Nagin gets testy under cross-examination

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wwltv.com

Posted on February 6, 2014 at 10:53 AM

Updated Friday, Feb 7 at 7:36 AM

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

Paul Murphy / Eyewitness News
Email: pmurphy@wwltv.com | Twitter: @pmurphywwl

NEW ORLEANS — Ray Nagin’s calm, cool demeanor during direct examination quickly turned to exasperation when prosecutors began their cross-examination Thursday, drawing him into terse, defiant retorts.

U.S. Attorney Matt Coman began by asking Nagin, the first mayor of New Orleans ever charged with public corruption, if he had sole discretion on who won city contracts for professional services.

“That’s not the process we had, sir,” Nagin said.

The former mayor claimed he had nothing to do with selecting Three Fold Consultants for a pool of public works and capital projects engineering firms. Nagin said he only signed off on the companies recommended by a committee of other city officials and outside experts.

But Coman then whipped out a document showing that the company, whose owners have admitted bribing Nagin, wasn’t actually recommended for one of the contract pools.

“In fact, it shows the selection review committee didn’t even recommend Rodney Williams’ company, did they?” Coman said.

That was a major moment in the trial because the committee's decision to not recommend Three Fold had never been shown before. In fact, WWL-TV reported exclusively in 2012 on Three Fold's failure to qualify for the work Nagin gave them, but until Coman surprised Nagin with the document today, no records had corroborated our report.

Coman asked Nagin to read from the document, which stated that Three Fold was“not recommended” by the committee for small, medium or large projects, before also saying that it was a “firm with no architectural experiences listed.”

Nagin was clearly flustered at that point, stating that there were a number of different types of contracts being reviewed and claiming not to know the context under which Three Fold was not recommended for the work.

The use of the new document capped a number of similar exchanged between Coman and Nagin, who engaged in a few verbal sparring sessions. One came when Coman asked Nagin who had sole discretion over selecting city professional service contracts, the kind Williams was seeking.

Nagin said he ultimately signed the contracts but the committee evaluated the firms without his input. Coman kept pressing that he wanted to know who had "sole discretion."

At one point, Nagin replied, “What do you want?”

“Man, I don’t know what you guys are presenting,” he added.

And then Coman showed a letter Nagin wrote in which he said the contractors would be selected "in my sole discretion."

Coman then showed Nagin an email to his former top aide Brenda Hatfield, telling her to get phone numbers for winning bidders so he could contact them personally.

The email referred to low-bid construction work even though Nagin already had said he wasn’t involved in bid work.

But it was the back-and-forth about Three Fold that had Nagin reeling.

Coman asked Nagin if Three Fold received more work, a total of $2.6 million in 2008 and 2009 because of the $60,000 payment Williams and his two partners made to Nagin's family company, Stone Age LLC, in January 2008. Williams and partner Bassam Mekari said the payment was a bribe. Nagin insists it was an investment in Stone Age.

“You trying to tie in the $60,000 and, you know, God bless you,” Nagin replied.

Nagin testified under direct examination that he did not talk with Williams while his company was seeking city work, emphasizing that he was always very careful about such things.

But Coman persisted, showing Nagin his phone records, including record of a call between him and Williams' late wife, Charlene, on Jan. 16, 2008. That same day, a meeting at Stone Age was marked on Nagin's calendar, and Williams testified that was when Nagin asked him directly for the $60,000.

Nagin says he kept personal/city business separate
The cross examination, which will continue Friday morning, followed shortly after the former mayor told jurors he always did due-diligence and was careful to keep his sons’ family business separate from that of the city’s, even telling a contractor he couldn’t make a deal happen without a bid.

The testimony was part of his last-ditch effort to defend decisions made while he was the mayor of New Orleans, actions that have him in the middle of a sweeping federal corruption trial that entered its seventh day Thursday.

Nagin said that vendor Frank Fradella, whom he had met during a trip to Chicago for the 2007 NFC championship game, pitched projects to the mayor and the two would periodically meet.

Nagin continued by explaining that it was hard to get public money after Hurricane Katrina; Fradella told Nagin he could raise between $250-$500 million the city could use at its discretion, Nagin’s attorney Robert Jenkins cited from an email.

The former mayor said he wasn’t aware that Fradella had planned with Aaron Bennett, a business partner who got the private plane for the Chicago trip, to help Nagin with Stone Age.

He told jurors about an email he sent to Bennett, who sold his business Benetech to Fradella, explaining his sons wouldn’t do business with a company seeking city work.

Nagin cited a different email in which he wrote to Fradella, telling him, “I prefer a competitive award process to make sure citizens get good deals.”

But the government has suggested those emails were statements in the public domain to cover up for contrary statements he made in private text messages. And then there's the simple fact that he got involved with Fradella on several projects anyway.

Nagin defended that by saying the projects Fradella pitched were good for the city, including the development of retail and condos at the old Market Street Power Plant, saying it deserved his attention because the city needed retail and more sales tax following Hurricane Katrina.

Nagin: I took over technologically-deficient city

In the first half hour of Nagin’s testimony, he discussed the technologically deficient plight of the city when he took over and the relationship formed with Greg Meffert, a man he called a problem solver.

When Nagin first was voted in to office in 2002, he said the city was behind, telling the jury, “they had a red Batman-type phone on the mayor’s desk. It never worked for me.”

“Greg became a top person on my staff,” Nagin testified, adding, “He was a problem solver.”

The mayor expanded Meffert’s duties.

Eventually, Meffert invited Nagin to Hawaii. While Meffert said in earlier testimony that the then-mayor knew technology vendor Mark St. Pierre was paying for the trip, Nagin denied as much Thursday.

“Greg came to me and said, ‘Look man, we’re going to Hawaii. I rented a house. If you guys want to join us, you’re welcome to,’ ” Nagin said to the jury.

According to Nagin, Meffert went on, saying, “ ‘Look man, I did well in the dot-com business, so I’ll even throw in the ticket for you.”

Nagin said there was no conversation about St. Pierre, or anyone else, paying for the trip.

Nagin’s testimony comes after a morning in which the defense team attempted to show that a selection committee vetted potential contractors, not the former mayor.

The former mayor disputed any wrongdoing in a relationship formed with the owner of a consultant firm that was granted city contracts following Hurricane Katrina.

Nagin told the jury that when he took office, there was pressure to change the contracting process. There was a want, he said, for an outside expert on the selection committee.

He testified he tried to reform the procurement process for personal services contracts with the city.

Nagin: Granite company Stone Age a "passive investment"

While Nagin said he was the “financier” of Stone Age, the granite company he and his sons owned, he called it a “passive investment.”

Meanwhile, in defense of the numerous trips that have been discussed during the trial, Nagin said the 2002 fishing trip with Three Fold Consultants was about letting the company know the city was doing business in the public sphere.

During a 2005 trip to Brazil, Nagin said Rodney Williams found out his sons were there and they “hit it off.”  Williams, the owner of Three Fold and an investor in Stone Age, was seen as a big brother to Nagin’s sons, the former mayor testified.

Williams was excited about the Stone Age work, Nagin said, and “he wanted to invest in the business to help them go to the next level.”

Nagin: Katrina changed everything

Then, in August, 2005, Hurricane Katrina swept through the north-central Gulf Coast.

“I’m sure you guys remember the Katrina story,” Nagin told the jury.

He said the selection of Three Fold following Katrina for city contracts came after he was presented a list of company rankings.

“Three Fold was there, but they were one of the lowest ranked,” Nagin said.

Nagin explained that the selection process was set up as it was because he wanted to “make sure everything was done fairly.”

The former mayor said he didn’t have any input about putting the approved contractor list together.

Earlier in the trial, prosecutors showed a photo of Nagin whispering in Williams’ ear during the mayor’s ball, saying Nagin was talking about contracts.

But Thursday, Nagin denied the accusation.

“I would not talk about city business in a public setting like that,” Nagin said.

Still, Williams, along with others in Three Fold, invested $60,000 in Stone Age, Nagin said.

The payment from Williams, Nagin said, was properly booked as “investment” in Stone Age. He denied that he ever sought to hide the payment from Williams.

Williams was the first person called to testify by the prosecution after opening statements.

Defense calls witnesses on Nagin's behalf

Nagin’s testimony followed  that of his former top aide, who testified that the then-mayor instructed staff to never take money from contractors, “admonishing” them to not do it.

Brenda Hatfield echoed earlier testimony from a bank CEO and the former public works director that Nagin never tried to influence her about public bid contracts.

The gist of federal case is the claim that Nagin took bribes in exchange for doling out lucrative city contracts.

But Hatfield later testified that Nagin set up a selection committee to “be more transparent” only to later fight City Council to keep it quiet.

Nagin changed the contract selection process on April 4, 2008, which Hatfield said gave him more leeway to make selections.

Hatfield said the fight between Nagin and the City Council was about more than keeping confidential information, but about protecting the mayor’s power.

That testimony was followed by Hatfield telling the court room that Nagin “instructed us never to take money from contractors. He admonished us not to do that.”

Earlier, Robert Mendoza testified Thursday in the federal corruption trial of Ray Nagin that the former formed New Orleans mayor didn’t try to influence proposals from businesses bidding on contracts, but did have hand in every step of the process.

Mendoza, the former public works director, was the second witness called to the stand on the seventh day of the trial, following that of Liberty Bank President and CEO Alden McDonald, who testified that he and his partners in a local movie theater were forced to sue the city in order to have an insurance check endorsed following Hurricane Katrina.

The committee Mendoza spoke of was made up of a mix of city staffers and community member, he said, adding that Nagin didn’t serve on the committee and wasn’t a part of the process.

Jenkins attempted to establish that the former mayor let the process play out without his influence.

Jenkins: “Did the mayor ever come in and seek to influence that (selection) committee?

Mendoza: “Not any that I was a part of.”

In cross examination, however, U.S. Attorney Richard Pickens established that Nagin's presence was felt throughout the bid process. Pickens asked Mendoza about getting access to city projects, suggesting that if a company doesn’t get into the bid pool, it can’t get selected.

Mendoza said yes, to which Pickens countered, “The mayor has to approve you for the assignment, correct?”

“Correct,” Mendoza said.

Pickens followed by asking if the mayor had to “approve you for the project” to get paid. Again, Mendoza said correct.

Finally, the prosecutor asked, “So, he’s there every step of the way?”

“Correct,” Mendoza said.

Meanwhile, McDonald, a part owner of Grand of the East theater, testified that Hurricane Katrina wiped out the movie house and the city had a lien on the theater for a second mortgage.

The city was holding the more than half-million dollar check because it had a lean on the property for a second mortgage it co-signed with the Department of Housing and Urban Development and the owners were behind in making payments to the city.

The city eventually waived $55,000 in penalties and interest at the request of Nagin and released the check.

Prosecutors claim theater co-owner, George Solomon, bribed Nagin with a free trip to New York City.

In questioning McDonald, Jenkins, asked the bank president if the mayor ever sought any advantage with him or his partners.

To which McDonald responded, “Not that I know of.”

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