Extortion claim linked to ex-official

Author(s): PETER SIMNKLH Date: April 25, 1996 Section: city des

Former state Rep. Michael Russo extorted $ 150,000 from a waste disposal company, an FBI agent testified Wednesday in what prosecutors say is the opening salvo of an attack on corruption in the Legislature. The allegations against Russo came eight months after prosecutors revealed a broad probe of corruption - mostly linked to the video poker industry - in the Legislature.

On Wednesday, U.S. Attorney L.J. Ilymel said the probe has expanded beyond video poker into both riverboat casinos and the land-based casino in New Orleans.

The testimony about Russo came Wednesday during a hearing for Vernon Hizel, a former vice president for Western Waste Industries.

Hizel, 60, of Golden, Colo., pleaded guilty to concealing Russo's extortion of Western Waste.

Russo was helping the company get a permit for a landfill in Livonia in Pointe Coupee Parish, an FBI agent testified Wednesday.

"Based on that evidence, I think it is probable that a grand jury will return charges against Mr. Russo," Hymel said after the hearing.

1 lymel didn't say when formal charges might be filed against Russo.

Russo decided not to seek re-election last fall, after his name surfaced in FBI documents made public in the gambling investigation.

Earlier this week, Russo denied knowing I lizel.

"That name doesn't ring a bell with me," Russo said Tuesday, a day before Hi/.el pleaded guilty and the FBI laid out the alleged scheme. Russo declined further comment.

On Wednesday, Russo's attorney, Thomas Damico, said his client "certainly was not involved in any kind of extortion in any form or fashion."

In court Wednesday, an FBI agent said Russo asked Western Waste to buy a piece of his property near Gross Tele.

The request came in 1993-94, when Russo was helping the company get permits for the Livonia disposal site, FBI agent Jennifer Smith Love testified.

To ensure the legislator's continued help, Ilizel arranged for a friend to buy the property for $150,000 from Russo, Love testified.

Hizel faces up to three years in prison and a fine of up to $250,000, prosecutors said.

After the hearing, Damico - Russo's attorney - questioned IHzel's credibility.

Hizel pleaded guilty to a charge of misprision of a felony, which carries a relatively light sentence, Damico noted.

"I don't know what his motives are," Damico said. "But I've seen one man standing up and making allegations, and in return for those allegations 1 see him getting a plea bargain that you don't see very often."

Russo also was named as an unindicted co-conspirator when Mafia figures were convicted last year of infiltrating the video poker industry in New Orleans. Damico said there was "no evidence to support that."

Damico also claimed prosecutors went after Hizel because their much-publicized gambling probe is faltering.

"It's looks to me like they're just trying to squeeze people because they're going nowhere on these gambling charges," Damico said.

But Hymel said his strategy for the next phase of the investigation is to proceed gradually, rather than filing a raft of charges against many defendants.

"One idea is that you have one large indictment where you might charge 20 or 30 people," Hymel said. "I personally don't like that way

to do it.

"What you will see in this investigation is taking one small piece at a time," he said. "What you saw today was the first small piece."

As more people agree to cooperate with prosecutors - as Hizel did when he signed a plea agreement Tuesday - the sweep of the probe could expand, Hymel said.

In court Wednesday, Love testified Russo scheduled meetings for Western Waste representatives with state Department of Environmental Quality officials.

In those meetings, Russo supported Western Waste's applications, Love testified.

About the same, Russo urged Western Waste to buy his property, she said.

Russo had bought the three-acre piece of property in 1988 for about $80,000, Assistant U.S. Attorney Rand Miller said after the hearing.

Western Waste considered the property environmentally unsuitable because the land had a bayou on it, Miller said.

But after Russo continued to press for the deal, I lizel agreed to buy the land, Love testified.

I lizel agreed to purchase the property "to avoid the consequences should Russo turn against the project," the FBI agent testified.

Hizel agreed to pay Russo $75,000 up front for the land, and another $75,000 after Western Waste got the permits it needed, the agent testified.

Russo insisted that the property be purchased in a name other than Western Waste, Love said. To that end, Hizel had a longtime friend, Daniel Horst, come to Louisiana and buy the property, Love testified.

After the deal went through with Ilorst acting as a "straw man," Western Waste obtained the permits to run the Livonia facility, she said.

Horst then came to Louisiana to bring Russo the remaining $75,000, Love testified.

Officials at Western Waste headquarters in Los Angeles did not return messages seeking comment.

Hymel said that, at least for now, prosecutors believe "the company was a victim."

Copyright 1996 Capital City Press, Baton Rouge, La.