FBI investigation of Rep. Jefferson

What was the point of storing money in the freezer?

Miller


He thought it was a good hiding place.

BBB

Constitutional Squabble May Have Earlier Roots
May 28, 2006
Constitutional Squabble May Have Earlier Roots
By CARL HULSE
New York Times
WASHINGTON, May 27, 2006

Speaker J. Dennis Hastert is moving publicly to put his constitutional showdown with the Justice Department in the past, but many on Capitol Hill believe that the bitter confrontation will resonate in the coming months.

Lawmakers and senior officials say Mr. Hastert's determined challenge to the Justice Department's court-authorized search of a Congressional office arose as much from frustration at missteps and slights by high-level administration officials as it did from outrage over what he saw as a gross violation of Congressional turf.

He and other Republicans were already upset at the Treasury Department for what they saw as the botched handling of the Dubai ports deal. And they held John D. Negroponte, the national intelligence director, responsible for what they considered the humiliating dismissal of Porter J. Goss, the popular former House member who was forced out as director of the Central Intelligence Agency.

The F.B.I. demand for access to the Rayburn House Office Building suite of Representative William J. Jefferson, a Louisiana Democrat under investigation in a corruption case, was seen as the last straw by Republican leaders worried about holding their majority in the House in the November elections, particularly with President Bush's flagging popularity.

"We are five months away from an election, and we can't afford to make high-profile mistakes," said one senior Republican official who was granted anonymity because he did not want to be identified discussing sensitive party strains. "There is a sense of tension in the air."

The usually low-key Mr. Hastert, a former Illinois high school civics teacher and wrestling coach, found himself at the center of a battle of wills with the administration he has worked hand in glove with for six years. Even he seemed surprised by it. "I tried not to pick a high-profile fight," Mr. Hastert told reporters.

On Friday, in an op-ed column for USA Today, the speaker said he considered the furor finished, given Mr. Bush's decision to seal the Jefferson material for 45 days. "That is behind us now," he wrote. "I am confident that in the next 45 days, the lawyers will figure out how to do it right."

While he battled the administration, Mr. Hastert found himself under fire from some of his own rank and file who believed that the speaker had picked the wrong fight. They said that the public did not understand the alarm over the search and that the tussle was robbing Republicans of a chance to capitalize on the accusations against Mr. Jefferson. And they were concerned that Democrats were scoring points by pressing Mr. Jefferson to quit an important committee.

The leadership, in a six-page document distributed to Republicans, acknowledged that it might not be taking the best political route by challenging the Justice Department search as a violation of the constitutional separation of powers. "Is this a smart battle for Congress to fight?" the leadership asked in the document, put together to try explain its stance on the search. "Perhaps not. Defending constitutional principles ?- particularly those related to institutional balances of power ?- is often not politically expedient and often results in bad publicity."

But the document said that a failure to challenge the search would result in serious erosion of the legislative branch's independence. And it said the Justice Department had plunged ahead with a search because the agency had become "tired of waiting" while the House counsel and Mr. Jefferson responded to a subpoena.

Many Republicans remained skeptical. But Mr. Hastert got some unexpected help from an ABC News report ?- denied by the Justice Department ?- that he was part of the continuing inquiry into the activities of the former lobbyist Jack Abramoff, who pleaded guilty to corruption charges this year. While lawmakers might have been miffed at Mr. Hastert, they were up in arms over what they saw as a not-so-subtle attack on their leader and Mr. Bush's chief ally in Congress. Mr. Hastert, in fact, had postponed plans to retire at the encouragement of the president.

The result of the upset over the search and the perceived shot at Mr. Hastert was a general Republican distemper, at a bad time for the administration. Mr. Bush has made immigration changes a priority. He will need the cooperation of House Republicans in striking a deal with the Senate, which on Thursday approved a measure that was met with disdain in the House. Resentful House Republicans may now be even less willing to work with the White House.

Congressional Republicans say their anger, exacerbated by their midterm political perils, is not aimed directly at Mr. Bush. They believe that Mr. Bush and his immediate circle have improved their efforts to consult with Congress, reversing a previously dismissive attitude as evidenced by two recent appearances by Karl Rove, the White House political strategist, at meetings of House Republicans.

And they say Mr. Bush, who heard complaints from Mr. Hastert about the search and Mr. Goss's dismissal, showed that he was sympathetic to the House stance by ordering the seized materials to be sealed for 45 days. The problem, one official said, is with cabinet secretaries like Attorney General Alberto R. Gonzales who, from the House perspective, do not seem to consider Congress an equal partner in governance.

As they sought to quiet the fight, which consumed a week that ended oddly with another search of the Rayburn building in a mistaken alarm over gunshots, lawmakers emphasized that they were not trying to bar law enforcement from the grounds. They said they only wanted to establish a procedure that would safeguard constitutional guarantees while not hindering the Justice Department.

"We both want the same thing, and that is for the Justice Department to get to the bottom of the Jefferson case," said Ron Bonjean, a spokesman for Mr. Hastert. "We just want them to do it in the right way."

Tension Over FBI Raid Triggers Hints of Quitting
Tension Over FBI Raid Triggers Hints of Quitting
Top Justice Department officials intimate they'd resign rather than return files to the House.
By Jim Puzzanghera, Los Angeles Times Staff Writer
May 28, 2006

WASHINGTON ?- As Congress and the Bush administration argued publicly last week over the extraordinary raid of a congressman's office, a high-stakes dispute simmered behind the scenes ?- top Justice Department officials indicated they'd resign if ordered to turn over documents seized in the search, administration officials said.

Atty. Gen. Alberto R. Gonzales; his deputy, Paul J. McNulty; and FBI Director Robert S. Mueller III never directly threatened to quit over the files taken from Rep. William J. Jefferson (D-La.). But they indicated they would be unwilling to hand over the documents if requested to do so by President Bush.

ADVERTISEMENT
"It was framed more theoretically: If this happens, this could happen," White House Press Secretary Tony Snow said Saturday, characterizing it as "an indirect threat."

"To the best of my knowledge, nobody ever said, 'I'm going to quit,' " Snow said.

But the implication was clear: The nation's top three law enforcement officials would resign or have to be fired if directed to give up the documents.

In a rare show of unity, House Speaker J. Dennis Hastert (R-Ill.) and Minority Leader Nancy Pelosi (D-San Francisco) condemned the search of Jefferson's congressional office as a violation of the constitutional separation of powers. They demanded the return of the files.

Bush diffused the potential crisis Thursday, ordering the seized material sealed for 45 days to give Congress and the Justice Department time to resolve the constitutional showdown.

The veiled resignation threats highlighted the tensions coursing through Washington last week after more than a dozen FBI agents conducted an unprecedented raid on Jefferson's office the night of May 20.

Jefferson has been accused of accepting $100,000 in cash in return for helping a Virginia businesswoman obtain contracts to provide mobile phone and Internet services in Ghana and Nigeria.

The FBI said that it had videotaped Jefferson receiving the money and that a search of his home in the Washington area had turned up $90,000 wrapped in foil in his freezer. FBI agents left Jefferson's office with two boxes of documents and copied computer files.

Gonzales, McNulty and Mueller strongly believed the documents were obtained legally, said an administration official who spoke on condition of anonymity because of the sensitive nature of the case.

"They feel they have an ethical and professional responsibility to enforce the laws of our country, and because of that they wouldn't be able or willing to turn over the documents," the official said. "It's very important to recognize that we never got to the juncture when anybody would have to resign."

Justice Department officials defended the raid as necessary because Jefferson had not responded to a subpoena. Gonzales called it "a unique step in response to a unique set of circumstances."

McNulty, who had worked 12 years as a congressional aide, was dispatched to Capitol Hill to try to resolve the dispute Tuesday afternoon, the source said. But a two-hour meeting with Hastert's chief of staff, Scott Palmer, and House general counsel Geraldine Gennet produced no agreement as each side dug in.

The White House was involved in negotiations between House and Justice Department officials and was aware of resignation suggestions, Snow said. The talk of resignation was triggered at one point by House negotiators threatening to cut the Justice Department's budget if the documents were not returned, Snow said.

Other administration officials weighed in Wednesday behind the scenes ?- on both sides of the issue.

David S. Addington, Vice President Dick Cheney's chief of staff and a former congressional staffer, questioned the legality of the raid, the source said. But Frances Townsend, a former Justice Department official and now Bush's homeland security and counterterrorism advisor, said she thought the search was legal, according to the unnamed administration official.

By Wednesday afternoon, the atmosphere was "really tense" at the Justice Department, the official said. Justice Department staff let their counterparts at the White House know Wednesday night that Gonzales, McNulty and Mueller would be "unwilling" to turn over the documents and that officials should "think through" the implications of such an order, the official said.

Resignation was the implication, the official said, but it "was a pretty big hypothetical."

Snow said: "In the conversations, there was some talk that people might resign. I think it's safe to say there were attempts at brinkmanship on both sides."

Gonzales met with Bush on Thursday morning but did not threaten to resign, Snow said. After the meeting, Bush announced that the items seized from Jefferson's office would be sealed for 45 days.

"Our government has not faced such a dilemma in more than two centuries," Bush said in a statement. "Yet after days of discussions, it is clear these differences will require more time to be worked out."

With passions high on the issue, Snow said Bush acted to cool things down.

"He realized given what we had seen and heard, both sides had their backs up," Snow said.

Target of F.B.I. Raid Had a Hard Path to Capitol Hill
May 29, 2006
Target of F.B.I. Raid Had a Hard Path to Capitol Hill
By CHRISTOPHER DREW and ROBERT PEAR
New York Times
NEW ORLEANS, May 27, 2006

Representative William J. Jefferson has always liked to talk about growing up in an impoverished farm community, picking cotton for $3 a day and hitting the books hard enough to win his ticket out ?- a scholarship to Harvard Law School.

But even as Mr. Jefferson built a reputation as one of Louisiana's brightest, most effective leaders, a less flattering view began to emerge, one signified by his nickname in political circles, "Dollar Bill."

Early in his career, as a state legislator, he was criticized for enriching his law firm with contracts from state and local agencies. He also ran stores that rented appliances by the month to poor residents, owned dilapidated apartment buildings and was sued by federal regulators over a defaulted loan.

Now, with the Federal Bureau of Investigation raid on his Capitol Hill office on May 20, Mr. Jefferson, a 59-year-old Democrat, is under investigation for possibly turning his efforts to promote trade with Africa into another sideline worth hundreds of thousands of dollars ?- and has become the central figure in a political drama consuming Washington.

The unprecedented raid has set off a huge institutional showdown, with Republican leaders including J. Dennis Hastert of Illinois, the speaker of the House, challenging the White House and criticizing the F.B.I.'s actions. Democratic leaders have also stood by the speaker's side.

President Bush has stepped into the fray, ordering the F.B.I. to seal any records it seized and calling for a 45-day cooling-off period to allow time to resolve the crisis.

The raid on Mr. Jefferson's office took place barely a week ago. But in a sense, the questions circling him have long resonances in his career, which was shaped by a remarkable ascent from the deepest poverty and a quest for the comforts his family never had.

In a 95-page affidavit released after the raid, the F.B.I. accused Mr. Jefferson, an eight-term lawmaker, of demanding more than $400,000 in bribes to help iGate Inc., a technology company based in Kentucky, obtain lucrative contracts in Africa. The bureau said it had also videotaped him accepting a suitcase with $100,000 in cash and later found $90,000 of it in his freezer.

Though the details were blacked out, the affidavit also said the F.B.I. had "evidence linking Congressman Jefferson to at least seven other schemes" in which he "sought things of value in return for his performance of official acts."

Mr. Jefferson has vigorously denied wrongdoing and has not been charged with a crime. "I certainly did not sell my office," Mr. Jefferson said in a recent statement. "The government seems inclined to view the facts in the worst possible light, and to characterize events that could be explained, or are exculpatory, in ways that tend to incriminate."

Whether his actions were criminal or not, several people who have long known Mr. Jefferson said he had often seemed driven by a desire to escape his spartan roots.

"There was always a feeling among those who knew him as Dollar Bill that having grown up as poor as he did, his hunger for wealth always burned," said Allan Katz, a New Orleans political consultant.

Mr. Jefferson, a taciturn man who began his career as a favorite of good-government groups, has built a political empire in New Orleans, winning re-election by wide margins and helping his sister, one of his five daughters and many allies win public offices.

Standing outside a new post office that Mr. Jefferson helped bring to his district, one voter, Joyce F. Smith, said that if the accusations were true, "I'd be very disappointed because he's been a very good congressman."

But many people here have been joking about his "frozen assets" and "cold cash." And Ms. Smith added, it is "hard for me to believe" that he would have stashed legitimate earnings in frozen-food containers and aluminum foil.

Mr. Jefferson was raised, along with eight brothers and sisters, on a small farm in northeast Louisiana, where, he said earlier this year, "our whole life revolved around that cotton field." His father left school after second grade, and his mother attended only through eighth grade.

As a child, Mr. Jefferson was such a good shot, his father once said, that when it came time to bag dinner, "if I wanted one rabbit, I'd give him one shell; and if I needed two rabbits, I'd give him two."

After he graduated from Southern University in Baton Rouge in 1969, Mr. Jefferson has said, he won his mother's blessing to go to Harvard Law School ?- she had never heard of it ?- only by explaining that it had been John F. Kennedy's college.

Mr. Jefferson has credited his parents with pressing the value of hard work. Elizabeth Brannum Trass, one of his high school teachers, said in an interview that he had always had the seriousness of purpose that helped catapult him onto a much faster track.

A clerkship with a United States district judge brought Mr. Jefferson to New Orleans in 1972. He got into politics as a campaign aide for Ernest N. Morial, who became the city's first black mayor in 1978 and gave Mr. Jefferson the Dollar Bill nickname.

Friends of both men said the mayor thought Mr. Jefferson had tried too aggressively to collect legal fees for helping Mr. Morial win the election. But after Mr. Jefferson became a state senator in 1979, his political rivals began to use "Dollar Bill" to refer to his expanding financial ventures.

His rental business ?- which leased television sets and other appliances to people who could not afford to buy them ?- appeared on the delinquent list in a city sales-tax scandal in the 1980's. And a day after he was elected to Congress in 1990, the Resolution Trust Corporation, which was trying to clean up the mess from the collapse of savings institutions, sued him for $160,000 over an apartment-building loan on which he had quit making payments. He later settled the suit, with friends saying his investments had been hurt by a faltering economy.

Still, once Mr. Jefferson became a close ally of President Bill Clinton, and then won a seat on the powerful House Ways and Means Committee, he was able to provide "absolute A+" support for city projects, said Marc H. Morial, one of Ernest Morial's sons and the mayor of New Orleans from 1994 to 2002.

Mr. Jefferson also became known as a strong advocate of freer trade and made at least nine trips to Africa to promote it, including one with President Clinton. He championed a 2000 law that extended trade benefits to sub-Saharan Africa. "Africa is a reservoir of opportunities for American businesses," he said then.

Over the years, Mr. Jefferson has received campaign contributions and free travel from individuals and companies seeking business in Africa, including iGate.

Campaign finance records show he received a $1,000 contribution as early as 2001 from Vernon L. Jackson, the chief executive of iGate, which makes technology to transmit high-speed Internet service across the wires used in some African nations. Mr. Jackson pleaded guilty this month to bribing Mr. Jefferson with more than $400,000 in cash and millions of shares of iGate stock.

Government documents show that Mr. Jackson told the F.B.I. that when he met Mr. Jefferson in late 2000, the congressman voluntarily helped promote iGate's products ?- a normal and legitimate action for a government official involved in trade issues. But according to the F.B.I. documents, in early 2001, the congressman's actions became improper when he said he would continue to use his influence on iGate's behalf only if Mr. Jackson made payments to a company, the ANJ Group, run by the Jefferson family. The iGate payments were disguised as consulting fees, the F.B.I. said.

Mr. Jefferson says these were private business dealings that had nothing to do with his work on the House committee.

But as part of a 2003 deal to distribute iGate's products, a Nigerian company, Netlink Digital Television, agreed to pay the congressman $5 per subscriber, the F.B.I. affidavit said, "in return for Jefferson's official assistance if the deal was successful."

House records show that in February 2004, Mr. Jefferson led a business delegation to Nigeria and Cameroon as a co-chairman of the Congressional Nigeria Caucus and the Africa Trade and Investment Caucus. The trip, which cost $16,313, according to the records, was paid for in part by iGate.

In 2005, the F.B.I. said, Mr. Jefferson wrote to the vice presidents of Nigeria and Ghana, and traveled to Ghana, seeking approval for iGate projects. Within a week after returning, the F.B.I. said, Mr. Jefferson used his influence to help a Virginia woman, Lori Modi, who had invested $3.5 million in the Nigeria project. He introduced her to officials at the Export-Import Bank of the United States and urged them to provide financing for the project.

But by then, Ms. Modi had asked the F.B.I. to investigate the deal.

Investigators said that in negotiating the deals, Mr. Jefferson had often cited his desire to provide for his five daughters, three of whom also have degrees from Harvard Law School.

From December 2004 through June 2005, the F.B.I. said in its affidavit, Mr. Jefferson increased his demands for equity in one Nigerian company, to 30 percent, to be split among his daughters. He also told an investor that one of his daughters had to be retained to do legal work, according to documents in the case.

Then, on July 30, 2005, when Mr. Jefferson met Ms. Modi at a Ritz-Carlton hotel, the F.B.I. said it supplied her with a briefcase with $100,000 in marked bills. Mr. Jefferson had told her the money would be needed to bribe Nigerian officials, the affidavit said.

As the F.B.I.'s video cameras zoomed in on him, the bureau said, Mr. Jefferson drove off with the briefcase on the seat of his Lincoln Town Car. And when agents raided his home four days later, $90,000 of the money turned up again, in the kitchen freezer.
------------------------------------------------

Christopher Drew reported from New Orleans for this article, and Robert Pear from Washington. Adam Nossiter contributed reporting from New Orleans.

Hasn't the guy ever heard of BANKS?

http://www.usatoday.com/news/washington/2006-05-29-raid-congress_x.htm

WASHINGTON (AP) ?- While House members are still angry about an FBI search of a congressman's office, the Senate's leader says the controversy has been "pretty much put to bed."
Senate Majority Leader Bill Frist said Sunday he had talked the issue over with Attorney General Alberto Gonzales and concluded that the FBI acted appropriately.

"I don't think it abused separation of powers," Frist said on Fox News Sunday. "I think there's allegations of criminal activity, and the American people need to have the law enforced."

Frist, R-Tenn., was responding to the search conducted May 20-21 in the office of Rep. William Jefferson, D-La.

FBI agents carted away computer and other records in their pursuit of evidence that Jefferson accepted hundreds of thousands of dollars in exchange for helping set up business deals in Africa.

It was the first time in the history of Congress that a warrant had been used to search a lawmaker's office.

House Speaker Dennis Hastert, R-Ill., and Democratic leader Nancy Pelosi of California responded with a rare joint statement, protesting that the FBI had not notified them and that the search violated the Constitution's separation of power protections.

The chairman of the House Judiciary Committee, which plans a hearing Tuesday on the constitutionality of the search, said the FBI overstepped its authority. Rep. James Sensenbrenner, R-Wis., compared the search to a Capitol Police raid of the Oval Office.

"This debate is not over whether Congressman Jefferson is guilty of a criminal offense," Sensenbrenner said Sunday on NBC's "Meet the Press." "He cannot use the constitutional immunity of Congress to shield himself from that or any evidence of that. But it is about the ability of the Congress to be able to do its job free of coercion from the executive branch."

Hastert complained directly to President Bush and demanded that the FBI return the materials. Bush struck a compromise Thursday, ordering that the documents be sealed for 45 days until congressional leaders and the Justice Department agree on what to do with them ?- a move that Frist said he supported "to let things settle down."

"I think we've seen it pretty much put to bed now, I hope," Frist said Sunday. "I trust our Department of Justice."

Before Bush's compromise, the showdown last week led the House leaders to threaten budgetary retaliation against the Justice Department, a senior administration official told The Associated Press on Saturday. Justice officials, including Attorney General Alberto Gonzales, raised the prospect of resigning if the department were asked to return the documents taken from Jefferson's office.

He wanted to have some "cold cash?"

He has 3 daughters who graduated from Harvard Law school. Suppose, he's saving now to put his grandkids through Harvard, too?

DoJ Fires Back at Jefferson, Claims He Hid Evidence
DoJ Fires Back at Jefferson, Claims He Hid Evidence
By Paul Kiel - May 30, 2006, 6:58 PM

I didn't think it was possible, but the Rep. William Jefferson (D-LA) case just got even uglier.

Today the Justice Department filed their response to Jefferson's lawyer's motion, where he argued that the search violated the "Speech or Debate" clause of the Constitution and demanded that the FBI return the seized documents. It is a lengthy, detailed dismantling of that argument - and TPMm readers interested in the Constitutional questions here should give it a read.

But beyond the legal argumentation, prosecutors supply the most detailed version of their case against him so far. And they explain why it is that they needed to raid his office - because they don't trust him to turn over evidence. According to an FBI agent's affidavit appended to the filing, Jefferson tried to "surreptitiously remove" documents while the FBI was searching his home in August of last year.

The agent provides a detailed narrative of catching Jefferson trying to hide the document. According to her, Jefferson, while sitting at his kitchen table during the search, hid the papers under a copy of the subpoena that agents had served on him. He then asked to move to the living room after it had been searched and placed the documents in a blue bag there which agents had already been through. She continues:

After several minutes, I approached Congressman Jefferson and told him that I needed to look at the documents that he had placed into the bag. Congressman Jefferson told me the documents were subpoenas. I then reiterated my request to review the documents. In response, Congressman Jefferson removed the documents from the bag and placed the subpoena on top of the other documents before allowing me to review them. Located beneath the subpoena were the documents I previously observed Congressman Jefferson with at the kitchen table. I reviewed the documents and observed that they had been faxed to Congressman Jefferson from an individual named B.K. Son on August 3, 2005 (the same day the search was executed). Noting that the warrant called for, among other things, all communications between Congressman Jefferson and Mr. Son, I collected the documents and turned them into the search team leader as evidence.

It is my belief that when Congressman Jefferson placed documents into the blue bag, he was attempting to conceal documents that were relevant to the investigation....

Oh my!

We will see if people on both sides of the aisle are truly interested in cleaning out corruption or do we have to put up with Democrat apologists again? Here is a guy that was apparently involved in some actually serious crimes. Do people care or are they more interested in executing politicians for the nebulous and very difficult to prove "possible" quid pro quo cases with Abramoff and others? Example: Harry Reed "researching" boxing with free $1,400 fight tickets.

For deals, Rep. Jefferson built web of firms
For deals, Rep. Jefferson built web of firms
Focus shifts from raid to congressman's corporate network
By Allan Lengel and Jonathan Weisman
The Washington Post
Updated: 9:41 p.m. MT June 4, 2006

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."

Personal finance controversies
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.

?'A deal you can't refuse'
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.

$90,000 in a freezer
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.

© 2006 The Washington Post Company
URL: http://www.msnbc.msn.com/id/13137361/

I thought that only the Republicans were corrupt!!!

This must be a setup.

Just in case no one saw it, I want to go again on the record as saying I'd like to line this guy Jefferson up right beside "the Hammer" Delay and shoot 'em both. Dirty lowdown crooks. I despise all the slimy dirtbags who get paid handsomely to look and sound important, get bennies out the yimyang, and still have the gall to steal money on top of all that. "Public Servants", indeed.

Far more Republicans than Democrats.

That's how they got all that money.

Jefferson makes DeLay look like Mother Teresa. And if you line up DeLay, do you also line up Harry Reid for his $1,400 near the ring boxing tickets so he could "research" the fights?

okie- you certainly do not want to trot out your whole list of corrupt democrats, and compare them with my list of republicans, do you? If you think the list of dems is longer, you haven't been paying attention. If you don't think more Democrats are corrupt, why not take my statement how I meant it - I'd like to shoot all the corrupt pols.