Businessman pleads guilty to bribing New Orleans official

Reuters News
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Posted: Jun 27, 2012 8:02 PM
Businessman pleads guilty to bribing New Orleans official

By Kathy Finn

NEW ORLEANS (Reuters) - A guilty plea in federal court in New Orleans on Wednesday by a businessman closely associated with a previous city administration intensified the focus on former mayor Ray Nagin.

In federal court on Wednesday, Frank Fradella, who owned Home Solutions of America Inc., which received contracts from the city beginning in 2007, told U.S. District Judge Susie Morgan that he was guilty of conspiracy to bribe a public official through payoffs of cash and other items.

The identity of that official has not been made public. Instead, court documents simply refer to Public Official "A" - who is described as having been "an agent of the city from May 2002 to May 2010."

Those dates coincide with Nagin's two terms in office.

Prosecutors and Fradella's lawyer, Randall Smith, declined to say whether Public Official "A" is Nagin, but Smith told reporters: "If it walks like a duck and talks like a duck, it's probably a duck."

Nagin's lawyer, Robert Jenkins, has not responded to a request for comment.

Federal prosecutors have for many months been investigating Nagin's dealings with city vendors and other businesses during his two terms in office. While he was mayor, Nagin and his two sons founded a countertop installation company called Stone Age LLC.

Fradella has been linked to a former executive with Home Depot in New Orleans who in 2007 gave a Home Depot contract to Stone Age. New Orleans businessman Aaron Bennett, who is awaiting sentencing in an unrelated government bribery case in Louisiana, has said in reports published in the New Orleans Times-Picayune that he introduced Nagin to Fradella to assist Stone Age in getting a Home Depot contract.

Bennett's lawyer, David Courcelle, did not respond to a request for comment.

JUSTICE DEPARTMENT POLICY

U.S. Attorney Jim Letten, who addressed reporters after Fradella entered his plea, said that publicly identifying Public Official "A" at this point "would be a violation of Department of Justice policy because the matter is still under investigation by a grand jury."

Letten added: "This is definitely an ongoing investigation," and that prosecutors, the FBI and the Internal Revenue Service will follow the case wherever it leads them.

A document detailing the charges says the conspiracy involving Fradella and the public official began around January 2007 and continued through March 2011, during which time Fradella "provided payoffs in various forms" to the official.

The payments included a $50,000 check that the government said was funneled through a third party's bank account "in an effort to disguise the illegality of the payment."

Fradella also admitted to making monthly payments in excess of $10,000 to the official "after Public Official 'A' left office in May, 2010."

In addition, Fradella admitted to providing "numerous truck loads of free granite" to the official.

The document states that the public official during this time approved city contracts involving Fradella's business interest and "used his public office and his official capacity to promote Fradella's business interests to include promoting his publicly traded corporation's financial image."

Fradella, who recently pleaded guilty to federal charges of securities fraud in Dallas, Texas was transferred to the Eastern District of Louisiana, where prosecutors negotiated a new plea deal that reduced six securities charges to one and added the new conspiracy charge.

If the court accepts the terms of Fradella's plea agreement, he will face up to seven years in prison, or less than half the time he would have faced under the original six securities charges filed against him in Texas.

(Editing by Corrie MacLaggan and Christopher Wilson)