A scandal that galvanized New Orleanians in summer 2008 and cast a long shadow over then-Mayor Ray Nagin’s second term came to a quiet, unremarkable close Wednesday morning when Stacey Jackson admitted she had taken tens of thousands of dollars in kickbacks from city contractors who were supposed to be remediating blighted homes in the wake of Hurricane Katrina.
Jackson, 47, clad in a simple black-and-white dress, pleaded guilty to one count of conspiring to defraud the federal government. She was facing a total of four counts related to the scheme and was scheduled to stand trial July 21. The charge to which she pleaded guilty carries a maximum sentence of five years.
Jackson said little during the proceeding, answering “Yes” when U.S. District Judge Mary Ann Vial Lemmon asked whether she was pleading guilty because she is in fact guilty.
It will be up to Lemmon to sentence Jackson. The judge set a sentencing hearing for Oct. 16.
Eddie Castaing, Jackson’s attorney, said his client was looking at a potential sentence of 15 to 20 years if she had gone to trial and been convicted on all counts.
Jackson’s crimes were committed while she was serving as director of New Orleans Affordable Homeownership, a city-supported nonprofit program that Nagin made the centerpiece of an anti-blight campaign.
The agency hired private companies to gut and board up some of the tens of thousands of properties damaged in Katrina and its aftermath. Media reports at the time revealed that many of the properties the city had paid to remediate in fact got little or no attention and remained in shockingly bad condition.
Rather than acknowledging the problems in the city-administered grant program, Nagin reacted angrily toward the news media as critical stories unspooled, a move that did lasting damage to his relationship with the public. His image was tarnished further by the fact that his brother-in-law, Cedric Smith, was a leading contractor for NOAH, although Smith never was charged with any wrongdoing.
The news reports in 2008 prompted a federal investigation, and NOAH’s operations were shut down shortly thereafter. Jackson said in court Wednesday that she has been unemployed since then.
Four years after launching their probe, prosecutors charged four contractors with paying kickbacks to Jackson in exchange for the work she steered to them but did not require them to perform. All of them pleaded guilty and were prepared to testify against Jackson.
Jackson’s plea deal came after a hard-fought effort by Jackson and Castaing to lay the foundation for a claim of prosecutorial misconduct, largely on the basis of inappropriate anonymous comments posted by former federal prosecutors Sal Perricone and Jan Mann under stories at nola.com. While none of the comments known to be left by Perricone and Mann targeted Jackson by name, some of Perricone’s posts made reference to the NOAH scandal, in which she was the central actor.
Castaing succeeded in persuading a federal magistrate to allow him to try to unmask other nola.com commenters who he believed also might be federal prosecutors. But in the end, the effort bore no fruit.
Castaing also had tried to argue that the government did not indict Jackson within the five-year statute of limitations of some of the crimes for which she was charged, but Lemmon rejected that claim.
The conspiracy charge to which Jackson pleaded guilty Wednesday essentially included all of the government’s central allegations against her — that she used NOAH money to overpay contractors working for the agency and then demanded they share the extra money with her. She also admitted creating fake documents after a grand jury investigation began in hopes of making it appear some of the payments were justified.
Although the NOAH scandal did not result in charges until 2012, two years after Nagin left office, it was one of several major scandals that tarnished his second term. His final years in office also were marked by kickback schemes in his technology office and at the Sewerage & Water Board, where board member Benjamin Edwards — an ardent supporter of the mayor — admitted to extorting bribes from contractors.
Nagin himself was found guilty of 20 of 21 bribery-related charges at a trial in February. He is due to be sentenced next week; he is thought to face a recommended sentence of roughly 20 years.
Before Wednesday’s hearing, Castaing continued to insist Jackson was innocent.
Two of the contractors who pleaded guilty in the NOAH case already have been sentenced: Richard Hall was sentenced to two years in prison and is scheduled to be released in December, while Jamon Dial was sentenced to six months and was released last month, according to federal records.
Two others, Trellis Smith and Earl Myers, are set to be sentenced in October.
A summary of the case against Jackson, which she signed, names only Smith and Myers as having paid her kickbacks. The document lists at least $63,960 in payments the pair made to Jackson or a person designated by her.
Follow Gordon Russell on Twitter, @gordonrussell1.