Eyewitness News has learned Orleans City Councilman-At-Large and mayoral hopeful Oliver Thomas has reached an agreement with federal prosecutors to plead guilty to charges of demanding illegal payments from a City Hall vendor.

Thomas was indicted by a Grand Jury in the federal government's city corruption probe.

WWL-TV

New Orleans City Councilman At-Large Oliver Thomas.

Sources have told Eyewitness News that Thomas will be arraigned Monday morning in Federal Court at 9 a.m. And at 10 a.m. Thomas could make an official plea before federal judge Sarah Vance.

U.S. Attorney Jim Letten would neither confirm nor deny the allegations about Thomas. The U.S. Attorney's office has been investigating alleged corruption inside City Hall for the last several years.

Sources say the case against Thomas came from Stan 'Pampy' Barre', an associate of former mayor Marc Morial, who pleaded guilty in January to skimming money off of a city energy contract. Sources say Barre' has been working with federal prosecutors before his sentence which has now been delayed until September 5.

Eyewitness News spoke with Councilman Thomas Friday night by telephone and asked him if he was resigning his council post because of the allegations.

“I’ll let you know, you’ll be the first to know,” he said.

Attempts to contact Thomas by telephone and at his house on Saturday were unsuccessful.

News of Thomas' indictment swept through the city quickly Saturday night with many people expressing shock.

New Orleans state legislator Juan LaFonta says if the charges are true, it would be another blow to the city.

"I was actually very upset when I heard the allegations because Oliver's a very important person in the community," he said. "I looked up to him. There's a lot of people in the neighborhoods that look up to him. He's very well liked. He's very well loved."

Thomas' indictment, comes on the heels of the indictment of Congressman William Jefferson. LaFonta says it sends the wrong message during a time of recovery. However, he said he believes Thomas' alleged corruption happened well before Katrina.

"From what I'm hearing and from what we're getting in the office with the caucus is that this is possibly old corruption charges from years past. I don't want folks to think this is something going on since the flood."

In 1990, Thomas was a member of the Downtown Development District. Four years later he was elected to the City Council District B and won re-election in 1998.

Thomas won the At-Large post in 2002 and was re-elected again in 2006.

City Council President Arnie Fielkow released the following statement Saturday:

"I have become aware of the reports which have just recently come to light regarding Councilman-at-Large Oliver Thomas. It would be inappropriate for me to comment on or speculate beyond what has been reported at this time. However, as Council President, I am closely monitoring the current situation, and will have further comment as developments warrant."

WWL-TV will have more on this story as information becomes available.