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In this episode of American Greed, Ray
Nagin rises to power as mayor of New
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Orleans on big promises of reform.
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The winds of change are blowing and they
are fanning the flames of a renaissance
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in our great city.
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When he first came into office, he was a
rock star. I mean, the guy who had
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crossover support, black, white, rich,
poor.
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I mean, he was the guy that came into
office that was supposed to.
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Change New Orleans, fix New Orleans,
clean up New Orleans. Until one of the
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catastrophic storms in history changes
everything.
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Katrina strikes a heavy blow to the
Louisiana coast as a Category 4 storm.
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Everybody was devastated.
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We had no electricity.
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We had no running water.
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We had no food.
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This city needed a great leader, and the
mayor was the logical choice.
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But as billions of dollars begin to flow
in for rebuilding, Nagin's anti
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-corruption ideals seem to wash away
like the floodwaters.
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And the mayor sells out the citizens of
the Crescent City for little more than
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$500 ,000 in luxury trips, services, and
cash.
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When his financial needs and his
lifestyle definitely outpaced his
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income, he then chose an illegitimate
income in those bribes and kickbacks.
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Every person is hereby ordered to
immediately evacuate the city of New
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or, if no other alternative is
available, to immediately move to one of
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facilities within the city that will be
designated as a refuge of last resort.
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On August 28, 2005,
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Mayor C. Ray Nagin orders the first ever
mandatory evacuation of New Orleans.
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as Hurricane Katrina roils in the Gulf
of Mexico.
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Nearly a million residents flee the
metropolitan area.
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Within two days, after the storm hits
and the levees fail, 80 % of New Orleans
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is underwater, and 100 ,000 people who
remain are stranded in deadly
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There are planning failures at all
levels of government, as the world
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horror. Get us out of here! We want to
get out of here! We need help, sir. We
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really need help. And Mayor Ray Nagin
catapults into the national spotlight as
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he attempts to triage one of the
country's worst ever disasters.
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But ten years after Katrina, Nagin is
conspicuously absent from the national
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remembrance.
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It's kind of surreal to think that when
the storm hit, he was elbow to elbow
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with the president of the United States.
And everybody who wanted to leave the
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recovery, and then as we hit the 10th
anniversary, he's watching in a prison
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jumpsuit from federal prison.
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Three years before Katrina hits,
Clarence Ray Nagin Jr.
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is a business executive and political
outsider.
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Born and raised in a working -class New
Orleans family, education guides Nagin
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out of the poor wards of the city to
Tuskegee University.
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He then climbs the corporate ladder, and
by the early 2000s, he is a vice
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president and general manager at Cox
Communications,
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earning $400 ,000 a year.
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Nagin lives with his wife and three kids
in the upper middle class area of Park
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Island in a mid -century modern home
known as the Ashtray House for the
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architect's use of 1 ,200 amber ashtrays
along the roofline.
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And he seems to be living the American
dream.
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Robert Jenkins is Nagin's attorney.
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He got a very, very astute business
background, very educated man, and a
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family man.
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But apparently, Nagin wants something
more.
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In 2002, with strong backing from the
business community, Nagin throws his hat
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into the mayoral race, running as the
anti -corruption, business -minded
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candidate.
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Salah dropped tremendously when he went
to public service. He was thinking more
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about what he could do to help this city
and help the citizens of this city.
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WDSU reporter Travers Mackle covers the
election and watches Nagin come from
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behind to beat a slew of seasoned
politicos.
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I think power is what attracted him to
the position that he was already the CEO
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of a large telecommunication company.
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So I guess he looked at it as, hey, I
can run a city.
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I think most people will tell you this.
When he came into office, his intentions
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were good.
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Thank you. Thank you.
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I am so happy.
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To be here doing this right now,
anticipation is a wonderful thing, but
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sometimes it wears you down, and I am
ready.
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This is a guy who had so much promise
and so much potential and so much
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and so much moxie that he seemed like he
was a rising star in politics, and it
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was going to put New Orleans in the
right direction.
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The winds of change are blowing, and
they are fanning the flames of a
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renaissance in our great city.
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Nagin appears to start out strong.
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Just 11 weeks into office, he implements
a sweeping operation to clean up
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bribery in the city's taxicab licensing
and inspection programs.
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After 84 arrests in one day, the mayor
makes national headlines as a new kind
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leader in the Crescent City.
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But Gordon Russell, who covers the story
for the Times -Picayune, says once the
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media fades away, there is little
payoff.
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There was kind of showmanship more than
anything. They marched these people, you
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know, they kind of brought them all out
for the cameras, and Frog marched them
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around in front of City Hall with
handcuffs on. And one of the people was
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cousin of the mayor, so it kind of sent
this message that, you know, nobody's
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above the law.
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In the end, the sweep nets not one
conviction.
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But in the meantime, Nagin's approval
rating shoots up 80%.
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Bill Roussel is a community organizer
and political consultant who has worked
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with Nagin's administration.
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There was an effort afoot to bring about
reform in
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city government. He took office with
that intent, and I think for the first
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three years or so was relatively
successful in getting people to
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feel good about it.
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the government.
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With popular support behind him, the
mayor also decides to focus on his
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for technology.
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I think he said something like, you
know, I'm used to George Jetson and this
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Fred Flintstone's world I'm living in.
When he came to City Hall, everything
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ancient. He said, we got to remake this
place totally and, you know, start
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putting things online and, you know,
just kind of bring the city into the
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century.
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Nagin creates the city's first mayor's
department of technology.
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To head it up, former assistant U .S.
attorney Matt Komen says Nagin reaches
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outside the political sphere and chooses
a local tech entrepreneur named Greg
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Meffert as chief technology officer.
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There was an air in the city of this
would be a new day. And that was
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his platform. And that was Gregory
Meffert was certainly a piece of that
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took office to.
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modernize City Hall, to be more
transparent, more accountable, and to
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from those ills of corruption, fraud,
waste, abuse.
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What people don't yet know is that the
mayor is handing enormous power to Greg
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Mefford, and it will prove to be
arguably the worst decision Ray Nagin
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makes. He had an incredible amount of
influence on Nagin. Nagin obviously is a
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weak -willed individual.
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to succumb to that kind of influence.
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In my opinion, Greg Mefford was the
single most corrupting influence on Ray
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Nagin.
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But even before examining the mayor's
relationship with Mefford, many people
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begin to question Nagin's ability to
lead the city.
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I don't think he truly understood the
nature of how you make compromise, how
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build relationships, how you work toward
consensus.
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in order to be able to move people
together in a harmonious way.
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His inexperience as a politician, he
just had trouble kind of governing, and
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was starting to become like, well, what
is this guy, what's he doing?
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Where's all the bold reform taking us?
Is he actually getting anything done?
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If Nagin intends to coast through the
rest of his term, however, Mother Nature
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has a different plan.
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In late August 2005, Hurricane Katrina
swings a hard right into the Gulf of
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Mexico, setting her course for New
Orleans.
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And it seems nothing will remain the
same.
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He was the status quo mayor up until
Katrina hit, and that changed the game
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it changed everything.
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Next on American Greed, a city
destroyed.
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Rebuilding New Orleans means big money
flowing into the Big Easy, much of it
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through Ray Nagin's hands.
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A few years into his administration, he
decided he was going to take the easy
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way out and take some easy money.
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It was a big storm.
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On the morning of August 29, 2005, the
fury of Hurricane Katrina slams into the
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Louisiana -Mississippi border.
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In New Orleans, the first of several
levees gives way, and billions of
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of water begin to flood the city.
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Thousands are stranded, hundreds dead
and dying. The world watches in shock as
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days go by with no real plan of action,
and all eyes are on Mayor Ray Nacon.
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The curfew will be from dusk to dawn.
There will be no one allowed to move
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the city routes with the exception of
security personnel. The next area that
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have been dealing with is trying to
recover as many of our beloved deceased
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citizens as possible.
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It was the faith of trying to get the
federal government.
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to come down and assist us quickly and
not wait. And he was all over the place
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trying to do this, slept a couple hours
every day trying to get the city back
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together. It was very, very difficult.
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In this radio interview, heard around
the nation five days after the storm,
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Nagin is desperate.
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I need reinforcements. I need troops,
man.
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I need 500 buses.
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This is a national disaster.
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Get every doggone Greyhound bus line in
the country and get their asses moving
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to New Orleans.
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That's they're taking small, man, and
this is a major, major, major deal.
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And I can't emphasize it enough, man.
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This is crazy.
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The storm's aftermath leaves New Orleans
in mold and ruin.
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Half a million residents are still
scattered throughout 44 states.
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Rebuilding will take years and billions
of dollars.
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We know that this is... It's been a hard
and tough road that we've been on.
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We'd like to move faster, but the
realities are this devastation is
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unprecedented and there's never been any
city that has gone through this.
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Mayor Nagin vows to unite the city and
rebuild stronger than ever. But Howard
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Schwartz, New Orleans Assistant
Inspector General, who was with the
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corruption team at the time, believes.
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Those are empty promises.
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With said great moments make great men,
the city needed a fully engaged mayor.
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The time to become fully engaged wasn't
after the crisis and here's how we do
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things. He wasn't hands -on from day
one. Since he wasn't hands -on, he
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prepared to handle a city on normal
circumstances, let alone after this
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catastrophe. It made it even worse.
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One of Mayor Nagin's most disastrous
moves after the storm.
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is to approve a city rebuilding plan by
a panel of experts that seeks to turn
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several flood -prone, historically
African -American areas into green
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Ray Nagin was the guy who sort of first
started talking about possibly redlining
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parts of the city, and he sort of
entertained that notion.
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After an immediate public outcry,
reporter Gordon Russell says that Nagin
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quickly backtracks.
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Because in the midst of a broken city,
where more than half the population is
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still scattered elsewhere,
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Nagin is running for re -election, and
he can't afford to alienate a key
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constituency.
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There was a lot of fear at the time,
among blacks especially, that they were
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being welcomed back with open arms, that
maybe some parts of town were going to
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be redlined or what have you. He changed
his direction somewhat and became much
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more concerned that
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African -American community have more of
a voice, more of a participation in
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the activities of the city.
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And now would you please welcome the
mayor of the great city of New Orleans,
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Ray Nagin. In a now infamous speech on
Martin Luther King Jr.
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Day 2006, Nagin appeals to the African
-American electorate while leaving
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offended.
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It's time for us to come together.
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It's time for us to rebuild a New
Orleans, the one that should be a
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New Orleans.
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And I don't care what people are saying
uptown or wherever they are.
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This city will be chocolate at the end
of the day.
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This city will be a majority
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African -American city.
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It's the way God wants it to be.
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In a sense, it was a really key piece to
galvanizing the African -American vote
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in his favor. There are people who think
it was something off the wall.
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I don't know if he had intentionally
planned it that way, but it certainly
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helped to galvanize the black vote for
him in the 2006 election.
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Eight months after Katrina, in May 2006,
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Nagin ekes out a second -term win and is
charged with leading the massive
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recovery of New Orleans.
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But within a year into his second term,
as little gets accomplished, frustration
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is growing across all areas of the city.
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I think the black community, like the
rest of the community, was disappointed
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the pace of the recovery.
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He was disengaged for the better part of
his second term. I think...
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he realized how big the rebuilding
effort was.
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A lot of people can easily make the
argument that he checked out probably
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sometime around late 2006, early 2007,
that he had no interest anymore in
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governing, in being the mayor, in
leading the rebuilding, that he was out
226
00:16:14,690 --> 00:16:19,649
himself at that point. Next on American
Greed, with his city still in ruin, the
227
00:16:19,650 --> 00:16:23,770
mayor chooses to focus not on rebuilding
for everyone, but for him.
228
00:16:24,360 --> 00:16:27,020
wasn't trying to help the city move
forward.
229
00:16:27,540 --> 00:16:31,719
The only time he became personally
engaged was when there was something in
230
00:16:31,720 --> 00:16:34,620
for him personally or his family in the
granite business.
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00:16:48,860 --> 00:16:51,920
New Orleans, Louisiana, early 2007.
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00:16:52,880 --> 00:16:57,719
About 18 months after Hurricane Katrina
and the ensuing floods devastate the Big
233
00:16:57,720 --> 00:17:02,420
Easy, there is a growing discontent in
the city about the slow pace of
234
00:17:03,020 --> 00:17:07,920
And most of the blame lands squarely on
the shoulders of Mayor Ray Nagin.
235
00:17:09,859 --> 00:17:15,159
There was a sort of wretched anger about
him having sort of the city's
236
00:17:15,160 --> 00:17:18,880
collective feeling that he had been sort
of mailing it in during...
237
00:17:20,119 --> 00:17:22,339
a time when we needed a real leader.
238
00:17:22,880 --> 00:17:27,899
Around the same time, New Orleans
investigative journalist Gordon Russell
239
00:17:27,900 --> 00:17:32,359
digging into a story about Mayor Nagin's
partial ownership of a granite company
240
00:17:32,360 --> 00:17:36,280
called StoneAge that was recently
started by his two sons.
241
00:17:36,860 --> 00:17:42,479
We were hearing that he was spending
more time at this business and like a
242
00:17:42,480 --> 00:17:46,740
bit of time, and it seems incredible
that you would have a mayor who's...
243
00:17:47,320 --> 00:17:51,979
faced with this incredible task of
rebuilding the city after this amazing
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00:17:51,980 --> 00:17:56,620
disaster, and he's, you know, running a
granite business.
245
00:17:57,100 --> 00:17:59,990
But on the other hand, a lot of people
needed countertops.
246
00:18:00,180 --> 00:18:05,659
So that was strange, and we started
looking into that a little bit more and
247
00:18:05,660 --> 00:18:11,420
got a few tips here and there, and then
that led us to the Home Depot.
248
00:18:12,400 --> 00:18:17,569
Russell learns that after Katrina, Home
Depot was anxious to open a new store in
249
00:18:17,570 --> 00:18:19,920
the Central City neighborhood of New
Orleans.
250
00:18:19,970 --> 00:18:25,130
Kind of a tough neighborhood plagued
with some violence, a lot of poverty.
251
00:18:26,110 --> 00:18:30,150
This is the Superdome over on this side
of you over here.
252
00:18:30,910 --> 00:18:37,229
You can see a lot of abandoned lots and
kind of blighted housing around us. And
253
00:18:37,230 --> 00:18:39,030
then this is the Home Depot over here.
254
00:18:39,170 --> 00:18:43,669
The company wants to purchase several
streets from the city in order to build
255
00:18:43,670 --> 00:18:45,590
the store and parking lot there.
256
00:18:45,790 --> 00:18:49,230
And the city appraises the land at $850
,000.
257
00:18:49,970 --> 00:18:54,689
Local community groups are also working
with the city council to require Home
258
00:18:54,690 --> 00:18:58,410
Depot to hire a certain percentage of
workers from the immediate area.
259
00:18:58,970 --> 00:19:00,830
at a higher than normal wage.
260
00:19:01,270 --> 00:19:04,270
And for the company, this is an
obstacle.
261
00:19:04,510 --> 00:19:09,509
That is, until Ray Nagin sees a business
opportunity, according to former U .S.
262
00:19:09,510 --> 00:19:10,670
Attorney Matt Komen.
263
00:19:11,470 --> 00:19:16,469
Ray Nagin involved himself and actually
left a voicemail for the CEO of Home
264
00:19:16,470 --> 00:19:20,430
Depot offering his assistance with the
community group.
265
00:19:20,890 --> 00:19:25,909
At some point soon thereafter, Ray Nagin
sent his chief economic development
266
00:19:25,910 --> 00:19:31,529
officer to a meeting at the city council
and instructed her to tell both the
267
00:19:31,530 --> 00:19:35,029
community group as well as Home Depot
that he would not support the community
268
00:19:35,030 --> 00:19:39,269
group's efforts anymore and he wanted
the project to go forward without any
269
00:19:39,270 --> 00:19:42,220
agreement between Home Depot and the
neighborhood group.
270
00:19:42,570 --> 00:19:48,669
And so, here in an overwhelmingly poor
African -American community, the mayor
271
00:19:48,670 --> 00:19:53,609
his so -called Chocolate City is accused
of selling out those very citizens he
272
00:19:53,610 --> 00:19:54,690
promised to fight for.
273
00:19:55,290 --> 00:20:00,809
About two weeks later, Stone Age lands a
contract with Home Depot to be the
274
00:20:00,810 --> 00:20:04,890
exclusive granite countertop installer
for several of their stores.
275
00:20:04,891 --> 00:20:08,769
They were obviously doing a lot of
business at the time because everybody
276
00:20:08,770 --> 00:20:11,490
new homes, countertops included.
277
00:20:12,270 --> 00:20:17,109
Nagin also agrees to sell Home Depot the
city land for a significantly reduced
278
00:20:17,110 --> 00:20:18,160
price.
279
00:20:18,770 --> 00:20:23,469
At first, Ray Nagin wanted the city to
receive the full appraised value. At
280
00:20:23,470 --> 00:20:29,669
point, we can only surmise, at some
point, light bulb went off, and Ray
281
00:20:29,670 --> 00:20:34,649
said, at the same time he began to
pursue Home Depot for his family -owned
282
00:20:34,650 --> 00:20:37,390
Age business, he then changed his mind.
283
00:20:37,630 --> 00:20:39,750
He had a change of heart.
284
00:20:40,110 --> 00:20:42,730
and agreed to that lower price of $100
,000.
285
00:20:43,870 --> 00:20:49,029
After securing the contract, Nagin sends
emails to Home Depot executives about
286
00:20:49,030 --> 00:20:50,750
giving StoneAge more business.
287
00:20:50,751 --> 00:20:54,629
When he felt they weren't getting enough
work from their deal, he would
288
00:20:54,630 --> 00:20:58,629
complain, and he would send them a note
saying, you know, it would say, from the
289
00:20:58,630 --> 00:21:02,769
mayor of New Orleans. It didn't say,
from Ray Nagin, this guy who owns the
290
00:21:02,770 --> 00:21:03,820
business.
291
00:21:03,821 --> 00:21:07,579
So he was definitely trading on the fact
that he was the mayor.
292
00:21:07,580 --> 00:21:13,859
He wanted and expected to receive
approximately 10 to 20 jobs, countertop
293
00:21:13,860 --> 00:21:16,150
installation jobs, per week from Home
Depot.
294
00:21:16,160 --> 00:21:21,340
That would equate to approximately total
$1 million per year in gross revenues.
295
00:21:21,560 --> 00:21:28,199
And his efforts to leverage and pressure
them, he believed, would be a huge
296
00:21:28,200 --> 00:21:29,250
windfall.
297
00:21:29,470 --> 00:21:35,189
StoneAge ultimately does about $170 ,000
in business before Home Depot ends the
298
00:21:35,190 --> 00:21:39,310
contract because of poor performance and
customer complaints.
299
00:21:39,810 --> 00:21:44,249
And that's when authorities say Ray
Nagin goes looking for another illegal
300
00:21:44,250 --> 00:21:45,300
revenue stream.
301
00:21:45,810 --> 00:21:50,809
Next on American Greed, investigators
begin to uncover the shocking extent of
302
00:21:50,810 --> 00:21:52,010
corruption at City Hall.
303
00:21:52,011 --> 00:21:55,769
Like going to strip clubs and paying for
it with your city credit card. Like
304
00:21:55,770 --> 00:21:59,050
having this yacht and inviting people
and strippers out on it.
305
00:22:13,260 --> 00:22:18,399
In 2008, the New Orleans Office of the
Inspector General starts investigating
306
00:22:18,400 --> 00:22:23,999
the mayor's Office of Technology and its
contract for a problematic citywide
307
00:22:24,000 --> 00:22:25,900
system of crime cameras.
308
00:22:25,901 --> 00:22:29,499
Through that investigation that was
conducted by our inspections and
309
00:22:29,500 --> 00:22:35,819
staff, they noticed some discrepancies
on the vendors, the quality of the
310
00:22:35,820 --> 00:22:40,420
cameras, what was being put out, and
there were just a lot of
311
00:22:41,020 --> 00:22:45,500
The contract is overseen by New Orleans
Chief Technology Officer Greg Mefford,
312
00:22:45,580 --> 00:22:51,699
who was handpicked by Mayor Ray Nagin as
soon as he took office in 2002, and who
313
00:22:51,700 --> 00:22:54,660
subsequently buys a home next door to
the mayor.
314
00:22:55,180 --> 00:23:01,539
He became one of the mayor's most
trusted aides, and eventually, by the
315
00:23:01,540 --> 00:23:06,519
Katrina... He was kind of calling
himself deputy mayor, which was a title
316
00:23:06,520 --> 00:23:10,399
own making, I think. But he was as
powerful a guy in the city government as
317
00:23:10,400 --> 00:23:11,900
there was outside of the mayor.
318
00:23:11,980 --> 00:23:16,799
I mean, these two were, for better or
worse, they were the dynamic duo. I
319
00:23:16,800 --> 00:23:19,719
these were the guys who came in and
said, you know what? We're going to
320
00:23:19,720 --> 00:23:21,640
City Hall. We're going to up technology.
321
00:23:21,860 --> 00:23:27,619
And Greg Meffert, almost from the start,
it has now been proven without to
322
00:23:27,620 --> 00:23:28,670
enrich himself.
323
00:23:29,060 --> 00:23:30,960
Two months after Katrina hit.
324
00:23:31,420 --> 00:23:35,959
Nagin had signed an executive order
giving Meffert free reign to hand out
325
00:23:35,960 --> 00:23:39,180
technology contracts with no bidding
required.
326
00:23:39,900 --> 00:23:44,240
He literally gave the mayor's office of
technology a license to steal.
327
00:23:44,241 --> 00:23:48,439
He signed an executive order for them to
award contracts, I'm talking millions
328
00:23:48,440 --> 00:23:52,679
of dollars in contracts, without a
competitive bidding process, without
329
00:23:52,680 --> 00:23:57,119
of approval, without a review period.
And that's when the money started coming
330
00:23:57,120 --> 00:24:02,839
in. Post -Katrina, Mefford awards
several huge no -bid contracts,
331
00:24:02,840 --> 00:24:07,980
crime cameras, to his friend, a private
tech entrepreneur named Marc St.
332
00:24:08,180 --> 00:24:12,260
Pierre. And with that, Marc St. Pierre
became a millionaire.
333
00:24:12,920 --> 00:24:17,499
In turn, Marc St. Pierre, at the same
time, was paying Gregory Mefford
334
00:24:17,500 --> 00:24:22,319
of thousands of dollars in bribes and
kickbacks for his favorable treatment at
335
00:24:22,320 --> 00:24:23,370
City Hall.
336
00:24:23,760 --> 00:24:28,460
After the Inspector General's office
issues a scathing report on Mefford and
337
00:24:28,560 --> 00:24:33,179
Pierre's crime camera deal, it sparks an
investigation involving the U .S.
338
00:24:33,180 --> 00:24:35,120
Attorney's Office and the FBI.
339
00:24:36,500 --> 00:24:40,699
Investigators learn that St. Pierre
provides a credit card for Mefford's
340
00:24:40,700 --> 00:24:44,840
unfettered use, and Mefford appears to
have no problem using it.
341
00:24:45,220 --> 00:24:49,880
Gregor Mefford charged approximately
$133 ,000 in trips.
342
00:24:50,380 --> 00:24:56,559
purchases and other items. He was
definitely living a life beyond his
343
00:24:56,560 --> 00:24:57,559
public servant.
344
00:24:57,560 --> 00:25:02,319
Craig Mefford had a card. The company
paid it off. The company was being paid
345
00:25:02,320 --> 00:25:06,000
the city of New Orleans. So we, the
taxpayers, were paying for his
346
00:25:06,760 --> 00:25:11,579
According to Inspector General
Investigator Eduardo Hernandez,
347
00:25:11,580 --> 00:25:16,139
lifestyle includes holding staff
meetings at a local strip club and
348
00:25:16,140 --> 00:25:17,940
a yacht called the Silicon Bayou.
349
00:25:18,419 --> 00:25:19,540
owned by Mark St.
350
00:25:19,780 --> 00:25:20,830
Pierre's company.
351
00:25:20,831 --> 00:25:24,459
The things that would occur on the boat,
they would have their normal meeting,
352
00:25:24,460 --> 00:25:28,250
but they would also have strippers come
onto the boat. They would play poker.
353
00:25:28,340 --> 00:25:34,519
The boat was also used at various times
by other employees for someone's
354
00:25:34,520 --> 00:25:35,319
birthday party.
355
00:25:35,320 --> 00:25:39,379
It almost seemed like it was the mayor
of technology's office for their own
356
00:25:39,380 --> 00:25:41,610
personal use for whatever they'd like to
do.
357
00:25:42,270 --> 00:25:47,489
Greg Meffert leaves the mayor's office
of technology in 2006 and promptly
358
00:25:47,490 --> 00:25:52,289
receiving hundreds of thousands of
dollars in so -called consulting fees
359
00:25:52,290 --> 00:25:53,530
his pal, St. Pierre.
360
00:25:54,480 --> 00:26:01,039
Gregory Meffert then collected
approximately $647 ,000 in a series of
361
00:26:01,040 --> 00:26:03,959
that Mark St. Pierre wrote to him, and
Gregory Meffert funneled through a
362
00:26:03,960 --> 00:26:08,780
different company. So in all, it was
approximately $900 ,000 that Mark St.
363
00:26:08,840 --> 00:26:12,599
Pierre bribed and kicked back to Gregory
Meffert over the term of their
364
00:26:12,600 --> 00:26:13,740
nefarious conduct.
365
00:26:14,680 --> 00:26:15,980
In November 2009,
366
00:26:16,860 --> 00:26:21,019
Meffert and St. Pierre are charged with
conspiracy, bribery, and money
367
00:26:21,020 --> 00:26:23,660
laundering in a 63 -count indictment.
368
00:26:25,000 --> 00:26:29,819
As the charges are made public, the big
question is, what is Ray Nagin's
369
00:26:29,820 --> 00:26:30,870
involvement?
370
00:26:30,980 --> 00:26:35,839
There are reports that Nagin accepted
several lavish family vacations, as well
371
00:26:35,840 --> 00:26:41,220
as cell phones, lawn care, and other
services paid for by Marc St. Pierre.
372
00:26:41,520 --> 00:26:43,440
But for now, no proof.
373
00:26:43,441 --> 00:26:48,099
Ray Nagin did some things when they were
in office that called him. It called a
374
00:26:48,100 --> 00:26:49,439
lot of things into question.
375
00:26:49,440 --> 00:26:54,419
City vendors were paying for Ray Nagin
to go on vacations. Ray Nagin claimed, I
376
00:26:54,420 --> 00:26:57,670
didn't know the city vendors were paying
for me to go on vacation.
377
00:26:58,040 --> 00:26:59,580
Greg Meffert set this up.
378
00:26:59,800 --> 00:27:06,339
Some of the records that were produced
did show that Ray Nagin had some
379
00:27:06,340 --> 00:27:11,060
involvement. But at that point, we did
not know the extent of that involvement.
380
00:27:11,560 --> 00:27:12,980
An American Greed returns.
381
00:27:13,320 --> 00:27:15,440
So far, Mayor Nagin is safe.
382
00:27:15,441 --> 00:27:19,379
But not for long. After they went after
Greg Maverick, they had their fight set
383
00:27:19,380 --> 00:27:20,560
on Ray Dagan.
384
00:27:21,820 --> 00:27:26,999
See how New Orleans' music scene has
bounced back after Katrina's devastation
385
00:27:27,000 --> 00:27:29,700
AmericanGreed .CNBCPrime .com.
386
00:27:31,180 --> 00:27:32,230
Feeling greedy?
387
00:27:32,600 --> 00:27:35,520
Want more than your share of behind -the
-scenes dirt?
388
00:27:36,100 --> 00:27:39,160
Follow us at AmericanGreedTV on Twitter.
389
00:27:39,480 --> 00:27:40,530
We'll be right back.
390
00:27:51,300 --> 00:27:57,399
In 2010, five years after Hurricane
Katrina, Mayor Ray Nagin's second and
391
00:27:57,400 --> 00:28:01,880
term comes to an end. He has a dismal 24
% approval rating.
392
00:28:02,280 --> 00:28:08,019
The fact of the matter is, is you have a
city as large as New Orleans, and you
393
00:28:08,020 --> 00:28:12,499
have everybody pulling you, we should
have the street lights here first, we
394
00:28:12,500 --> 00:28:15,799
should have our electricity here first,
we should have the water purification
395
00:28:15,800 --> 00:28:20,560
here. And decisions have to be made. You
can't cater to everybody all the time.
396
00:28:20,561 --> 00:28:24,159
So some people are going to get upset if
you don't do it the way they want it
397
00:28:24,160 --> 00:28:29,639
done. It seems for Nagin and his wife,
Salitha, his last days in public office
398
00:28:29,640 --> 00:28:31,100
can't come soon enough.
399
00:28:31,380 --> 00:28:34,120
She is ready to go, and I am too.
400
00:28:34,940 --> 00:28:40,060
I have been beaten on for almost four
years, but that takes a toll.
401
00:28:40,800 --> 00:28:43,640
Nagin moves with his family to Frisco,
Texas.
402
00:28:44,140 --> 00:28:48,259
and begins collecting big consulting
fees from some of the same vendors he
403
00:28:48,260 --> 00:28:50,140
awarded city contracts to as mayor.
404
00:28:50,440 --> 00:28:54,879
But if he thinks he's going to move on
and leave New Orleans behind, he's very
405
00:28:54,880 --> 00:28:55,930
wrong.
406
00:28:56,080 --> 00:29:01,339
You might start a case with some low
officials. You might start a case with
407
00:29:01,340 --> 00:29:06,519
contractors, with non -appointed or
elected officials. But the purpose, the
408
00:29:06,520 --> 00:29:10,919
intent, is to get to the highest
official. In this case, the highest
409
00:29:10,920 --> 00:29:12,000
was Nagin.
410
00:29:12,520 --> 00:29:17,639
Ray Nagin's former technology chief and
closest advisor, Greg Meffert, is
411
00:29:17,640 --> 00:29:19,740
already under indictment for corruption.
412
00:29:20,340 --> 00:29:24,059
Accused of accepting hundreds of
thousands of dollars in bribes and
413
00:29:24,060 --> 00:29:27,960
from city contractor Mark St. Pierre,
who was also charged.
414
00:29:28,520 --> 00:29:32,680
Meffert has one card to play that might
get him less jail time.
415
00:29:32,900 --> 00:29:36,000
And that is what he knows about Nagin.
416
00:29:36,880 --> 00:29:41,480
Faith to say, in 2010, when Greg Meffert
got indicted,
417
00:29:41,481 --> 00:29:45,079
It was probably the beginning of the end
for Ray Nagin. It was when everything
418
00:29:45,080 --> 00:29:48,880
started to go downhill and started
picking up steam pretty fast.
419
00:29:49,680 --> 00:29:54,220
Medford agrees to fully cooperate with
the U .S. Attorney's Office and the FBI.
420
00:29:55,580 --> 00:29:59,540
Medford made a deal, as a lot of people
do, believing he could help himself,
421
00:29:59,541 --> 00:30:02,319
help himself with his sentence, to
reduce his sentence. That's why people
422
00:30:02,320 --> 00:30:03,370
cooperate.
423
00:30:03,640 --> 00:30:08,499
But in the federal system, there is no
guarantee that they will benefit, they
424
00:30:08,500 --> 00:30:09,660
will profit, they will...
425
00:30:09,661 --> 00:30:13,919
get a lesser sentence. The only one that
knows what that sentence is going to be
426
00:30:13,920 --> 00:30:14,970
is the federal judge.
427
00:30:15,580 --> 00:30:19,699
Nagin's former ally pulls back the
curtain on his time at City Hall with
428
00:30:19,700 --> 00:30:24,559
mayor and says that Ray Nagin accepted
bribes from vendors looking for city
429
00:30:24,560 --> 00:30:25,610
contracts.
430
00:30:26,180 --> 00:30:30,660
He fleshed out the interactions that
they had, the conversations that they
431
00:30:30,760 --> 00:30:34,480
the trips that Nagin took, the money
that he took.
432
00:30:35,949 --> 00:30:40,649
Prosecutors say that when Nagin went
from making $400 ,000 a year in the
433
00:30:40,650 --> 00:30:47,110
sector to $130 ,000 as mayor, he and his
family never changed their lifestyle.
434
00:30:47,410 --> 00:30:50,530
And Nagin had to supplement his income
to keep up.
435
00:30:51,170 --> 00:30:57,889
They continued to eat at the finest
restaurants in town, to buy relatively
436
00:30:57,890 --> 00:31:01,410
expensive clothes, have other expenses
that we all have.
437
00:31:02,460 --> 00:31:06,540
tuition, house payment, and all those
other items, which was his choice.
438
00:31:07,380 --> 00:31:11,959
The choice he did not have legally to
make was to go on the take. And that's
439
00:31:11,960 --> 00:31:13,760
what he did to make up the difference.
440
00:31:14,360 --> 00:31:18,879
In addition to several lavish family
trips, cell phones, and lawn care
441
00:31:18,880 --> 00:31:24,019
paid for by St. Pierre, the government
charges that Nagin then used his son's
442
00:31:24,020 --> 00:31:27,200
granite business, Stone Age, as a
conduit of corruption.
443
00:31:27,920 --> 00:31:31,900
Several years earlier, after a deal he
arranged with Home Depot fell through,
444
00:31:32,500 --> 00:31:37,300
Nagin, being the company's sole
financier, needs to bring in more
445
00:31:37,720 --> 00:31:42,659
That's when prosecutor Matt Komen says
he turns to Rodney Williams, owner of a
446
00:31:42,660 --> 00:31:46,759
local engineering firm who had been
trying to get into the city contractor
447
00:31:46,760 --> 00:31:49,340
to get work during the post -Katrina
recovery.
448
00:31:49,900 --> 00:31:55,939
Specifically, Ray Nagin asked for a
total of $60 ,000 in January of 2008
449
00:31:55,940 --> 00:31:56,990
Rodney Williams.
450
00:31:57,710 --> 00:32:03,630
And at that same time, Ray Nagin
promised and guaranteed to Rodney
451
00:32:03,830 --> 00:32:06,550
quote, I will take care of you at City
Hall.
452
00:32:06,870 --> 00:32:11,529
And in fact, Rodney Williams and his two
partners wrote personal checks on the
453
00:32:11,530 --> 00:32:14,050
same date, January 31st, 2008.
454
00:32:14,310 --> 00:32:16,970
$20 ,000, $20 ,000, $20 ,000.
455
00:32:17,550 --> 00:32:21,989
Delivered those. Those were deposited in
Ray Nagin's company named Stone Age
456
00:32:21,990 --> 00:32:23,040
LLC.
457
00:32:23,041 --> 00:32:26,079
And Ray Nagin, in turn, signed contract
after contract.
458
00:32:26,080 --> 00:32:31,999
Rodney Williams went from averaging
about $100 ,000 a year in city work to
459
00:32:32,000 --> 00:32:35,610
a million dollars a year after he paid
the bribe that Ray Nagin asked for.
460
00:32:36,320 --> 00:32:41,039
Nagin's defense attorney says that the
mayor is simply a legal partial owner of
461
00:32:41,040 --> 00:32:45,559
StoneAge and that he did not know Rodney
Williams had given money as a so
462
00:32:45,560 --> 00:32:47,420
-called investment in the company.
463
00:32:47,421 --> 00:32:51,429
He did nothing wrong. He did nothing
illegal. He did nothing improper.
464
00:32:51,430 --> 00:32:54,169
Rodney tried to get close to the mayor
by going through the funds.
465
00:32:54,170 --> 00:32:55,830
So he had no idea about that.
466
00:32:56,730 --> 00:32:59,610
Stoney stands with a total separate
entity.
467
00:33:00,370 --> 00:33:04,790
But prosecutor Matt Komen says that
after going through Rodney Williams'
468
00:33:05,170 --> 00:33:07,710
Nagin had set out to take in even more.
469
00:33:08,090 --> 00:33:13,469
This time from Frank Fradella, CEO of
the construction firm Home Solutions of
470
00:33:13,470 --> 00:33:18,859
America. who was trying to set up a huge
deal to turn a defunct smokestack power
471
00:33:18,860 --> 00:33:21,940
plant in New Orleans into a mixed -use
development.
472
00:33:22,420 --> 00:33:29,159
His value with other individuals were
his connections with City Hall, namely
473
00:33:29,160 --> 00:33:35,059
Nagin. Could he get things approved by
City Hall? Those things are very
474
00:33:35,060 --> 00:33:38,499
important when it comes to financing
large projects, so that's what Frank
475
00:33:38,500 --> 00:33:42,840
Fadella wanted to basically sell, and
Ray Nagin was available.
476
00:33:43,240 --> 00:33:48,180
He was for sale, and he asked for that
$100 ,000 from Frank Fridella.
477
00:33:49,160 --> 00:33:54,199
In order to conceal the payment, Komen
says Fridella brings in an associate
478
00:33:54,200 --> 00:33:59,119
New Jersey to transfer $50 ,000 from his
daughter's trust account to the Stone
479
00:33:59,120 --> 00:34:00,119
Age Company.
480
00:34:00,120 --> 00:34:05,259
In addition to the $50 ,000, prosecutors
say Fridella shipped another $52 ,000
481
00:34:05,260 --> 00:34:10,519
worth of free granite to Stone Age. But
Robert Jenkins says Fridella cannot be
482
00:34:10,520 --> 00:34:11,570
trusted.
483
00:34:11,889 --> 00:34:15,948
Frank Fidella is a kind man, and you can
see that throughout his history, that
484
00:34:15,949 --> 00:34:19,909
he is a kind man. He has convictions
throughout other jurisdictions.
485
00:34:20,510 --> 00:34:25,270
And at the time when he had to say that,
he was already caught. And he was what?
486
00:34:25,290 --> 00:34:29,649
About to be sentenced in Texas. So the
deal's worked out that, hey, we'll hold
487
00:34:29,650 --> 00:34:32,180
up your sentencing if you cooperate in
Louisiana.
488
00:34:32,181 --> 00:34:35,928
So what do you think he's going to do?
He's going to say whatever is necessary
489
00:34:35,929 --> 00:34:37,090
to help him.
490
00:34:37,799 --> 00:34:42,819
Next on American Greed, the feds may
have trapped a bunch of rats, but are
491
00:34:42,820 --> 00:34:43,870
telling the truth?
492
00:34:43,871 --> 00:34:47,039
It became a big finger -pointing thing,
and in the end they were all pointing
493
00:34:47,040 --> 00:34:48,180
the finger at Ray Nagin.
494
00:35:01,100 --> 00:35:07,079
In January 2013, former Mayor Ray Nagin,
who has been out of office and living
495
00:35:07,080 --> 00:35:11,460
in Texas for three years, was charged
with 21 counts of corruption.
496
00:35:12,080 --> 00:35:16,540
Almost a year later, his trial opens at
the federal courthouse in New Orleans.
497
00:35:17,880 --> 00:35:20,860
WDSU reporter Travers Mackle covers the
case.
498
00:35:22,080 --> 00:35:26,079
So the trial was arguably the biggest
trial in the history of New Orleans. We
499
00:35:26,080 --> 00:35:31,779
have... A long history of public
corruption in government in Louisiana.
500
00:35:31,780 --> 00:35:33,760
was a lot of anticipation for the trial.
501
00:35:33,980 --> 00:35:37,200
I mean, everybody wanted to know what
was going on.
502
00:35:37,740 --> 00:35:42,219
At trial, the government lays out a
detailed case of corruption spanning
503
00:35:42,220 --> 00:35:47,099
years, bolstered by their star witnesses
Greg Meffert, Rodney Williams, and
504
00:35:47,100 --> 00:35:48,150
Frank Fradella.
505
00:35:48,280 --> 00:35:53,659
But his defense attorney, Robert
Jenkins, insists that Nagin is innocent
506
00:35:53,660 --> 00:35:54,710
charges.
507
00:35:54,810 --> 00:35:57,220
The main defense was that these guys
were lying.
508
00:35:57,390 --> 00:36:02,489
They were receiving a benefit for their
testimony. He didn't do any of these
509
00:36:02,490 --> 00:36:05,289
actions. When you go back and you look
at Fridella, you can look at what he got
510
00:36:05,290 --> 00:36:07,950
out of it. He had convictions in other
states.
511
00:36:07,951 --> 00:36:11,989
You go look at Meffert, what he got, his
first sentence, and then what he got
512
00:36:11,990 --> 00:36:15,230
the reduction on when he cooperated with
the government.
513
00:36:15,450 --> 00:36:20,149
So they all got something, they gained
something, and when that happens, of
514
00:36:20,150 --> 00:36:22,620
course you have to be suspect of their
testimony.
515
00:36:23,180 --> 00:36:28,219
The defense argues that Ray Nagin did
not accept bribes, that he did
516
00:36:28,220 --> 00:36:30,600
in the good faith of rebuilding New
Orleans.
517
00:36:31,340 --> 00:36:33,900
Nagin takes the stand to defend himself.
518
00:36:34,560 --> 00:36:40,739
It appears that he thought he could
charm his way through testimony and
519
00:36:40,740 --> 00:36:45,079
get one juror to side with him and get a
hung jury or maybe charm them all. And
520
00:36:45,080 --> 00:36:48,199
they'd say, you know what? Look at this
guy. Charismatic, charming, smart, had
521
00:36:48,200 --> 00:36:50,850
everything. No way he could have done
this. Not guilty.
522
00:36:51,760 --> 00:36:55,500
But in the end, it's up to the jury to
decide who they believe.
523
00:36:56,760 --> 00:37:02,980
On February 12, 2014, after an eight
-day trial and six hours of
524
00:37:03,160 --> 00:37:09,719
they find Nagan guilty on 20 of 21
counts, including conspiracy, bribery,
525
00:37:09,720 --> 00:37:14,360
fraud, conspiracy to commit money
laundering, and filing false tax
526
00:37:14,361 --> 00:37:17,399
When the verdict came down, he looked
stunned.
527
00:37:17,400 --> 00:37:19,810
I mean, he looked, I don't think he was
prepared.
528
00:37:20,330 --> 00:37:21,790
at all for a guilty verdict.
529
00:37:22,830 --> 00:37:27,649
Nagin becomes the first ever mayor of
New Orleans to be convicted on federal
530
00:37:27,650 --> 00:37:28,700
corruption charges.
531
00:37:29,510 --> 00:37:30,770
Well, we were devastated.
532
00:37:30,771 --> 00:37:34,369
We didn't think that they would come
back to be guilty on the testimony of a
533
00:37:34,370 --> 00:37:39,809
convicted felon, Frank Fadella, Greg
Meffert. Nobody came into the trial
534
00:37:39,810 --> 00:37:42,730
Mr. Nagin that had what we call clean
hands.
535
00:37:42,950 --> 00:37:44,870
All these people had something to gain.
536
00:37:45,600 --> 00:37:50,139
After testifying against Nagin, Greg
Meffert receives a reduced two -and -a
537
00:37:50,140 --> 00:37:51,220
-half -year sentence.
538
00:37:51,560 --> 00:37:54,820
Rodney Williams and Frank Fadella both
get one -year sentences.
539
00:37:55,520 --> 00:38:01,159
And Mark St. Pierre's 17 -year sentence
is later reduced to five years after he
540
00:38:01,160 --> 00:38:02,420
also agrees to cooperate.
541
00:38:03,640 --> 00:38:08,419
Five months later, it's Ray Nagin's turn
to learn his fate as he enters the
542
00:38:08,420 --> 00:38:09,980
federal courthouse once again.
543
00:38:09,981 --> 00:38:11,919
Still maintain your innocence?
544
00:38:11,920 --> 00:38:12,970
Absolutely.
545
00:38:13,900 --> 00:38:16,920
Negan is facing 15 to 20 years.
546
00:38:17,440 --> 00:38:22,179
Judge Helen Berrigan decides to go below
the recommended guidelines and
547
00:38:22,180 --> 00:38:25,160
sentences him to 10 years at a federal
prison camp.
548
00:38:25,880 --> 00:38:30,879
In this, his only post -conviction
interview, done just after the
549
00:38:30,880 --> 00:38:35,200
with WDSU reporter Travers Mackle, Negan
appears unchanged.
550
00:38:35,201 --> 00:38:39,899
So 10 years in prison, what was going
through your mind when the judge read
551
00:38:39,900 --> 00:38:40,950
in court today?
552
00:38:41,260 --> 00:38:46,479
Well, you know, all of this is pretty
surreal to me. You know, I still
553
00:38:46,480 --> 00:38:48,830
my innocence. We're going to appeal this
thing.
554
00:38:49,140 --> 00:38:52,090
And, you know, it's just something
that's very difficult.
555
00:38:52,460 --> 00:38:57,819
The former mayor says the prosecution
presented a false case against him. The
556
00:38:57,820 --> 00:38:59,660
prosecutors were fairly magical.
557
00:39:00,760 --> 00:39:04,919
their ability to take something that
supposedly happened and paint it as
558
00:39:04,920 --> 00:39:06,840
reality, when it really didn't happen.
559
00:39:07,220 --> 00:39:12,140
I was not aware of any of that stuff. I
was not involved in any kind of bribes.
560
00:39:12,600 --> 00:39:15,360
And I think my testimony laid that out.
561
00:39:15,600 --> 00:39:20,579
When asked what happened to Ray Nagin,
the former mayor says that he crossed
562
00:39:20,580 --> 00:39:22,960
wrong people, though he doesn't name
them.
563
00:39:23,260 --> 00:39:24,940
In my opinion, I've been targeted.
564
00:39:25,240 --> 00:39:27,580
I've been smeared, tarnished.
565
00:39:28,360 --> 00:39:30,100
And for some reason...
566
00:39:30,320 --> 00:39:35,139
Some of the stances that I took after
Katrina didn't sit well with some very
567
00:39:35,140 --> 00:39:37,680
powerful people. So now I'm paying a
price for that.
568
00:39:37,940 --> 00:39:42,559
Attorney Robert Jenkins says Nagin's
statements harken back to his infamous
569
00:39:42,560 --> 00:39:43,920
Chocolate City speech.
570
00:39:44,480 --> 00:39:50,719
There was a movement basically to, I
guess, recapture the city and move
571
00:39:50,720 --> 00:39:53,360
into certain areas and make place for
green space.
572
00:39:53,620 --> 00:39:56,979
And he wasn't going to do that. So he
fought that. He fought to bring
573
00:39:56,980 --> 00:39:59,360
back. And that may have made him a total
hero.
574
00:40:00,140 --> 00:40:05,380
But lead prosecutor Matt Komen says the
evidence is what convicted Ray Nagin,
575
00:40:05,420 --> 00:40:08,140
and there are no other conspiracies at
work.
576
00:40:08,920 --> 00:40:14,519
Many times the mayor, when he was ever
questioned, would typically, one, deny
577
00:40:14,520 --> 00:40:19,559
any knowledge, obviously deny any
culpability or responsibility for his
578
00:40:19,560 --> 00:40:26,319
actions, and then thirdly would offer up
some abstract motivation by unknown
579
00:40:26,320 --> 00:40:31,299
forces. He did so in a book. He did so
in that interview. He actually made
580
00:40:31,300 --> 00:40:33,579
reference to that during his trial
testimony.
581
00:40:33,580 --> 00:40:37,959
But to date, as we sit here, I'm still
waiting to hear exactly what he's
582
00:40:37,960 --> 00:40:39,010
about.
583
00:40:39,260 --> 00:40:45,139
I think that's what a lot of people
still hate him for, is that he seems
584
00:40:45,140 --> 00:40:46,190
arrogant.
585
00:40:47,330 --> 00:40:52,550
He maintains the facade of I'm being
targeted, and he never says, well, look,
586
00:40:52,710 --> 00:40:56,850
maybe I made some, at least maybe I made
some errors in judgment, or, you know,
587
00:40:56,851 --> 00:41:00,449
I shouldn't have done this. I didn't
think I was doing something crooked, but
588
00:41:00,450 --> 00:41:04,989
maybe I shouldn't have been doing a deal
with Home Depot. Whatever, just tell us
589
00:41:04,990 --> 00:41:09,709
something. And I think people don't
forgive him for not, like, I feel like
590
00:41:09,710 --> 00:41:13,710
came out and gave a really heartfelt,
abject apology, people might not even.
591
00:41:14,270 --> 00:41:18,770
need to see him go to prison, but they
feel like this guy still hasn't learned.
592
00:41:21,350 --> 00:41:24,810
Now the city of New Orleans is finally
gaining some traction.
593
00:41:25,530 --> 00:41:30,689
Some call it a renaissance, while others
see continuing injustices and social
594
00:41:30,690 --> 00:41:32,990
issues that faced most major cities.
595
00:41:33,950 --> 00:41:37,949
And while the soul of the Crescent City
may have been badly hurt by the tragedy
596
00:41:37,950 --> 00:41:40,610
of Katrina, its essence survives.
597
00:41:42,000 --> 00:41:46,699
We've still got some of the greatest
people in the world. We still have the
598
00:41:46,700 --> 00:41:47,750
food in the country.
599
00:41:47,940 --> 00:41:53,640
Our music is continuing to innovate and
reach new heights.
600
00:41:54,480 --> 00:41:59,839
So at the end of the day, beating a city
like New Orleans is still a pretty good
601
00:41:59,840 --> 00:42:00,890
decent job.
602
00:42:02,800 --> 00:42:08,509
And authorities believe there is a real
focus on making sure Those who succumb
603
00:42:08,510 --> 00:42:11,610
to corruption are ultimately held
accountable.
604
00:42:12,250 --> 00:42:17,170
Whenever your elected or appointed
public official takes money, becomes
605
00:42:17,390 --> 00:42:20,490
it is always a bad situation. It's never
good.
606
00:42:21,130 --> 00:42:26,209
But in this case, under these
circumstances, after Katrina, it was
607
00:42:26,210 --> 00:42:30,770
what Negan did. The city needed someone
to be a true leader.
608
00:42:31,570 --> 00:42:32,830
And he let everybody down.
609
00:42:32,840 --> 00:42:37,390
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