Opinion ID: 3049934
Heading Depth: 1
Heading Rank: 3

Heading: the swann trial (05-544)

Text: The Swann trial, held from September 19 to October 2, 2006, involved more than $330,000 in bribes paid to County employee Swann by the Pugh, Rast, and Dougherty defendants. The government called 25 witnesses, including Wilson, Chandler, and Ellis. The defense called 20 witnesses, including Grady Pugh. No named defendants testified except for Swann. The government’s witnesses described in great detail the bribes to Swann and how Swann financially helped the Pugh, Rast, and Dougherty defendants in their contracts with and payments from Jefferson County. And to counter the defendants’ lack-of-corrupt-intent defense, the government introduced 404(b) evidence describing bribes that the same Pugh, Rast, and Dougherty defendants gave to McNair, Barber, Wilson, and Chandler.22
JCESD Director Jack Swann reported directly to Commissioner McNair. It was Swann’s responsibility to implement the EPA consent decree, which included recommending engineering firms to McNair and negotiating the scope and price of 22 For example, in the Swann trial, the government presented evidence about how RAST bought Barber a piece of land. This evidence is outlined later in this opinion under the Barber trial evidence. Defendant Barber pled guilty to this charge. 29 no-bid engineering contracts, such as with FWDE. Swann supervised the sewer work and made recommendations to McNair for payment approvals and change orders. Swann also was able to grant time extensions and field directives that greatly benefitted RAST and PUGH. For example, in May 1998, the JCESD awarded the Vestavia Trunk Sewer Replacement project to PUGH. PUGH’s failure to meet the project’s May 17, 2000 completion date would trigger a liquidated damages clause, obligating PUGH to pay $1,000 per day. In March 2000, PUGH was running far behind schedule on this project and requested a 120-day extension to the May 17 completion date. Swann initially denied PUGH’s request. On June 13, 2000, PUGH renewed its request, this time for a 180-day extension. On July 10 — five days after PUGH’s Yessick hired Guthrie Landscaping (“Guthrie”) to landscape Swann’s property — Swann granted PUGH’s request for a 180-day extension to the May 17 completion date. Swann’s extension saved PUGH $180,000 in potential liquidated damages. In July 2000, the JCESD awarded the Valley Creek Trunk Relief Tunnel project (designed by FWDE) to RAST and its joint venture partner W.L. Hailey. In December 2001, during the first phase of the project, RAST’s tunnel-boring machine became stuck in the ground. An independent engineer concluded the 30 machine became stuck because RAST may have discounted certain information in a geotechnical survey. And the JCESD’s supervising engineer faulted RAST for using “the wrong machine.” Nevertheless, Swann authorized RAST to remove the machine at a cost of $2.6 million to Jefferson County. Further, Swann declined to invoke the performance bond against RAST, which would have guaranteed the project’s completion at the original contract price of $27.8 million. Instead, RAST won a re-bid for an additional contract worth $23.8 million. Consequently, the County effectively paid RAST over $50 million for work RAST was obligated to perform under the original $27.8 million contract. Swann also approved a lucrative field directive that benefitted PUGH ($827,417) and three that benefitted RAST ($2,020,367). Although in the County’s internal accounting system Swann recorded the County’s payments to the RAST-Hailey joint venture for each of these field directives as payments for the Valley Creek Tunnel Relief project, none of the field directives involved work on that project. Swann also exercised great influence over the selection of engineers, like FWDE.
In 1998, Swann and his wife Nila purchased a house two doors down from 31 their own residence. The Swanns lived in their residence while they renovated their new home. Between September 1998 and June 2002, the Swanns put over $600,000 worth of additions and improvements into their new home. FWDE, RAST, and PUGH provided Swann, at no charge, more than $330,000 in goods, services, labor, and materials for that work. For certain improvements paid for by FWDE, Swann admitted he did not reimburse FWDE or Dougherty. As they had done for the McNair studio project, the contractor-defendants worked together on Swann’s new home. While the work was going on, Swann periodically came over to observe the work at the new home. While Swann was recommending and approving JCESD actions worth millions of dollars, the contractor-defendants were providing hundreds of thousands of dollars in materials and services to renovate and expand Swann’s new home. Specifically, in the fall of 1998, Dougherty sent FWDE supervisors Wayne Hendon and Bill Bailey to meet with Swann and his wife about plans to remodel their new home. Over the course of the three-year project, FWDE employees continually supervised the remodeling of the new home. From about October 1999 to March 2001, FWDE paid employee John Stanger $28,839 for his work at Swann’s home. During that time period, FWDE’s Hendon spent half of every work day supervising other contractors at Swann’s home and billed his time as a 32 nonpaying job. FWDE paid Hendon $94,090 for his work at Swann’s home. In the fall of 1998, FWDE hired subcontractor Dudley Davis for framing, costing over $28,000. Dougherty visited the site periodically. In the winter of 1999, Bobby Rast sent RAST superintendent Luke Cobb to supervise RAST crews who did demolition work and poured concrete for Swann’s new home. Bobby Rast had RAST employee Derek Houston serve as a point of contact for RAST’s suppliers and subcontractors for Swann’s home and paid Houston $6,300 for his work there. In 2000, RAST paid its employees $18,867.20 in miscellaneous labor costs for their work on Swann’s home and McNair’s studio. RAST avoided using Swann’s name on invoices, delivery tickets, and internal accounting reports, instead using his nickname, “Little Big Man.” RAST also bought bricks and other materials, and paid different subcontractors for installation of hardwood floors and stairs and exterior brickwork, plumbing work, and painting. RAST paid $3,535 for flooring and stairs installation that Don’s Carpet One performed at Swann’s new home in 2000 or 2001. In the fall of 1999, RAST paid $1,964 for brick and mortar work by Alabama Brick Delivery. In the fall of 2000, RAST paid Kimro Painting & Services, Inc. (“Kimro Painting”) $9,733 for painting work at Swann’s new home. In May 2001, RAST paid $4,441.50 to Sherman International for concrete work. 33 The delivery ticket for ready-mix concrete RAST purchased from Sherman International directed delivery to the Swann address but identified it as the “Rast Residence.” In October 2001, RAST paid Brown Mechanical Contractors, Inc. (“Brown Mechanical”) for $9,540 worth of plumbing work performed at Swann’s new home. Bobby Rast had the payments to Brown Mechanical coded as expenses to RAST’s Jefferson County contracts for “Annual Rehab” and “Minor Pump Station.” In the summer of 2000, PUGH began contributing to Swann’s new home remodeling. PUGH’s President Yessick hired subcontractor Aquatic Gardens to install a waterfall and koi pond at a cost of $7,422. Yessick told Aquatic Gardens to send its invoices to PUGH and not mention Swann by name. Yessick hired other subcontractors for various work after Swann claimed to have overpaid for the remodeling. Yessick hired Guthrie to help landscape Swann’s new home, and in July 2000 Guthrie gave an initial estimate of $40,000. PUGH’s book entries and invoices for Guthrie’s work on Swann’s home were never kept in Swann’s name, but always under some other code. Yessick had PUGH’s accountant charge Guthrie’s expenses to “Metro Park Roadway,” a Jefferson County job. By December 2001, PUGH had paid Guthrie $93,680 for its landscaping work at the Swann home, which included $1,200 a month for ongoing 34 weekly yard maintenance. In January 2002, PUGH’s President Yessick asked Guthrie to stop submitting invoices to PUGH, and instead PUGH advanced Guthrie $47,000 for three years worth of landscaping and maintenance on Swann’s new home; and Guthrie performed about $10,000 worth of work. Although PUGH’s manager of accounts testified she filed Guthrie’s invoices regularly and that PUGH kept these records for 5 to 7 years, the invoices were not found during the government’s investigation.23 In December 2001, Yessick used a PUGH check to buy $1,000 worth of bookstore gift certificates for Swann.24 In August 2002, after Grady Pugh and Yessick heard rumors of a government investigation, Guthrie was asked to stop working on Swann’s property, even though there was a balance remaining on the advance Yessick had given to Guthrie. At that time, Yessick directed his assistant to send an invoice to Swann’s mother-in-law for $12,572 for tree removal and “remodeling work.” In 23 Count 101 ($47,000 check from Guthrie) was dismissed on the government’s motion during the third day of trial. On that trial day, Paul Guthrie (the owner of Guthrie) testified that, even though Guthrie received a $47,000 check from PUGH’s Yessick for Guthrie’s work at Swann’s home, Guthrie to date had done about $10,000 worth of work on Swann’s home, not $47,000. Swann was convicted on Count 52, which charges him with receiving approximately $100,000 in work done by Guthrie. 24 The government also presented evidence that Bobby and Danny Rast used at least $4,000 of RAST’s funds to pay for Swann’s expenses on two trips to England. Swann and the Rast defendants were acquitted on Counts 59 (Swann accepted $3,015 trips to England and Scotland) and 68 (Rast defendants paid Swann for those trips). 35 September 2002, Yessick instructed his assistant to create an invoice, this time to Swann’s mother, for $46,684 of landscaping work. In November 2002, the Swanns paid PUGH this amount with checks drawn from joint checking accounts the Swanns had taken out with their mothers, after taking out two home equity loans in each of their mothers’ names.25
In the Swann trial, the defense basically was that the defendants lacked the corrupt intent to commit bribery and acted at all times in good faith. The contractor-defendants contended they performed work on Swann’s home out of goodwill and without expecting anything in return. Swann argued he did not have an intent to be influenced by the things the contractor-defendants gave him. In addition, the defendants presented evidence showing that Nila Swann (Swann’s wife) had an engineering background, acted as her own general contractor, hired and supervised subcontractors, and initially paid the bills for the work on the Swann home. Swann testified that Nila handled all of the couple’s financial matters and that he assumed she was paying for the work. According to Swann, Nila frequently changed her mind, was not a good manager, and disputed the cost and scope of the work with the subcontractors. Dougherty and the Rast 25 The plan all along had been for the Swanns’ mothers to move into the old home after the new home was built. 36 brothers were longtime friends of Nila and Jack Swann. Swann stated that Dougherty and the Rast brothers stepped in only to offer advice and take over supervision to make the work go more smoothly. The contractor-defendants claimed that they paid several of these disputed bills to preserve their own business relationships with the subcontractors and their expectation was that the Swanns would eventually reimburse them. However, with the sole exception of PUGH’s belated invoices to Swann for landscaping and remodeling work, there was no evidence that the Swanns paid the contractor-defendants for the work at their new home. As to the conspiracy charge, the defendants also claimed that the government had not presented sufficient evidence to show an unlawful agreement between Swann and any of the contractor-defendants. In the Swann trial, the government presented 404(b) evidence about similar items of value the same contractor-defendants had provided to McNair for his studio, their help with McNair’s home in Arkansas, and other benefits they provided for McNair, Barber, and Chandler.
The jury convicted defendants Swann, PUGH, Yessick, RAST, Bobby Rast, FWDE, and Dougherty of conspiring to bribe Swann (Count 51). 37 The jury convicted Swann on these substantive bribery counts: 52 ($100,000 from PUGH through subcontractor Guthrie Landscaping), 53 ($7,422 from PUGH through subcontractor Aquatic Gardens), and 54 ($1,000 in gift certificates to Alabama Book Smith from PUGH). The jury convicted defendants PUGH and Yessick on Counts 61-63 (same facts as 52-54, respectively). The jury convicted defendants Swann, PUGH, and Yessick on Counts 90-100 (honest services mail fraud involving PUGH’s paying $93,680 in checks to Guthrie for landscaping work performed for Swann). The jury also convicted defendant Swann on Counts 57 ($9,733 in painting by Kimro Painting from RAST) and 58 ($8,940 in plumbing by Brown Mechanical from RAST) and defendants RAST and Bobby Rast on Counts 66 and 67 (same facts as Counts 57 and 58, respectively).26 The jury also convicted defendant Swann on Count 60 ($24,176 for construction supervision by FWDE’s Stanger) and defendants FWDE and 26 In the Swann trial, the jury acquitted defendant Danny Rast on Count 51 (conspiracy to bribe Swann), on Count 66 ($9,733 in painting work for Swann by Kimro Painting) and on Count 67 ($8,940 in plumbing work for Swann by Brown Mechanical). The jury also acquitted defendant Swann on Count 59 ($3,015 bribe received by Swann from the Rast defendants in the form of England and Scotland trips); defendants RAST, Bobby Rast, and Danny Rast on Count 68 ($3,015 bribe given to Swann in the form of England and Scotland trips); and defendant PUGH on Count 125 (obstruction of justice). 38 Dougherty on Count 69 (same facts as Count 60).27 In summary, the jury convicted defendant Swann on the bribery conspiracy count, six substantive bribery counts, and eleven honest services mail fraud counts. The jury convicted defendants PUGH and Yessick on the bribery conspiracy count, three substantive bribery counts, and eleven honest services mail fraud counts. The jury convicted defendants RAST and Bobby Rast on the bribery conspiracy count and two substantive bribery counts. The jury convicted FWDE and Dougherty on the bribery conspiracy count and one substantive bribery count. Defendants Swann, PUGH, RAST, Bobby Rast, FWDE, and Dougherty appeal all conviction counts. 27 When the Indictment was severed into the five separate cases for trial, Counts 107-121 of the Indictment were scheduled to be tried in the Wilson trial (05-545). The government later dismissed Counts 107-121 and re-filed them essentially as Counts 1-17 in a new indictment docketed as case number 06-084. This case (06-084) was consolidated for trial with the Swann trial (05-544). The Swann jury heard evidence on these 17 counts of honest services mail fraud under 18 U.S.C. §§ 1341 and 1346. In November 1999, Wilson resigned from the JCESD and formed his own engineering consulting firm, CEDS. With Swann’s help, Wilson immediately obtained two no-bid engineering contracts ($483,000 and $350,000) from the County worth a total of $833,000. To get around “revolving door” provisions in Alabama’s ethics law that prohibited former employees from doing business with the County for two years, Wilson made arrangements for his firm to operate as FWDE’s “subcontractor.” FWDE was awarded the contracts. Even though Wilson’s firm performed the work, FWDE passed Wilson’s invoices on to the County under FWDE’s own name. These 17 counts of honest services mail fraud related to money paid to CEDS. Wilson and CEDS pled guilty to one count each and are not defendant-appellants in the Swann appeal. The Swann jury acquitted Swann, FWDE, and Dougherty on these 17 counts involving money paid to CEDS through FWDE. This evidence was introduced only in the Swann trial, not in the Wilson trial. 39