N.O. blindsided by Johnson indictment

23rd July 2012   ·   0 Comments

The Louisiana Weekly Staff Reports

District E City Council-man Jon Johnson, a New Orleans businessman and former state legislator, became the latest public official snarled by the U.S. Attorney’s Office for allegedly engaging in practices that violate federal law.

Court papers filed Wednes­day charge Johnson with conspiracy to commit theft of government funds and to submit false documents.

The councilman is specifically accused by the U.S. Department of Justice of plotting to steal federal funds earmarked to be used by a nonprofit group for post-Katrina recovery work and use it to finance other projects, including a failed 2007 bid for a seat in the Louisiana Senate.

Federal prosecutors allege that Johnson, 63, diverted funds intended for the Ninth Ward Housing Development Corporation.

“Usually by the time we approach these individuals, our cases are made and they’re rock solid,” U.S. Attorney Jim Letten said.
This is an extremely important development. This is evidence of I think our absolute zero tolerance policy that we have maintained steadfastly for any public corruption offenses.”

Councilman Johnson, whose district includes eastern New Orleans and the Ninth Ward, has been an outspoken critic of the snail’s pace of recovery in those sections of the city, particularly the lack of a major retail storer and a hospital since those areas were devastated by floodwaters nearly seven years ago.

“Today July 18, 2012, I will enter a plea to a one count bill of information, charging me with conspiracy to convert federal funds and to file a false statement with a government agency,” Councilman Johnson said in a statement issued Wednesday.

“For some time now, I have been aware that there was an investigation being conducted by the federal government regarding two non-profit organizations—9th Ward Housing Development Corpora­tions and the New Orleans Health Corporation, which I have been assisting as an unpaid manager following Hurricane Katrina.

“My attorney, Julian Murray, was advised by the assistant U.S. attorney that the government would be seeking charges against me relative to my activities in working with these two corporations, which received federal funds as a result of the storm damage,” Johnson continued. “Believing I had done nothing wrong and to the contrary having large sums of my personal money and having devoted thousands of volunteer hours to these two charitable organizations, I requested a meeting with U.S. Attorney Jim Letten.

“While they acknowledged the positive contributions I have made, they were able to show me documentation where on two occasions I converted federal FEMA funds totaling $13,000 to use in my 2007 senate campaign, and where I filed a false statement in connection with an SBA loan which I was seeking.

“I acknowledge that I was, in fact, guilty of those offenses and accordingly agreed to enter a plea and to resign my position as a city councilman. I am hopeful that when all the facts are known, it will be found that my positive efforts to help these two charitable organizations, my many civic activities and my years of honest service to my city and state outweigh my transgressions,” Johnson sid.

“The actions in question took place during the years I was a private citizen and not serving in any public office or as an elected official.”

Prior to getting elected to the District E council seat in 2010, Johnson served in the Louisiana legislature as both a state representative and a state senator.

Johnson faces up to five years behind bars.

New Orleans Mayor Mitch Lan­drieu said he was “very surprised” to learn of Johnson’s indictment and plea. “It’s a very sad day for the City of New Orleans, another difficult black eye. Of course it has no place in city government,” Lan­drieu told WWL-TV. “I think we’ve done a really good job of working through that. So I’m saddened by today’s news, but we’ll keep forging ahead and working to make this the 21st-century city that we always knew she could be.”

A Louisiana legislative auditor’s report, dated January 4, 2012, shows that Johnson’s corporation received more than $62,000 for repairs, but used $58,000 for other purposes.

“You know how federal cases are. We develop corruption cases by seeking assistance cooperation by individuals who plead guilty because they’re obligated to do that,” U.S. Attorney Jim Letten told FOX 8 News.

The auditor’s report also shows a Katrina damaged house on Alabo Street in the 9th Ward, which neighbors complained to FOX 8 about nearly two years ago, was earmarked for $283,000 in repairs.

That money was part of a $2.8 million grant package which Johnson’s was pre-approved for, but not paid, because of the irregularities which were uncovered. Seven years after Katrina, more fraud cases are likely.

“How many cases will come out from Katrina, I don’t know. Some of these laundering cases are Road Home fraud, which could come from the larger claims. We just don’t know,” said Letten.

Letten vowed to follow the evidence in Johnson’s case wherever it may lead.

“It is with great sadness that we have accepted the news today about Councilmember Jon John­son,” City Council President Jacquelyn Brechtel Clarkson said in a statement Wednesday. “We want to assure the people of New Orleans East, the Ninth Ward and all of District E that the district office will remain open and will continue to serve them with any necessary assistance from the rest of the council and administration.”To the people of New Orleans, the City Council will keep moving forward together,” Clark­son added.

Clarkson said the council would meet Wednesday in a special session to declare a vacancy on the council and call for a special election on November 6. Voters will also need to fill a vacancy in District B as well this fall after Councilwoman Stacy Head stepped down in order to fill an at-Large seat on the City Council.

State Sen. J.P. Morrell, the son of Dist. D Councilwoman Cynthia Hedge Morrell, asked the City Council to allow residents of District E to weigh in with their choices for interim councilperson before choosing a replacement for Johnson.

State Rep. Austin Badon, D-New Orleans, was clear about how he felt about Tuesday’s news and how it will impact Black New Orleans residents. “It came out of left field,” Badon told The Louisiana Weekly. “I’m very sympathetic to him and his family. It’s a tough situation and I’m quite a bit shocked. This is another scar on the African-American politician and we have to work to rebuild our image.”

While Badon, a St. Augustine High School grad, said he was not interested in serving as an interim councilman for District E, he did announce bis candidacy Tuesday for the fall bid to permanently replace Dist. E Councilman Jon Johnson.

“I’m running for it because I want to restore dignity and honor to the position,” Badon said. “I’m an honest person, a Christian person and we need someone with those values.

“I’m going to run for it again because I’m ready to serve,” Badon added. “Serving the community means you put the needs of others before the needs of yourself and that’s what i’m prepared to do.

“I’m going to make it my number one focus to get that hospital open as quickly as possible. My pledge is that i’m going to work on getting Methodist open as quickly as possible.and make it a state-of- the-art, first-class healthcare facility.”

Asked what last week’s developments will mean for development and representation in eastern New Orleans, attorney Mike Darnell, a former interim council member tapped to replace at-Large Councilman Oliver Thomas several years ago, told The Louisiana Weekly: “There’s a vibrant community in New Orleans East. I think an interim will be appointed quickly and an election will be called quickly. So i don’t think New Orleans East will miss any steps forward. It’s poised to take a big leap. We need to have good retail and employment. We need to make it a good quality place to live.”

“I think it’s unfortunate,” former City Council candidate Nolan Marshall III told The Louisiana Weekly. “I think that District E has a lot of challenges and opportunities and that it’s a really unfortunate situation. Hopefully they can find someone to step in and serve as interim and eventually take that seat. They have a lot of challenges but they need someone who can seize the opportunities as well. It’s a great community.”

Marshall added that attorney Mike Darnell would be an excellent choice to replace Johnson over the long term. “I think he would be an excellent councilperson,” Marshall said.

Asked whether he might toss his hat into the race to replace Jon Johnson this fall, Darnell said, “I sat on the council before. I thought I was effective then as an at-large. And I’ve also run for office in Senate District 2. I think I could be very helpful and could do an effective job in either capacity. Instead of people making announcements, we need to reflect a day or two. That should allow some time for discussions to take place. Instead of this being an all-out campaign with people throwing their hats into the ring with this distressing news today, i think we need to reflect and decide how to proceed.”

While Mike Darnell would not commit to running for the District E City Council seat, he offered up some words of wisdom about what the constituents of District E and the rest of the city need and deserve.

“We need somebody who is not tarnished and isn’t carrying any baggage with them,” Darnell told The Louisiana Weekly. “That person will have the backing of the entire community.”

This article originally published in the July 23, 2012 print edition of The Louisiana Weekly newspaper.