La. Congressman Indicted on Host of Corruption Charges

June 4, 2007 — -- A federal grand jury handed up a 16-count indictment against Rep. William Jefferson, D - La., on charges right out of "The Sopranos," including money laundering, racketeering, and obstruction of justice, with allegations of corruption spanning years and two continents.

The 94-page document outlines in detail allegations that Jefferson used his office to promote various business interests seeking contracts throughout Africa in exchange for more than $8 million in fees and stocks for himself and his family. The indictment also outlines the first time any U.S. official has been charged with violating the Foreign Corrupt Practices Act, which bars bribing foreign leaders. According to court documents, Jefferson told colleagues that he needed cash to pay bribes to Atiku Abubakar, Nigeria's former vice president. The indictment refers to Jefferson's dealings with a high-ranking official in the executive branch of the Nigerian government who had a spouse in Maryland, but it does not name Abubakar specifically.

"This case is about greed, power and arrogance," said Joseph Persichini, Jr, assistant director in charge of the FBI's Washington, D.C., field office. "Everyone is entitled to honest and ethical public service."

But in a defiant press conference declaring the nine-term incumbent "innocent," Jefferson's attorney, Robert Trout, said that the FBI was guilty of entrapment. "They decided that it was an opportunity to bring down a congressman," Trout said. "They get excited about that."

Prosecutors said Jefferson, a former member of the powerful House Committee on Ways and Means improperly used his position, his office, congressional staffers, letterhead and e-mail to help various telecommunications, oil exploration, sugar and fertilizer companies invest throughout Ghana, Cameroon, Nigeria, Equatorial Guinea, Sao Tome, Principe, Botswana, and the Republic of Congo.

Jefferson, the co-chair of the Africa Trade and Investment Caucus, is alleged to have done this for a series of corrupt quid pro quos in the form of "monthly fees or retainers, consulting fees, percentage sghares of revenue and profit, flat fees per item sold, and stock ownership in the companies seeking his official assistance."

In fact, while not alleging any wrongdoing by any of his staffers, the government charged Jefferson with running his congressional office as if it were a criminal enterprise.

The charges helped explain why in May 2006, the FBI took the historically unprecedented step of raiding Jefferson's Capitol Hill congressional office, prompting a constitutional debate over whether the raid constituted an unconstitutional breach of the separation of powers. Jefferson's attorney, Trout, however, pointed out that since many of those documents have yet to be turned over to the FBI -- the constitutionality of the search is still being appealed -- the indictment indicates that the Justice Department's assertion "that they needed those papers … was not true, and the violation of the Constitution was not justified."

Indictment Puts 'House-Cleaning' Democrats in Awkward Spot

While hardly unexpected, news of the indictment Monday put Democratic leaders -- who campaigned against a "culture of corruption" for last November's midterm elections -- in an awkward position.

"The charges in the indictment against Congressman Jefferson are extremely serious," said House Speaker Nancy Pelosi, D-Calif., in a written statement. "While Mr. Jefferson, just as any other citizen, must be considered innocent until proven guilty, if these charges are proven true, they constitute an egregious and unacceptable abuse of public trust and power."

Jefferson, 60, was first elected in 1990 to Congress. Pelosi led the charge to have him removed in July 2006 from the House Ways and Means Committee. After much sturm und drang and protests from many members of the Congressional Black Caucus, Pelosi named Jefferson to the House Homeland Security Committee -- but he has never been formally approved for the vacancy on that committee.

House Minority Leader John Boehner, R-Ohio, announced that he would introduce a resolution to instruct the House Committee on Official Standards to review the case against Jefferson and report within 30 days on whether his expulsion would be appropriate. Boehner introduced no such resolution when any number of House Republicans were indicted in recent years including former Reps. Tom DeLay, R-Texas, Duke Cunningham, R-Calif., and Bob Ney, R-Ohio.

Indeed, Trout asserted that since the government has not alleged that Jefferson took any legislative action to benefit himself or any of these businesses -- unlike with Cunningham and Ney -- that somehow constituted evidence that his client was clean. "Even after they turned over every rock, they did not allege in this indictment that the former member of the powerful House Ways and Means committee promised anybody any legislation," Trout said. "There is no suggestion that he promised anyone any appropriations. There were no earmarks. There were no government contracts."

The original case revolves around an investigation that began when Virginia businesswoman Lori Mody became an investor in a Kentucky-based high-tech company called iGate Inc. which sought to expand its broadband business for the Internet and cable television to Nigeria and Ghana. Mody told the FBI that on July 21, 2005, Jefferson told her that he needed to give a half-million dollars to Nigerian Vice President Atikua Abubakar to make sure iGate Inc. obtained the contracts it sought. Mody agreed to give Jefferson $100,000 instead. From there the investigation proceeded rapidly:

On July 30, 2005, at the parking garage of the Ritz-Carlton in Arlington, Va., Mody -- while wearing a wire and being filmed by the FBI -- handed over the cash, $100,000 in marked bills.

On Aug. 3, 2005, FBI agents raided Jefferson's homes in New Orleans and Northeast Washington, D.C. In the latter home FBI agents found $90,000 in cash in Jefferson's freezer. Five other locations were searched, including Abubakar's home in Potomac, Md., and offices of iGate Inc. in Kentucky and New Jersey.

On May 3, 2006, iGate CEO Vernon Jackson, pleaded guilty to bribing Jefferson, admitting in court that he funneled $367,500 to a business controlled by Jefferson's family in exchange for Jefferson's help in obtaining contracts in Africa. Jackson is currently serving a seven year prison sentence.

On Saturday May 20, 2006, the FBI raided Jefferson's Capitol Hill office in May 2006, setting off executive branch/legislative branch turf battles. In July 2006, U.S. District Judge Thomas Hogan ruled the raid constitutional.

On May 26, 2006, Mody business associate and former Jefferson legislative aide Bret Pfeffer was sentenced to eight years in prison for bribing Jefferson. Pfeffer had suggested to Mody that she invest in iGate, per Jefferson's instructions. Mody offered an investment of $3.5 million. According to Pfeffer, Jefferson -- in exchange for his help -- demanded a 5 to 7 percent stake and that his relatives be put on the payroll.

The government's obstruction of justice charge against Jefferson alleges that during the search of his New Orleans home, Jefferson attempted to conceal from law enforcement agents an August 3, 2005, fax relating to telecommuinications transactions in Nigeria, Ghana, and elsewhere. It was just a few days later, in September 2005, as first reported by ABC News (LINK ), that in the wake of Hurricane Katrina Jefferson used National Guard troops to check on his property and rescue his personal belongings -- even while New Orleans residents were trying to get rescued from rooftops.

Avery Miller, Jason Ryan, Z. Byron Wolf and Dean Norland contributed to this report.