Kenneth Fairley was sentenced December 19th, 2016 on three felony counts. One of those counts was conspiracy, and the other two counts were receiving stolen property. On appeal, the appellate court ruled that jury instructions were flawed as they pertained to the two charges of receiving stolen propery, and the sentences were vacated by Judge Starrett on March 12th, 2018.
The catch for Fairley is the three sentences were running concurrently, meaning at the same time, as opposed to consecutively, meaning one after the other. While Fairley supporters are cheering a victory, it may not be much of one, if at all. All Judge Starrett would have to do, according to a reply brief by Federal prosecutors, is to discharge the mandatory assessments for the two vacated charges. That’s just $100.00 per charge. So, Fairley will save $200 total after having spent tens of thousands of legal expenses.
If Judge Starrett holds a new sentencing hearing for Mr. Fairley, it could end up badly for him. To hold a new hearing would involve transporting Mr. Fairley back to Mississippi, which would be costly to taxpayers, and according to prosecutors unnecessary, unless Judge Starrett plans to impose a more stiff penalty than he did before.
The government stated in its reply brief for Fairley’s motion for a new sentencing hearing and bail pending that sentencing,
” If this Court were to consider imposing a more onerous sentence than Fairley originally received on December 19, 2016, then the Court should follow the procedure defendant Fairley advocates. But if the Court is satisfied that Fairley’s sentence need not be altered in light of the vacated convictions, the Court is authorized to exercise its discretion to do so without another sentencing hearing. In this event, the Court would merely be correcting a discrete part of the sentence to eliminate the $100 mandatory assessments imposed on account of the vacation of the convictions on Counts 2 and 3. The Court could correct the judgment without the necessity of holding a resentencing hearing and without the costs associated with transporting the defendant back to Mississippi.”
A local pastor spoke on behalf of Kenneth Fairley prior to his trial and referred to him as a “tree shaker,” who was “stirring everything up,” so people could “make jelly” with the fruit of Fairley’s efforts. This led to the birth of the hastag #TreeShakersAndJellyMakers on Facebook. For the history of this on Facebook, search that Hashtag.
Charles Bolton and his wife are taking two FBI agents to court.
Convicted former Chief Forrest County Deputy, Charles Bolton and his wife have filed suit against two FBI agents. The lawsuit alleges that Christopher Freeze and Jerome McDuffie slandered the Boltons and caused emotional distress when the two agents,
“misrepresent(ed) as fact that Charles and Linda Bolton had stolen over $700,000 worth of food from the Forrest County jail and diverted such into their businesses.” an April 26, 2017 interview. McDuffie in the interview,
Christopher Freeze said in the WDAM interview of the Boltons,
“They were taking over $700,000 of food that was bought for the jail to be used for the inmates in the jail and then diverting that to their own restaurants, and then selling it, preparing it and selling it to their customers,”
When asked about Mr. Bolton going through the discovery and deposition process, as well as Mr. Bolton going under oath, The Boltons’ Attorney, Mary Lee Holmes, told HPNM
“The Boltons are well aware of the rules of civil procedure, which will require them, if requested, giving a deposition under oath and them answering interrogatories under oath.”
Neither of the Boltons testified in their own defense at trial. Both were convicted of tax crimes, but neither were indicted in the jail food theft conspiracy. Their sentences were enhanced due to currently sealed evidence and sealed testimony that comprises the Pre Sentencing Report (PSR). That testimony includes Jerry Wayne Woodland and Alan Haralson, along with several others.
Both Haralson and Woodland pled guilty to conspiring with “others” to steal hundreds of thousands of dollars worth of food from the Billy McGee Detention Center over a twelve year period. Haralson died a few months after pleading guilty. Woodland served one year followed by house arrest. To learn more search #UnafraidToFeed on Facebook.
A recently unsealed whistle blower civil action known as a “Qui Tam” has made allegations of a widespread scheme to defraud Medicare at seven “Critical Access Hospitals” (CAH) across the State of Mississippi, since 2005. The complaint, filed by former U.S. Attorney, J. Brad Pigott, on behalf of Plaintiff/Relator Walton Stephen “Steve” Vaughan and Plaintiff/Relator Mitchell D. Monsour alleged violations of the False Claims Act (FCA) and the Anti Kickback Act (AKA)
Vaughan is the CEO and Administrator of Pearl River County Hospital and Monsour is a health care executive and management consultant hired by Vaughan. Together the two uncovered the alleged fraud in 2012 at Pearl River County Hospital and through investigations, put together a complaint that details evidence of fraud involving seven Mississippi Hospitals. Personal defendants in the action are:
The four defendants are accused of using their companies:
Piercon, Inc. (Piercon), dismissed 3.21.18
Performance Accounts Receivables (PAR),
Performance Capital Leasing (PCL),
Stepping Stones Healthcare, LLC (SSH)
Defendants’ Cost Padding Scheme:
43. “Beginning in approximately 2005, Defendant Wade Walters offered to each of the Hospital Defendants, and each of the Hospital Defendants have accepted, agreements under which each of the Defendants fraudulently exploited the cost-based system of Medicare reimbursement of CAH’s as described above, through millions of dollars in payments by the Hospital Defendants to Walters (and the remaining Defendants who are not Hospital Defendants) for activities designed
Wade Walters and his wife both had property seized in the #CreamScheme. Now Wade Walters faces new allegations of widespread Medicare Fraud dating back as far as 2005 involving seven rural Mississippi hospitals.
to pad and inflate costs, the amounts of which were falsely represented on the Hospitals Defendants’ cost reports to Medicare as directly related to (and as necessary to) patient health care (but the central purpose and effect of which was to enrich Walters and the remaining Defendants other than Hospital Defendants). All of those activities by the ‘Defendants’ Cost Padding Scheme.’ ”
44. “As a key part of the Defendants’ Cost Padding Scheme, Defendant Walters, through Defendant Performance Capital Leasing, LLC (“PAR”), which was owned and controlled by Walters, entered written agreements with Hospital Defendants, not in order to provide services necessary to or directly to patient care, but to create higher costs and thus higher Medicare revenues for the Hospital Defendants as an end in itself.”
45. “Under such agreements, the Hospital Defendants engaged Walters and PAR to ‘develop and implement strategic plan(s) to restructure (the) hospital’s operations to all for maximum cost based reimbursement,’ pursuant to which PAR promised to provide ‘monthly operating reports demonstrating revenue generation.’ “
Defendant Walters through defendant PAR was given substantial managerial control in a 2005 contract with North Sunflower Hospital. The hospital agreed to pay Walters and PAR 7% of all receipts for “swing-bed” and intensive outpatient (“IOP”) services delivered by healthcare professionals. In 2010 Walters and PAR obtained a new agreement requiring the hospital to pay 7% of all such revenue received by that Hospital from all inpatient and outpatient activities.
According to the complaint,
50. By agreeing to link their payments to Walters and PAR directly to the amount of Medicare revenue collected by each CAH, each such Hospital Defendant left no doubt that it was engaging Walters and PAR to increase the revenues as an end in itself, rather than to cause an efficient expenditure of costs actually necessary to patient care (as required by the Medicare laws described above).
52. As a further and related part of the Defendants’ cost padding scheme, Walters recruited, and caused Hospital Defendants to enter purported service contracts with, other entities who or which would be paid by the Hospital Defendants to enter purported service contracts with, other entities who or which would be paid by the Hospital Defendants, not on the basis of any reasonable or market value of services rendered for patient care, and not on the basis of any services of any kind that they would render, but instead based on how much those other vendors or contractors succeeded in increasing the reported costs (and thus Medicare revenues) associated with their area of hospital operations.
Critical Access Hospitals (CAHs) are limited to 25 beds, and operate in rural and generally economically deprived and medically undeserved areas of the United States. Unlike traditional hospital facilities that are paid under Medicare’s Prospective Payment Systems (PPSs) through which Medicare reimbursement is fixed and capped, Medicare pays CAHs based on each hospital’s reported and allowable costs. Those costs must be directly related to patient care in order to be lawfully reimbursable.
Critical Access Hospitals named in the original filing, that have since been voluntarily dismissed by the Plaintiffs/Relators are:
North Sunflower Medical Center
North Sunflower Medical Foundation
Franklin County Memorial Hospital
Franklin County Memorial Hospital Medical Foundation
Tallahatchie General Hospital and Extended Care Facility
Tallahatchie County Memorial Hospital Medical
*UPDATE – Paragraph 21 of the Compliant listed the below hospitals as being “Defendants;” however, these Hospitals were never served with the complaint and are not identified on page one of the complaint as Defendants. Calls to Plaintiff’s attorney Brad Pigott were not returned. A representative for Hardy Wilson Memorial Hospital stated unequivocally that they were not defendants in the complaint nor were the other below named hospitals.
Critical Access Hospitals named in paragraph 21 of the original filing,
Perry County General Hospital, LLC
Quitman County Hospital, LLC
Hardy Wilson Memorial Hospital
Noxubee General Hospital
Defendant Dennis Pierce
*UPDATE 3.23.18 Defendant Pierce and Piercon were dismissed as defendants in the lawsuit by the plaintiffs on 3.21.2018
58. “One of the vendors who Walters recruited to participate in, and who agreed to and did participate in, the Defendants’ Cost Padding Scheme, was Defendant Dennis L. Pierce (hereafter, ‘Pierce’), and also
Dennis Pierce has been accused of padding his invoices and circumventing bid laws to defraud Medicare.
Defendant Piercon, Inc. (hereafter, ‘Piercon’), which was owned and controlled by Dennis Pierce.”
59. “Pierce and Piercon each agreed to participate in the Defendants’ Cost Padding Scheme by agreeing to conduct various construction projects on the premises of the Pearl River County Hospital, and perhaps on the premises of Hospital Defendants’ operations, and to charge non-competitive and exorbitant prices for such construction work (for which no competitive bids were solicited or taken), and also to split invoices for such work into multiple invoices of under $5,000 per invoice, in order to allow Walters and such Hospital Defendants fraudulently to evade a Medicare requirement that such construction expenditures in excess of $5,000 per invoice, in order to allow Walters and such Hospital Defendants fraudulently to evade a Medicare requirement that such construction expenditures in excess of $5,000 be treated as a capital project and be the subject of depreciation over time (and also to evade Mississippi statutes forbidding ‘split invoicing’ to evade state bid laws governing the expenditure of State funds). “
Defendant Hope Thomley
65. “Defendant Hope Thomley agreed with Defendant Walters to support, and actively participated in and profited from the Defendants’ Cost Padding Scheme, by fraudulently using her position as an employee of Defendant PAR to
Hope Thomley is a defendant in the case. Her husband Randy was given the insurance business for one or more of the hospitals Hope was involved.
cause Pearl River County Hospital to incur multiple expenses and enter multiple contracts, none of which was related to or necessary to the delivery of health care services to patients, but all of which benefited Thomley financially (and all of which were falsely included as direct health care expenses on the Medicare cost reports of that Hospital). Those transactions included payments by Pearl Rover County Hospital to Thomley of a salary apart from her salary from PAR, purchases by that Hospital of insurance policies as to which Defendant Thomley’s husband was the commission-paid insurance agent, purchases by that Hospital of approximately $2,000 in Christmas decorations in November 2011 from a company owned or controlled by Thomley’s husband, payments by that Hospital of over $6,000 to a company formed by Defendant Thomley and her husband for purported services including information technology consulting, and payments by that Hospital of personal expense of Defendant Thomley charged on her personal American Express credit card. “
Defendant Mike Boleware
The Plaintiffs/Relators voluntarily withdrew Boleware as a Defendant, but the Government reserves the right to bring its own complaint in the future.
64. “Defendant Mike Boleware agreed with Defendant Walters to support , and actively participated in, the Defendants’ Cost Padding Scheme, as and through his position of Hospital Administrator and CEO at Pearl River County Hospital, at Defendant Franklin County Hospital, and at Hardy Wilson Memorial Hospital (located at Hazlehurst, Mississippi), in part by allowing Defendant Walters to carry out the entire Cost Padding Scheme at such Hospitals and through false items on the Cost Reports of each such Critical Access Hospital. “
Defendant Wade Walters (alleged ring leader)
68. “In the course of and for the purpose of padding the ‘costs’ to be reported by the Hospital Defendants on their Medicare ‘costs’ to be reported by the Hospital Defendants on their Medicare cost reports. Defendants Walters routinely caused Defendant Performance Capital Leasing, LLC, which he owned and controlled, to designed to ‘lease’ to the Hospital Defendants modular buildings, medical equipment, vans, and other properties at exorbitant leasing rates designed to increase the Hospitals’ ‘costs’ and thus further to achieve the purpose of the Defendants’ Costs Padding Scheme. “
69. Because the Defendants all knew that compliance with the AKA was material to and a prerequisite to the Hospital Defendants’ entitlement to any payments from Medicare, all payment claims submitted for all Medicare payments by all of the Hospital Defendants throughout their participation in Defendant’s Cost Padding Scheme were known by the Defendants to be legally and factually false claims made in violation of the FCA.
Count I
Claims By and on Behalf of the United States for Making False Claims (and for Causing False Claims to be Made)
76. By virtue of the acts described herein, each and every one of the Defendants knowingly caused to be presented false claims for payment, to officials of the United States Government in violation of 31 U.S.C. subsection 3729(a)(1), and as amended in 2009 and codified as 31 U.S.C. subsection 3729(a)(1)(A).
Count II
Claims By and on Behalf of the United States for Causing False Records of Statements to be Used to Get Paid, and/or Which were Material to, False Claims
81. By virtue of the acts described above and the Defendants’ uses of, or activities causing to be used, false records and statements to get false and fraudulent claims paid and approved by the Government, and otherwise the Defendants’ acts causing false records and statements to be used which were material to false records or statements to get false or fraudulent claims made by the Hospital Defendants, the Defendants made and used false records or statements to get false or fraudulent claims paid or approved by an agency of the United States Government, in violation of 31 U.S.C. subsection 3729(a)(2)(codified before 2009 amendments), and also caused to be made or used false records or statements which were material to false or fraudulent claims in violation of 31 U.S.C. subsection 3729(a)(1)(B)(as codified pursuant to amendments to the FCA in 2009.
Count III
Claims By and on Behalf of the United States for Conspiracy to Submit False Claims
86. By reason of the foregoing with respect to Defendants’ Cost Padding Scheme, each of the Defendants agreed and conspired with one or more Hospital Defendants to participate in that Scheme and thereby to defraud the government in order to get false or fraudulent cost-based claims paid by Medicare, in violation of 31 U.S.C. subsection 3729(a)(3), and in violation of 31 U.S.C. subsection 3729(a)(1)(C) as amended in 2009. In furtherance of the conspiracy, and through each of the particular activities described above, each of the Defendants acted overtly to affect the objects of the conspiracy alleged herein.
87. By virtue of the false claims presented or caused to be presented by the Defendants pursuant to this conspiracy, the United States has suffered actual damages and is entitled to recover from Accretive three times the amount by which it is damaged, plus civil money penalties of not less than $5,500 and not more than $11,000 for each of the false claims presented or caused to be presented, and other monetary relief as appropriate.
While no criminal charges have been filed in this whistle blower action, the government has not waived its right to join in or to file its own complaint or charges against the defendants.
Wade Walters is an unindicted co-conspirator in connection with over $65 million in alleged fraudulent TRICARE billing that originated with just two pharmacies he owned in Utah over a 4 month period.
A February 2017 filing by the U.S. Attorney’s office in the Southern District of Mississippi, pertaining to asset forfeiture in connection with TRICARE prescription fraud, alleges that Mitchell “Chad” Barrett of Clinton, Wade Walters and Hope Thomley of Hattiesburg, and Thomas E. “Tommy” Spell, Jr. of Ridgeland were the key players in a Mississippi scheme that bilked TRICARE and other insurers of over $400 million. Then, less than six months later, in July of 2017, in the Federal Court of the Southern District of Mississippi, Jason May, the pharmacist for Walter’s (et al) Advantage Pharmacy in Hattiesburg, waived indictment and pleaded guilty to submitting over $192 million in fraudulent billing to TRICARE. May’s plea reads,
“Beginning in or around Jan. 2012, and continuing through in or around Dec. 2015, in Lamar County, Jason May did knowingly and willfully, that is, with the intent to further the objects of the conspiracy, combine, conspire, confederate, and agree with co-conspirator 1, and other persons known and unknown to the U.S. Attorney, to commit offenses against the United States.”
On CLICK TO ENLARGE – Mississippi Secretary of States records show that Walters Holdings is solely owned by Wade Walters. Funds from this company were used to purchase CFK, Inc. CFK in turn allegedly defrauded TRICARE for over $65 million dollars in four months.
Now, things are heating up in other states as a July 2017 indictment from the U.S. Attorney of the Southern District of California, which had remained under seal, was unsealed on January 24th, 2018. Interestingly, the road for this indictment leads right to the FBI Field Office in Jackson, Mississippi.
The recently unsealed indictment charges Jimmy Collins, Ashley Collins, and “CFK, Inc.,” with one (1) Count of Conspiracy to Commit Health Care Fraud, and six (6) Counts of Payments of Illegal Remuneration. If convicted, the defendants face up to 10 years in prison and a $250,000 fine for Count 1, and for Counts 2-7, up to 5 years in prison and a $250,000 fine for each count.
CFK, Inc., is a Utah based corporation that did business as “The Medicine Shoppe Pharmacy” and “Prescriptions Plus Pharmacy” in Bountiful, Utah. CFK, Inc. was purchased with funds from Walters Holdings, LLC., a Mississippi Limited Liability Company. According to the Mississippi Secretary of State’s office, Walters Holdings, LLC is owned solely by Wade Walters. Walters is referenced in the indictment as “W.W.” The indictment alleges,
8. “In or around, December 2014, W.W. and T.S. purchased CFK, Inc. (“CFK”), a Utah Corporation that operated and did business as the Medicine Shoppe Pharmacy and Prescriptions Plus in Bountiful, Utah. Ownership of CFK was in the name of C.F. and A.F. ,W.W.’s daughter and son-in-law, but the funds to purchase CFK came from Walters Holdings, LLC, a Mississippi company controlled by W.W. Following the purchase, W.W., T.S., and R.M. were elected as CFK’s corporate officers.
9. Between January 2015 and May 9, 2015 – the period immediately following the purchase – CFK submitted reimbursement request of more than $65 million for compounded drug prescriptions filled by the Medicine Shoppe. The average price of these compounded drugs over this period was $14,510.33.”
The Utah Secretary of State’s website shows Wade Walters’ daughter and son-in-law as officers of CFK; Inc.
According to the Utah’s Secretary of States Office, the President of CFK was Chandler Frame, who is Wade Walters’ son-in-law. Walters’ daughter, Alison Frame, was named Vice President of CFK. The Frames are referenced in the indictment as “CF” and “AF.”
The indictment charges that in its non-resident pharmacy application to the California Board of Pharmacy, CFK listed as its officers and managers the Frames, when in fact, they had “no role in operating CFK of the Medicine Shoppe.” According to the indictment, Wade Walters “W.W.,” Tommy Spell “T.S.,” “R.M.,” and Walters Holdings, LLC., failed to disclose that they were the real owners and/or managers of CFK.
In fairly specific detail, the indictment alleges that CFK “falsely represented to the California Board of Pharmacy” that each patient was called before filing a prescription, and medication was shipped to a patient only after having such direct communication with the patient. But in reality, the medications were shipped without ever speaking to the recipient.
The indictment further alleges that CFK paid almost $46 million in illegal kickbacks to Jimmy and Ashley Collins between February and July 2015 for recruiting thousands of “straw TRICARE beneficiaries” to receive compound medications from CFK’s pharmacies, the Medicine Shoppe and Prescriptions Plus in Bountiful, Utah.
The U.S. Attorney alleged in the indictment,
CFK, its officers, and related companies, paid kickbacks in the form of a percentage of gross revenue received by CFK for claims submitted to TRICARE for compounded drug prescriptions. These kickbacks were paid to companies and individuals who recruited and paid TRICARE beneficiaries (straw beneficiaries) to sign up to receive compounded drug prescriptions covered by TRICARE’s pharmacy benefits.
The conspiracy employed a vast network of recruiters that targeted TRICARE beneficiaries (veterans and their families) who were covered under the healthcare program. According to the indictment recruiters were instructed.
to falsely tell TRICARE beneficiaries that they would receive compounded prescription medications as part of a medical trial, and in exchange for doing so, that they would be paid a monthly sum, typically $300 per month. In reality, no study was taking place and this monthly sum was an illegal kickback to the straw beneficiaries.
The indictment charges,
It was the object of the conspiracy for the defendants and their co-conspirators to unlawfully enrich themselves by submitting fraudulent claims to TRICARE, a federal benefit program, for compounded drugs prescribed to TRICARE beneficiaries, which prescriptions had been induced by kickbacks paid and promised to be paid to TRICARE beneficiaries and marketers, while concealing those kickbacks from DHA, TRICARE, and Express Scripts.
The indictment also includes a detailed request for forfeiture that would require the defendants, upon conviction, to forfeit millions upon millions of dollars in cash, expensive jewelry, luxury vehicles, gold and silver bars, and real property, and other various investments and holdings.
The press release on Friday January 26th, 2018 from the U.S. Attorney’s Office of the Southern District of California (see below) summarized the indictment, but at the very bottom, the U.S. Attorney of the Southern District of California credited the following agencies for putting the case together:
Defense Criminal Investigative Service
Naval Criminal Investigative Service IRS Criminal Investigative Division, Gulfport, MS Federal Bureau of Investigation – Jackson, MS Field Office
Hattieburg Patriot News Media asked the Attorney General’s office for the Southern District of Mississippi for a comment regarding CFK’s connection to Walters Holdings, LLC, a Mississippi Company. The reply was, “Sorry, no comment.”
A video obtained by Hattiesburg Patriot News Media shows a bus driver employed at the Forrest County School District assaulting an unnamed student. Throughout the encounter, the driver appears to have the student in a choke hold.
“He’s over here fighting a 5’3″ kid thinking he is bad”
At one point the driver proclaims,
“No one on this bus could knock me out.”
At one point another student says to the driver,
“There’s high schoolers and kids on here. Why are you trying to fight anybody?”
At the end of the video Coach Alexander (Coach A) get’s on the bus to diffuse the situation. HPNM reached out to the district. Mr. Bryan Freeman told HPNM,
“We have seen the video, and the employee has been terminated for violating our policies and procedures. That is not something we tolerate. We will not tolerate, and that employee is no longer with us.”
According to TSA, former Mississippi Governor Haley Barbour was arrested January 2, 2018 for having a loaded 38 caliber revolver in his carry-on bag while attempting to clear TSA security.
Hattiesburg Patriot News Media (HPNM) has confirmed that former Mississippi Governor Haley Barbour was arrested in the morning hours of January 2nd at the Jackson–Medgar Wiley Evers International Airport when he attempted to board a plane with a loaded 38 caliber revolver. Hattiesburg Patriot news media submitted Freedom of Information Request with TSA and the Jackson Airport police after sources contacted HPNM about the incident.
TSA responded to request for all emails, video, audio, and communications regarding the alleged detainer and/or arrest of former Mississippi Governor Haley Barbour with the following email communication.
.38 caliber revolver loaded with five bullets and here is the photo of the gun.
The former governor was arrested by airport police, posted bond, and was able to catch his flight.
Lisa Farbstein
Acting Director of Media Relations and Press Secretary
Office of Public Affairs
Transportation Security Administration [email protected]<mailto:[email protected]>
In a follow up email, TSA wrote the following:
TSA confiscated this gun from Mississippi Governor Haley Barbour when he went through TSA Security.
On the morning of January 2, 2018, a TSA officer who was staffing a checkpoint x-ray machine at Jackson-Medgar Wiley Evers International Airport spotted a firearm in a carry-on bag. As per protocol, TSA officials contacted the airport police, who responded to the checkpoint, confiscated the weapon and detained the passenger for questioning. The firearm was loaded with five rounds.
As a reminder, individuals who bring weapons to the checkpoint are subject to federal civil penalties of up to $13,000. This applies to travelers with or without concealed gun carry permits because even though an individual may have a concealed carry permit, it does not allow for a firearm to be carried onto an airplane. A typical first offense for carrying a handgun into a checkpoint is $3,900. The complete list of penalties is posted online here: https://www.tsa.gov/travel/civil-enforcement
Hattiesburg Patriot News Media also broke a story last week about Barbour’s lobbying firm, BGR Government Affairs’ unregistered lobbying efforts on behalf of the Uranium One deal that has been the subject of national reporting. Read that story here.
U.S. Attorney General Jeff Sessions received a November 15th, 2017 letter from Senate Judiciary Chariman, Chuck Grassley, about Three lobbying firms which didn’t register with the government while pushing Uranium One Deal.
One would think it newsworthy that the Chairman of the U.S. Senate Judiciary Committee wrote a letter to the U.S. Attorney General informing him that the former Chairman of the Republican National Committee (cum Washington powerbroker) is, in opinion, violating federal law. Yet, before the Hattiesburg Patriot News Media’s report this week, no other news outlet in the country had reported on the failure of Haley Barbour’s powerhouse lobbying firm to comply with the Foreign Agents Registration Act (FARA). Why? There are several possible answers to that question, but more important are the reasons why the Patriot did report the story.
First, the notion that a select few have direct access to and influence over our governmental officials, a privilege not shared by or available to all citizens, is antithetical to basic principles of our democratic form of government. Over 100 years ago, U.S. Supreme Court Justice Harlan based his disagreement with the Court’s since-rejected opinion in Plessy v. Ferguson on the fundamental premise that
“there is in this country no superior, dominant, ruling class of citizens. There is no caste here.”
Barbour is a founding member of BGR Government Affiars and the former Governor of the State of Mississippi
That, unfortunately, is simply not true. The fact is that, in our country, the wealthy are a “superior, dominant, ruling class of citizens.” That this is so in most other countries and throughout history does not make it right. This is America. It is not supposed to happen here. Especially not today.
Among the many special privileges unique to the wealthy, perhaps the most pernicious is their ability to influence governmental decision-making, which they accomplish by their employment of lobbyists. Lobbyists make no bones about the fact that it is their job to obtain special favor from our government officials on behalf of the privileged few who can afford to pay them. Day in and day out, lobbyists persuade lawmakers and administrators to act – or not act – in their clients’ best interests, and make decisions that are often inconsistent with or even contrary to the interests of the electorate.
The practice is disturbing enough when exercised by American citizens and companies, but most would be alarmed to know that it is also being aggressively employed by foreign countries and organizations with interests adverse to our own. Foreign interference governmental decision-making is a form of economic warfare when aimed at capturing or otherwise controlling the supply of critical economic resources. Without some measure of control and oversight, it can threaten our nation’s security, and may in some circumstances rise to the level of an existential threat.
Enter the Foreign Agents Registration Act (“FARA”). FARA was originally enacted in 1938 to counter clandestine foreign use of American firms and citizens to spread Nazi and Communist propaganda in the United States. However, its fundamental purpose remains as important today as when it was enacted – to ensure that the American people are informed of the source of information and the identity of foreign attempts to influence U.S. public opinion, policy and laws.
FARA is a procedural statute, not a substantive one. It does not prohibit particular activities in the abstract; it merely requires that those engaged in such activities on behalf of foreign interests identify themselves (and disclose their interests) to the U.S. government. Under FARA, each agent of a foreign principal must file (and periodically supplement) a comprehensive registration statement with the Attorney General disclosing, among other things: the identity of the foreign principal represented; the issues to be lobbied; the services the agent intends to provide; the lobbying activities actually performed; the financial arrangement between the agent and foreign principal; and any payment(s) the agent receives.
Over time, the Act has been redefined and refocused to require reporting of a broader range of activities by corporations, lawyers, lobbyists, and public relations firms regarding their efforts to influence the political and governmental processes on behalf of foreign entities in both the public and private sectors. Greater attention has recently been focused on the roles of those who advocate on behalf of foreign interests. For example, FARA was used as a basis to prosecute former National Security Advisor Michael Flynn (who belatedly registered under the statute after it was discovered that his lobbying firm received $530,000 for work on behalf of a Dutch company with ties to the Turkish government); and former Trump Campaign Manager Paul Manafort, who is alleged to have received far more money from Oleg Deripaska (a Russian billionaire with close ties to Vladimir Putin) to promote various Russian interests.
Now back to Barbour. With offices in Washington, D.C. and London, Barbour’s firm (BGR Holdings, LLC and its subsidiaries) is one of the most powerful lobbying firms in the country. BGR makes no secret about what it does for its clients, proudly touting on its website that the firm “specialize[s] in creating, implementing and changing public policy. Whether you seek new legislation, need to modify regulation, or want to put a stop to adverse legislation, we have the skills to achieve results under the most difficult of circumstances.” And just how does BGR do that? Through its “longstanding relationships with key government and business decision-makers in Washington” with whom BGR “facilitate[s] introductions.” All of this, BGR says, “translates into a competitive advantage for our clients.”
BGR’s list of clients on behalf of which it “lobbies” American elected officials and administrators is long and impressive. In 2013 the firm was paid $13.7 million for lobbying and its three largest clients were the Republic of India, Ukraine Chevron Corp. and the State of Kazakhstan. In 2014 it was widely reported that BGR Group was “at the center of [a] lobbyist network” supporting Republican Senator Thad Cochran, while he fought a tight primary election race against Tea Party candidate, Chris McDaniel. In April 2015, the Government of South Korea retained BGR for public relations and image building.
BGR cannot possibly be unaware that its activities fall squarely within FARA, or that the willful failure to register and/or disclose its activities can subject it to both civil and criminal penalties. One must therefore ask why a sophisticated, experienced lobbying firm like BGR would fail to comply with the Act’s seemingly simple requirements. The reasons may not be nefarious, and the answer may be innocuous. But the question is worth asking, and the issues raised by Senator Grassley’s letter involve matters not only of public trust, but potentially of national security.
U.S. Senate Judiciary Committee Chairman, Chuck Grassley’s, letter to Jeff Sessions barbour
Haley Barbour is a founding member of BGR Government Affairs. Mr. Barbour is also an attorney with Butler Snow practicing in government relations. Picture Source www.bgrdc.com
A newly uncovered letter reveals that U.S. Senate Judiciary Committee Chairman, Senator Chuck Grassley, wrote U.S. Attorney General Jeff Sessions on November 15, 2017 with serious concerns about Haley Barbour’s lobbying firm BGR Government Affairs. Grassley’s concerns centered around BGR Government Affairs‘ lobbying involvement on behalf of Uranium One, which is a Canadian based company that is owned by the Russian government. Barbour is listed on the BGR’s website as a founding partner and is active in the firms lobbying efforts.
Two weeks prior to Grassley’s letter to Sessions, on October 30th, 2017, Paul Manafort and Rick Gates were indicted by the federal grand jury on 12 counts; one of which was conspiracy against the United States for being an unregistered agent of a foreign principal under the Foreign Agents Registration Act (FARA). (Manafort and Gates indictment below article.)
In Grassley’s November 15th to Attorney General Jeff Sessions he states,
Today, I write concerning lobbying work done by three lobbying firms – the Podesta Group, BGR Government Affairs, and Kountoupes Denham – on behalf of Uranium One, a Canadian company owned by the Russian government. All firms lobbied both houses of Congress, and the executive branch. None of the firms have registered under FARA for their representation. However, at the time of representation Uranium One was owned by the Russian government-owned company, Rosatom.”
Iowa U.S. Senator Chuck Grassley is the Chairman of the Senate Judiciary Committee.
‘[p]rovid[ed] strategic counsel and assistance regarding the CFIUS process’ and continued representation after CFIUS approved Rosantom’s acquisition of Uranium One.
Grassley further noted in his letter to Sessions,
The FARA requires individuals to register with the Department of Justice (DOJ) if they act , even through an intermediary, “as an agent, representative, employee, or servant” or “in any other capacity” at the behest of a foreign principal, including a foreign political party, for purposes of engagement with a United States official. The registration applies to anyone who attempts to influence a U.S. government official on behalf of a foreign principal in an effort to “formulat[e], adopt[], or chang[e] the domestic of foreign politics of the United States.”
Senator Grassley’s November 15th letter requesed clarification from Sessions as to why the three firms mentioned in the letter, including Barbour’s, were not charged with FARA violations. Grassley listed the following four items to which he wanted a response:
1. Please explain why DOJ required FARA registration for the Podesta Group and Mercury LLC for work on behalf of the European Center for Modern Ukraine (ECFMU) but has not required the Podesta Group, BGR Government Affairs, or Kountoupes Denham to register under FARA for work on behalf of Uranium One.
2. What actions has the Justice Department taken to access whether the Podesta Group, BGR Government Affairs, and Kountoupes Denham should have registered under FARA for work on behalf of Uranium One?
3. Has the Justice Department sent a letter of inquiry to any of the entities? If so, please provide a copy. If not, why not?
4. Under 28 C.F.R 5.2, any present or prospective agent of a foreign entity may request an advisory opinion from the Justice Department regarding the need to register. Has any of the entities ever requested one in relation to their work on behalf of Uranium One? If so, please provide a copy of the request and opinion.
According to www.fara.gov,
Failure to file any such registration statement or supplements thereto as is required by the Act shall be considered a continuing offense for as long as such failure exists, notwithstanding any statute of limitation or other statute to the contrary. Any person who willfully violates any provisions of this Act or any regulations thereunder, shall, upon conviction thereof, be punished by a fine of not more than $10,000 or by imprisonment for not more than five years. For some offenses the punishment shall be a fine of not more than $5,000 or imprisonment for not more than six months, or both.
The purpose of FARA is to ensure that the U.S. Government and the people of the United States are informed of the source of information (propaganda) and the identity of persons attempting to influence U.S. public opinion, policy, and laws.
U.S. Senate Judiciary Committee Chairman, Chuck Grassley’s, letter to Jeff Sessions barbour
Exclusive interview with former Public Woks employee and whistle blower, Corey Adams.
“(Larry Barnes) came and got me told me to take a ride with him and that nobody needed to know where the gates were going. He brought me out there, and I measured them, went back to the shop and built them, and when I came back Monday, they were gone. I not sure who installed them. I just built them.”
PUSH PLAY TO HEAR EXCLUSIVE AUDIO WITH COREY ADAMS
Push play.
The Hattiesburg Public Works Department is no stranger to scandal and allegations of impropriety under the leadership of Dupree era Public Works Director Larry Barnes. Just recently, this outlet blew the lid off a recycle scandal that had transpired for well over two years and right up to the day the investigation was published. Barnes initially reported the video reported as “an isolated incident,” but the event was anything but isolated.The investigation by this outlet ultimately revealed that for over two years approximately 140 city residents, who paid for recycling, had their recycle material loaded every week with other trash and taken to the landfill.
Months after the report, Mayor Barker held a press conference (video above). Barker admitted that the report published by Hattiesburg Patriot News Media was 100% accurate and that refunds or credits to the affected residents would be given. Barker attempted to turn the negative moment into a positive situation by demonstrating how the problems of the past would not reoccur, and that residents could have faith in the program, the department, and Larry Barnes. Mayor Barker demonstrated the new process for recycling, and Barker, along with Councilwoman Mary Dryden, stood behind Barnes as the man for the job.
This picture is of a gate that was constructed by former Public Works employee, Corey Adams. This picture was taken inside the public works shop. According to Adams, Barnes ordered him to make the gates after taking Adams to his home to measure the openings in his fence.
Now, a new problem has arisen, and this time it appears to have much more serious implications. A former Public Works employee, Corey Adams, reached out to this outlet about a number of things that he was ordered to do for Barnes and Manager Allen McKinley, using city material and while on city time. In a post on HPNM Facebook Adams wrote,
“So I figured I’d put a set of gates on fb that Larry Barnes the big boss made me make on city time and materials witch (sic) are now out in front of his house…”
A few days after Adams posted the statements to HPNM Facebook, photos of two newly constructed, wooden gates were taken at Larry Barnes home in Timber Ridge Subdivision. It’s clear by the photos that new, wooden gates had been installed and that steel gates no longer were installed.Those pictures are seen here. Corey Adams identified that home as the location where Mr. Barnes took him to measure for the steel gates. Adams states in the audio,
But now that’s the, that’s the house you showed me with the unstained gates with the little Mazda truck out. That’s where I went out to measure, measure for uh, measure for those gates.
According to Corey Adams, he went to this house in this photo and measured for custom made steel gates, which, according to Adams, he constructed on taxpayer time and using taxpayer one inch by one inch steel tubing.This is the first of two gates that former Hattiesburg Public Works employee Corey Adams said he custom made for Barnes on city time using city materials on August 19th, 2016.
An excerpt from the audio reveals the following:
HPNM: Okay, Now… where did the material come from?
ADAMS: I’m sure it was bought by the City. It was delivered on a truck, uh..
HPNM: Was it delivered on a truck to the city?
ADAMS: Yes, to the City of Hattiesburg. I unloaded it with a tractor, and tuned it into gates.
When asked on audio who instructed him to make these gates Adams said,
“(Larry Barnes) came and got me told me to take a ride with him and that nobody needed to know where the gates were going. He brought me out there, and I measured them, went back to the shop and built them, and when I came back Monday, they were gone. I not sure who installed them. I just built them.”
Public Works General Manager Allen McKinley
When asked if he had any other first hand knowledge of anything else improper. Adams said he was paid overtime to remove iron bars from a house that was to be demolished by the city and load the material onto the Public Works Manager’s (Allen McKinley) personal trailer. He (Allen McKInley) said the city was demoing the house and they wanted to get the iron burglar bars first. According to Adams,
“He (Allen McKinley) said he was going to keep some of it (iron burglar bars) and put some it on Craig’s List.”
Based on Adams statements, serious consequences could arise.
To catch up on the related issues mentioned in the above article search the hashtags #ShadyGates #HattiesburgPublicTwerksDepartment
Forrest County School Board Attorney Pat Zachary has some expensive issues with the IRS. The IRS claims Zachary owes the government a combined $264,594.40 in back federal income taxes. Zachary owes the following amounts:
The Forrest County School Board hires the Board Attorney, and the board is elected and includes the following members:
Charles McMahan, Board President
Jason Helton, Board Vice President
Angie Myers, Board Legislative Liaison
Board Secretary, Sabrina Morse
Ronnie Perkins. Board Assistant Secretary
Pat Zachary, Board Attorney
Zachary is also the Attorney defending Forrest County Prosecutor Pam Castle in an alienation of affection case filed against her by former Forrest County Deputy Candace Eubanks.
Tax Liens are below. Mr. Zachary’s ex wife was released from the liens. pat-zachary-hattiesburg
