Jacques Morial to plead guilty
Attorney: He'll admit failing to file taxes
September 15, 2007

The sweeping, five-year federal investigation of former Mayor Marc Morial's administration has hit close to home before. But never this close.

Jacques Morial, 46, the ex-mayor's younger brother, has joined a long line of Morial associates caught up in the still-unfolding probe by agreeing to plead guilty to misdemeanor charges that he failed to file income tax returns for three consecutive years beginning in 2000, his attorney said Friday

"We all have an obligation to pay our taxes, and Mr. Morial has acknowledged that he failed to do what he was supposed to do," Pat Fanning said.

While the plea agreement Jacques Morial signed this week requires him to cooperate with federal investigators, Fanning said his client has not yet been asked to come in for an interview.

"I have no idea what questions they would ask," Fanning said. "We didn't go in and say, 'We have information for you, will you please give us these misdemeanors.' That's not the deal."

While many of the cases against members of Marc Morial's inner circle have had clear links to contracts awarded during his City Hall tenure, Jacques Morial's offense does not appear to have any relation to his brother's actions as mayor between 1994 and 2002. Marc Morial, who has headed the National Urban League since 2003, has not been accused of any wrongdoing.

High-profile search

The plea agreement comes 3 ½ years after agents from the FBI and the Internal Revenue Service — armed with a search warrant and weapons — used a battering ram to break down the door of Jacques Morial's French Quarter townhouse.

The forced entry into Morial's home, which family and friends decried as excessive, came as the federal investigation into his brother's administration was heating up. During the raid, which lasted several hours, agents removed computers and boxes of documents.

While the federal government has never revealed what was taken from Morial's North Rampart Street residence, nothing in the three-page bill of information indicates that the seized materials had any connection with city government.

The charges against Jacques Morial, a political strategist and a former investment banker, are spelled out in a three-count bill of information, a legal instrument used by prosecutors in lieu of a grand jury indictment when defendants choose to cooperate. Fanning said he expects Morial to enter his guilty plea in federal court as soon as next week.

Morial faces up to a year in jail and a fine of $25,000, according to the court document, which does not list the amount of back taxes he owes for 2000, 2001 and 2002.

Fanning said Morial paid slightly more than $26,000 in taxes for the three years in 2004, though he was uncertain whether all penalties and interest have been remitted.

Morial's decision to pay the back taxes and plead guilty could result in a lesser sentence than the maximum terms called for by law, Fanning said.

"We hope the court will look at Mr. Morial's clean record and his history, and exercise the leniency that he is entitled to," Fanning said. "That's what we're hoping for."

Following the early morning raid by federal agents on Feb. 14, 2004, Fanning said he considered the government's action to be overkill. Greeting a sleeping Jacques Morial at gunpoint was "like swatting a fly with a sledgehammer," Fanning said.

Morial's mother, Sybil, widow of former Mayor Dutch Morial and a top Xavier University administrator at the time, echoed those sentiments.

"To use a battering ram to break down his door at gunpoint to retrieve business records, which were available on a voluntary basis, was unnecessary and goes beyond what is acceptable in a free democracy," she said at the time.

Defense attorney Donald "Chick" Foret, a former state and federal prosecutor, said Friday that the dramatic nature of the raid elevated the public's expectations.

"Normally, search warrants are executed and the general public is not even aware of it," Foret said. "In this case, because of the high-profile nature of the suspect, we were aware of the execution of the search warrant, therefore the general public has been waiting to see what, if any, criminal charges would be brought against Mr. Morial."

Veteran defense attorney Vinny Mosca said some Morial supporters may be angered that so little has resulted from the episode three years later. But he added that the federal government has certain tools to investigate alleged crimes and it will continue to use them.

"Some might find it appalling to think that they can just go knock down your door," Mosca said. "But if they think a crime has been committed and they don't want evidence to be destroyed, this is what they do."

Obligated to answer

Mosca noted that the fact that Morial has agreed to plead guilty means that he is obligated to answer questions from investigators.

"So, the end of this chapter is not written yet," he said.

Jacques Morial will be the third member of Marc Morial's family to admit to a crime.

Note that Jacque Morial only pleaded guilty to misdemeanor charges of failing to file federal income tax returns for 2000, 2001 and 2002.  He was never charged with a crime or any other wrongdoing.
  • Gordon Russell, "Jacques Morial pleads guilty to tax evasion; High-profile case ends quietly," The Times-Picayune, New Orleans, September 26, 2007, National, p. 1.

The former mayor's uncle, investment banker Glenn Haydel, is serving a two-year prison sentence for bilking the city's public transportation system of $550,000. Haydel is a brother of Sybil Morial.

Glenn Haydel's wife, Lillian Haydel Smith, is awaiting sentencing for unrelated offenses in connection with her brokering of Orleans Parish school system insurance policies.

Also serving a term in federal prison is Bill Schultz, a political operative and close Morial associate, who was sentenced in February to one year and one day after he pleaded guilty to failure to file income tax returns. Like the case against Jacques Morial, there appears to be no link between Schultz's offense and city business.

Others await sentencing

More jail sentences are pending, however, in connection with the highest-profile case to come out of the City Hall investigation: a scheme to skim more than $1 million from the city's massive energy-efficiency contract with Johnson Controls Inc., which was awarded during the waning months of Marc Morial's mayoral term.

One of the four co-conspirators, Kerry DeCay, who headed the city's property management department under Morial, began serving a nine-year stint in a Massachusetts prison last month after pleading guilty to corruption charges.

The other participants in the conspiracy — restaurateur Stan "Pampy" Barré, a Morial family confidant; businessman Reggie Walker; and former Johnson Controls project manager Terry Songy — are cooperating with investigators and awaiting sentencing.

Conversations between the federal government and Barré also produced the evidence prosecutors used to secure a guilty plea from former New Orleans City Councilman Oliver Thomas in an unrelated case.

Thomas, who resigned last month, pleaded guilty to accepting bribes in 2002 from Barré, who at the time held a share of a contract to operate three city-owned parking lots.

Copyright 2007, The Times-Picayune Publishing Corporation

From: The Times-Picayune, September 15, 2007, National, p. 1.  Michelle Krupa contributed to this story.  Frank Donze can be reached at fdonze@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.

  • Gordon Russell, "Graft inquiry nets 6th guilty plea; Defendant accused of pocketing kickbacks," The Times-Picayune, New Orleans, January 26, 2006, p. A-1.

  • Michelle Krupa, "Haydel gets 2 years in RTA rip-off; Letten keeping the heat on Morial associates," The Times-Picayune, New Orleans, September 7, 2006, p. B-1.

  • Gordon Russell, "Defense wants Morial to testify; Subpoena possible ahead of pals' trial," The Times-Picayune, New Orleans, January 3, 2007, p. A-1.

  • Gordon Russell, "Morial Casts Shadow on Pals' Trial; Feds try to minimize mention of ex-mayor," The Times-Picayune, New Orleans, January 7, 2007, p. A-1.

  • Gordon Russell and Frank Donze, "Conspiracy charge often is feds' best friend; After six years, curtain rises on corruption trial; Contracting culture, Morial legacy at stake," The Times-Picayune, New Orleans, January 14, 2007, p. A-1.

  • Gordon Russell and Frank Donze, "‘Yes, I'm Guilty’ Say Two Morial Cohorts; Barré, DeCay Admit to Conspiracy, Fraud Charges," The Times-Picayune, New Orleans, January 15, 2007, p. A-1.

  • Gordon Russell, "Ex-Morial aide gets 9 years in fraud case; Judge says DeCay was motivated by 'greed, pure and simple greed'," The Times-Picayune, New Orleans, June 23, 2007, National, p. 1.

  • Stephanie Grace, "Attitude won't keep DeCay out of jail," The Times-Picayune, New Orleans, June 26, 2007, Metro, p. 7.

  • Bruce Murphy, "Johnson Controls: The story the Journal Sentinel wouldn't tell you," Milwaukee Magazine, January 10, 2006, http://www.milwaukeemagazine.com/murphyslaw/2006-01-10.asp, accessed 03/14/06.

  • John Schmid, "Corporate catalyst for stricken cities; Johnson Controls has a blueprint to revive urban centers across the country while expanding its business" [First of two parts], Milwaukee Journal Sentinel, January 7, 2006, http://www.jsonline.com/story/index.aspx?id=383530, accessed 03/14/06.

  • John Schmid, "Taking an offbeat approach; Johnson Controls has high hopes for a jazz-meets-jobs training center in New Orleans" [Second of two parts], Milwaukee Journal Sentinel, January 8, 2006, http://www.jsonline.com/story/index.aspx?id=383656, accessed 03/14/06.