Sources: Contractor ready to testify he paid Nagin $50K for city contracts

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wwltv.com

Posted on November 13, 2012 at 10:40 AM

Updated Friday, Jan 18 at 2:48 PM

David Hammer / Eyewitness News
Email: dhammer@wwltv.com | Twitter: @davidhammerWWL

NEW ORLEANS -- Another city contractor is ready to testify that he paid then-Mayor Ray Nagin $50,000 in order to get millions of dollars in no-bid city work and a purported piece of Nagin’s granite countertop business, sources tell Eyewitness News.

It’s been the best kept secret of the feds’ investigation of Nagin, until now. Our sources say that Rodney W. Williams, former president of Three Fold Consultants LLC, paid Nagin the $50,000 and was immediately rewarded with a city contract.

If Williams pleads guilty, that could sew up the wide-ranging probe of the former mayor, who has not been charged with any crime but has been implicated by some other contractors who have pleaded guilty in federal court.

The alleged $50,000 apparently helped launch Three Fold as a go-to construction design firm in Nagin's City Hall. The only city records available from that time cover the last two years of Nagin's second term. But in that time Three Fold collected more than $3 million to design and manage street and sidewalk repairs, downtown bike racks, NORD playground projects, fire houses and more.

Three Fold and Williams appear to have little, if anything, to do with the other people the feds have lined up to testify against Nagin: former aides Greg Meffert and Anthony Jones and contractors Mark St. Pierre, Aaron Bennett and Frank Fradella.

Nagin was expected to fight those allegations by contending he did nothing special for those contractors, even if they did give him exotic vacations or other freebies. For instance, with St. Pierre – who paid for Nagin vacations and campaign parties through Meffert – Nagin always contended that he thought Meffert had paid, not a vendor.

Or with Fradella -- who pleaded guilty in June to funneling $50,000 to Nagin and sending him truckloads of free granite for the Nagin family countertop firm – Nagin could argue that Fradella’s company got its city work through open bidding.

But a plea deal from Williams could undercut that defense because of how Three Fold got its city contracts.

"In the Fradella case and the St. Pierre case, there wasn't really a quid pro quo,” said WWL-TV legal analyst Donald "Chick" Foret. “There was some mechanism set up it appears where there were some third parties involved.... In this case it looks like contracts were given out perhaps in return for perhaps $50,000 in bribes that were sent toward the mayor, C. Ray Nagin."

The mayor fought a challenge from the City Council and used an executive order so he would have the power to award consulting and management contracts to whomever he wanted, no matter how they measured up against other contractors.

Our sources say that Rodney Williams paid Nagin $50,000 while Three Fold was pursuing a city contract and Nagin turned right around and used the closed door process he'd set up to select Three Fold, even though the company scored so poorly in a review of contract proposals that it was considered unqualified for the job.

The allegations are similar in a couple of ways to those lodged by Fradella when he pleaded guilty in June to conspiring to bribe a public official known to be Nagin. Fradella admitted to funneling $50,000 to Nagin in June 2008, through someone else at his company. Sources have confirmed that person was Michael McGrath, the former chairman of Fradella’s company Home Solutions of America -- a man who is now serving time for federal mortgage fraud. Our sources said Nagin gave McGrath documents purporting to transfer to him ownership in Stone Age LLC the granite countertop business Nagin owned with his sons, Jeremy and Jarin. No such ownership transfer was ever reported to the Secretary of State, however.

Similarly, our sources say that Williams got similar documents supposedly giving him a share of Stone Age in exchange for the $50,000 payment. Again, no such transfer was reported publicly before Stone Age went out of business in 2009.

In the case of Williams’ alleged arrangement with Stone Age, our sources tell us that Nagin's sons Jeremy and Jarin were also in on the discussions. Given that Nagin's sons were subpoenaed before the grand jury just a few weeks ago, some wonder if they could have some exposure as well.

“If indeed the evidence leads towards the children of Mayor Nagin, then he may be put in a situation where he has to discuss more seriously the possibility of resolving the charges against him so that his children are not charged," Foret said.

U.S. Attorney Jim Letten’s office has been known to use such leverage against family members. Prosecutors initially charged Meffert’s wife, Linda, with participating in a bribery conspiracy with her husband and St. Pierre, but essentially let her walk when Greg Meffert testified against St. Pierre.

The attorney for Nagin's sons, Clarence Roby Jr., said he could not comment without knowing if the government is pursuing any charges against his clients.

Three Fold managed to fly under the radar for years while landing big money contracts from city hall. Right after Katrina, it served as a subcontractor under two major government contractors, Shaw and MWH Americas.

But it managed to stay out of the limelight when it became a prime contractor itself, even when the state legislative auditor questioned the way Three Fold landed another rich deal from Nagin in 2008. In that particular case, the original contract was a relatively small $79,631 deal to manage lighting repairs at just four city playgrounds. But then the legislative auditor found out that Three Fold was actually getting paid for federally funded work at 23 playgrounds, all under the same contract.

In 2009, Nagin amended the original contract to include an unlimited number of projects.

Just before Nagin left office in 2010, the legislative auditor reported that he couldn't even tell how many jobs Three Fold was working on or how much public money it was taking in.

Meanwhile, Williams and Three Fold backed Nagin with public donations to his election campaigns. Rodney Williams, another former Three Fold official named Charlene Williams and the company itself combined to donate more than $13,000 to Nagin’s campaigns.

Reached by cell phone Monday, Williams declined to comment for our story. Nagin’s defense attorney, Robert Jenkins, did not respond to requests for comment.

The timing of a possible plea deal with Williams could be important for prosecutors’ efforts in other parts of the case. If a deal comes through in short order, sources say the feds will be able to include a charge against Nagin for allegedly getting hundreds of thousands of dollars in free granite from Fradella. The delivery of that granite to Stone Age happened in late 2007, almost five years ago, and there’s a statute of limitations of five years for the feds to charge overt acts of fraud. They have at most six weeks to do that for the granite deliveries, and they face other imminent deadlines too, our sources say.

“It looks like there are serious plea bargain discussions that are taking place and I think that if the government is going to make a deal, if the defendant is going to make a deal, now is the time, because the potential charges may well be getting ready to prescribe -- the statute of limitations may be up soon -- and if two parties are going to make a deal, now is the time,” Foret said.

We should also point out that last month Three Fold removed Williams as an officer of the company in secretary of state records.

The company's website does not mention Williams, and Three Fold's managing partners are not believed to be involved in the alleged scheme.

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