William Jefferson warned they could land in 'pokey,' tapes reveal
by Bruce Alpert, The Times-Picayune
Friday June 19, 2009, 5:00 AM
ALEXANDRIA, VA. -- Jurors on Thursday heard the first secretly recorded conversations of the William Jefferson corruption trial, including a profanity-laced 2005 phone call in which Jefferson warns that he and the president of a Kentucky technology company could end up in the "pokey" if they oust the firm's major investor.
"Lori isn't stupid, " Jefferson told iGate CEO Vernon Jackson about his plan to replace Mody with another investor in the wiretapped conversation. "She's going to file suit. She's going to say, 'F -- - no.' "
Jefferson was referring to Lori Mody, the Virginia businesswoman who had invested in iGate and who by the time of the Jefferson-Jackson phone call had been working as a government informant, secretly recording conversations with Jefferson. Her actions led to the 16-count indictment for which Jefferson is now on trial.
In response to questions by prosecutor Rebeca Bellows, Jackson, 58, who pleaded guilty in 2006 to bribing Jefferson, said he suspected the nine-term Democratic congressman feared a suit by Mody because it would expose activities Jefferson performed on behalf of iGate, which he described as "not aboveboard."
During three days of testimony, Jackson testified that Jefferson used his congressional office to bring customers and investments for his telecommunications company, mostly in western Africa, in return for consulting fees and iGate stock provided to ANJ, a firm controlled by Jefferson's wife, Andrea.
But in cross-examination, Jefferson's attorney, Robert Trout, said Jackson exaggerated Jefferson's role on behalf of iGate. For example, Trout said a meeting with the vice president of Nigeria, which Jackson credited Jefferson with setting up, actually had been arranged by a Nigerian businessman.
And far from trying to push Jackson aside from his technology business, Trout said Jefferson and his wife worked hard to save the company, even providing a $25,000 unsecured loan to help Jackson make payroll.
And he said that counter to Jackson's contention that Andrea Jefferson did nothing for iGate, she had set up meetings with potential investors, among other work. Jackson even referred to her as "the boss" during a telephone conversation with the congressman, Trout said.
Trouble with questions
Jackson, who answered questions from prosecutors confidently about events during the past five years, had trouble responding to Trout's questions. He couldn't remember how many times he had been questioned by the FBI and couldn't recall whether he had first met the Jeffersons at a Chicago trade show, nor could he remember what he and the Jeffersons discussed during an introductory dinner in Louisville, Ky., where Jackson's business was based.
Trout also cited inconsistencies in Jackson's testimony, noting that he had told the jury that his stock price had gone up after a 2002 letter from former House Energy and Commerce Committee Chairman Billy Tauzin, R-Chackbay, endorsing iGate's technology. Jackson credited Jefferson with getting the letter. Trout said Jackson didn't sell a single share of stock that year.
Earlier in his direct testimony, marking his third day on the witness stand, Jackson testified that he didn't object to Jefferson's efforts to bring in a new team to replace him in the day-to-day management of iGate. But he was unhappy with subsequent plans by Jefferson to start a new company that would leave him only a 5 percent stake, compared with his more than 60 percent ownership stake in iGate.
Jackson said he saw it as an effort by Jefferson to get him "out of the way." But the effort to change the company became academic a month later when the FBI raided Jefferson's homes and iGate's office on Aug. 3, 2005, revealing a federal probe that had begun four months earlier and putting iGate's activities on hold.
A year later, Jackson pleaded guilty to bribing Jefferson, and in June 2007, a federal grand jury returned its 16-count indictment of Jefferson. Jackson, who is wearing a green prison jump suit during his testimony, hopes to reduce his seven-year, three-month sentence as a result of his testimony.
'No time to negotiate'
In one of a series of taped conversations played for the jury Thursday, Jefferson expressed concern about iGate creditors who were threatening to put liens against Jackson's patents -- jeopardizing his efforts to resolve the company's financial problems.
"There is no time to negotiate all this s -- -, " Jefferson tells Jackson about the claims by creditors.
In explaining how he came to work with Jefferson, Jackson said his marketing director, Jack White of Washington, D.C., wanted a member of Congress to help develop business contacts. White was discussing approaching Jefferson or Rep. Charlie Rangel, D-N.Y., the top Democrat on the House Ways and Means Committee, according to Jackson.
With the Justice Department's announcement that it won't call Mody to the stand, Jackson has emerged as the key government witness. He testified that Jefferson used his congressional office over and over again to support iGate in return for his payments to ANJ, while Trout argued that Jefferson's efforts on behalf of iGate and other companies cited in the indictment of the former congressman involve private business deals not covered by the bribery statutes.
Although Mody won't testify unless called by the defense, her parents were in the courtroom Wednesday and Thursday.
Meeting with general
In addition to Jackson, also testifying Thursday was retired Army Maj. Gen. James Hylton, who said he met Jefferson and Jackson at his office to discuss an Army test of the viability of the iGate technology to determine whether it could be used by the military. In response to a question from lead prosecutor Mark Lytle, Hylton said he would have first checked with Army legal officials about whether the meeting was appropriate had he known that Jefferson's family had a financial interest in iGate.
Under cross-examination by Jefferson attorney Gloria Solomon, Hylton said Jefferson never demanded he test the iGate equipment.
The trial resumes Monday at 10 a.m. before federal Judge T.S. Ellis III. Prosecutors say they plan to call 49 witnesses.
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Bruce Alpert can be reached at firstname.lastname@example.org or 202.383.7861.