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The Legal Woes Of Rep. Jefferson
Probe of La. Democrat Provides Fodder for GOP

By Shailagh Murray and Allan Lengel
Washington Post Staff Writers
Thursday, February 16, 2006

Around Washington, Rep. William J. Jefferson nurtured a reputation as a serious, even wonkish, lawmaker, a grade-school dropouts' son who graduated from Harvard Law School and was elected Louisiana's first black congressman since Reconstruction.

Then came the allegations last August that Jefferson had orchestrated a corruption scheme. Federal investigators are targeting the Democratic congressman, 58, for allegedly demanding cash and other favors for himself and relatives, in exchange for using his congressional clout to arrange African business deals. A former aide recently pleaded guilty to bribing Jefferson and is cooperating with authorities, and sources familiar with the case say a plea agreement with the lawmaker is being explored.

Jefferson's world is toppling. Tall and lean, he at times has looked ashen as he walks the halls of the Capitol. Those who know him describe him as shellshocked by the turn of events. Depending on Jefferson's fate, his central New Orleans district -- badly damaged by Hurricane Katrina and in need of effective representation in Washington -- could face a rowdy special election. The political scene is so chaotic that Republicans believe they could win the gerrymandered Democratic seat.

"It's all clear as mud," said Edward F. Renwick, a Loyola University political scientist.

Jefferson's woes are unwelcome news for his party and have undercut the Democrats' election-year assertion that Republicans have created a "culture of corruption." If Jefferson is indicted and pleads guilty or is convicted, he will have to step down or face expulsion. But if he is indicted and decides to go to trial, he may remain in Congress and stand for reelection -- the course Rep. Tom DeLay (R-Tex.) has followed since being charged last year with violating Texas campaign law.

Federal corruption investigations have produced guilty pleas from former representative Randy "Duke" Cunningham (R-Calif.) and have forced Rep. Robert W. Ney (R-Ohio) to relinquish his committee chairmanship. Investigations also won guilty pleas and the cooperation of former Republican lobbyist Jack Abramoff, whose plea agreement cited only GOP aides and lawmakers.

The investigation of Jefferson and the recent guilty plea by a former aide give Republicans the chance to argue that corruption in Washington has a bipartisan tinge.

Republican groups frequently invoke the Jefferson case in defending their party from broad-brush charges of corruption. Even Public Citizen, a liberal consumer watchdog group, featured Jefferson on an "Ethics Hall of Shame" list recently.

Jefferson has said he did nothing improper. Spokeswoman Melanie Roussell said he is focused on hurricane recovery and has been traveling to his district for field hearings and other storm-related events. Jefferson has begun campaigning for election this fall to a ninth term and has scheduled a March 8 fundraiser. He attended Coretta Scott King's funeral in Atlanta last week.

In his only public statement on the case, Jefferson said he was "disappointed and in some ways perplexed" by former aide Brett Pfeffer's guilty plea on Jan. 11. Jefferson added that he has never "required, demanded or accepted . . . anything to perform a service for which I have been elected." Ron Machen, one of Jefferson's attorneys, declined to comment.

The investigation became public on Aug. 3 when FBI agents raided Jefferson's homes in New Orleans and Northeast Washington, where they found about $90,000 in cash in his freezer, law enforcement sources have said. They also raided five other locations, including the Kentucky and New Jersey offices of iGate Inc., a high-tech firm that has become central to the investigation, along with a house in Potomac owned by Atiku Abubakar, the vice president of Nigeria.

IGate has denied any wrongdoing, as has Abubakar. Pfeffer declined to comment.

Jefferson was raised in Lake Providence, La., one of 10 children. He graduated from Harvard Law School in 1972 and served in the state Senate before he was elected to the House in 1990. He is married and is the father of five grown daughters.

As a senior member of the Ways and Means Committee and co-chairman of the Africa Trade and Investment Caucus and the congressional caucuses on Brazil and Nigeria, Jefferson has carved out a niche in Third World trade issues, and he has traveled extensively on privately and publicly funded trips.

"He's someone respected for doing his homework on issues," said Silas Lee, a New Orleans political analyst. "He's viewed as a very serious, very studious person."

Pfeffer, who faces as much as 20 years in prison, paints a different picture of Jefferson, for whom he worked as a legislative aide from 1995 to 1998.

According to court documents and law enforcement sources, Pfeffer, 37, became president of W2 Corp., an investment company that was owned by Lori Mody, a wealthy Vienna, Va., woman. Mody, 41, is the founder of Win-Win Strategies Foundation, whose mission includes helping needy children learn about the high-tech world.

In early 2004, Pfeffer told Jefferson about his new investment job, court records show. Jefferson told Pfeffer about a telecommunications opportunity in Nigeria and about iGate, which held the rights to a technology that enabled copper wires to transport high-speed Internet service to a wide array of consumers.

In mid-2004, Pfeffer brought Mody to Jefferson's office in Washington. There she was introduced to the founder of iGate, who has since been identified as Vernon Jackson. Not long after, Mody's company entered into a licensing and distribution agreement with iGate for the exclusive rights to market and distribute the company's technology in Nigeria.

Mody agreed to invest $45 million for the exclusive rights to iGate's technology and equipment for the Nigerian deal. She put up $3.5 million and agreed to finance the balance through the Export-Import Bank of the United States, a government-run agency that promotes U.S. business exports.

Afterward, Pfeffer told Mody that Jefferson would expect compensation for his "official assistance on the Nigerian deal," according to court documents.

In summer 2004, Pfeffer, Mody, Jefferson and others met in New Orleans at the law firm of one of Jefferson's daughters, who provided the legal work for the business deal. While in the lobby of the law firm, Jefferson approached Pfeffer in private and told him that he would require 5 to 7 percent of Mody's new Nigerian company, the court document said.

Later, in a phone conversation, Jefferson told Pfeffer that he wanted a family member to be put on the payroll of the Nigerian company and to receive about $2,500 to $5,000 in monthly payments, court documents said.

"Pfeffer understood that [Jefferson] was soliciting a bribe in exchange" for the congressman's assistance in "official acts," including influencing high-ranking officials in the Nigerian government via trips and correspondences, and meeting with officials of the Export-Import Bank to help secure financing, the court document said.

Mody, who had grown concerned about the propriety of the transactions, went to the FBI in March 2005. She agreed to record conversations in what became a sting, say law enforcement sources, who spoke on the condition of anonymity because of the probe.

On March 31, she gave $2,100 to Jefferson's campaign. And in July, months after approaching the FBI, her Win-Win Strategies Foundation was listed in congressional travel documents as the sponsor of Jefferson's trip to Ghana to promote the broadband technology venture.

Jefferson was accompanied to Ghana by a relative, a staff member, Pfeffer and an iGate employee, according to documents. The trip disclosure form that Jefferson filed with the House lists the purpose of the trip as "education and business development" and lists no accompanying family member. Win-Win Strategies paid $9,248 for Jefferson's expenses, the form shows.

During the trip, Pfeffer was in contact with Mody in Virginia, reporting on Jefferson's "official acts" with high-ranking Ghanaian officials, court papers said. Pfeffer believed that Jefferson would get similar compensation for the Ghanaian project as in the Nigerian deal, the court document said. Jefferson also told Pfeffer that a member of his extended family had been designated as the secretary of the Ghanaian company and would serve in a marketing role, the document said.

Mody said late last week that authorities told her not to comment because of the probe.

Jefferson has attracted controversy over the years. Nicknamed "Dollar Bill" in New Orleans, he is known as a formidable fundraiser with designs on his own political empire. Daughter Jalila Jefferson-Bullock is a state legislator. In helping her get elected, Jefferson was heard on an FBI wiretap soliciting improper fundraising help from his brother-in-law, Jefferson Parish Judge Alan Green, who was sentenced last week to more than four years in federal prison in an unrelated bail-bond corruption case.

Jefferson said in a statement last May that he recalled the conversation with Green but added that his request for help was familial.

"To my knowledge, nothing resulted from the conversation -- the campaign did not receive any money from Judge Green or anyone who may have been prompted by him to contribute -- and there were no further conversations on the matter," Jefferson said.

Jefferson also generated controversy when, in the midst of post-Katrina rescue efforts, he used National Guard troops to help him get belongings from his house in New Orleans.

Jefferson's legal problems have received modest attention in New Orleans, where residents and officials are consumed with rebuilding the city and upcoming local elections. But names of potential challengers are starting to circulate, and political observers are handicapping their prospects.

With only about one-fifth of the district's 500,000 residents believed to be living in New Orleans, it is possible that a white Democrat or even a Republican could take the seat, which was drawn as a black district and which Jefferson had hoped to hand off eventually to his chosen successor. That now looks less likely.

"He's strong, but not that strong that he could withstand an indictment," said John Maginnis, publisher of a weekly Louisiana political newsletter.

Researchers Madonna Lebling and Bobbye Pratt contributed to this report.

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