Rep. William J. Jefferson (D-La.), a veteran member of the Ways and Means Committee whose homes in Washington and New Orleans were raided by the FBI last week, had been the target of an undercover FBI sting involving public corruption for nearly a year, according to law enforcement sources.
Investigators are looking into whether Jefferson illegally pocketed hundreds of thousands of dollars of an investor's money from business transactions during the sting, according to the sources who spoke on the condition of anonymity because of the sensitive nature of the case.
According to the sources, a high-tech company that was starting up in Northern Virginia agreed to cooperate with the FBI in the sting, and conversations with Jefferson were secretly recorded. Jefferson, an eight-term congressman who once was dogged by reports of defaults on outstanding loans and mortgages, allegedly agreed to invest in the start-up company and use his congressional influence to bring in business, the sources said.
Jefferson, 58, a Harvard Law School graduate and former state senator, has not been charged with wrongdoing. A federal grand jury in Alexandria is investigating the matter. The U.S. attorney's office in Alexandria and the FBI have declined to comment. A Justice Department spokesman has said that the search warrants were executed "in connection with an ongoing criminal investigation" but provided no further details.
In the raids on his homes, FBI agents seized a number of items, including a large amount of cash that was kept in a freezer, the sources said. His accountant's home and office were also searched.
It is extremely rare that the FBI targets a congressman in a sting, former and current law enforcement authorities said. They said the last such case of note they remembered was the 1978 Abscam case, an FBI undercover sting that resulted in the conviction of six representatives and a senator. FBI agents, who posed as Arab sheiks and associates, offered the politicians money in exchange for favors, raising complaints of entrapment.
Jefferson's attorney, Michael Fawer of New Orleans, said yesterday that he was "satisfied in what we're involved in is a sting operation on the part of the FBI or some other law enforcement organization that has been pulling strings behind the scenes just as they had in Abscam."
"If it looks like a duck and walks like a duck and smells like a duck, then it's a sting," he said, declining to say what information he based his comments on.
Fawer said he was confident Jefferson "did not pocket any money." He declined to comment on what was seized in the raids.
"The congressman has lots of contacts. He's involved in advancing a lot of businesses on behalf of his constituents and states and in a number of countries throughout the world," he said.
Fawer, a former Justice Department lawyer, added that he found it curious that the case was being handled in Northern Virginia, a "primarily white district," instead of Washington or Louisiana, where Jefferson, who is black, conducts most of his business.
Immediately after the raids on his homes in Northeast Washington and New Orleans on Aug. 3, Jefferson issued a statement saying, "I do not know the extent or the precise nature of this investigation but I am cooperating fully with authorities."
Jefferson is well known to Washington lobbyists because of his seat on the tax-writing Ways and Means Committee and his business-friendly views. Operatives in both parties said the investigation could have implications for next year's midterm elections because it could complicate Democratic efforts to paint the GOP as scandal-plagued.
Democrats have raised ethical questions about House Majority Leader Tom DeLay (R-Tex.) and several other Republican leaders, suggesting the GOP might be weak in the 2006 elections.
"This gives Republicans more fodder to muddy the water," said a Democratic leadership aide who spoke on the condition of anonymity. "Now, they can throw ethics back in our face."
Jefferson represents a solidly Democratic seat, and several officials who have looked into the matter said they think Jefferson will run again even if he is indicted, in part because he has weathered past charges.
The New Orleans Times-Picayune suggested in an article that Jefferson was entering "a political limbo of unknown duration."
"It's a big deal. Just about everyone I know is talking about it," said Edward F. Renwick, director of Loyola University Institute of Politics in New Orleans. "This came as a great shock."
In 1990, Jefferson became the first African American to be elected to Congress from Louisiana since Reconstruction.
A day after his election, the Resolution Trust Corp., which was given the task of cleaning up the savings and loan scandal, sued Jefferson to recover a six-figure loan. Jefferson said in 1994 that he had settled the loan.
In January 1991, a civil court judge ordered Jefferson and a group of partners to pay $67,000 due on a mortgage on which they had stopped making payments.
In the early 1990s, Jefferson's properties also became a subject of public scrutiny. Jefferson Parish (county), a suburb of New Orleans, filed lawsuits against Jefferson for failing to properly maintain two dilapidated apartment buildings and threatened to raze two others if they were not repaired. Jefferson hired a management firm to make the repairs.
In the House, Jefferson has demonstrated what colleagues have described as impressive political skills and has a moderate voting record among Democrats. He is a senior member of the Ways and Means Committee and serves on its trade subcommittee.
After the 2002 election, he made an unsuccessful bid to become chairman of the Democratic Congressional Campaign Committee, with backing from the Congressional Black Caucus.
Jefferson also serves on the Budget Committee and is co-chair of the Africa Trade and Investment Caucus and the Congressional Caucuses on Brazil and Nigeria.
Randall Eliason, former chief in Washington of the U.S. attorney's unit on public corruption and government fraud, said: "You don't want to initiate an investigation into someone as important as a congressman unless you feel very confident.
"Everything you do is going to be scrutinized under a microscope, and you're going to have the best legal talent available fighting you every step of the way," said Eliason, who teaches at American University and George Washington University law schools.
Staff writer Mike Allen and researcher Madonna Lebling contributed to this report.