money knowing that it
was given to him for his political influence,” Laurenzi said. “It wasn’t the FBI
or (FBI Agent) Dan Netemeyer, it was greed. It was just greed.”

Michael Scholl, Ford’s attorney, said “this whole case is
about manipulation” and jurors were shown only “snippets” of tapes cast in the
most incriminating light.

“It should be shocking to watch how you can take little
pieces of a conversation and set up anybody,” Scholl said.

However, he also argued that Ford was the victim of
entrapment, which seemed to concede that he had taken the money as the tapes
show.

Scholl reminded jurors that Ford and his wife Myrna, who
testified in the trial, are a “mom and pop operation” in the family funeral
home.

“Not only do you have to believe that Mr. Ford is lying,
you’ve got to believe that his wife got up here and lied, too,” he said.

In his instructions to the jury, U.S. District Judge Samuel
H. Mays told jurors they must not be influenced by sympathy.

Jurors were given detailed instructions about entrapment.
Federal courts have ruled that a bribe need not be explicitly stated as a “quid
pro quo.” The defendant must know that the payment is made in return for
official acts, but a certain amount of subtlety is acceptable. The Ford
videotapes show him taking $100 bills as Cooper and Ford discuss pending
decisions of the City Council or other official actions.

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News News Feature

Ford Completes Testimony; Case to Jury Tuesday

A subdued Edmund Ford left the witness stand Monday afternoon after prosecutors replayed their payoff tapes and drove home their contention that the payments were bribes for Ford’s influence over the Memphis City Council.

By testifying, Ford got to tell jurors his interpretation of the $8,900 in payments he took from lobbyist Joe Cooper in his own words. But he left himself open to a methodical cross-examination by Assistant U.S. Attorney Larry Laurenzi that could have a devastating effect on jurors.

Jurors heard Ford, on tape, utter such memorable lines as “You know I can carry seven votes, can’t I?” and “We got all the votes” and “I’ll drum up seven or I’ll make somebody walk out” and “Really, I didn’t have too much of a problem” at the very moment he was taking wads of $100 bills from Cooper and sliding them inside his coat pocket.

Ford and his attorney Michael Scholl continued to put Cooper “on trial” as Ford called him a liar who “ran off at the mouth” and had as many as three personalities. But the government and Cooper have readily acknowledged his 1977 federal conviction and his more recent conviction on money-laundering charges.

As one payoff tape was played, Ford explained that he was “very busy” that day and things were “going in one ear and out the other.”

Laurenzi replied, “Why didn’t you give it back?” as the tape was stopped so jurors could see the money on the screen in the courtroom.

Ford said he kept it to pay down a loan on the funeral home from developer Jackie Welch.

“It was for your benefit, right?” Laurenzi countered.

The day ended with Scholl calling eight character witnesses for Ford. With the jury out of the courtroom, Scholl told U.S. District Judge Samuel H. Mays he will use an entrapment defense.

That defense did not work in Tennessee Waltz cases and is considered something of a long shot.

Mays told jurors they can expect to begin deliberations Tuesday afternoon.

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Cover Feature News

The Last Waltz

CREDIT: Trey Harrison

Prosecutor Procedural

If there is a sub-genre of that literary favorite, the police procedural, it might be called the prosecutor procedural, and Operation Tennessee Waltz would be a bestseller.

The final chapter was written last week when Michael Hooks Jr. was sentenced to 30 days in jail. Hooks’ attorney, Glen Reid, said his client was not part of Tennessee Waltz, and prosecutor Tim DiScenza agreed. But Hooks had the misfortune to be part of a small-time corruption case involving bogus invoices to Shelby County Juvenile Court, which led, through his partners Tim Willis and Barry Myers, to Roscoe Dixon, John Ford, and the FBI undercover operation that came to be known as Tennessee Waltz.

Like any good novel, that story had money, deception, corrupt power, famous names, bag men, lucky breaks, moral ambiguity, courtroom suspense, and the threat of physical violence. It began late in 2002 and consumed the resources of the FBI, federal courts, prosecutors, and the media for more than five years. The timeline that follows is based on trial testimony, transcripts of taped conversations, and interviews with prosecutors, investigators, and defense attorneys conducted after the investigation became public on May 26, 2005.

2000-2001: Tim Willis and Barry Myers, politically ambitious young men, meet while working on a campaign. Myers, a Roscoe Dixon protégé wise to the ways of state legislators, tells him, “You need to be able to take care of people.” Two more young men on the make, Shelby County administrator Calvin Williams and Darrell Catron, get Myers a job at Juvenile Court. Catron and Willis devise an embezzlement scheme involving bogus invoices.

2002: The FBI and agent Brian Burns begin an investigation of Juvenile Court. Federal agencies, while not without their own politics, are considered, by unwritten agreement, less political than elected district attorney generals such as Shelby County D.A. Bill Gibbons. Willis, who already has a Mississippi conviction for credit-card fraud, compounds his problems by lying to the grand jury.

January and February 2003: Willis and Catron agree to cooperate with the government. Catron pleads guilty to embezzlement, but his sentencing is postponed. Willis is not charged but instead tells investigators about corruption in local and state government. His information is deemed credible, and the FBI pays him $34,000 in 2003 to tape conversations with public officials. He records incriminating conversations with Myers and Williams about Dixon, John Ford, Kathryn Bowers, Michael Hooks Sr., and others.

Summer 2003: The FBI’s interest shifts from Juvenile Court to the state legislature in Nashville. Agents entrust Willis to offer Dixon a payoff for influencing a children’s dental contract. As is the case with all undercover witnesses, they are gambling that he will not betray them. They are especially worried about Ford, who is believed to have connections nearly everywhere. Local FBI agents come up with the name Tennessee Waltz. The proposal is vetted in Washington, D.C., with the FBI’s public corruption unit, which must approve undercovers, and the U.S. Attorney General’s Office, which must approve wiretaps. A deputy of Attorney General John Ashcroft, a Republican from Missouri, gives the approval.

Fall 2003: The FBI designates retired agent Joe Carroll and a young African-American undercover specialist known as L.C. McNeil to set up a fake company called E-Cycle Management to try to get legislation helping it do business in Tennessee.

2004: Willis, now making $77,000 a year plus expenses, tells state lawmakers he is lobbying for E-Cycle and has “a little discretionary money to take care of folks.” In February, he makes a videotaped payment to Dixon. Willis introduces lawmakers to Carroll, who is using the fake name Joe Carson. Ironically, “Joe Carson” has done previous well-publicized FBI undercovers of public corruption in other states within the last 10 years. By May, Dixon is suspicious of the large amounts of money E-Cycle is throwing around but apparently does not Google “Joe Carson” and “FBI agent.” McNeil, meanwhile, is getting a wealth of incriminating information from taped conversations with the talkative Myers. Near the end of the legislative session, E-Cycle has Dixon withdraw its bill.

January 2005: Carson is working hard on Chattanooga senator Ward Crutchfield and his bag man, Charles Love, while McNeil has forged a friendship with Ford. McNeil is also taping Michael Hooks Sr., who is eager to make money off of Shelby County contracts. Dixon, meanwhile, has quit the legislature to take a full-time job as a top assistant to Shelby County mayor A C Wharton, whose past campaigns he managed. This opens new doors but also complicates matters for the FBI.

Spring 2005: Ford is taped several times taking payoffs from McNeil. In a meeting at his office in Memphis, a suspicious Ford threatens to shoot Willis, who is terrified. Prosecutors and the FBI decide they must wrap up the investigation for two reasons. One, they fear it will be exposed and someone will get hurt; two, they can’t allow E-Cycle’s legislation to come to a floor vote and they are running out of excuses. On May 13th, agent Mark Jackson gives Dixon a last chance to confess, but he sticks to his lies. A few days later, prosecutors and the FBI set a date of May 26th for top-secret indictments of Dixon, Ford, Myers, Bowers, Chris Newton, Crutchfield, and Love. On May 25th, they get one last surprise: Harold Ford Jr. announces he is running for Senate, throwing an unintended political theme and Ford angle into the story, which will get national media attention.

Summer and Fall 2005: The dominoes begin to fall. Newton, Myers, and Love plead guilty. Myers will provide key testimony against Dixon and Bowers. Love will incriminate Crutchfield. Williams, who is not named in the May indictment, insists that he is writing a tell-all book about Willis and political corruption in Shelby County.

2006: Dixon goes on trial in June. Jurors hear several hours of tapes and testimony on the stand from Myers and Willis, whose credibility is not shaken by Dixon’s attorney. Dixon himself testifies and admits that he took payments. His alibi is destroyed by Tim DiScenza, whose courtroom presentation spares none of the dirty details on the tapes. Dixon is convicted and sentenced to 63 months in prison. The government sends a message that it is willing, even eager, to take more cases to trial. In August, Michael Hooks Sr. pleads guilty to bribery, leaving an arsenal of incriminating tapes forever out of the public view. The nephew of civil rights legend Dr. Benjamin Hooks is sentenced to 26 months in prison.

January 2007: Williams goes to trial. Willis testifies against him. Like Dixon, Williams takes the stand in his own defense. And, like Dixon, he is convicted of extortion in connection with a grant for a community program in Memphis. He is sentenced to 33 months in prison.

June 2007: Ford goes to trial. The key witnesses against him are Willis and his old “friend” McNeil. But Ford’s biggest problem is the collection of videotapes that show him taking a series of clandestine $10,000 payments. He is convicted on one count of extortion and sentenced to 66 months in prison. Later in 2007, Crutchfield and Bowers change their pleas to guilty.

Epilogue 2008: Michael Hooks Jr. is expected to serve his 30 days, probably in a halfway house, later this year. His father is in the federal prison in Montgomery, Alabama. Ford is supposed to report to prison in Texas on April 28th. Dixon is in a federal prison in Louisiana. Myers is in prison in Yazoo City, Mississippi. Williams is in prison in Forrest City, Arkansas. Bowers will begin serving her 16-month prison term in June. Crutchfield received home confinement instead of prison time due to health considerations. Newton has served his prison sentence. Catron did not testify at any trials and received probation.

FBI agent Brian Burns was reassigned to Buffalo, New York. His partner, Mark Jackson, was reassigned to Los Angeles. The government says “McNeil” is working on another undercover assignment at an undisclosed location. The government will not say where Willis is or what he is doing.

— John Branston

No Robin Hoods Here

On the night in December 2006 before he was arrested and charged with felonious graft in relation to his service as a Memphis city councilman, Rickey Peete was hanging out with a tableful of reporters and fellow pols in the Hard Rock Café on Beale Street. There had been a show-and-tell featuring Mayor Willie Herenton and Joe Frazier, the former heavyweight champ who was Herenton’s scheduled “opponent” in the next night’s charity boxing match.

A mayor’s race would be coming up within months, and, at Peete’s table, the subject easily elided from one species of contenders into another. The councilman began confiding his sense of what he saw as virtually unlimited political prospects not only for himself but for members of his family.

“Just my last name alone is practically a guarantee of victory in Memphis,” the genial Peete said, his infectious Cheshire grin expanding to Brobdingnabian proportions.

Wrong.

Within hours, Peete would be in handcuffs, charged with vote-selling and bribery and on his way to being a two-time loser in federal court, his good name and political career (both painfully rehabilitated after an 1988 bust for extorting money from a developer) ruined anew, and with his very liberty soon to expire.

The federal sting that nailed Peete was called Operation Main Street Sweeper. It was something like a second cousin to the more ballyhooed Tennessee Waltz operation that not long before had baited an assortment of corruptible officials with offers of swag, thereby sweeping in political offenders across the breadth of the state.

One of those had been Kathryn Bowers, who, at the time she was nabbed by the FBI — mid-session in Nashville in May 2005 — was a freshly elected state senator who doubled as chairman of the Shelby County Democratic Party. Less than a month before her arrest, she had been gloating on her triumph over party adversaries and the enlarged prospects that had come with her elevation from the state House of Representatives to the more elite senior body.

Within two years, Bowers was an emotional and physical wreck, under a doctor’s care and forced to cop a plea after initial protestations of innocence. “I ask for forgiveness of my bad decisions of receiving money in an inappropriate manner” was the awkward, curiously euphemistic mea culpa she managed to sputter out in February of this year, when she was being sentenced by U.S. district judge Daniel Breen to a 16-month prison term, followed by two years’ probation.

With the possible exception of former state senator John Ford, a millionaire who was already beleaguered on a number of graft fronts at the time that the Tennessee Waltz trap was sprung, the other sting victims (if that’s the right noun) were — by their own lights at least — riding high at the time they were busted.

Roscoe Dixon, the former state senator whose seat Bowers had filled, had vacated it to take a well-paying job as an assistant to Shelby County mayor A C Wharton. And he had spent much of the spring of 2005 in near-successful efforts to get the Shelby County Commission to appoint his erstwhile legislative aide-de-camp, one Barry Myers, to either the state Senate or the state House of Representatives.

The hard-working chairman of that selfsame County Commission for the 2004-’05 term was Michael Hooks Sr. Honorably rehabbed from a drug offense some years back, Hooks had just been a legitimate ballot contender himself for the state Senate seat won by Bowers. His son, Michael Hooks Jr., a respected member of the Memphis school board, was an aspiring actor who, in that same spring of 2005, appeared in a climactic speaking role in the surprise Indie hit Hustle & Flow.

All of the above hopefuls, along with the long revered state senator Ward Crutchfield of Chattanooga and assorted other members of state and local government, would end up under arrest and subject to trial. Most would cop pleas, and all would receive sentences of one kind or another. Those who, like Senator Ford and the hapless Dixon, dared to brazen it out and actually stand trial ended up as big-time losers, getting significant time.

With the exceptions of state representative Chris Newton, a Newport Republican widely regarded by his GOP mates in the legislature as a Democratic fellow traveler, all of those nabbed in the various stings orchestrated by the FBI and the local U.S. Attorney’s Office from 2005 to 2007 were either nominal or highly active Democrats.

A late exception was former county commissioner Bruce Thompson, a Republican who came under investigation in late 2007 for improprieties connected with his brokering a school construction contract. The case against Thompson, however, was not based on a sting per se. The crime, such as it was, had sprung from Thompson’s own machinations, and that fact, as much as his political persuasion, made the ex-commissioner’s legal situation unique.

Numerous local Democrats profess to smell a fish regarding these operations, but it’s difficult to get any, save the indicted themselves, to go on record with their suspicions.

In all fairness, testimony at several of the Tennessee Waltz trials indicated at least perfunctory attempts to recruit Republican legislators. And the audio and video introduced in evidence seemed to confirm that the FBI agents posing as computer entrepreneurs from a company called “E-Cycle” invited GOP members to the “receptions” that were, in reality, fishing expeditions.

To be sure, one or two Republicans got close enough at least to sniff from the bucketloads of cash made available to high-class helpers. State senator Jeff Miller of Knoxville opted out of reelection and decided to add “former” to his title not long after he belatedly declared $1,000 worth of E-Cycle cash as a “campaign contribution.” (And two indictees in recent years — former County Commission administrator Calvin Williams and ex-Juvenile Court aide Darrell Catron — were once regarded by the Shelby County Republican Party as prize recruits from the African-American community.)

The fact remains that the chief indictees of the Tennessee Waltz investigation were disproportionately Democratic, disproportionately black, and disproportionately from Memphis. They also seemed to be disproportionately from that part of the traditional Democratic apparatus known loosely as the “Ford organization.”

There are several ways to construe this fact, but, for comparison’s sake, two of them may be stated as: 1) Such folk were more corruptible than others involved with the trade of politics; or 2) pure and simply, they were targeted. Both these scenarios have their believers. And neither, alas, is subject to definite proof.

It is a fact, attributable to pure coincidence perhaps, that there was a lengthy hiatus in prosecutions of this sort, at least locally, during the two terms of Bill Clinton’s presidency. But during the Republican administrations that came immediately before and, as we have seen, immediately after, prominent Democrats were on the mark statewide.

No doubt, Knoxville bankers Jake and C.H. Butcher were shady operators back in 1983. They were also important components of the Tennessee Democrats’ party-building efforts. Ditto with Memphis congressman Harold Ford (“Senior,” as he has come to be known following the celebrity of his namesake son and congressional successor). Call it another coincidence, but Ford and several fellow defendants who had been connected with the Butchers were acquitted of bank fraud by a rural West Tennessee jury in the first year of the Clinton administration. Did Dan Clancy, the holdover prosecutor and a self-declared Democrat, let up on the throttle (even if only unconsciously), or had the government’s case always been as shockingly weak as it seemed to be? This, too, is a case of you-flips-your-coin-and-you-takes-your-choice.

But even if political bias, at least of the conscious variety, is discarded as a motive in the prosecution of politicians these last several years, there is another factor at work: Most of those indicted and convicted of accepting money for votes or for otherwise boondoggling the public trust (Crutchfield, the Butchers, and Thompson are clear exceptions) stem from working-class origins.

These were not the high-flying and well-protected financial scammers whose schemes, toting up in the stratospheric millions, are often too Byzantine for the public or juries or prosecutors even to comprehend, much less punish. These are basically blue-collar criminals doing low-level, white-collar crimes.

Most, before achieving office, were unused to the ways and mores of legitimately acquired wealth but came to occupy positions that exposed them on a daily basis to influential and privileged people or institutions on whose behalf they were routinely asked to intercede. Familiarity can breed, besides contempt, simple covetousness.

The truly sad fact is that many of those netted in the stings of recent years went down for what, in the scheme of things, amounted to nickels and dimes. But the sadder reality — the bottom line, as it were — is that nobody made them do it. And none of them answered to the name of Robin Hood.

— Jackson Baker

Categories
Politics Politics Feature

POLITICS: New Game, Different Name

When Bruce Thompson, freshly charged with extortion and mail fraud, called a press conference last week to respond, the former county commissioner struck an unusual note of defiance, chastising My Harrison, the FBI’s local agent in charge, for the “same game, different name” remark with which she had characterized his place in the ever-burgeoning series of federal indictments of local officials.

His life was no game, Thompson said, making the issue personal, and since the distinguished defense attorney Leslie Ballin stood at his elbow when he said it, lending his considerable legal imprimatur to the statement, what Thompson said smacked less of pique than of considered strategy. Indeed, it seemed overtly political, the response of one contender to another in a heated public debate.

And make no mistake: Though both Thompson’s legal defenders and the prosecutorial team representing U.S. attorney David Kustoff will presumably offer abundant briefs, proofs, and exhibits in evidence as they join the issue, there is something political about not only this trial but the whole series of recent ones based on operations with catchy code names like Tennessee Waltz, Main Street Sweeper, and suchlike.

There had already been sporadic, mainly sub rosa efforts within the ranks of local Democrats to challenge the series of Justice Department prosecutions as partisan ones aimed at their party’s power structure. The presence of a nominal Republican, former East Tennessee legislator Chris Newton, among the Tennessee Waltz indictees, had done little to dispel the accusation, since Newton’s GOP colleagues had always considered him a fellow traveler with the General Assembly’s Democrats.

The conservative Thompson, a bona fide upscale Gucci-wearing Republican with strong connections in the local business community, would seem to be a different matter. Yet it can be argued, at no prejudice to the legal merits of either case, that both Thompson’s prosecution and that of former MLGW head Joseph Lee, currently under indictment for improper collusion with city councilman Edmund Ford Sr., are inherently political.

Rather than instances of out-and-out bribery, conveniently staged and videotaped by the government itself, these two cases are not stings but the results of real ex nihilo investigations of actions initiated by the principals themselves. What connects them to the prior cases is that they expressly target the freedom-of-action of public officials.

The prosecutions of Thompson and, even more obviously, Lee are aimed at what had previously been a no-man’s-land of politics, the domain where favors are done in return for favors, where one hand washes the other, and where if you scratch my back, I’ll sure as hell scratch yours.

Did MLGW president Lee choose to look the other way at Ford’s thousands of dollars’ worth of unpaid bills because the councilman changed his mind on Lee’s acceptability as the utility’s head, and because, even more crucially, Ford headed Lee’s oversight committee? It might once have been said: That’s just politics. But Harrison and Kustoff have now declared that statement inoperative, as chief prosecutor Tim DiScenza shortly will in court.

Thompson’s case is even more ambivalent. Before he went to work on getting the Memphis school board to approve a school-construction contract for a West Tennessee company (for an ultimate fee of $250,000 for himself), the then commissioner sought — and got — the formal sanction of county attorney Brian Kuhn.

No conflict of interest, said Kuhn, who reaffirmed again Monday his belief that Thompson, distanced by the state’s funding formula both from city-school spending per se and from oversight of specific school construction, was within his rights to act as an advocate for the company.

That was on pure conflict-of-interest grounds, stressed Kuhn, who eschewed any judgment about various potential illegalities associated with other aspects of the case. Asked whether the Thompson and Lee cases could be interpreted as incursions by federal authorities onto turf previously regarded as exclusively and flexibly political, Kuhn allowed — unofficially and informally, you understand — that he understood how somebody could see it that way.

In an interview with the Flyer back in 1994, when he was first running for the Senate, current presidential hopeful Fred Thompson mused on the then ongoing Whitewater investigation into President Bill Clinton‘s private finances and, at some passionate length, expressed regret at what he saw as the creeping criminalization of politics.

Locally as well as nationally, what Thompson then lamented seems now to be the very name of the game.

Categories
Politics Politics Feature

New Game, Different Name

When Bruce Thompson, freshly charged with extortion and mail fraud, called a press conference last week to respond, the former county commissioner struck an unusual note of defiance, chastising My Harrison, the FBI’s local agent in charge, for the “same game, different name” remark with which she had characterized his place in the ever-burgeoning series of federal indictments of local officials.

His life was no game, Thompson said, making the issue personal, and since the distinguished defense attorney Leslie Ballin stood at his elbow when he said it, lending his considerable legal imprimatur to the statement, what Thompson said smacked less of pique than of considered strategy. Indeed, it seemed overtly political, the response of one contender to another in a heated public debate.

And make no mistake: Though both Thompson’s legal defenders and the prosecutorial team representing U.S. attorney David Kustoff will presumably offer abundant briefs, proofs, and exhibits in evidence as they join the issue, there is something political about not only this trial but the whole series of recent ones based on operations with catchy code names like Tennessee Waltz, Main Street Sweeper, and suchlike.

There had already been sporadic, mainly sub rosa efforts within the ranks of local Democrats to challenge the series of Justice Department prosecutions as partisan ones aimed at their party’s power structure. The presence of a nominal Republican, former East Tennessee legislator Chris Newton, among the Tennessee Waltz indictees, had done little to dispel the accusation, since Newton’s GOP colleagues had always considered him a fellow traveler with the General Assembly’s Democrats.

The conservative Thompson, a bona fide upscale Gucci-wearing Republican with strong connections in the local business community, would seem to be a different matter. Yet it can be argued, at no prejudice to the legal merits of either case, that both Thompson’s prosecution and that of former MLGW head Joseph Lee, currently under indictment for improper collusion with city councilman Edmund Ford Sr., are inherently political.

Rather than instances of out-and-out bribery, conveniently staged and videotaped by the government itself, these two cases are not stings but the results of real ex nihilo investigations of actions initiated by the principals themselves. What connects them to the prior cases is that they expressly target the freedom-of-action of public officials.

The prosecutions of Thompson and, even more obviously, Lee are aimed at what had previously been a no-man’s-land of politics, the domain where favors are done in return for favors, where one hand washes the other, and where if you scratch my back, I’ll sure as hell scratch yours.

Did MLGW president Lee choose to look the other way at Ford’s thousands of dollars’ worth of unpaid bills because the councilman changed his mind on Lee’s acceptability as the utility’s head, and because, even more crucially, Ford headed Lee’s oversight committee? It might once have been said: That’s just politics. But Harrison and Kustoff have now declared that statement inoperative, as chief prosecutor Tim DiScenza shortly will in court.

Thompson’s case is even more ambivalent. Before he went to work on getting the Memphis school board to approve a school-construction contract for a West Tennessee company (for an ultimate fee of $250,000 for himself), the then commissioner sought — and got — the formal sanction of county attorney Brian Kuhn.

No conflict of interest, said Kuhn, who reaffirmed again Monday his belief that Thompson, distanced by the state’s funding formula both from city-school spending per se and from oversight of specific school construction, was within his rights to act as an advocate for the company.

That was on pure conflict-of-interest grounds, stressed Kuhn, who eschewed any judgment about various potential illegalities associated with other aspects of the case. Asked whether the Thompson and Lee cases could be interpreted as incursions by federal authorities onto turf previously regarded as exclusively and flexibly political, Kuhn allowed — unofficially and informally, you understand — that he understood how somebody could see it that way.

In an interview with the Flyer back in 1994, when he was first running for the Senate, current presidential hopeful Fred Thompson mused on the then ongoing Whitewater investigation into President Bill Clinton‘s private finances and, at some passionate length, expressed regret at what he saw as the creeping criminalization of politics.

Locally as well as nationally, what Thompson then lamented seems now to be the very name of the game.

Categories
News

Burning Questions After the Bruce Thompson Indictment

Ten questions in the wake of the indictment of former Shelby County commissioner Bruce Thompson. Sorry, the questions are better than the answers at this stage of the game.

Is Memphis in some kind of Gilded Age of Corruption? Or are federal prosecutors just looking harder and calling them closer?

I would say both. Statistically, there were more indictments for political corruption from 2003-2007 than any period I can remember in my 25 years as a reporter in Memphis. It seemed like everyone had some kind of deal going. Big contracts for FedExForum, school construction, and Tenn-Care services opened the door to self-styled consultants.

Some politicians and government employees became envious when they saw what people they considered less influential than themselves were making off of those projects. Remember the taped comments of Roscoe Dixon and Barry Myers on this subject. And, as I wrote last week, I think minority participation was perverted from a worthy goal to an excuse for corruption.

On the other hand, I think federal prosecutors are calling them closer. The office runs in cycles, from high-volume, quick-turnover cases to time-consuming public corruption cases. We’re in the latter stage now. No way do I believe the indictments of former MLGW chief executive Joseph Lee (for cutting Edmund Ford some slack on his utility bill) and Michael Hooks Jr. (for perjury and rigging invoices for less than $10,000 to Juvenile Court) would have been sought in other years.

What’s the difference between John Ford and Bruce Thompson?

Media villain and media darling, for one thing. Ford allegedly got more than $800,000 from Tenn-Care contractors. Thompson allegedly got more than $260,000 from H&M Construction. It’s interesting that the federal indictment of Ford, which came out of Nashville, not Memphis, says the public was deprived of his honest services. But the indictment of Thompson makes it sound like H&M was the victim because Thompson “falsely” purported to be able to influence votes on the Memphis school board. U.S. Attorney David Kustoff did nothing to clear this up in his brief press conference announcing the Thompson indictment.

Did the Feds need to get a white Republican?

They’ll never say it, but of course they did. At the national and Memphis level, the Feds are under pressure for allegedly (hah!) having a bias against blacks and Democrats and those who are not loyal to George W. Bush. I’m not saying there is a quota system or anything, but prosecutors are human like the rest of us.

Did the FBI “miss” Thompson in Tennessee Waltz?

There are indications that Thompson got a hard look in the Tennessee Waltz investigation. His name came up in a taped conversation between an E-Cycle Management executive (in reality, an FBI agent) and Charles Love, a Chattanooga bag man. If you look at the timeline, 2004 was a critical year. Tennessee Waltz got underway in 2003 and became public in May, 2005. After May, 2005, any public official who took chances had to be reckless or crazy.

Who is the victim?

Again, I think that is one of the questions that Thompson and his attorneys are likely to raise. Thompson allegedly got $263,000 for helping H&M get a $46 million contract. Real estate agents and investment brokers can relate to that kind of “commission.” Thompson got an opinion from Shelby County attorney Brian Kuhn that it was all right for him to consult for H&M, although the specifics of what Kuhn was told about the arrangement by Thompson are likely more complicated than that. And I’ll bet Kuhn hedged his advice.

From 2002-2006, Thompson was a high-profile commissioner and an up-front advocate of privatization. After his term ended, he continued to stay in the public eye on politics and do occasional commentary. He didn’t act like someone with something to hide. And to my knowledge, he is pretty well-to-do and doesn’t need money. In other words, I don’t get it.

When is a campaign contribution a bribe?

n the minds of some people, they’re synonymous. But a contribution within the legal limit that is reported is not a crime, as far as I can see. Even if it’s in cash. In a sense, every contribution is intended to buy some access, influence, or official action (or inaction) down the road. When prosecutors start going after campaign contributions just because their timing was suspect or they weren’t reported, they will have gone too far in my opinion.

What happened to the $7,000 to Kirby Salton?

Salton was H&M’s minority partner. He has been quoted fairly extensively in The Commercial Appeal and apparently cooperated with prosecutors. The Thompson indictment is vague about the $7000 — and so was Kustoff in the press conference. It still is not clear whether any or all of it got to school board members and/or their associates. And there is an obvious imbalance if Thompson got $263,000 for consulting and one or more board members who actually voted on the construction contract got $7000 in campaign contributions. I would think H&M has to be savvy enough to ask what the hell was going on with their money.

Would Thompson’s actions have been illegal if he were not a commissioner?

The way the indictment reads, I would say no. The indictment uses the word “extortion” in a way that is probably unfamiliar to most people who associate it with guns, fists, and dirty looks. This came up in the John Ford trial, where the jury was puzzled by it and ultimately didn’t convict Ford on some counts. As used in the Ford and Thompson indictments, extortion (to oversimplify and avoid legalese) means using your official position unlawfully to get someone to do something.

There’s a pretty simple test for public officials. Would anyone consult with you for money if were not a public official? Is what’s right for you also right for all of your colleagues? And were you (or are you) a consultant before (or after) your political career?

What’s the deal with mail fraud?

Part of me thinks prosecutors use this junky charge to complicate the lives of reporters. Come on, say what you mean, Feds. We know you have to make it a federal case, but tell us this, in plain language: What is the underlying crime? Nobody sets out to commit mail fraud by sending money or a check or letter through the U.S. mail.

Are school board members out of the woods?

Probably not. Kustoff said the investigation is “ongoing” and he sounded like he meant it. The board changed its mind on the contractor award for three schools, or, perhaps more accurately, went along with the administration’s recommendation to change to H&M. What went down between the first vote and the second vote? Thompson will probably get a chance to shed some light on this.

Categories
Editorial Opinion

A Bridge Too Far?

Anybody who expresses skepticism about the prospects of the U.S. Attorney’s Office, in tandem with the FBI, for closing out a prosecution successfully should probably submit to the proverbial head examination. After all, in the 11 Tennessee Waltz-related cases tried or otherwise resolved so far, federal prosecutors and the men and women of the bureau have proved to be literally invincible — a perfect record.

In the last week alone, guilty pleas were wrung from two lions of the state legislature: former state senator Kathryn Bowers of Memphis, who had resigned after being indicted, and state senator Ward Crutchfield of Chattanooga, who still serves. It’s clear though that he, like Bowers, who is due for sentencing this fall, will be among the missing when the General Assembly reconvenes in January.

But we are reserving judgment about both the validity and the outcome of new prosecutions announced last week by the two federal offices. These indictments — of former MLGW head Joseph Lee, city councilman Edmund Ford, and Ford’s landlord Dennis Churchwell — pose some troubling questions. Not that we countenance the offenses these three men are accused of — namely, engaging in improper trade-offs of favors to secure private goals from city government. Basically, the entire nexus of the case lies in the incontrovertible fact of Ford’s being a world-class deadbeat in relation to the whopping bills he owed to MLGW in utility fees and to Churchwell in rent for his funeral home.

The government charges that Ford was given a pass by Lee in return for the councilman’s favorable attitude on matters, some personal and financial, of importance to the utility president. Churchwell and Ford are accused of a compact in which the councilman voted Churchwell’s way on zoning issues in which the latter had a vested interest, in return for inhabiting his professional quarters rent-free.

Sleaz-eee! This is big-time corruption, and it should be punished. We shed no tears for Lee, who was sacked from his job when these and other matters became public, nor for Ford, who already carries a bribery indictment and is clearly a scofflaw of unmatchable arrogance, nor for the self-serving Churchwell, for whom the word “lout” may well have been invented.

The question is: How much of this unsavory one-hand-washes-the-other mess actually rises to the level of crime? It is not by way of excusing the behavior to observe that these acts are consistent with and bear the same shape, odor, and texture of the way politics, government, and private interests have always interacted. If this case succeeds, are we to call for the prosecution of a public servant who sponsors or votes for significant legislation on behalf of a major campaign contributor? Does anybody doubt that causal connections to one degree or another exist in such instances? And how does one extricate from all these itemized quid pro quos simple facts of friendship or convenience?

The burden of proof is, as always, on the government, but in this case we trust it can also demonstrate to a jury that it is not expanding its immense power into areas of conduct that, however questionable, have rarely if ever been regarded as criminal.

Categories
Editorial Opinion

Rush the Judgment

Ordinarily we favor patient deliberation in the pursuit of justice — particularly when, as in the case of the current special investigation into charges of a blackmail plot against Memphis mayor Willie Herenton, there are political implications involved. But since there is a mayor’s race on, and especially since this year’s city election is shaping up to be as epochal in its way as the one in 1991 which first elected

Herenton, we incline to the view that we as citizens are entitled to the equivalent of a speedy trial. Once so distant in our mind’s eye, the filing deadline for mayoral candidates and other city candidates — July 19th — is now almost upon us.

Given the gravity of our political situation — a City Council decimated by charges of corruption, a growing schism between the community’s economic leadership and the mayor’s office, a sense of civic confusion symbolized by the entangled Networx and MLGW dilemmas — this is one case in which due process could morph into “long overdue.”

There are two questions in particular that special prosecutor Joe Baugh should quickly get to the bottom of: 1) Was there a “blackmail” plot or any other criminal enterprise of the sort charged by Herenton in his bizarre press conference of some weeks back? 2) Has there been a legitimate ongoing investigation by law enforcement authorities into improper relationships between city officials and topless clubs or similar enterprises?

It seems clear now that answering those two questions would not constitute the be-all or end-all of everything we need to know politically or, for that matter, the completion of an investigation into possible corruption and illegalities. But having some sort of reliable focus on those two issues is crucial to our ability to shape our own destiny this election year.

We understand the unlikelihood that Baugh can provide those basic preliminary answers in the next two weeks. Depending on what he might say, accusations of haste or political slanting or whatever might well come from this or that quarter and become embedded in the dynamics of the campaign. It is far more probable that the special prosecutor could speak with completeness and authority at some later point before the October 4th general election itself, and that, too, would be worth something.

But we think some earlier resolution, before July 19th, is worth the risk. It should be possible, at least in partial or general terms, to provide some guidance to the community on the two indicated issues. Putting it bluntly: There is reason to believe that the mayoral field is still incomplete, and there is a definite “need to know” on the part of major candidates still meditating on whether their candidacies would be matters of genuine urgency for Memphis itself and for the city’s greater metropolitan area.

Let us say too: What we have learned in the last couple of weeks about private interventions into the public weal has been disquieting. We don’t doubt, for example, that Nick Clark is motivated by religious conviction in his concern about topless clubs. But there are aspects to his own freebooting investigation that smack of vigilantism and commercial self-interest. What we need, as quickly as possible, are public answers to public questions from a duly constituted public source.

Categories
News The Fly-By

Why the Rush?

The clock is ticking. On Thursday, July 5th, MLGW’s Board of Governors will vote whether to sell Memphis Networx to a Colorado-based holding company, Communications Infrastructure Investments (CII), for $11.5 million — a loss for MLGW exceeding $28 million. Networx representatives have cautioned that any significant delay could negatively impact a deal that, for MLGW ratepayers, is already negative.

Before the vote, however, some serious questions should be asked regarding potential conflicts of interest and the business practices that led MLGW to this juncture.

First, if MLGW is already prepared to eat almost all of its $29 million investment, what do the ratepayers stand to lose by delaying this decision long enough to ensure that the sale is on the up and up?

Question two: Who exactly is Tom Swanson, the McLean Group consultant who assembled the list of Networx potential buyers and helped facilitate the deal? Last week, when City Council chairman Tom Marshall asked that same question, Networx board member Nick Clark responded by quoting Swanson’s McLean Group Web bio, which leaves out an interesting piece of information. Swanson’s bio for his own private consulting business (TJSwansonCo) lists his involvement with a now-shuttered company called Intira, where, according to SEC records, he served as vice president of sales. Intira was co-founded in 1998 by former Networx CEO Mark Ivie and employed former Networx controller Jeff Rice as well as current Networx CEO Dan Platko. Given his background, should Swanson have been the broker for the deal?

An official contract signed by Platko and obtained by the Flyer suggests, and other sources verify, that late last year, Platko offered Swanson $2,000 a day to consult with Networx’ sales division through his private firm. Swanson’s compensation may have dropped by about one-third when he took on the job of assisting with the sale of Networx through the McLean Group in December 2006.

More questions: Who stands to profit from the sale of Networx? Certainly not MLGW ratepayers, currently taking a $28 million bath. Will any Networx executives have employment opportunities with the new ownership or with companies related to the new ownership? Have there been any arrangements made behind the scenes that may have tilted the scales in CII’s favor?

This isn’t the first time Memphis Networx has been positioned for sale. American Fiber Systems (AFS), the New York communications infrastructure company that submitted a bid for Networx valued at $13 million, has been trying to acquire the company since 2004. AFS’ initial bids involved no cash, but Networx execs and at least one board member showed substantial interest.

More recently, AFS placed a higher combined cash-and-stock bid for Memphis Networx than CII, but it wasn’t the highest. Ohio-based BTI Corporate, a communications firm looking to partner with Memphis Bioworks and strike a deal with MLGW that could allow the local utility to recoup some of its losses, submitted a bid valued at $20 million.

Whose best interests have been served in the rush to unload Memphis Networx? The ratepayers? The private investors? Or someone else? Ultimately, selling Networx — even at a loss — may be in MLGW’s best interests. But given the history, it’s important that MLGW’s ratepayers know who profits from the botched $29 million investment and why.

Categories
Politics Politics Feature

Snake, Rat, or Martyr?

Whatever the final resolution of Memphis’ current political soap opera — dubbed “The 2007 Political Conspiracy” by chief protagonist Mayor Willie Herenton — there would seem to be little doubt as to the fate of one principal, lawyer Richard Fields. One way or another, Fields will take a fall; indeed, he has already suffered one.

Designated as the chief villain of what Herenton alleges is a blackmail plot against him — a “snake,” in Herenton’s term — Fields is now in an untenable situation. Even if, as many believe, he ends up being exonerated of the mayor’s specific charges (orchestrating an elaborate sex sting against Herenton), Fields will have inevitably plummeted to earth from a once-lofty position, his wax wings burnt and melted like some presumptuous Icarus come too close to the sun.

In the classical sense, Fields is an object lesson in hubris — a Greek term denoting prideful and ultimately ruinous overreaching. Well-regarded for years as a dedicated civil rights attorney, Fields seems to have made a decision some years back to establish himself as a power broker second to none in the city’s history.

That phase of his life may have begun as far back as the school-superintendent years of Willie Herenton (see “City Beat,” p. 12) and crystallized in 1991 when Fields was one of the few whites who actively supported Herenton in his successful bid to become the city’s first elected black mayor.

For some time thereafter, Fields remained close to the mayor, but he quarreled seriously with other mayoral intimates, like former city attorney Robert Spence, who would later accuse Fields of wanting to dictate city contracts. And, after an off-and-on period of close collaboration, Fields — or Herenton — decided in the last year or two, for whatever reason, to open up some real distance in the relationship.

That fissure seems to have coincided with turbulence in Fields’ private life — including the latest of four divorces, all from African-American women. (Fields himself is Caucasian, and his enemies — notably blogger Thaddeus Matthews — have broadly insinuated an almost Freudian hostility on his part to black men, especially those holding public office.)

In the meantime, Fields had made a somewhat feckless Democratic primary race against then state senator John Ford in 2002, finishing well out of the money (in every sense of that term). The experience, along with his long proximity to the city’s powerful and often imperious mayor, seems to have pushed him in the direction of kingmaking.

Largely on the strength of his ties to Herenton, Fields got himself elected to the Shelby County Democratic executive committee in 2005, in a party convention dominated by Herenton ally Sidney Chism and reformist leader Desi Franklin. (If Fields’ relations with Chism, since elected to the County Commission, are now necessarily strained, he apparently remains close to Franklin, a possible City Council candidate this year.)

Then came Fields’ pro bono involvement, alongside the legal team of the state Republican Party, in an effort to void the state Senate victory of Democrat Ophelia Ford over the GOP’s Terry Roland. Though the effort was ultimately successful, Fields had meanwhile been forced off the local Democratic committee amid accusations of a political conflict of interest.

Undaunted, Fields got his hand back in the political process almost immediately, with widely circulated broadsides enumerating the purported liabilities of certain judicial candidates in the 2006 August general election and calling for their defeat, while touting the prospects of others. His efforts seemed to some an attempt to replicate the influence of the old “Ford ballots,” voter guides put out at election time by former congressman Harold Ford Sr.

Since many of the candidates opposed by Fields were black and since his ballot choices, by design or otherwise, received most attention in largely white precincts of Midtown and East Memphis, he was accused — perhaps ironically, given his personal history — of a racial bias.

Whether for that reason or some other, Fields amended at least two early judicial choices, substituting African-American candidates for white candidates he had promised to support. To some, that took the gloss of his supposed high-mindedness.

Fields was back at it again for the fall elections last year, with newly distributed ballot choices in partisan races, taking sides with a number of Republican candidates against their Democratic opponents. That brought new outcries, especially among fellow Democrats, some of whom tried anew earlier this year to expel Fields, newly elected to a new version of the Democratic committee. That attempt was ruled out of order by the party’s new chairman, Keith Norman.

During the runup to the party’s reorganization, Fields had made public statements about “vetting” Norman that suggested to some he had handpicked the new chairman — a fact that prompted a clearly offended Norman to make a public disavowal of that scenario.

Fields continued in his new career as would-be power broker, sending out letters attacking old foe Spence in the latter’s Democratic Party primary contest against ultimate winner Beverly Marrero in yet another special-election contest, this one also for a state Senate seat.

Meanwhile, Fields was increasingly given to temperamental outbursts — some marginally understandable, as when he became unruly in Criminal Court judge Rita Stotts‘ courtroom last year and had to be removed by her bailiff during a legal process in which he apparently thought his son had been unfairly targeted.

There were instances of alleged assault — one against lawyer Jay Bailey; another against radio talk-show host Jennings Bernard, who filed a formal complaint. There were hostile reactions by Fields to routine, even friendly media attention, which culminated in an attempt by the erstwhile civil-libertarian and First Amendment supporter to have the media banned from public meetings of the Democratic committee.

Though this action would patently have violated the state’s Sunshine Law, Fields’ motion was formally vetted by Norman before being dismissed out of hand. (After last week’s events, Norman demanded and got Fields’ resignation, his second in two years, from the executive committee.)

That brings the Fields saga to the present and the ongoing legal/political saga pitting the mayor, his allies, and double (perhaps triple) agent Gwen Smith, who alleges that Fields hired her to entrap Herenton sexually, against Fields and other alleged adversaries of the mayor, some of whom may have had no other involvement in things than to favor Herenton’s taking leave of his office.

It is hard to imagine that an FBI agent would, as Herenton charged, take part in an illegal conspiracy designed to defeat his reelection. What seems more likely is that a sting may have been getting under way, perhaps urged on by Fields, centering on the relations of the mayor and beer-board chairman Reginald French, a Herenton ally, with topless clubs seeking liquor licenses.

Just what is what in this affair may be determined — and in short order — by the special prosecutor requested by District Attorney General Bill Gibbons. And whatever the legal and political consequences to others, the options available to Richard Fields in the end game seem rather starkly circumscribed.

In this age of the real Tennessee Waltz and the fictionalized Sopranos, they range from possible criminal charges on one end to political “rat” on the other. Even if Fields proves to have had the purest of motives, he seems above all to have been an overreacher.