For Deals, Jefferson Built Web Of Firms
By Allan Lengel and Jonathan
Washington Post Staff Writers
Monday, June 5, 2006; A01
On May 12, 2005, over dinner with business partner and FBI informant Lori Mody, Rep. William J. Jefferson (D-La.) furtively scrawled the letter "c" on a sheet of paper, and next to it wrote some numbers indicating that he was demanding a much larger personal stake in an African business deal than previously agreed to.
"The 'c' is like for 'children,' " the congressman told Mody, as an FBI tape recorder rolled. "I make a deal for my children. It wouldn't be for me."
As court records, sworn affidavits, plea agreements and search warrants attest, it was quite a deal, one of several involving at least seven business entities, nearly a dozen family members and hundreds of thousands of dollars sloshing through bank accounts, all for Jefferson's personal benefit.
An FBI raid on Jefferson's congressional office last month triggered a constitutional showdown between the White House and congressional leaders from both parties over separation of powers. But as that controversy subsides, the focus has shifted back to Jefferson and the corporate labyrinth that federal authorities say he erected to secretly receive illegal payments for promoting high-tech ventures in Cameroon, Ghana and Nigeria.
For Jefferson, 59, the money-making schemes were supposed to be all in the family, involving his wife, two brothers, five daughters and two sons-in-law. As a member of the House Ways and Means trade subcommittee, Jefferson has traveled repeatedly to Nigeria and other western African countries and met with their leaders.
Jefferson's secretive business negotiations have already yielded guilty pleas from one business partner, Vernon L. Jackson, and a former top aide, Brett M. Pfeffer. Both have confessed to conspiring to bribe the congressman. Jackson admitted giving Jefferson more than $400,000 in exchange for using his official position to promote high-tech business ventures in Africa.
Jefferson has repeatedly denied wrongdoing. Late last week, his attorney, Robert P. Trout, complained that the Justice Department has leaked grand jury information and "has not passed up any opportunity to further its public relations campaign to justify the unprecedented -- and we believe illegal -- search of a congressman's office."
"The congressman has not been charged with any offense, and now is not the time to respond to the ever-growing number of inappropriate and improper disclosures by the government," Trout said. "Congressman Jefferson continues to maintain that he has never accepted payment from anyone for the performance of any act or duty for which he was elected."
To political observers in his native New Orleans, the recent revelations of a sprawling corruption investigation fit neatly into the biography of a politician who has been bedeviled by personal finance controversies his whole career. The son of impoverished Louisiana sharecroppers and a graduate of Harvard Law School, Jefferson has never been content to live off the salary of a public servant, nor did he want to leave his family in the financial straits he pulled himself out of, observers say.
He broke with his mentor, Ernest N. "Dutch" Morial, New Orleans's first black mayor, in the late 1970s over a steep bill Jefferson delivered for legal work that Morial had assumed was free. He was sued in 1990 by the federal government for failing to pay the mortgage on his dilapidated rental properties, and eventually settled. He took heat for a business he ran renting appliances to poor people who could not afford their own, according to local news accounts.
"That's why we call him 'Dollar Bill,' " said Allan Katz, an independent New Orleans political consultant, who chronicled Jefferson's early political career for the Times-Picayune.
But Jefferson's recent ventures show a level of sophistication that puts his landlord days in the distant past.
In the 1990s, Jefferson made a name for himself on Capitol Hill as an ardent promoter of Africa as a huge new market for trade and investment. In 2000, that caught the attention of Jackson, whose company, iGate Inc., sold technology to deliver high-speed Internet access over ordinary copper wires. Jefferson saw the technology as a way for poor West African countries to skip the huge investments needed to install fiber optic cables or wireless relay stations, court records show.
At first, Jefferson promoted iGate's technology without asking for anything in return. But in early 2001, according to court documents, he informed Jackson that his services would no longer be free. On Jan. 19 of that year, the Jefferson family started the ANJ Group, with Jefferson's wife, Andrea Green Jefferson, as manager, and his five daughters listed as company members.
On Rep. Jefferson's instructions, court records show, ANJ was to receive $7,500 a month in consulting fees from iGate, along with 5 percent of gross sales over $5 million a year, 5 percent of capital investments in iGate secured by Jefferson and 1 million shares of the company.
Between 2001 and 2005, iGate transferred $455,446 to ANJ, some of which covered Jefferson's travel costs to Africa, according to an FBI search warrant.
Jackson traveled to Africa with Jefferson, who met with officials to promote the deals, according to court documents. But there were tensions between the two.
"Jackson believed that in the event Jackson did not pay these invoices, [Jefferson] would stop performing official acts on behalf of iGate and take affirmative steps to impede the success of iGate," said a court document in Jackson's guilty plea.
The seed of Jefferson's current troubles was planted in 2004 when Netlink Digital Television abruptly backed out of a one-year-old agreement with iGate to provide access to Nigeria's cable television and Internet market. That breach sent Jefferson and Jackson scrambling for new investors, court records show. They found Lori Mody.
Mody, 42, had co-founded the information technology company Signal Corp. with her late father, Win Remley, out of their house in McLean and built it up with defense contracts. In 2002, Veridian Corp. bought it for a reported $227 million.
Mody hired Pfeffer, a gregarious friend and former Jefferson staffer, in 2003 to help her invest in start-up companies and charitable ventures. When Pfeffer told Jefferson of Mody's investment interests, the congressman jumped, according to court records. In June 2004, Pfeffer introduced Jefferson to Mody over lunch in New Orleans.
Jefferson spelled out iGate's potential in Africa as "a deal you can't refuse," according to an FBI search warrant. Mody's company agreed to invest $45 million for the right to use iGate's technology and equipment in Nigeria, with $3.5 million paid up front.
That August, Jefferson, with the help of one of his daughters, a lawyer, established W2-International Broadband Services Ltd., (W2-IBBS) under Mody's ownership, to partner with a Nigerian telecommunications firm, Rosecom.
Mody then transferred $3.5 million to iGate with the understanding that those funds would be forwarded to Netlink Digital Television to buy back the rights to iGate's technology. FBI documents say only half that money reached the television company.
Four months later, over lunch in a congressional dining room, Jefferson informed Mody that he wanted a 5 percent to 7 percent stake in W2-IBBS in the name of his five daughters. That stake would be channeled through their own African company, Global Energy & Environmental Services LLC, which would be run by his son-in-law, according to court documents.
Over the ensuing months, Mody increasingly questioned Pfeffer and Jackson about the deal and her $3.5 million. In March 2005, she went to the FBI. From then on, Jefferson's ever-more-complex business dealings unfolded under the watch of federal investigators.
On May 12, 2005, Jefferson demanded that his stake in the Nigerian deal rise from 7 percent to as much as 20 percent, "for my children," according to court documents. The figure eventually reached 30 percent.
On July 12, after a trip to Ghana, Jefferson met with Mody to inform her she now owned a company there, International Broad Band Services, which, like W2-IBBS, would be partially owned by the Jefferson family, according to the search warrant.
On July 26, Jefferson and Mody met to discuss Jefferson's formation of a new company, Multimedia Broadband Services Inc., to buy out iGate's role in the African venture and relegate Jackson to an employee of his own operation, court records show.
On July 30, Mody met Jefferson at the Ritz-Carlton in Pentagon City to deliver a briefcase containing $100,000 in FBI-marked bills, allegedly to be used to bribe Nigerian officials, records show.
On Aug. 3, 2005, the FBI raided Jefferson's residence and found $90,000 of those bills in a freezer. Agents also found a document detailing still more corporate entities: Diverse Communications, which was to receive a percentage of Nigerian operating profits plus $5 per television set using iGate technology; and Jefferson Interests Inc., operated by Jefferson and his brothers, whose bank account was listed as a destination for Nigerian cash.