Key figure in Jefferson investigation to plead guilty
By Bruce Alpert Washington bureau
WASHINGTON - The head of a technology company at the center of a federal investigation into Rep. William Jefferson, D-New Orleans, is expected to plead guilty Wednesday to aiding and abetting the solicitation of bribes and has agreed to cooperate with the investigation, according to court documents and sources familiar with the case.
Vernon Jackson, CEO of Kentucky-based iGate Inc., has signed a 13-page statement of facts in which he says that Jefferson helped get his telecommunications firm listed with the General Services Administration so it could get government contracts, one of the sources said.
The statement also alleges that Jefferson, an eight-term congressman and a senior Democrat on the House Ways and Means Committee, later demanded payments to a company that included the congressman's wife and children in return for his help in gaining lucrative Internet and cable television contracts in Africa.
The source said the government has obtained a copy of payment transactions from Jackson to the business it says is directly tied to Jefferson's family.
A hearing is scheduled Wednesday before Judge T.S. Ellis III in federal court in Alexandria, Va., on Jackson's plea arrangement, according to a filing with the U.S. District Court. On April 20, according to the court documents, Jackson asked for the appointment of a public defender, and Ellis appointed Michael Stefan Nachamanoff who couldn't be reached for comment tonight.
Jefferson hasn't been charged in the case and has denied any wrongdoing. He recently replaced his Washington, D.C. counsel, Ronald Machen, with Robert Trout, who had handled the case until he was replaced by Machen last winter,
Trout declined comment. Melanie Roussell, spokeswoman for Jefferson, also declined comment.
Jackson would be the second person to take a plea bargain and agree to cooperate with federal investigators in the probe. Brett Pfeffer, 37, a former Jefferson congressional aide, pleaded guilty in January to conspiracy and aiding and abetting the solicitation of bribes, and agreed to cooperate with investigators. He is awaiting sentencing later this month.
Jefferson said after the Pfeffer plea that he had never requested or accepted anything to "perform a service for which I have been elected." He said he was disappointed and perplexed by Pfeffer's accusations.
According to sources, Jackson will plead guilty to the same two charges in Pfeffer's plea: conspiracy and aiding and abetting the solicitation of bribes. Jackson faces up to 20 years in prison and $500,000 in fines, but is expected to face lesser penalties if he carries out his offer to cooperate with the government investigation.
Jackson almost single-handedly created iGate, offering what he said was a promising copper wire technology that could provide high-speed Internet service and cable television at significantly lower costs than traditional technology.
According to Justice Department documents filed with Pfeffer's pleas agreement, Pfeffer was running a northern Virginia investment company in 2004 and told Jefferson, identified only as "Representative A," he was on a lookout for new business. That's when government records say, Jefferson informed him of a "major telecommunications opportunity in Nigeria."
Eventually, Pfeffer's boss, millionaire former technology firm executive Lori Mody, met with Jackson and Jefferson in the congressman's office and agreed to put up $3.5 million and finance the remaining $41.5 million needed for a licensing deal through a loan with the Export-Import Bank, according to the documents.
Mody soured on the transaction sometime after Pfeffer told her that Jefferson would require a 5 percent to 7 percent share in a company being established for the African business. Jefferson also asked that some legal and marketing work for the new African venture be given to members of his family, according to the prosecution's documents.
At some point in 2005, Mody became a "cooperating witness" and agreed to record some conversations with Jefferson, sources said.
"Pfeffer told (the cooperating witness) about the bribe solicitation and advised that it was the cost of doing business with Representative A," according to documents filed in the Pfeffer case.
Jackson had previously denied any wrongdoing and said he was eager to move on with his life. His attorneys earlier said that neither Jackson nor others affiliated with iGate had any clue that Mody was not fully committed to the African investments and were surprised to learn she had become a cooperating witness.
They learned of the probe when Jackson's iGate office, along with the New Orleans and Washington homes of Jefferson, were raided by federal agents Aug. 3, 2005, along with the Maryland home of Nigeria's vice president.
In 2003, Jackson and his wife, Sandra, both gave Jefferson's re-election campaign $4,000 each. One year later, identical amounts were donated to Jefferson's campaign by Rawle Arno, identified by iGate attorneys as a former iGate executive, and his wife, Carol.
(Bruce Alpert can be reached at firstname.lastname@example.org or (202) 383-7861.)