Assistant U.S. Attorney Matthew Coman launched into his cross-examination of former Mayor Ray Nagin Thursday afternoon, at about 2:40 p.m., challenging him over his claim of having little real authority to approve the kind of professional services contracts that play a central role in his corruption trial.
One striking moment came not long into the prosecutor’s questions, as he began to focus on city contractor Rodney Williams, who is accused of funneling some $60,000 in bribe money to the Nagin family granite business. Nagin has characterized that money as an investment in his sons’ business.
Coman disputed Nagin’s suggestion that Williams may have been among the many contractors who profited from a steep rise in city contracting business after Hurricane Katrina, and not from the alleged bribe.
“You’re trying to tie in the $60,000, and God bless you,” Nagin said.
Coman then posted a city rating sheet on the screen from January 2008 that showed Williams’ firm, Three Fold, was not recommended to be in a city pool of architectural firms for any kind of project, whether for a dollar or more than $2 million.
That, Coman said, was just before Williams and his partners doled out $60,000 to Stone Age and city business opened up for Williams.
That sheet appeared to be a legal ace in the hole; prosecutors did not introduce the document before resting their case. The document seemed to suggest that Three Fold got put into the coveted “pool” of qualified engineers only because of the mayor’s intervention.
Nagin appeared rattled by the document, stammering that the review by the panel was just one of many such evaluations undertaken in the post-Katrina period.
In his direct testimony, Nagin denied he had spoken or met with Williams around that time. But under cross-examination, he acknowledged going to Stone Age’s offices one day and finding Williams there. However, he denied asking him for money.
Nagin denied speaking with Williams around that time, but Coman posted a calendar and phone records on the screen showing a two-minute phone call between Nagin and Williams’ then-wife, Charlene, who is now deceased.
Earlier in the cross examination, Coman pressed Nagin to acknowledge that he was “the ultimate decision-maker” on what companies got contracts.
“I had final approval,” Nagin testified. “I had final sign-off on those selected, yes.”
Nagin clung to his stance that his final approval was at the end of a city process that left him with little more than a ministerial role.
Nagin’s attorney, Robert Jenkins, turned over questioning of the mayor after less than two hours of friendly guidance in which Nagin downplayed his discretion as mayor to hand out choice city work or influence the bidding process.
Coman approached Nagin to show him an e-mail string with city official Brenda Hatfield, in which Nagin in 2006 directed her to send certain pending contracts directly to him, so he could reach the contractors directly as the city’s “key contact.”
Coman apologized for standing so close to the ex-mayor.
“No no, get closer,” Nagin jested. “We’re friends.”
Nagin took the witness stand at 11:25 a.m. Thursday for his much-anticipated testimony in the federal corruption against him. U.S. District Judge Helen “Ginger” Berrigan broke for lunch after less than an hour with Nagin on the stand. Nagin returned about 1:45 p.m. to continue under friendly questioning by his attorney, Robert Jenkins.
From direct questioning by Jenkins earlier Thursday afternoon:
Much of Nagin’s testimony surrounded businessman Frank Fradella, and his discussions with the mayor over investments in the recovering city. Fradella has pleaded guilty to bribing Nagin.
“Mr. Fradella approached me and said he was interested in relocating his company to New Orleans, you know I thought that was a pretty good idea. He followed through.
After that time he basically informed me he had some large scale projects that he could get funding for.
We would meet periodically to discuss them.”
Jenkins posted an e-mail on the courtroom screen from Fradella to Nagin dated March 22, 2007, telling Nagin he was planning to raise $250 million to $500 million of “investment capital to be used at the city’s discretion for capital/Katrina infastructure related rebuilding projects.”
Fradella told Nagin he could get as much as $1 billion. Nagin read the memo aloud in court.
Nagin: “It would be major with a capital M. We desperately needed capital money to recover the city of New Orleans.”
Another email, not to Nagin, details Fradella’s hope for Nagin’s influence on various projects, including the World Trade Center.
Jenkins: “You didn’t know that he had a private agenda, correct?”
Nagin: “No sir.”
“They wanted to make sure their true intentions were not revealed.”
Jenkins sought to highlight Nagin’s claims that he rebuffed attempts to sidestep competitive bidding by Fradella and an attempt to work with the family’s granite business.
The idea: Nagin was careful not to mix city business with his own.
According to one e-mail, Aaron Bennett, an associate of Fradella’s, had tried to set up a short meeting with Nagin over granite business with his sons.
“Nope, not interested. My sons will not be able to do business with you guys as long as you go after city business,” Nagin responded by email.
“I just told them to stay away from city contracting. I just wanted to make it clear to these guys. They were trying to tie in, in my opinion, granite business with city business,” Nagin testified.
Nagin’s testimony under questioning from his attorney focused largely on Fradella. The former mayor emphasized setting sharp boundaries between his son’s business and Fradella.
Nagin said Fradella never got several big-scale projects with the city off the ground. Among them was a riverfront condo project that Fradella had wanted to build.
“He wanted basically to secure a whole section of riverfront so these people who bought these condos would have these amazing views. And we never promised that,” Nagin testified.
“There was another problem with the project. They were interested in cordoning off that property so other people couldn’t have access to it.”
“Did this deal ever go forward,” Jenkins asked.
“No. Never happened,” Nagin said.
Nagin claimed he rebuffed suggestions by Fradella that he could skirt the city’s open bidding policies.
“At one point in time Frank I think he sent me an email to suggest his company could be in on the deal without going to bid and I responded to him that that could not happen. It would have to be a competetive bid process of some sort to make sure citizens got a good deal.”
Nagin said he was “always very careful” in mixing Fradella’s city business with Fradella’s business with Stone Age, which included the suspect shipments of granite.
“I wanted to make sure anything he was doing with Stone Age was separate from the city,” Nagin said.
Nagin also said he was ignorant that Fradella was being looked at by SEC investigators at the same time he was trying to work deals out with the city.
“The only reason I was dealing with Frank Fradella is he had some ideas on some major projects that would solve some infrastructure problems for the City of New Orleans.”
“Many people pitched ideas, but I always looked for what they had done in the past.”
Fradella’s work with Nagin’s sons - including granite installation for Fradella’s home - had nothing to do with the projects that Fradella was seeking to get off the ground in the city.
Nagin admitted that Fradella had offered to help find investors for Stone Age.
“It’s virtually impossible,” Nagin said of any pay-for-favors scheme with Fradella. “This guy was doing work for the city. There was no payoff. This guy wasn’t paying me off. All he said is he was goign to go help my sons get an investor.”
Nagin’s testimony proceeded to questions surrounding favorable treatment for Home Depot, and the company’s agreement to sign on with Stone Age for a choice contract installing countertops for its New Orleans-area stores.
Nagin denied lobbying for the company or having much of a say in the city’s decision to grant the company a below-market deal for city blocks around a planned Central City store.
Jenkins then turned the questioning of Nagin over to prosecutors at 2:40 p.m..
Below are highlights from the morning.
Before lunch, Nagin began his testomony by talking about his first election victory, the sorry financial state of the city at the time and his efforts to reform the city contracting process.
His attorney, Robert Jenkins, moved on to questions about contractor Rodney Williams and his relations with Nagin’s two sons and other issues at the heart of the allegations against him, contained in a 21-count indictment.
Nagin described himself as a “passive” investor in Stone Age LLC, the granite company he owned with his sons.
He testified on direct examination for about 50 minutes before the lunch break.
The following are running quotes from Nagin’s testimony:
On Rodney Williams, an engineering firm executive, and Nagin’s sons:
“They thought that he was kind of cool and this was a guy they could learn a lot from.”
“Rodney ordered some granite from my sons. He needed some work done at his home. My sons did the work and the work was done so well and Rodney was so excited about it they started talking more about the granite business. This particular job was highlighted in a national magazine on granite as a great job.”
“Then after that Rodney let them know he was interested in investing in the business because he wanted to help them go to the next level.”
On Hurricane Katrina rebuilding:
“I’m sure you remember the Katrina. So 80 percent of the city was damaged....We were fighting with the federal government and the state for funding to fix the city.”
On public bidding, a crucial issue in the trial:
“There’s really no leeway that you have in a public bid....The formal bids are opened in public. No leeway there. The lowest responsible bid is awarded the contract.”
“Engineering contractor is considered to be a professional services contractor by state law. It’s not as rigid a requirement as in construction. But the state still requires you have a competitive process.
“We established that. The city attorney advised me I needed to issue an executive order to establish that selection process.
“The process was basically anyone who was interested in dong business with the city of New Orleans would present their qualifications to the city of New Orleans...They would be ranked and the rankings would come to me as mayor. I would sit down with the department head, the disadvantaged business compliance officer and they would go over the rankings with me. They’d say we’ve got 55 people to choose from. We have more work than any of these could possibly do. How many do you need?”
“We wanted to make sure it was done fairly...that before it got to my desk there was no politics involved.”
“I signed contracts not only in City Hall but for most agencies outside City Hall. It was a tremendous burden. I spent a significant portion of my day every day and on weekends signing contracts.”
Nagin said he gave Three Fold, Williams’ engineering firm, no favor in contracting, treating them like any other firm that came to the city for Katrina recovery work. On Stone Age and his sons, in which Williams and two other Three Fold owners contributed $60,000, Nagin portrayed himself as a silent investor:
“There was a time they were concerned because I was the only financier. They came to me and said Dad, look, we know you support us but we’re going to try to get some investors for this company.”
“Like any father I wanted to help my sons. I know we initially bought some equipment like a saw. We had to buy granite. I gave them some working capital. I intimated I was going to help them get started but I was going to try to keep it to about $10,000 a month.”
Three fold as DBE:
“There were quite a few. I would say to the city itself maybe 20 or 30. There was a historical disadvantage that had been proven that women-owned companies and minorities had experienced.
On Greg Meffert:
“I met Mr. Meffert right after I was elected in 2002. A lady who was key in my campaign was named Beth James. We were putting together transition teams ... and she recommended Greg because he had been in the dot-com business and she told me he had been very successful and skilled.
He came into the city eventually after we went through a selection process. He became the director of technology.
He took a look at just about everything technology related. Phones, computers, backup systems, you name it.
“I had come from a technology company, Cox Communcation, and we was doing a lot of cutting edge stuff and when I got to City Hall I was pretty shocked. They were still using 8-track tape...The phones were an Israeli brand nobody had ever heard of. The mayor’s desk they had a red phone, like a bat phone. It never worked for me.”
“Greg tackled all of that.”
On what he knew of Mark St. Pierre, a contractor friend of Meffert’s who allegedly paid for Nagin family trips:
“I think he was a contractor that Greg brought in.”
“It was sometime during the first term when he was moving to clean a lot of the problems I just described.
“They were developing software. We had very little technology as to how we processed things. You couldn’t go online in the city and pay a bill. They were working on things like that.”
“The first time I remember meeting (St. Pierre) was at a Christmas Party. It was very brief. I can remember him at the party, I walked up said it’s great to meet you and that was it.”
Jenkins asked, “Nothing about city business?”
On the Hawaii trip with Meffert:
“Greg came to me said look man we’re going to Hawaii. I rented a house, he said if you want to you can join us. I said fine.
Jenkins: He offered the trip to your family?
“He said look man, I’ve done well in the dot-come business I’ll even throw in a ticket for you.”
On St. Pierre paying for it:
“That was never brought to my attention. If anything Greg said he was paying for the trip.”
“And Mr. Meffert offered you the trip is that correct?” - Jenkins
On St. Pierre paying for trips:
“I had no idea this was going on.”
Jenkins: Did you have any contact after this trip with Mark St. Pierre about any city business?
Nagin: “No sir.”
On questions over his use of a Blackberry to send and receive pin messages, which prosecutors suggested was an attempt to elude detection, Nagin said he was comfortable using the device from his days at Cox Communications. One advantage: The “pin” messages were encrypted.
As for trying to hide anything, Nagin said:
“That was not the purpose of using that system.”
Jenkins: “Did your City Attorney also have a Blackberry?”
“Yes...It was pretty much the phone that was used throughout City Hall.”
Nagin said he communicated on the device with “George Bush, pretty much every living president, Prince Charles - Everybody was involved and concerned with the recovery of New Orleans.”
On Frank Fradella of Home Solutions of America and the trip to Chicago on a private plane for the Saints game in Chicago:
“It was about the time the Saints were making their Super Bowl run or maybe the year before...Greg was aware I was having trouble getting up there (to Chicago).
Greg Meffert “got this plane ride to Chicago and that’s when I met Mr. Fradella.”
“A security guy, this guy Aaron Bennett and some other people I don’t recall” also were on the flight.
Nagin denied talking business on the trip.
“We talked about the Saints. It was a trip to go, potentially for the Saints to go to the Super Bowl. It wasn’t a business-associated trip at all.
“Everyone was really excited about the Saints and playing the game. It was a really fun trip.”
On the flight back: “I think Mr. Fradella was on the flight. Aaron Bennett was on the flight. You know, my wife, a security person, a couple of other people.”
During the game, “I know we went suite hopping (in the stadium). I remember going into Mayor Daley’s suite. We stopped and talked to him. And, he was senator at the time, Sen. Barack Obama - we went into his suite.”