NEW ORLEANS - City Councilman Jon Johnson pleaded guilty to charges by federal authorities in connection with his nonprofit, the "Ninth Ward Housing Development Corporation."
Johnson, 63, issued a statement Wednesday, admitting his guilt and his intention to resign from his city council seat. His resignation was made official by the Secretary of State shortly before 4 p.m.
“I am hopeful that when all of the facts are known, it will be found that my positive efforts to help these two charitable organizations, my many civic activities, and my years of honest service to my city and state outweigh my transgressions," Johnson's statement read.
Johnson left the federal courthouse several hours after the guilty plea but declined to comment to media members awaiting him outside.
Council President Jackie Clarkson issued a statement on behalf of the City Council in the afternoon on Johnson's resignation and called a special meeting to discuss the next step in filling his seat.
"It is with great sadness that we have accepted the news today about Councilmember Jon Johnson," Clarkson statement said. "We want to assure the people of New Orleans East, the Ninth Ward and all of District E that the district office will remain open and will continue to serve them with any necessary assistance from the rest of the council and administration.
"To the people of New Orleans, the City Council will keep moving forward together."
According to a bill of information, from 2006 to 2008, prosecutors said he misused federal FEMA dollars, alleging he redirected rebuilding funds to pay expenses for his campaign for the Louisiana state senate in 2007.
“Usually by the time we approach these individuals, our cases are made and they’re rock solid," Letten said.
"This is an extremely important development. This is evidence of I think our absolute zero tolerance policy that we have maintained steadfastly for any public corruption offenses," said Letten.
In his letter admitting his guilt, Johnson said he was aware of a federal investigation into two non-profit organizations that he had been helping with following Hurricane Katrina.
However, Johnson said he was unaware that he was misusing FEMA funds earmarked to help the organizations recover from storm damage.
"Believing that I had done nothing wrong – and to the contrary, having loaned large sums of my personal money and having devoted thousands of volunteer hours to these two charitable organizations – I requested a meeting with United State Attorney, Jim Letten, and the assistant United State attorneys assigned to the case," Johnson said in his letter.
He added, "they were able to show me documentation where on two occasions I converted federal FEMA funds totaling $13,000 to use in my 2007 Senate campaign and where I had filed a false statement in connection with an SBA loan which I was seeking. I acknowledged that I was, in fact, guilty of those offenses and accordingly agreed to enter a plea and to resign m position as a City Councilman."
Johnson was not in public office when the offenses took place. Johnson's attorney Julian Murray said, "The man was a private citizen when then these things took place and he was doing volunteer work. He didn't hold any public office at the time, didn't use any public office relative to what took place."
"He got together with another individual and completely concocted these invoives for services that were just not legitimate. They were lies to SBA," said Letten.
His bond was set for $25,000 and he faces up to five years in prison. He was asked to surrender his passport because of the charges.
Donald "Chick" Foret, Eyewitness News legal analyst, said Johnson got a good deal for pleading guilty to the charges. "A one-count conspiracy, the statutory maximum penalty is five years imprisonment."
But since the amount of monetary loss doesn't appear to be large, said Foret, and Johnson was not a public official when the act was committed, "I don't think he'll serve a lot of jail time."
"He pled to a crime that he admitted and he's going to cooperate fully. He's resigning office which I think is the right thing to do and that is as much as I have to say," said Murray.
Johnson is the first sitting New Orleans City Council member to resign after pleading guilty to a federal crime since Oliver Thomas in 2007. He has until Monday to wrap up his city council business and clear out his office. Sentencing is set for Oct. 25.
"When individuals such as Mr. Johnson or Mr. Oliver Thomas are confronted with the kind of evidence that we have about their conduct, they quite frankly end up acknowledging that because they understand the strength of our evidence," said Letten.
State Rep. Austin Badon said he will be a candidate for the city council seat vacated by Johnson. A special election for the District E seat will be held on Nov. 6. The council unanimously passed the resolution for special election.
Johnson also was told he has an outstanding warrant for an arrest in Jefferson Parish over a matter involving rental property.
Johnson was elected to the District E City Council seat in 2010, representing New Orleans East and the Lower Ninth Ward. Prior to that, he served in the state legislature as a state representative and senator.