Friday, February 10, 2012

Democrat culture of corruption

Ray Nagin is focus of federal grand jury probe


David Hammer, The Times-Picayune

A federal grand jury is investigating whether city vendors gave former New Orleans Mayor Ray Nagin gratuities ranging from plane tickets to materials and equipment for his family's granite-countertop business and also helped the firm land an exclusive installation deal with a retailing giant while Nagin was in office, according to several sources close to the probe. The federal probe is zeroing in on Nagin along three parallel tracks: luxury travel and home maintenance provided by city technology vendors; a granite countertop installation contract that Nagin's family company got from The Home Depot; and the possibility that at least two businesses with City Hall dealings arranged for the delivery of free equipment or materials to the Nagin family's now-defunct firm.

Ray NaginThe federal probe apparently is zeroing in on former New Orleans Mayor Ray Nagin along three parallel tracks.

Nagin's lawyer, Harry Rosenberg, said he had "no comment on those notions." U.S. Attorney Jim Letten declined to comment.

Part of the case the government is building is well-established in the public record. Court documents and sworn testimony established long ago that Nagin and his family went to Hawaii in December 2004 on the nickel of city technology vendor Mark St. Pierre, who is now serving a 17-year prison sentence for bribing Nagin's chief technology officer, Greg Meffert.

Likewise, it's long been known that St. Pierre lined up a private jet and then paid for first-class airfare so the Nagins could vacation in Jamaica after Hurricane Katrina, and also provided a private yacht and plane tickets to Chicago for Nagin re-election campaign parties. And newspaper stories and court testimony showed that St. Pierre spent more than $1,000 on landscaping services at Nagin's home in the months after Katrina.

Former tech chief on 'Team USA'

To prove that the gifts from St. Pierre violate the law, the feds would have to prove that Nagin -- who has said he thought Meffert was the source -- knew they were coming from St. Pierre. Meffert, who is awaiting sentencing in May for taking bribes from St. Pierre, has been subjected to numerous debriefings with federal investigators, and his lawyer, Randy Smith, has said Meffert is an enthusiastic member of "Team USA."

home-depot-nagin-sign.jpgView full sizeIn 2007, a company partly owned by then-Mayor Ray Nagin landed a contract with The Home Depot to install granite and marble countertops from four other store locations.

The second track of the Nagin investigation revolves around the granite countertop firm Stone Age LLC, which Nagin founded with his two sons in 2005. Four years ago, The Times-Picayune reported that Stone Age had quietly landed a deal to be the exclusive installer of granite countertops for four local Home Depot stores at a time when City Hall was negotiating the sale of land to Home Depot for a new store in Central City.

The probe is focused not on the city's sale of land for the new store, the sources said, but on whether Nagin's relationship with Frank Fradella, who was president of a restoration company called Home Solutions of America, helped him land the installation work. HSOA was a leading countertop vendor for Home Depot, and Nagin during his second term met often with Fradella. He also attended Fradella's wedding, according to his public calendar.

Nagin's firm got the countertop installation deal from Home Depot in April 2007. Meanwhile, Home Solutions landed big city contracts totaling about $50 million -- repairing the roof and inside of the terminal and concourses at Louis Armstrong International Airport, rebuilding sidewalks in the French Quarter and restoring the storm-damaged French Market stalls. The company also got lucrative recovery work at several public schools and was hired to rebuild kitchens at Orleans Parish Prison.

Businessman Aaron Bennett, who recently pleaded guilty to bribing Plaquemines Parish Sheriff Jiff Hingle, sold a company to HSOA in 2006 and has said he introduced Nagin to Fradella in January 2007. The introduction came during a trip the three made to Chicago, on a plane leased by an HSOA subsidiary, to take in the NFC championship game between the Saints and the Bears.

Around that time, Bennett began getting paid to oversee St. Pierre in Nagin's tech office, which authorities have said was simply a pass-through arrangement that involved no real work.

Bennett has told The Times-Picayune that he hooked Nagin up with Fradella specifically to help the mayor get the Home Depot granite installation work. Bennett's sentencing on the bribery charge has been pushed back until late June, and sources have said he is bidding for leniency by telling federal investigators everything he knows.

When Fradella and Nagin met, Home Solutions was claiming in news releases that it had granite installation contracts at dozens of Home Depot stores throughout the Gulf South. Fradella is now facing securities fraud charges in Dallas, in part because he allegedly exaggerated the size of such Home Solutions contracts, causing the publicly traded company's stock price to artificially rise and allowing him to dump shares at a profit. His trial is set for June.

Mayor's meetings blacked out of calendar

In April 2007, just three months after Bennett introduced Nagin to Fradella, Stone Age got its four-store contract with Home Depot. During the next two years, Nagin met often with Fradella. When the mayor initially released his 2008 schedule to comply with a public records request, a few meetings had been redacted. After he was forced to disclose them, it turned out most of them were with Fradella.

Smith, who represents both Fradella and Meffert, said Fradella played no role in getting Stone Age the job, adding that Fradella would not have had the ability to do so. Smith said that just before being charged in October, Bennett called Fradella and seemed to be trying to record the conversation, but Fradella couldn't be sure. Bennett, meanwhile, was collared when Hingle caught him on tape offering a $10,000 bribe.

Smith said Thursday that prosecutors in New Orleans have not tried to contact Fradella in the past few months.

Sources close to the Nagin case say federal investigators are trying to determine whether Larry Laseter, a former vice president for The Home Depot who oversaw the sale of special orders for the massive home services retailer, played a role in getting Nagin the work. Sometime in mid-2007, months after Stone Age got the Home Depot contract, Laseter left Home Depot to work for Fradella.

Laseter, now living in Atlanta and serving as president of the energy-efficiency firm WellHome, did not return messages left for him this week through Facebook and with his mother in Covington, Ga.

Home Depot spokesman Stephen Holmes declined to comment on Laseter's employment or the nature of his departure. He did say, however, that "we're not aware of any allegations against The Home Depot and its past business relationship with Stone Age."

The Home Depot severed its relationship with Stone Age shortly after the newspaper wrote about the deal in April 2008.

Firm's buyer 'had a master plan'

The third track of the federal probe deals with deliveries of free granite or equipment to Stone Age by several city vendors. Investigators are trying to determine whether some of those deliveries were made by or on behalf of a Home Solutions subsidiary, Cornerstone Building & Remodeling of Fort Myers, Fla. -- and if other deliveries came from other city contractors.

Anthony Leeber Jr., Cornerstone's founder, said that after Home Solutions bought his firm, Fradella pushed him out, systematically liquidated Cornerstone's inventory and sent some of the equipment to Stone Age. Leeber said that from the moment Fradella acquired Cornerstone in 2005, for shares of Home Solutions stock that would soon become worthless, Fradella called the shots. By mid-2006, Leeber was out entirely, and it was some time after that that some of his materials were provided to Nagin's firm.

"He (Fradella) liquidated my inventory in 2007, when I wasn't president of the company anymore: brand-new bridge saws, compressors, my personal generators," Leeber said. "He destroyed the business I'd built up for years. He had a master plan all along."


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