Rodney Williams and his partners in the engineering firm Three Fold Consultants were dying for a bigger slice of city work when Mayor Ray Nagin took office in May 2002.
So they took the new mayor on a fishing trip. In 2005, Williams accompanied Nagin and some of his aides on an economic development mission to Brazil.
Two years later, Williams even hired Stone Age, the granite firm Nagin founded with his two sons, to install countertops at his home.
None of it really worked, Williams testified Thursday — until he and his partners each wrote $20,000 checks to Nagin and his sons, Jeremy and Jarin, that Williams called “bribes.”
Williams was the first person the government put on the stand after a jury was seated Thursday afternoon and Nagin’s long-awaited federal corruption trial finally got underway. The engineer gave a calm, detailed and seemingly devastating account of being shaken down by the mayor and his sons, making the requested payoffs, and winding up on the receiving end of a raft of contracts.
The sordid business began when Jeremy Nagin showed up unannounced at Three Fold’s offices near City Hall in January 2008, Williams said. At the time, Three Fold was anxiously awaiting the results of two large city solicitations for architecture and engineering services. Firms that got accepted into the “pool” stood to get loads of recovery work, Williams said, while those who didn’t would get none.
“Who was the ultimate decider if you were in or out?” Assistant U.S. Attorney Matt Coman asked Williams.
“The mayor,” Williams answered.
With so much on the line, Coman asked whether Williams and his partners, Bassam Mekari and Tarek Elnaggar, felt compelled to pay the bribes.
Williams’ partners initially balked, but in the end, Williams said, “we felt it was almost suicide not to (pay) with the RFQs (requests for qualifications) pending.”
Each man wrote a $20,000 check to Stone Age, which Williams delivered to the firm’s storefront on Earhart Boulevard. He was surprised to find the mayor there.
“The mayor told me he was tapped out and he didn’t have any additional funding to put into the company, and he appreciated me considering putting the money up that his sons had requested,” Williams testified.
“Were you paying a bribe or making a legitimate investment?” Coman asked.
“We were paying a bribe,” Williams responded.
To make the transaction look legitimate, the group formed a corporation called BRT Investments about two months later, Williams said. Stone Age created documents showing that BRT had a 4.5 percent interest in the company.
But the paperwork, and BRT itself, were bogus, Williams testified.
The purpose of BRT was to “distance us from our bread-and-butter company, Three Fold,” Williams said. The group “didn’t want it (the payment) to be affiliated with Three Fold. We felt we needed to cover up the bribe we were committing.”
Shortly after Three Fold’s principals made the payments, Williams said, they were at a Mardi Gras party hosted by Nagin. The mayor pulled Williams aside.
“He told me he had just taken care of us on the pool” for architecture and engineering contracts, Williams testified.
A few months later, Jeremy Nagin again showed up unannounced. This time, Williams wrote him a check for $2,250.
After that, contracts for road design and playground lighting started to roll in. But the jobs were small at first, often less than six figures, Williams said, and he pushed the mayor for more.
Nagin signed the first seven-figure contract between the city and Three Fold on July 20, 2009. The next day, Williams testified, Jeremy Nagin came by again, this time asking for $10,000 in cash. The partners again assented, and again took pains to cover their tracks, Williams testified.
He said Mekari wrote a $10,000 personal check to “cash,” adding “home improvements” in the memo field. Mekari handed the money over to Jeremy Nagin, and a few days later, Three Fold reimbursed the $10,000 to Mekari. It was all a sham, he said.
Coman had Williams go through a dizzying number of contracts, highlighting key portions on an overhead screen. He also put up a graphic showing that Three Fold’s earnings from City Hall shot up from just over $100,000 in 2007 and 2008 to $884,000 in 2009 and $1.2 milllion in 2010.
“Did the payoffs to Ray Nagin pay off?” Coman asked.
“Yes,” Williams said.
Williams’ testimony came after opening arguments from Coman on behalf of the U.S. Attorney’s Office and from Robert Jenkins, Nagin’s lead lawyer, on behalf of the former mayor.
Coman wasted no time in delivering the government’s blunt message: that Nagin was a thoroughly crooked politician who solicited bribes from city contractors, laundered money and even used his sons as bag men.
“Corruption was alive and well in this building, New Orleans City Hall, 2004 to 2010, right down the street,” Coman said, as an image of City Hall was projected on a screen behind him. “The evidence presented in this trial will show Ray Nagin was a corrupt mayor, pure and simple. He swore an oath to serve the public. Instead, he chose to serve himself.”
For nearly an hour, Coman ran through the five distinct schemes in which the government alleges Nagin used the power of his office for personal gain. All told, Coman said, flashing a graphic, the mayor helped himself to gifts and cash totaling $511,201.
Nagin sat impassively throughout, occasionally whispering in Jenkins’ ear but showing little reaction as Coman laid into him.
The prosecutor began with the mayor’s signing of an executive order in 2004 exempting technology services from city bidding rules. That helped tech contractor Mark St. Pierre profit handsomely from city work, and St. Pierre repaid the favor by funneling kickbacks to the city’s chief technology officer, Greg Meffert, and bankrolling Nagin family trips to Hawaii, Jamaica and Chicago, Coman said. St. Pierre also provided cell phones to Nagin family members for two years at a cost of $8,000, he said.
Through yet another corrupt contractor in the city’s technology department, Nagin was introduced to businessman Frank Fradella on a trip by private plane that included stops in Chicago and Las Vegas. Fradella’s company, Home Solutions of America, wanted disaster-recovery contracts, as well as Nagin’s endorsement with major corporate financiers, Coman said.
Nagin delivered, the prosecutor said. Coman posted documents indicating 10 separate meetings with Fradella and others in 2007 and 2008, some of them with banks — noting that the mayor had initially removed the records of all those meetings when the news media requested his daily calendar.
“But all this help from Ray Nagin came at a price. Ray Nagin wanted Fradella to come up with $100,000, and he wanted it funneled to Stone Age,” Coman said.
So Fradella and a partner, Mark McGrath, moved $50,000 through a trust account for McGrath’s daughter to mask the source of the money, Coman said. Fradella’s company in Tampa, Fla., also sent Stone Age two free shipments of granite that Coman said were “conservatively” worth $50,000.
Other alleged schemes included the mayor’s offer to put the kibosh on an agreement Home Depot officials wanted to avoid signing with neighbors of their proposed Central City store. That help, Coman said, was given in exchange for Stone Age’s receipt of a exclusive installation contract with the retailer that brought it $170,000 in business.
Coman also said the mayor helped a group of businessmen avoid paying delinquent fees on overdue payments they owed the city on the Grand of the East cinema at the Lake Forest Plaza mall. Nagin also allowed the group to keep insurance proceeds for damage to the cinema, even though the city had underwritten much of the theater’s cost, Coman said.
In return, he said, one member of the group — George Solomon, whom the government had previously referred to as “Businessman A” — flew the Nagin family to New York City on a private jet at a cost of $23,500.
“Ray Nagin took money and things of value from these city contractors because he wanted more than his paycheck and felt he was entitled to it,” Coman said. “Now’s the time for the defendant, Ray Nagin, to be held personally accountable for his own criminal conduct.”
If Coman’s opening statement was precise and loaded with details, Jenkins’ was looser, almost extemporaneous. It was also far shorter, around 20 minutes.
Jenkins argued that whatever the contractors who admit to bribing Nagin say now, their criminal records cast serious doubt on their credibility, while numerous internal city documents and rules about the awarding of municipal contracts will show those bribes didn’t happen.
Jenkins told the jury that “we have thousands and thousands of emails to support there was no corruption, no kickbacks and no payoffs” during Nagin’s two terms in office. He offered little by way of example, but said some emails will show Nagin actually was reluctant to sell Home Depot some city streets at a lower-than-appraised price, while City Councilwoman Stacy Head was pushing for that.
He also told the jury that Nagin’s legal department, not the mayor himself, was responsible for redacting, or removing, items from his calendar. And those doing the redactions did it not because they were trying to cover up meetings with sleazy characters, Jenkins said, but “because they didn’t like” the reporter who sought the calendar: Lee Zurik, then of WWL-TV.
Jenkins made clear he’ll try to impugn several of those who have pleaded guilty in the alleged conspiracy, some of whom carry the baggage of criminal records unrelated to the alleged Nagin schemes.
He noted that Meffert and St. Pierre have previously professed their innocence under oath, and have since changed their stories. Fradella, meanwhile, was facing serious charges in a stock-fraud case when he entered a plea and agreed to help the government in its case against Nagin.
“Frank Fradella had his history of convictions and lying and perjury,” Jenkins told the jury. “They all have baggage. All of them.”
Jenkins previewed a defense that appears to lean heavily on the incentive that Nagin’s accusers allegedly have to testify against him for the government.
Another plank of Jenkins’ defense will be that the prosecution vastly overrates the mayor’s influence on public bid contracting in the city, as well as on the kind of no-bid professional services contracts that prosecutors say Nagin doled out to St. Pierre and Williams. In fact, such decisions were largely left to panels of city employees, who will testify to that effect, Jenkins said.
The two sides made their statements after a jury was seated early Thursday afternoon. Jury selection seemed surprisingly easy, with a panel of 12 jurors and four alternates being drawn from 60 people screened by lawyers on Monday.
None of those screened said they had strong opinions about Nagin, and only five said they had voted in an election in which he was on the ballot. The 12 jurors include six men and six women; nine in the group are white, two are Asian and one is African-American. The four alternates are all white.
The larger jury pool was more diverse; more than one in four jurors screened was black. It’s not clear how the final panel was chosen, as the process of striking jurors takes place outside the view of the media.
The trial will resume at 9 a.m. Friday, with Williams under cross-examination. He seemed relieved as he wrapped up his testimony Thursday.
“I feel I’ve done something I’m not proud of,” he said. “It’s been a long time dealing with it. ... Quite frankly, I’m glad it’s over.”