BRADENTON, Fla. - Calling it a "classic pay-to-play scheme," U.S. attorney Alice Martin yesterday outlined a 101-count indictment against Birmingham, Ala., Mayor Larry Langford, his long-time friend and lobbyist Albert LaPierre, and Montgomery bond dealer William Blount.
The criminal charges against the trio include conspiracy, bribery, fraud, money laundering, and filing false tax returns in connection with a long-running bribery scheme related to bond and other financial transactions in Jefferson County, Martin said.
The 62-page indictment, filed by a grand jury Nov. 25 in the U.S. District Court for the Northern District of Alabama, was unsealed after Langford was taken into custody yesterday morning. Langford appeared in federal court and entered a not guilty plea to the indictment. He was released on a $50,000 bond.
Most, if not all, of the alleged illegal activities relate to Langford's tenure as president of the Jefferson County Commission when $3.2 billion of debt was sold to finance the county's sewer system. That debt and related swaps have pushed Alabama's largest county to the edge of bankruptcy.
"Former commission president Langford owed a duty of loyalty to Jefferson County in the administration of the county's financial affairs," Martin stated. "He sold out his public office to his friends Blount and LaPierre for about $235,000 in expensive clothes, Rolex watches, and cash to pay his growing personal debt. All the while, Blount was paid fees topping $7 million."
"Through a web of financing agreements, Langford required many institutions to use Blount as a consultant so Blount would make fees and in turn pay off Langford," Martin said. "It was a classic pay-to-play scheme."
Calls yesterday to Langford attorney Thomas Baddley with Baddley & Mauro LLC, LaPierre attorneys Thomas Spina and Joseph Fawal at Fawal & Spina, and Blount attorneys Andrew Campbell and Caroline Smith Gidiere at Campbell Waller & Poer LLC were not immediately returned.
Langford was a member of the County Commission from 2002 until November 2007, when he was elected mayor of Alabama's largest city. Most of the time he was on the county commission, Langford was president and head of the Department of Finance and General Services overseeing the county's bond deals.
Martin said Langford conspired to solicit and accept bribes from Blount and LaPierre and to use his influence as president of the commission to include Blount and his company, Blount Parrish & Co., in transactions primarily related to the county's sewer debt.
Some of the financial transactions were handled through JPMorgan, which, as a condition for getting the financing business of the county through Langford, had to pay Blount Parrish fees, or had to pay associate Goldman, Sachs & Co., which then paid Blount Parrish consulting fees, Martin said.
Between 2003 and 2006, Martin said Blount and his company received approximately $7.1 million in fees in connection with the county's transactions. Blount, in turn, paid LaPierre approximately $219,500 in consulting fees.
"To influence and reward Langford in connection with Jefferson County financial transactions, Blount and LaPierre paid, and Langford solicited and accepted, approximately $235,000 in cash, loan payoffs, and expensive clothing and jewelry," Martin said.
Martin said items of value offered by Blount and LaPierre that were accepted by Langford, included a transaction in which Blount transferred $69,000 to LaPierre, who wrote a check to Langford for that same amount. Langford then deposited the money into his account and used a portion of the money to purchase audio equipment and expensive clothing, the indictment alleged.
Blount also allegedly helped Langford obtain a $50,000 unsecured loan from Colonial Bank. When Langford's loan became past due, LaPierre obtained a $50,000 loan from Colonial Bank to pay off Langford's debt. Blount then transferred $50,000 to LaPierre to pay off his loan.
Martin said Blount also transferred $30,000 to LaPierre, who wrote a check to Langford for the same amount. Langford then allegedly used the money to pay his personal taxes using an official bank check.
While on trips to New York with Langford to work on county bond transactions, Martin said Blount bought Langford expensive clothing and jewelry from stores such as Salvatore Ferragamo, Turbell & Asser, Tourneau, and Ermenegildo Zegna. Blount and LaPierre also allegedly set up an account for Langford at Remon's Clothiers in downtown Birmingham and paid the bills.
Langford was also charged with filing false tax returns between 2003 and 2005, and failing to report the value of the bribes he received, which would have been taxable income. The indictment alleged that he received bribes totaling $125,357 in 2003, $81,420 in 2004, and $22,187 in 2005.
LaPierre was charged with filing false tax returns between 2003 and 2006 for under-reporting his income by more than $280,000.
Blount was additionally charged with mail fraud and bribery for allegedly buying former Jefferson County commissioner Mary Buckelew $4,000 in gifts and spa treatments "to influence" her, the indictment said. Buckelew on Oct. 28 pleaded guilty to lying to the grand jury about the gifts. She is scheduled for sentencing on Feb. 25.
While a federal grand jury has been investigating Jefferson County's bond financings for months, the Securities and Exchange Commission has charged Langford, LaPierre, and Blount with securities fraud and related charges in a separate civil suit filed on April 30. The SEC had no comment about yesterday's criminal charges or if it would affect the agency's pending civil case.
In a statement yesterday, Langford's chief of staff, Deborah Vance, said that the mayor's arrest was no surprise given the ongoing grand jury investigation.
"We are glad the mayor will finally have his day in court," Vance said.