“What matters is whether [Pampy Barré] successfully traded on the public impression that he had been informally deputized by Morial to control the flow of city money...”
-- The Times-Picayune

Morial Casts Shadow on Pals' Trial
Feds try to minimize mention of ex-mayor
January 7, 2007

If Buddy Lemann and other defense attorneys succeed, former Mayor Marc Morial will be the elephant in the courtroom in which two of Morial's pals and one of his former administrators face trial later this month. He might even be subpoenaed to testify.

Their goal is to suggest that Morial is the real target of the lengthy federal probe, but that prosecutors had to settle instead for the indictment of businessmen and Morial insiders Stan "Pampy" Barré and Reginald Walker, plus the city's former director of property management, Kerry DeCay.

Lemann wants jurors to believe that the group is paying the price for refusing to give up the goods on Morial, goods that Lemann says don't exist. He claimed in a recent motion that prosecutors piled on new charges against DeCay for refusing "to testify against the other defendants and Mark (sic) Morial."

Without doubt, the probe has centered on Morial's contracting practices and at times has veered quite close to the former mayor, for instance when investigators broke down brother Jacques Morial's door during an evidence search February 2003, and when they subpoenaed Morial's billing records from his brief tenure with the law firm of Adams & Reese after the end of his mayoral administration.

But regardless of whether U.S. Attorney Jim Letten ever dreamed he could snare Morial in the dragnet that has led to indictment of former aides and associates, his office's game plan is exactly the opposite of Lemann's.

Federal prosecutors have been fighting in pretrial hearings to minimize references to Morial, now president of the National Urban League and still one of the city's most popular political figures, lest they distract jurors from a hard-nosed evaluation of the guilt or innocence of the men on trial. One motion, still pending, asks U.S. District Judge Carl Barbier to bar the defense from even bringing up the notion that the investigation has political or racial motives.

No matter which side prevails, Morial's presence is sure to loom large as the government seeks to prove that a member of his administration and two of his friends skimmed about $1 million from one of the largest city contracts awarded during his eight years in office. The defendants are charged with 21 offenses, including mail fraud, money laundering and extortion.

Legacy on the line

Symbolically, if not legally, the legacy and reputation of Morial's administration, often dogged by accusations of cronyism, hang in the balance. In unrelated prosecutions, Morial's aunt and uncle, Glenn and Lillian Smith Haydel, pleaded guilty, she to paying kickbacks for insurance work and he to looting the city's mass transit system of $540,000.

But the scope of the Johnson Controls contract dwarfed other deals inked by the Morial administration. At a cost to the city of $81 million over 20 years, the contract hired Johnson Controls to install and maintain new equipment ranging from traffic and interior lighting to air conditioners and heating units in city buildings. Much of the direct cost was meant to be offset by savings on utility bills.

Many longtime Morial supporters walked away with hefty subcontracts. Two of them, Barré and Walker, are now accused of felonies in connection with the deal. And nearly every company that received a subcontract — many of them already Morial supporters — gave to Morial's unsuccessful third-term campaign.

Ties to Morial

However unsavory, patronage is not a crime, and whether Morial abused it is not the subject on trial. Even so, the prosecution is going to have no choice but to bring Morial's name into the proceedings, all the while hoping that the trial can be kept from turning into a referendum on the former mayor.

For instance, it will be difficult to describe Barré without invoking Morial. A former New Orleans policeman who now runs a restaurant and catering business, Barré's ties to the Morial family date back to his service in the 1980s as a bodyguard in the administration of Dutch Morial, the first black mayor of New Orleans and the father of Marc and Jacques. Barré is also portrayed in the indictment as the mastermind of a conspiracy and as recipient of the largest share of ill-gotten gains. According to the indictment, the restaurateur grossed about $825,000 for little or no work.

When it comes to explaining the source of Barré's alleged power to extort money from other Johnson Controls subcontractors, prosecutors presumably will have no choice but to say that it derived from his close relationship with Morial.

Pointing to politics

Of the defense attorneys, Lemann has been the most persistent in his campaign to inject Morial into the case wherever possible. His filings and comments indicate that he does not intend to disparage the former mayor. Rather, Lemann seeks to paint his client, DeCay, as a collateral casualty of Letten's probe.

In Lemann's portrayal, the probe amounts to a witch hunt rooted not in law but in politics. Letten is a Republican and owes his appointment to Republicans, Lemann has noted, while Morial was a prominent and outspoken Democrat. Morial championed affirmative-action programs designed to beef up businesses owned by women and minority executives and funneled work to many associates through them.

Programs like Morial's "Open Access" plan are a favorite target of Republican politicians, who contend that they often lose sight of their high-minded goals and become conduits for steering lucrative contracts to political supporters, many of them already wealthy.

"This case deals with several explosive issues regarding the disadvantaged business enterprise contracts and the Morial administration," according to a motion filed by Barré's legal defense team. The motion, which seeks broader power to exclude potential jurors, argues that the Morial administration "has been investigated by the government as if it was a crime syndicate."

Lemann takes the argument further. "This case is all about Mayor Morial's DBE (disadvantaged business enterprise) program," one motion states.

In another, Lemann claims that the purpose of Morial's affirmative-action program was to set aside 35 percent of the value of every city contract for minority-owned businesses. Whether companies awarded work under such set-asides actually did any work is beside the point, Lemann argued in a recent motion.

"Mayor Morial's Open Access plan was one of entitlement, and, like all entitlement programs, involved the expenditure of public funds to the disadvantaged based upon a political judgment that in the end all of society would benefit thereby," Lemann writes.

He then compares the prosecution's "star witness," former Johnson Controls project manager Terry Songy, who pleaded guilty to taking bribes and began cooperating with the government, to a thief who steals welfare checks from their rightful recipients. The "legitimate welfare recipients," in Lemann's analogy, are minority-owned businesses that paid bribes to Songy because that was the price of doing business.

"While such thievery no doubt frustrates the entitlement program, it is the welfare recipient, not the governing authority, who is the victim of the theft," Lemann writes.

'Red herring'

Prosecutors reject that line of reasoning as a "red herring" and urge the judge to ignore it.

"In truth and in fact, the indictment does not mention Marc Morial nor the Morial administration, it does not charge nor allege any violation associated with any DBE program of the city of New Orleans under any administration, and it does not charge nor allege any violation relative to 'pass through' companies," a prosecution motion says in part.

In seeking to debunk the claim that the case is racially motivated, prosecutors note that "a number" of white contractors who worked for Johnson Controls have pleaded guilty to roles in the scheme and that the fourth defendant in the trial, glass and door-maker Julius Lips Jr., a bit player in the alleged conspiracy, is white.

"If allowed, this trial will turn into a trial not about fraud, extortion and money laundering, but one about uncharged and unnamed persons (Marc Morial and the Morial administration), the DBE or Open Access programs of the city of New Orleans and what those programs authorized, including whether or not they are simply entitlement programs," the motion reads. "But, at the end of the day, those questions and issues will not be before the jury."

In another motion, prosecutors fret that, should Barbier not rein in the defense, the result will be a "nightmarish" sideshow that would "divert the jury's attention" from the real case.

Lurking in the background

Although prosecutors want to prevent Morial from being a focus of the trial, they can't leave him out of the case completely.

A central element of the government's case is that the defendants conspired to defraud taxpayers by agreeing to inflate certain invoices to various subcontractors, who would then pay kickbacks to the defendants.

The indictment portrays Barré as the top dog in the scheme. At one point, it says, he "demanded" that DeCay and Songy give Walker a subcontract. At a meeting at his 7th Ward restaurant, Pampy's, Barré "explained how he wanted the fraudulently obtained money to be split."

While Barré is not accused of extortion, it's clear that prosecutors think he acted as a gatekeeper for city contracts. Although it's unclear how far the government will push that theory, attorneys involved in the case say witnesses will testify that contractors had come to believe Barré could make or break them when it came to getting city work.

Without that kind of testimony, jurors might be left to wonder how Barré, a businessman without an official role in city government, could have secured the alleged payoffs.

"A gap in this indictment is that it isn't clear on its face where Stanford Barré gets the stroke to influence the awarding of contracts," said defense attorney and former federal prosecutor Shaun Clarke. "The unspoken implication is that it comes from a relationship with the mayor."

In position of influence?

Defense attorneys already have seized on the notion that Barré was not in a position to demand anything of anyone. For instance, in the indictment and subsequent motions, prosecutors have said repeatedly that Barré received "kickbacks." But the defense counters that Barré, as a private citizen, was in no position to get a kickback, which typically goes to an agent of the government in return for help with a contract.

While prosecutors dismiss that argument as a technicality — "kickback" is a colloquialism rather than legal term — they say jurors nonetheless will want to hear some evidence that Barré was in a position to call the shots.

"They're going to have to back that up," said L. Eades Hogue, a veteran New Orleans defense lawyer who for years headed the racketeering unit of the U.S. attorney's office.

From a legal perspective, it might not matter whether Barré actually possessed the power some contractors attributed to him. What matters is whether he successfully traded on the public impression that he had been informally deputized by Morial to control the flow of city money, observers say.

"On the face of the statute, it doesn't matter whether he had the stroke, if the perception existed that he did, and that allowed him to take advantage," Clarke said. "If he was able to essentially extort money from people, it doesn't matter whether he could back up the threat."

Hogue, who has no direct knowledge of the case, noted that conspiracy cases allow prosecutors to introduce evidence that normally would be considered hearsay.

"What Songy is probably going to testify to is numerous conversations with Pampy Barré and others touting Barré's connections and ability to get things done," Hogue said.

Clues from Ohio

Even if defense attorneys succeed in making Morial a prominent part of the upcoming trial, that's no guarantee they can spare their clients from conviction.

A hint at the role Morial might play in the trial can be gleaned from a case tried in Ohio in 2005, a case with striking parallels to the Johnson Controls affair, including some overlapping players.

In the Ohio case, Nate Gray, a close friend of former Cleveland Mayor Michael White, was convicted along with his friend, New Orleans businessman Gilbert Jackson, on charges that his self-styled "consulting" business was actually a racketeering organization that traded on his friendships with powerful politicians, White chief among them.

Like Morial, White was not and still hasn't been charged with a crime. But at trial, prosecutors said Gray was White's "right-hand man" and made clear that they saw White as complicit in Gray's runaway success as a contract broker.

Along with similar plotlines, the two cases have at least two players in common.

Barré served as best man at Jackson's 2004 wedding, and Jackson was convicted of bribing a Morial insider, Vincent Sylvain. Sylvain, who has not been charged with a crime, was Morial's campaign manager and housing director. He now works as director of public relations for Barré's business interests.

Copyright 2007, The Times-Picayune Publishing Corporation

From: The Times-Picayune, January 7, 2007, p. A-1.  Gordon Russell can be reached at grussell@timespicayune.com.  Reprinted in accordance with the "fair use" provision of Title 17 U.S.C. § 107 for a non-profit educational purpose.

  • Gordon Russell and Frank Donze, "4 indicted in probe of Morial-era deal; Contract used to steal cash, Letten says," The Times-Picayune, New Orleans, June 17, 2005, p. A-1.

  • "A disturbing picture" [Editorial], The Times-Picayune, New Orleans, June 19, 2005, p. B-6.

  • Gordon Russell, "Pampy Barré has done well for himself; Even a federal indictment can't diminish accomplishments he credits to hard work, initiative and the right connections," The Times-Picayune, New Orleans, June 19, 2005, p. A-1.

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