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September 17, 2006
Jefferson's Corruption Goes Beyond Bribery (Bumped)

When the FBI found $90,000 of cash in William Jefferson's freezer and raided his office on Capitol Hill, many observers believed that law enforcement suspected the Louisiana Congressman of the usual pedestrian corruption -- taking money from special interests and shooting federal money into their pockets, as well as his. However, as Christopher Drew reports in the New York Times, Jefferson had a much more far-reaching abuse of power in mind. Instead, he had conspired to wrest control of iGate from its founder, Vernon Jackson, and exploit the company for the benefit of his family:

For nearly five years, the inventor and the congressman had carried the message that Mr. Jackson’s company, iGate, could help close the “digital divide” by delivering high-speed Internet access to poor blacks around the world.

They had flown to Africa to seek business opportunities, and they had talked up iGate to potential partners at the Kentucky Derby and the United States Open tennis tournament in New York.

But now, with iGate starved for cash, Mr. Jackson was convinced that Mr. Jefferson, his “friend on the Hill,” was about to betray him, Mr. Harper recalled.

Over breakfast at the Grand Hyatt Hotel, the congressman had made a proposal that, in Mr. Jackson’s view, was tantamount to theft: in return for a quick infusion of cash, Mr. Harper said, Mr. Jefferson and his investors would take control of iGate and its promising broadband patents while easing Mr. Jackson aside and cutting off most of the company’s creditors.

Unbeknownst to the two men, the Federal Bureau of Investigation had been monitoring their dealings. Less than three weeks later, agents raided Mr. Jefferson’s homes, in Washington and in New Orleans, and found stacks of cash stuffed in a freezer.

Jackson has pleaded guilty to bribing Jefferson, spending $400,000 to get assistance from the man who later would try to steal his company. While I have extremely limited sympathy for Jackson, who seems to have reaped a little rough justice with his attempt to buy influence, the description of Jefferson's infiltration of iGate is nothing short of breathtaking. One disturbing element of the story is Jefferson's acquisition of 30 million shares of iGate -- about one quarter of the company.

This goes beyond corruption. This is a gross abuse of power, and it sheds some light on why the FBI was so adamant about raiding Jefferson's office. Read all of Drew's report.

UPDATE and BUMP: I'm bumping this into Sunday because I want to make sure that people get a chance to see this. It occurred to me later in the day that Drew's excellent reporting came out on the least-read newspaper day of the week. Saturday is a graveyard for news items, and this seems too explosive to get buried. Why didn't the Times wait until Monday, and shouldn't this be front-page news?

Let's tak a look at the Jefferson tentacles in iGate:

* His wife, Andrea, had a marketing contract with iGate.
* His eldest daughter did legal work for the company.
* Andrea's brother-in-law was iGate's chief engineer.
* His wife and five daughters formed a consultancy that acquired 31 million shares of stock -- a 25% interest in iGate -- at no cost.

Drew gives a great look at the consultancy, which got formed just as Jefferson told Jackson that he could no longer provide assistance to iGate. ANJ Consulting comprised a university chancellor (Andrea), a lawyer and four college and high-school students (his daughters). For this expertise, ANJ got $7500 a month, a commission on sales and investments, and stock options in the company, an unusual arrangement for a consultancy, although not illegal.

It's really too long to excerpt here, so once again I urge people to read all of Drew's excellent article. It underscores the extraordinary corruption in play at iGate and Jefferson's offices.

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Posted by Ed Morrissey at September 17, 2006 9:32 AM

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» Representative William Jefferson Watch: Tale of Friendship, Ambition and Betrayal from FullosseousFlap's Dental Blog
Congressman William Jefferson (D-LA) speaks to reporters after arriving at Reagan National Airport in Washington, May 22, 2006. A Kentucky businessman was sentenced on Friday to seven years and three months in prison after pleading guilty to paying br... [Read More]

Tracked on September 16, 2006 3:26 PM


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