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Ex-mayor, La. man plead innocent

Pair indicted in alleged scheme linked to Edwards

Author(s): William Pack Date: December 15, 1999 Section: News

A former Houston mayor and a friend of former Gov. Edwin Edwards pleaded innocent Tuesday to several crimes only minutes after a co-defendant pleaded guilty and implicated them in an alleged bribery scheme. Texas businessman Guy Thompson pleaded guilty in U.S. District Court and agreed to cooperate with prosecutors in the case against former Houston Mayor Fred Hofheinz and Eunice auctioneer Cecil Brown. Thompson, 45, of Mineola, Texas, was indicted with Brown and Hofheinz in November for allegedly participating in a bribery and extortion scheme designed to help a Thompson company and three firms that Hofheinz co-owned win contracts in Louisiana.

But Tuesday, Thompson pleaded guilty to the lone charge against him -accessory to interstate travel in aid of the bribery scheme.

Edwards and other Louisiana politicians were targeted for payoffs in 1995 as a waste processing firm founded by Thompson sought a commercial foothold in Louisiana, says a report prosecutors submitted Tuesday to U.S. District Judge Frank Polozola.

The report was meant to give the judge enough information to decide whether to accept Thompson’s guilty plea.

Brown told Thompson that Udwards laughed off a $560,000 payoff Thompson believed his firm had made, the report says. Brown quoted the then-governor as saying that amount “wouldn’t have been enough anyway,” the report says.

Thompson’s firm, Evergreen Global Resources Inc., entered into a consulting agreement with Brown’s firm in 1996. The agreement was designed to funnel what could have been millions of dollars in revenue to Edwards and other politicians, the report says.

On Tuesday, Thompson told Polozola the report, called a “factual basis,” was correct. The report doesn’t say Edwards or any other politicians benefited from the scheme.

Edwards, who wasn’t charged in the indictment, couldn’t be reached for comment Tuesday.

The indictment accuses Brown and Hofheinz of carrying out extortion and bribery schemes to help three Hofheinz firms on three Louisiana projects.

The projects involved a juvenile prison in Jena, an arena lease to help relocate the NBA’s Minnesota Timberwolves to New Orleans and municipal waste disposal contracts for Evergreen Global Resources.

Minutes after Thompson concluded his court appearance, Hofheinz, a former two-term Houston mayor. and Brown pleaded innocent.

Brown, 56, is charged with extortion, interstate travel in aid of bribery and conspiracy to engage in extortion and bribery. Hofheinz, 61, was named only in the conspiracy and interstate travel in aid of bribery counts.

Both men were released on personal recognizance bonds.

Meeting briefly with the press after his plea, Hofheinz said he had hoped he could respond to the allegations, but a gag order Polozola slapped on participants in the case prohibited elaboration.

“I know I’m not guilty,” Hofheinz said. “We’re going to win this. “Brown, who has known Edwards for more than 30 years, also declined to say much, other than to take a swipe at the tactics of federal authorities.

Edwards was not named in the most recent indictment, but was referred to as “a high level public official” who expected to receive financial benefits as a result of his contacts with Brown and others, prosecutors have said.

Edwards already faces corruption charges related to the riverboat casino licensing process and has been charged with insurance fraud and other counts in an insurance company liquidation settlement.

Brown is also indicted in the riverboat case. He, Edwards and five co-defendants are set to stand trial on those charges on Jan. 10.

The factual basis filed Tuesday in Thompson’s plea hearing outlined several points of the Evergreen scheme, including: Michael Graham, a government informant and convicted tax cheat, approached Evergreen in 1995 and said he could market Evergreen’s waste disposal method in Louisiana.

On March 31,1995, Evergreen and a company Hofheinz and Graham formed signed a “co-development agreement” making the Hofheinz firm responsible for the financial planning of Evergreen’s projects in Louisiana.

Several weeks later, Evergreen loaned the Hotheinz firm, Bayshore Environmental Inc., $500,000 and gave Graham another $60,000 to be used for development activities, including transfers “to certain ‘politicians’ designated by Brown.” When nothing happened with the Evergreen projects in Louisiana, the company’s partners feared Bayshore had stolen their $560,000, but were assured by Graham that the appropriate payments had been made.

Graham said Brown was given $100,000 through two checks signed by Hofheinz. The FBI determined the remaining $460,000 was used by Hofheinz and his Bayshore partners for personal and office expenses.

A court-ordered wiretap on Brown’s telephone showed he talked to Edwards about setting up a meeting with New Orleans officials about the Evergreen waste disposal proposal. A meeting was held but Evergreen didn’t get a contract.

Thompson declined comment as he left the courthouse Tuesday. His attorney, Tommy Damico, said it was in Thompson’s best interest to plead guilty.

“Mr. Thompson truly regrets his involvement in this and wants to put it behind him,” Damico said.

Thompson faces up to 2 1/2 years in prison and a $125,000 fine. Polozola postponed sentencing until the case against Hofheinz and Brown is completed.

Copyright 1999, 2000 Capital City Press, Baton Rouge, La.