|Meet William Jefferson's Political Supporters|
Posted on Wednesday, June 14, 2006.
By Ken Silverstein.
Congressman William Jefferson of Louisiana is currently under investigation by the FBI for allegedly taking bribes from a company seeking business in Nigeria and, as I reported last week, the feds are apparently also looking at his ties to São Tomé and to some Americans doing business in that African country. Since then, I've received additional information that points even more strongly to a São Tomé-Jefferson connection.
It gets complicated, but stay with me. First I'll explain the history of a small energy firm called ERHC, which was born in Lafayette, Louisiana, but is now based in Houston. Next, I'll discuss a few people connected to the firm and to a second company called Global Environmental Energy Corp. (GEEC), whose president, Noreen Wilson, has played a key role in ERHC. The cast of characters here includes a Texas wildcatter, a convicted felon, and a reverend whose company invested in an adult entertainment firm. Lastly, we'll get back to Jefferson, who has curious ties to both ERHC and GEEC.
It all starts in 1997, when ERHC—despite having no revenue and just a single full-time employee—won extensive energy rights in the tiny island nation of São Tomé. In exchange for a $5 million payment to the government for the right to market the country's oil potential, ERHC was awarded a minimum of four oil fields, exempted from all taxes, and granted half the future profits in STPetro, a state oil company created by the deal. Noreen Wilson, a lobbyist who helped negotiate the deal for ERHC and who became a major shareholder, was appointed to STPetro's board and made ERHC's chief financial officer.
In 2003, I wrote about ERHC's agreement in São Tomé for the Los Angeles Times. “Was the deal a little rich?” Wilson said in an interview. “Yeah, it probably was, but who else was going to take the risk back then? They couldn't give their oil away, let alone get someone to pay them for it.” But Andrew Latham of Wood Mackenzie, an energy-consulting firm in Edinburgh, Scotland, said the original deal was far out of line with industry standards and said he'd never seen a company “get a stake like ERHC obtained in São Tomé.”
In São Tomé, plenty of people have questioned the deal. A December 2005 report by São Tomé's attorney general said that the country's lead negotiator on the agreement, Carlos Gomes, a nephew of the prime minister, was awarded an executive position at STPetro and a salary of thousands of dollars a month paid by ERHC. The report said that Mateus “Nando” Meira Rita, a former São Toméan Secretary of State, became STPetro's general manager and also received a generous salary as an ERHC consultant. SEC records show that in 1998 ERHC named Rita as its Vice President of International Affairs and granted him 500,000 shares of company stock valued at $158,203.
Such was the controversy that the agreement was subsequently renegotiated twice, first in 2001 and again in 2003—that second time under President Fradique de Menezes, who had initially pledged to revoke ERHC's privileged position (which he described as “unconscionable”). The current deal is less favorable to ERHC than the original—the company has relinquished its rights in the state oil company in exchange for other benefits—but still favorable enough that when it was signed, dozens of civic and political leaders in São Tomé issued an open letter that accused President de Menezes of selling out the national interest. “As a shareholder, I'm thrilled,” Noreen Wilson told me at the time. “Everyone was focused on what we gave up and no one added up what we got.”
After the renegotiation was concluded it was discovered that the Nigerian owner of ERHC—a reported billionaire with close ties to his government—had made a secret $100,000 contribution to a company controlled by President de Menezes; the president said that the money was for his political campaign. According to the attorney general's report, “several São Toméans holding interests in ERHC” participated in the renegotiations, including the above-mentioned “Nando” Rita, who was then São Tomé’s Foreign Minister and who “still owned 500,000 shares in ERHC.”
Here's what the attorney general's report said about the contract:
[A]t every stage there is the suggestion that ERHC and its [Nigerian parent company] Chrome may have made improper payments to government officials or provided benefits to their families in order to secure the assistance of such officials in continuing the contract . . . [The contract,] if enforced, will result in the possible loss of nearly $60 million in signature bonus revenue which would otherwise flow to the government of São Tomé . . . This amount compares to São Tomé’s total annual budget of $50 million.
After the attorney general's report came out, the Joint Development Authority (JDA), which oversees energy development in a zone controlled by Saõ Tomé and Nigeria, put a statement on its website that rejected the report “in its entirety.” The JDA's chairman and executive director is Carlos Gomes, the former STPetro official whose salary was paid by ERHC and whose son, Noreen Wilson told me back in 2003, was provided an academic scholarship at the University of Louisiana at Lafayette from ERHC.
ERHC has an unusual history and a host of colorful characters have been involved with the firm, such as ex-CEO Sam L. Bass Jr. (now deceased), a former wildcatter who had done business in Nigeria and put out oil fires in Kuwait after the Persian Gulf War, and Phil H. Nugent, a Houston-based oil and gas consultant who was a major shareholder in ERHC and a big promoter of the firm.
Then there's Reverend Ernie Chu, who, according to SEC records briefly served as treasurer and chief financial officer of ERHC in 1999. Chu is now an assistant minister with Religious Science of Fort Lauderdale (“The Infinite,” reads his bio, “is always loving and supportive in allowing us to create lives filled with prosperity, fulfillment and love”) and has undergone miraculous “surgery” at the hands of Brazilian faith healer John of God, apparently with good results. In addition to his religious pursuits, SEC records show that Chu and someone named Vito Lamonco are the beneficial owners of Corporate Builders L.P., which was a major shareholder in Jill Kelly Productions, “one of the first adult entertainment movie production company created by an adult film star.” (You may not want to click on that last link if you're at work or bothered by the image of a mostly naked woman in a cowboy hat.)
In an interview by phone, Chu said that he got involved with the ERHC through Noreen Wilson and that he and a group of investors “put some money into the deal. I sold most of my stock. We did okay after it looked like we were going to get wiped out.” Chu described his own company, Corporate Builders, as “venture builders,” and explained that the company helps firms bring money in and provides management assistance. He said the firm acquired its shares in Jill Kelly Productions from an investment bank that was a client of Corporate Builders and that “the intention was to distribute the shares to individuals” associated with Corporate Builders, but that never happened because the porn company went bankrupt. Chu said that the activities of Corporate Builders are currently “winding down” and that ERHC and Jill Kelley “were both quite unusual and different from our core business,” which he said was working with medical and technology firms.
The story of GEEC, formerly known as Life Energy & Technology Holdings Inc., is perhaps even more remarkable. That firm is registered in Louisiana but lists its principal office in the Bahamas. As I mentioned above, GEEC's president is Noreen Wilson, the mover and shaker involved with ERHC. Its registered agent is Phil C. Nugent, the son of Phil H. Nugent, the latter who also has ties to ERHC. Nugent Sr. is also listed as chairman of a firm called Green Energy Management, which has been a partner of GEEC. (If you check the Louisiana Secretary of State's website you'll find that the two Phil Nugents have had a hand in a number of small companies.)
According to its corporate filings, the company had plans to turn solid waste into electricity with its revolutionary Biosphere ProcessTM, which would also produce a “pulverized powder” that could be sold as a by-product for the building industry; part of the plan at one point was to introduce the Biosphere Process in Libya, followed by other installations in sub-Saharan Africa. Over the years GEEC has claimed to have billions of dollars worth of contracts (in China, among other places) but its ship never came in and the company filed for bankruptcy last year. In a post-bankruptcy story about the company, Barron's (which has also reported on some of the odd characters involved in the story), said GEEC “has reported no revenue for 2 1/2 years, and its latest balance sheet showed a total of $3 in cash.”
But just a year earlier, GEEC/Life Energy still had high hopes. It announced that it would receive $450 million in financing arranged by Diamond Ridge Advisors, a company controlled by a man named William Kent Trumble. That money never materialized, which is perhaps not surprising given that Trumble, according to a recent story in the Fort Mill Times, is currently under investigation in Pennsylvania for failing to deliver “on a $3.5 million pledge to help build a YMCA” and for possibly taking “$22,000 earmarked to help a Bible college” and not following through “on his pledge to convert it into $2.5 million.”
The Fort Mills newspaper reported that records from the Kentucky State Reformatory showed that:
Trumble was sentenced to five years in jail for two felony counts of second degree forgery and five felony counts of theft by deception. His sentence started there in March, 1978, and he was transferred to the Frankfurt Career Development Center in May, 1978, and stayed there until he was paroled in January, 1979 . . . Trumble's roots in Fort Mill extend to the waning days of the PTL, Jim and Tammy Faye Bakker's former religious empire and theme park based in what's now Regent Park. He befriended people tied to the PTL.
A second person affiliated with the company has also had problems with the law, namely Donald Mintmire, a Palm Beach, Florida, attorney who did legal work for GEEC/Life Energy. SEC filings show that Mintmire had also done work for ERHC and for a firm called Power Interactive Media, where Noreen Wilson was a consultant. Mintmire, according to various news accounts, was sentenced to jail time earlier this year for obstructing a grand jury investigation into the collapse of a company called Clements Golden Phoenix. A 2005 story in the Stuart News said that Golden Phoenix “was supposed to get rich exporting Florida citrus to China but instead cost investors millions.”
Now we come full circle to Congressman Jefferson, who apparently went to bat for ERHC in regard to its controversial stake in São Tomé. A well-placed source who provided detailed information said that President de Menezes of São Tomé met with Jefferson at least four times in the United States: in the congressman's office in May and September of 2002, in June of the following year in New Orleans, and at the Ritz-Carlton Hotel in Georgetown that same month. The source said that the above-mentioned “Nando” Rita—the ERHC shareholder who worked with the company when it was negotiating its deal and who later became a member of de Menezes's government and close advisor to the president—pushed de Menezes to meet with Jefferson.
“ERHC, through ‘Nando’ Rita,” said the source, “kept telling [de Menezes] that Jefferson would help São Tomé, and Jefferson, in turn, kept telling him that ERHC was a wonderful outfit, just as the president was considering voiding their previously-acquired rights in a review he did of all the oil-related agreements signed by the previous administration. He was ready to void the ERHC deal. Then he didn't move forward. I cannot say it was Jefferson who changed his mind. But I cannot say it wasn't a factor either.”
On April 16, 2003, six days after São Tomé and ERHC concluded the final renegotiation of the company's energy rights, Wilson donated $500 to Jefferson, as did two other people, Wayne Hartke and Weldon Rougeau. Hartke, the son of former Indiana senator Wayne Hartke, was an ERHC shareholder and once served as its general counsel. Rougeau is the former head of the Congressional Black Caucus Foundation, which, several months after the donation was made, signed an agreement with São Tomé that called for the Caucus Foundation to promote development in the country. This deal was made with the backing of Jefferson, who was then the Caucus Foundation's chairman. (Rougeau, according to the source cited above, later visited São Tomé on at least two occasions, as did several other members of the foundation.)
As to Jefferson and GEEC, as I mentioned in my last story, the company helped cover the costs of the congressman's February 2004 trip to Nigeria, São Tomé, and two other African countries in his capacity as co-chair of the Africa Trade and Investment Caucus. Several other firms also pitched in, including iGate, the Kentucky firm whose owner recently pleaded guilty to bribing Jefferson to promote deals for the company in Nigeria, and Verizon. According to Africa Energy Intelligence, GEEC “won a concession in Nigeria's offshore last year but had to abandon it because it was unable to pay the front-end bonus.”
In 2004 and 2005, Noreen Wilson made an additional $4,500 in contributions to Jefferson. The donations were made through a company called HSW Group and a number of other people affiliated with the firm —all but one with the last name of Wilson—kicked in another $11,500 to the congressman over the same period. (The one non-Wilson to contribute was June Nichols, Deputy Administrator of the U.S. Small Business Administration under Ronald Reagan. HSW was retained in 2003 by GEEC/Life Energy to represent it in Washington, and Nichols was placed on its advisory board.)
None of this shows that Jefferson received anything more than campaign contributions and a travel subsidy from people linked to ERHC and GEEC. What it does suggest, along with other published accounts and what I've been told by a source familiar with the ongoing investigation, is that Jefferson's ties to the companies and to Saõ Tomé, and ERHC's involvement in that country, are of interest to investigators. Most suggestive of all is that a U.S. District Court issued a search warrant last month for “documents related to [ERHC's] correspondence with foreign governmental officials or entities in São Tomé and Nigeria.”
Note: Noreen Wilson, ERHC, Rougeau and Robert Trout, Jefferson's attorney, did not reply to phone calls or emails requesting comment.