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Former New Orleans mayor Nagin charged with corruption

NEW ORLEANS (Reuters) - A federal grand jury on Friday charged Ray Nagin, the former New Orleans mayor who denounced the federal government response to Hurricane Katrina, with 21 counts of public corruption including receiving thousands of dollars in kickbacks for city services.

Ray Nagin, Mayor of New Orleans, talks during an interview in Havana October 20, 2009. REUTERS/Enrique De La Osa

The charges include six counts of bribery, nine counts of wire fraud, four counts of filing false tax returns and one count each of conspiracy and money laundering.

“Nagin used his public office and his official capacity to provide favorable treatment that benefited the business and financial interests of individuals providing him with bribery or kickback payoffs in the form of checks, cash, granite inventory, wire transfers, personal services and free travel,” the indictment said.

In one case he received $72,500 in bribes, and $50,000 in another, according to the indictment. Nagin and his sons, Jeremy Nagin and Jarin Nagin, owned a countertop company called Stone Age LLC that provided granite for projects such as kitchen remodeling. In several instances, he received wire transfers and granite as bribes, the indictment said.

The charges followed months of investigation by federal prosecutors, who reached agreements with several former associates of Nagin to provide evidence against him.

Nagin, 56, and a Democrat, served as mayor from 2002-2010 and stirred national controversy after the powerful hurricane broke local flood walls and inundated most of the city, killing some 1,500 people and wrecking tens of thousands of homes.

In the immediate aftermath of the storm, Nagin told federal officials to “get off your asses” as thousands of people who had been forced from their homes waited for help.

“This is, if true, a betrayal of the public trust that really started before Katrina,” said Rafael Goyeneche, president of the Metropolitan Crime Commission Inc, a non-profit organization dedicated to fighting corruption in Louisiana.

“Is it any wonder that New Orleans is still struggling to recover from the catastrophic effects of that storm when the person that was supposed to be championing the city’s recovery was more interested in lining his own pockets?” he said.

Nagin’s attorney, Robert Jenkins, could not immediately be reached to comment on the charges.

The government secured a key witness in November when businessman Rodney Williams admitted that he gave payments totaling $60,000 in 2008 to an unnamed public official in return for city contracts steered to Williams’ engineering firm, according to court documents.

Williams also said he paid $10,000 to close family members of the public official, who were not identified by name.

Last June, businessman Frank Fradella pleaded guilty to bribing an unnamed public official with $50,000 in cash and “truckloads” of free granite delivered to a granite countertop installation company owned by the official.

When asked by reporters if the unnamed public official was Nagin, Fradella’s lawyer Randall Smith repeatedly said: “If it walks like a duck and talks like a duck, it’s probably a duck.”

Businessman Aaron Bennett, who pleaded guilty in an unrelated government bribery case in Louisiana, has said that he introduced Nagin to Fradella to assist the Nagins’ granite company in getting business.

Jeremy and Jarin Nagin last fall appeared before a grand jury and provided documents in response to a subpoena, their attorney Clarence Roby confirmed in October.

Friday’s indictment refers to two of the persons who allegedly conspired with Nagin as “Family Member 1” and “Family Member 2.”

Roby said on Friday after the indictment that he assumed the two family members are Nagin’s sons. Prosecutors had not responded to his repeated questions during the investigation whether the sons were targets of the investigation.

“To have them listed as unindicted co-conspirators shows that they are on the government’s radar,” he said on Friday.

The Nagin administration’s former chief technology officer, Gregory Meffert, pleaded guilty in 2010 to tax fraud and conspiracy to commit wire fraud and bribery in connection with a city program that received federal funds.

Mark St. Pierre, who ran a technology company that received big city contracts, is serving a 17-year prison sentence for bribing Meffert and another city official.

The Nagin indictment names Williams, Fradella, Bennett, Meffert and St. Pierre, as co-conspirators in defrauding the city. Meffert, who was also a business associate of St. Pierre, is alleged to have paid lodging and vacation expenses for Nagin and his family in Hawaii in order to help steer business to St. Pierre’s company.

St. Pierre is alleged to have paid for first-class airfare for the Nagin family to Jamaica.

The indictment alleges that another party identified as “Businessman A” bribed Nagin with “private jet travel and limousine services to New York City, costing approximately $23,500,” in return for Nagin agreeing to waive penalties owed by the man on a delinquent city tax bill.

“This indictment should serve as a reminder to current and former public officials that ... the FBI pursues corruption even after an official leaves office,” Michael Anderson, Special Agent in Charge of the FBI’s New Orleans Field Office, said in a statement.

A former cable television executive, Nagin had broad political support during his first term as New Orleans mayor. He was re-elected after the hurricane in 2006 but alienated some supporters who saw his public comments as racially divisive.

In a speech on Martin Luther King Jr. Day in 2006, Nagin, who is black, said: “It’s time for us to rebuild ... a chocolate New Orleans,” adding that “This city will be a majority African-American city. It’s the way God wants it to be.”

He still managed to defeat his foremost challenger Mitch Landrieu, who then was lieutenant governor of the state. Landrieu succeeded Nagin as mayor in 2010.

After the indictment was announced, Landrieu issued a statement saying it was a sad day for New Orleans, which has a long history of public corruption.

If convicted on all charges, Nagin faces up to 48 years in prison and fines of more than $1 million.

Loyola University New Orleans Law Professor Dane Ciolino said the charges do not necessarily mean Nagin will go to trial.

“The vast majority of these cases end in a negotiated plea,” Ciolino said.

Nagin sold his home in the Gentilly neighborhood of New Orleans last year and now lives in Frisco, Texas.

Reporting by Kathy Finn; Editing by Greg McCune, Andrew Hay and David Gregorio