The William Jefferson Chronicles

N.O. congressman faces 16 counts
Posted by Washington bureau June 04, 2007 12:11PM
By Bill Walsh and Bruce Alpert Washington bureau -

WASHINGTON - A federal grand jury issued an indictment today against U.S. Rep. William Jefferson, accusing the New Orleans Democrat of 16 counts including racketeering, soliciting bribes, fraud, money-laundering and obstructing justice in connection with a web of business deals in Africa, a federal official said.

Jefferson was not immediately available for comment. The charges will not impact his ability to serve in Congress while awaiting trial.

The indictment pulls back the cover on a government investigation that became public when the FBI raided the congressman's Capitol Hill townhouse in August 2005, finding $90,000 stashed in his freezer. Prosecutors say the cash was part of the $100,000 that an informant had handed Jefferson days earlier in a northern Virginia parking garage.

Jefferson, 60, who won reelection in December despite the publicity from the probe, has steadfastly maintained his innocence and said last year there is "an honorable explanation" for the money and other allegations, some based on conversations secretly recorded by the informant.

The FBI's sting operation, the first of its kind since the Abscam probe targeting corrupt members of Congress in the 1970s, has already sent two former Jefferson associates to prison. Both acknowledged taking part in a scheme to funnel money to companies controlled by the nine-term congressman and his family in exchange for his help in promoting a telecommunications business in Nigeria and Ghana.

At the center of the investigation is a small Kentucky telecommunications company iGate Inc. whose owner, Vernon Jackson, said he sought Jefferson to help in promote a novel high-speed Internet technology he invented.

Jackson told investigators, according to court documents, that Jefferson agreed to help only if Jackson hired the ANJ Group LLC, a Louisiana company in the name of Jefferson's wife, Andrea. From 2001-2004, Jackson sent to the ANJ Group $367,500 cash, paid for more than $87,000 worth of travel and transferred about 30 million shares of iGate Inc. stock, according to the government.

Investigators say Jefferson saw a market for iGate's technology in Nigeria and Ghana, two developing West African countries looking to build high-speed telecommunications capabilities but lacked a modern fiber optic network. iGate's "Triple Play" product seemed to be a perfect fit: It would send high-speed data, voice and video over old-fashioned copper telephone lines.

Jefferson lined up a Nigerian investor who paid $6.5 million to license the technology, but the deal unraveled in a legal dispute. The disgruntled investor ultimately said that at Jefferson's behest, money was paid to bank accounts controlled by the congressman's family, including brothers Mose and Bennie.

A second investor, northern Virginia philanthropist Lori Mody, was introduced to Jefferson by his former legislative aide, Brett Pfeffer. Mody paid $3.5 million to iGate in 2004 to license "Triple Play." But months later, she went to the FBI saying Jackson, Pfeffer and Jefferson had defrauded her.

She agreed to become a government informant and for months secretly record her conversations with the congressman. Transcripts from those meetings include Jefferson requesting a stake in her company for his five daughters, a plan for him to personally take over iGate with financing from Mody and a scheme to bribe the former Vice President of Nigeria, Atiku Abubakar, to sew up the deal.

The briefcase of money Jefferson received from Mody in July 2005 in the Arlington, Va., parking garage of the Ritz-Carlton hotel was, according to transcripts, intended as a bribe for Abubakar, but was never paid.

Days later, the FBI raided Jefferson's homes in New Orleans and Capitol Hill, the office of his accountant, and Abubakar's house in Maryland.

Jackson and Pfeffer ultimately pleaded guilty to bribery related charges and agreed to cooperate with federal prosecutors. They both began serving prison sentences earlier this year.
The charges against Jefferson come as the Justice Department and Jefferson await a ruling from a federal appeals court on the constitutionality of the FBI's May 2006 search of his congressional office. The first-of-its-kind search sparked a protracted legal and political battle between the White House and Capitol Hill that delayed the case for months.

Carl Tobias, a constitutional law professor at the University of Richmond, said he would expect U.S. District Court Judge T.S. Ellis III, to schedule the case quickly. Trial dates as early as September or October have been mentioned by lawyers involved with the case.

But one possible hold up will be the continued legal challenge to the unprecedented search of Jefferson's office May 20-21 2006. A three-judge panel for the Court of Appeals for the District of Columbia is expected to rule soon on Jefferson's challenge - in effect deciding what materials and computer hard drives taken by FBI agents from his office can be used by prosecutors.

But even if the court rules in favor of the prosecution, Jefferson could appeal to the U.S. Supreme Court. It is also possible that Jefferson's attorneys can challenge the use of some of the material taken from the office in a proceeding before Ellis.

Jefferson has argued that at the very least the courts should bar prosecutors use of any materials they challenged under the Speech or Debate clause of the Constitution, which shields documents related to legislative work from the executive branch.

The Justice Department has had access to the unchallenged documents, which numbered in the thousands, for the last several months.

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