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Edwards associate indicted

Author(s): WILLIAM PACK Dale: November 30, 1999 Section: News

A third indictment in the nearly completed investigation of Edwin Edwards’ business activities accuses a former Houston mayor and a longtime Edwards associate of wrongdoing associated with extortion schemes hut does not officially target the former governor. The indictment was returned Monday by a new federal grand jury impaneled only a week.

It accuses longtime Edwards friend Cecil Brown of four counts of extortion and implicates both Brown and former Houston Mayor Fred 1 Hofheinz in a conspiracy involving approximately $2 million in payoffs for three business ventures.

A third businessman, Guy Thompson, of Tyler, Texas, also was indicted as an accessory to one of the crimes allegedly committed by Hofheinz and Brown – interstate travel in the aid of bribery.

U.S. Attorney Eddie Jordan Jr. of New Orleans said the indictment “constitutes another chapter in the ongoing saga of greed and corruption on the part of former Gov. Edwin Edwards and his former associates.” An earlier federal grand jury in Baton Rouge indicted Edwards twice – for racketeering and other crimes that allegedly corrupted the state’s riverboat casino licensing process and for insurance fraud related to an insurance liquidation settlement that the government called a sham.

In Monday’s indictment, Edwards is not mentioned by name. But numerous references are made to a friend of Brown’s who also is “a high level public official in Louisiana with influence over the granting of state contracts. “Jordan, whose office has conducted the nearly 4-year-old investigation, identified the “high level” official as Edwards.

Jordan said Brown extorted a “substantial sum of money” from three Hofheinz firms that were doing business in Louisiana.

The money was intended for both Brown and Edwards, Jordan said. The indictment, however, does not slate that Brown’s influential friend ever received any money, Jordan said.

“Hofheinz wanted Edwards’ support and approval to ensure he would not interfere in any business ventures (Hofheinz) planned in the state of Louisiana,” said Jordan.

The chief prosecutor said in light of the two pending indictments against Edwards, he decided it would be “superfluous, counterproductive and not in the best interests of justice” to indict the former governor again. Jordan declined to elaborate.

Edwards, reached at his home, rejected Jordan’s explanation but could not resist turning the prosecutor’s words around on him.

“If the money was in my hand, 1 would have been indicted,” Edwards said. “You don’t have to he a brain surgeon to understand that.”Hofheinz, 61, mayor of Texas’ largest city for two terms in the mid-70s, declined comment in anticipation of a gag order being clamped on the case.

One of his attorneys, Eddie Castaing Jr., also had little to say about the indictment.

“He’ll plead ‘not guilty’ and defend himself vigorously,” Castaing said.

Brown, 56, a Eunice cattleman and auctioneer who has been Edwards’ friend for nearly 30 years, could not be reached for comment.

His attorney, Rebecca Hudsmith, said she expects Brown will plead “not guilty” at arraignment but had not been appointed to represent him in the new case.

Hudsmith, the federal public defender in two of Louisiana’s three federal districts, has been appointed to represent Brown in the riverboat corruption prosecution. Brown is one of seven defendants in that case.

Hudsmith said she is concerned that the new indictment, returned so close to the Jan. 10 trial date in the riverboat case, might “pollute the jury pool” for the upcoming trial. She stopped short of saying the government had manipulated the timing of the new indictment but said it comes “at a difficult time” in relation to the January trial.

Thompson’s attorney Tommy Damico said he was not surprised by the indictment but declined to say what his client’s next step might be.

“We’re going to look at the evidence, and my client will weigh all his options and act accordingly,” Damico said.

The indictment contained numerous allegations. Among them are Brown and Hofheinz participated in a conspiracy to commit extortion and bribery between 1993 and 1997.

Three Houston-based companies Hofheinz co-owned retained Brown to help win state approval for three business ventures: Viewpoint Development Corp. wanted to finance a juvenile prison in Jena. Top Rank Inc. sought a lease on a New Orleans arena as part of an effort to relocate a professional basketball team from Minnesota to New Orleans. Bayshore Environmental Inc. planned to win municipal waste disposal contracts for another Texas company, Evergreen Global Resources, which Thompson had started.

Hofheinz gave $845,000 to a partner in Viewpoint in 1993 and 1994 to deliver to Brown, who was expected to transfer the money to his influential friend in public office.

Hofheinz signed a $1.3 million “lobbying” contract for Brown’s firm in 1995 effective once Viewpoint obtained the financing needed to complete the Jena project. On Feb. 13, 1996, Viewpoint sold its rights in the Jena project to another Houston company for $3.5 million, again conditioned on the receipt of financing to complete the prison

Jena. Brown demanded $1.7 million for his consulting firm and $100,000 for himself.

Brown and Hofheinz’s partner in Viewpoint agreed in 1996 to reduce the $1,7 million fee “to a cash payment of $1,020,000. Brown’s friend would receive $1 million and Brown would receive $20,000.”In July 1996, Brown warned the partner that his friend “would mess it (the Jena deal) up at Corrections if I didn’t get my fee.” Three months later, the partner met with Brown and Brown’s friend for dinner in Baton Rouge. The partner gave Brown $100,000 in cash. Brown then drove to the friend’s home and stayed there for an hour.

Fewer payments were made for either the Fop Rank or the Bayshore projects.

Top Rank and Viewpoint gave Brown four checks totaling $599,000 in 1994. Jordan said the Top Rank payoffs apparently were made in attempting to win a favorable arena lease for the proposed basketball team.

Hofheinz paid Brown $100,000 in 1995 through two Bayshore checks. A year later, Evergreen entered into a marketing consultant agreement with Brown allowing Brown to earn a 5 percent commission on payments the company received under any municipal waste disposal contracts.

Prosecutors have said Thompson paid Hofheinz $500,000 in 1995 with the expectation it would be passed on to Brown and Edwards. Evergreen officials hoped the money would help the firm win a waste disposal contract with New Orleans, prosecutors said. Evergreen officials met with New Orleans’ mayor but did not win a contract.

Aside from the conspiracy allegation, Brown and Hofheinz are indicted on three counts of interstate travel in aid of unlawful activity, which was identified as bribery.

Brown faces four extortion counts for obtaining money from Hofheinz’s firms under the threat that a failure to pay would result in economic harm.

Jordan said Brown and Hofheinz face up to five years in prison on the conspiracy count and on each of the three bribery-related counts.

Brown faces as many as 20 years in prison on each of the extortion counts, while Thompson faces a maximum of 21/2 years in prison as an accessory to the bribery-related count.

The defendants also face a fine of $250,000 per count.

The defendants will be summoned to appear before a federal judge in the coming weeks. The case has been allotted to U.S. District Judge Frank Polozola, who also presides over the other indictments involving Edwards.

The grand jury, meanwhile, is awaiting further orders from the U.S. Attorney’s Office.