BRADENTON, Fla. — The alleged pay-to-play scheme in connection with Jefferson County, Ala.'s sewer bonds and swaps unraveled further yesterday when Montgomery-based bond dealer William Blount pleaded guilty in a plea agreement to one count each of bribery and conspiracy.
Blount agreed to forfeit $1 million and to testify against Birmingham Mayor Larry Langford, whose trial in the case is scheduled to begin Aug. 31. A federal judge recently agreed to pick up the tab for Langford's attorney after finding that the mayor was unable to pay.
Last November, Langford, Blount, and mutual friend Albert LaPierre, a lobbyist, were named in a 101-count federal indictment charging that Langford, while he was president of the Jefferson County Commission, steered bond business to Blount at his then-firm Blount Parrish & Co., earning the firm $7.1 million in fees.
According to yesterday's plea agreement, Blount used LaPierre as a conduit to funnel money to Langford. LaPierre, who received nearly $400,000 in the scheme, pleaded guilty in July to one count each of conspiracy and filing a false tax return. He agreed to testify against Langford.
In 2002, Blount and LaPierre helped Langford get a $50,000 unsecured loan from Colonial Bank in Montgomery, which failed last week, and they eventually paid off the loan when Langford could not.
In 2003, Langford allegedly asked for $69,000, for which Blount wrote a check to LaPierre, and LaPierre wrote a check to Langford. In 2004, Langford allegedly asked Blount for another $30,000. Blount again funneled the money to Langford through LaPierre, according to his plea agreement.
In addition to cash, Blount admitted to bribing Langford and former Jefferson County Commissioner Mary Buckelew with expensive gifts purchased while they were on trips to New York conducting the county's bond sales. Blount said he also sent gifts to their county offices in Birmingham. Last September, Buckelew admitted to lying to a federal grand jury about receiving the gifts. She will testify at Langford's trial and faces sentencing on one count of obstructing justice.
Blount's plea agreement not only requires him to testify in Langford's trial, but he must provide assistance to other federal agencies such as the Federal Bureau of Investigation and the Internal Revenue Service.
If Blount provides "substantial assistance," prosecutors have agreed to recommend a sentence of 52 months in prison, plus other reductions in his plea agreement. Prosecutors said they will outline "all material assistance" Blount has provided prior to his sentencing.
If Blount does not cooperate to the satisfaction of prosecutors, they could recommend that he receive the maximum sentence of 10 years in prison for bribery and another five years for conspiracy, plus various fines in addition to the $1 million he has agreed to forfeit.
David McKnight, Blount's attorney who also signed the plea agreement, did not return a call seeking comment.
Langford has denied taking bribes and he has insisted the transactions were only loans. He and others recently said that the federal judge in the case ordered them not to make public comments.
In response to requests for a comment about Blount's plea, Langford's office yesterday released a statement that said, "City business will continue to operate as it does every day."
"Although there seem to be rumors, daily stories in the Birmingham News, and various other media outlets, the mayor's office is committed to adhering to the judge's order to remain silent even while others are not," the statement said, directing further questions to Langford's attorneys.
Langford's main attorney, Michael Rasmussen, could not be reached for comment.
The Securities and Exchange Commission was the first to press pay-to-play charges against Langford, Blount, and LaPierre. The SEC, in an April 30, 2008, federal civil suit, alleged the trio committed securities fraud and related charges in the agency's first enforcement action involving security-based swap agreements, in this case swaps based on municipal bond indexes.
The SEC's case has been on hold pending the outcome of the federal criminal case.
Langford orchestrated the refinancing of most of Jefferson County's $3.2 billion of sewer debt into variable- and auction-rate modes covered by swaps. The debt, in addition to $766.3 million now being demanded for swap termination payments, has threatened to bankrupt the county for well over a year.