Prosecutors called a flurry of nine witnesses on the second day of the federal corruption trial against Bayou la Batre Mayor Stan Wright Feb. 26, nearly all of whom supported the primary charge against him: Conspiracy to defraud the United States.
While the $27,249 Wright is accused of stealing may not remarkable, his alleged motivation is. Prosecutors say Wright wanted to help his daughter, Mary Cook, pay off a $21,000 debt incurred after a recent divorce.
Testimony began with City Clerk Donna Gainey. As the record keeper for the city, Gainey spoke about how meeting notices and agendas were created and posted in 2007, the year Wright is accused of transferring a piece of property to Cook, who later sold it back to the city for an inflated price.
Gainey said it was typical for the city not to develop agendas until council work sessions, which are generally scheduled in the hour prior to regular City Council meetings. Evidence shows the Nov. 15, 2007 meeting was no different, and the public would have first been notified of Cook’s pending sale only if they had attended that day’s work session or the meeting itself.
That day, the City Council was preparing to approve the expense of more than $524,000 worth of FEMA funds to purchase property for a long-term housing pilot program for victims of Hurricane Katrina. The purchase included three acquisitions of private property for right-of-way, including Cook’s.
An audiotape from the work session was introduced, which documented Wright informing attendees his daughter was the owner of one of the parcels necessary to acquire to meet ALDOT technical specifications.
"I want the whole world to know, my daughter owns a piece of that property,” Wright announced. "I used to own it but I deeded it over to her.”
After some inaudible discussion from a contracted engineer about how he determined the price per-square-foot of the right-of-way acquisitions, Wright’s distinctive voice booms again:
"Before the rumors started flying, I wanted to explain to the public how this all came about,” he said.
But he didn’t, according to prosecutors, not at that work session, not at the subsequent meeting or anytime since. Wright never publicly explained that his daughter incurred the debt from a June 2007 divorce, or how he paid it off with his own money. Wright never explained why he deeded the property to his daughter less than a month before she sold it to the city or why she incrementally deposited the proceeds back into his account, just days after cashing the $27,249 check.
Details or discussion about the property’s size and price are absent from any city agenda or minutes, Gainey testified, with evidence showing they could have only been determined by looking at the deeds and payments after-the-fact. To this day, Bayou la Batre maintains the habit of not developing City Council meeting agendas until work sessions, where the only paperwork prepared for the public is a mandatory sign-in sheet with a box to indicate whether one is recording the meeting.
Gainey testified that despite a detailed subpoena, she never provided the city’s own procurement policy, an oversight she attributed to confusion over the government’s sweeping request for documents. Gainey also said the city never received key pieces of paperwork related to administration of the $15 million FEMA grant because it was being fully administered by a contractor, Janey Galbraith of Galbraith and Associates.
"All I have are the documents Janey provided,” Gainey said.
Relating to a charge of retaliating against a witness, Gainey said she was in Wright’s office when he overstepped his authority and ordered the arrest of former police captain Darryl Wilson. Wright had recently learned Wilson was cooperating in the investigation against him and sought to have him charged with theft for taking home a city-owned vehicle.
Gainey also defined the role of Craig Bryant in the FEMA program. Bryant was the principal engineer of Polysurveying, Inc., a contractor with which the city had an established relationship. In addition to serving as the general contractor on the design and construction of the program, Bryant also secured all the properties. Bryant had been characterized as "city engineer,” but he has never been an employee of Bayou la Batre, Gainey said.
WITNESS GERALD BYRD
Gerald Byrd, president of Byrd Surveying, was hired by the prosecution to survey the Cook/Wright parcel. Byrd was the first to notice the legal definitions on all three recent deeds — two from Wright to Cook and one from Cook to Bayou la Batre — were incorrect. In his experience, he said incorrect legal descriptions "aren’t too frequent,” but they "do come across them.”
Wright’s primary property is a 7.2 acre rectangle, traversed by Highway 188 on the southwest corner, creating a small triangle of Wright’s property on the opposite side of the highway. Early in the development of the FEMA project, ALDOT told the city to correct the angle of Shine Road where it intersects with Highway 188 to create a right angle and add two turn lanes. In order to do so, the project would need to procure a portion of Wright’s triangle, as well as portions of two neighboring properties.
Byrd testified that Wright’s triangle, in its original state, had a gross area of 9,196 square feet, but a "buildable area” of only 3,977 square feet. If Wright had sold only what ALDOT required, he would be left with 5,357 gross square feet, of which 1,948 was "buildable.”
While the two other property owners were asked to sell only what was necessary for the right-of-way, Wright’s entire triangle was acquired. Defense attorney Arthur Madden defended the sale, twice calling what Wright would have been left with an "uneconomic remnant.”
WITNESS ANNETTE JOHNSON
Bayou la Batre City Councilwoman Annette Johnson, who was involved with the city’s Community Development Board after Katrina, testified about the inception of the Bayou la Batre Housing Authority, which was created to manage what was eventually Safe Harbor, the 100-unit property developed with the FEMA funds. Johnson said she first met James Cook, Mary Cook’s new husband and Wright’s son-in-law, in December 2008, when the Housing Authority was formed and Galbraith hired him to perform maintenance on the property.
Johnson, who was a Housing Authority board member until late 2012, said she was not aware of Cook’s $59,500 salary until federal assistance for the development ran out, and the Housing Authority had to assume full responsibility for the finances of Safe Harbor. Prior to that, the Housing Authority simply sent a $15,000 monthly lump sum to Galbraith, who paid Cook’s salary — a job where he essentially mowed lawns, changed air filters and investigated complaints, Johnson said.
In cross examination, Johnson defended the Housing Authority’s re-approval of Cook’s contracts, as well as that of Director Felicia Douglass.
"We signed the contracts because the community was in a major transition and we decided to make decisions that would secure the arrangements with 100 families,” Johnson said.
Cook resigned later, but Douglass is still there. Today, the Housing Authority operates without a quorum of the Board, but transactions are still passed which will have to be "rectified later,” according to another board member. The city and the Housing Authority is awaiting a state Attorney General’s opinion regarding the mayor’s most recent three board appointments.
WITNESS DANA MICHAEL BOURNE
If anyone in the trial could speak to legal grant administration, it would be Dana Michael Bourne, FEMA’s director of grant operations. Bourne corroborated the testimony of two earlier FEMA witnesses by concluding that Wright’s transfer of land to Cook, and Cook’s sale of land to the city was a conflict of interest. Contrary to the defense’s position, it doesn’t matter that Wright abstained from the City Council’s vote on the purchase.
Because Wright accepted the grant on behalf of the city, Bourne said, he was its "authorized representative” and could not "pick and choose what [he] was going to act upon in the agreement.”
Madden disagreed, pointing to separate FEMA regulations for states and municipalities. Bourne said regardless of the regulations, grantees were expected to adhere to the "most restrictive laws.” Madden attempted to characterize Wright not as the "authorized representative” but rather just a part of the "grantee entity.”
WITNESS TONY LEWIS
Tony Lewis, a certified general real estate appraiser, was hired by the prosecution to perform a forensic appraisal of the Wright/Cook property at the time it was sold. Lewis testified he was able to reach a reliable forensic appraisal based on a number of factors: MLS sales from the area at the time, improvements to the property, legal descriptions, surveys and personal inspections of the neighborhood.
The property was zoned for business, Lewis said, but with a buildable area just shy of 4,000 square feet, its practical purposes were limited.
"It would be a very small building with very limited parking,” Lewis said of the property’s development potential. "If it wasn’t already zoned B-2, I wouldn’t ever have considered it a commercial site.”
Thus, Lewis made a professional decision to compare it to 100 similar residential properties, drawing upon five in particular to settle upon a total appraised value of $5,500, or $21,749 less than the city’s purchase price.
Madden assailed the appraisal, questioning Lewis’ professional judgement in comparing commercially zoned property to anything residential.
"Normally, a corner lot on a major highway would be considered prime commercial real estate would it not?” Madden asked.
He also said the property was not sold in a "fair market” environment, but one more similar to a forced-sale or eminent domain situation.
WITNESS ROBERT HOWARD
Howard, an engineer with Polysurveying at the time Safe Harbor was developed, was responsible for all the road improvements, water and sewer infrastructure on the property. He testified that in order to acquire the necessary right-of-way, only the Wright acquisition exceeded the exact square footage needed to proceed. But Howard also said the property owner to the west, Carolyn Godwin, had her driveway relocated and a fence installed, while the property owner to the south, Dwayne Dees, had three driveway aprons installed as part of the project.
WITNESS DWAYNE DEES
Dwayne Dees owns and operates a machine shop on a piece of property on Highway 188 he originally purchased in 1996. In 2007, he acquired an adjacent property on Shine Road to ensure tractor trailers would always have access to the rear of his shop. Almost simultaneously, he was approached by Craig Bryant about selling the right-of-way on Shine Road for the turn lane.
Dees testified the engineer wanted a piece exactly 15 feet wide by 330 feet long, for a total of 4,950 square feet. He was offered and accepted 85 cents per square foot for a total of $4,207.50. Dees said the three new driveway aprons were not his requirement and are in fact on city property.
Dees said he met with Bryant three or four times and was confronted about selling his entire property for $135,000, but that wouldn’t cover the costs of dismantling and relocating his shop, which features a 110,000-pound lathe and "tons” of materials and other equipment. Dees said his counter offer of $500,000 was rejected, and the negotiations ended.
Tellingly, Dees testified that when he asked what neighbors were being offered for their rights-of-way, he was told "it was none of his business,” and "they said all they could give was fair market value."
WITNESS CAROLYN GODWIN
To the jury, neighboring property owner Carolyn Godwin is either someone who drives a hard bargain or an old friend of the mayor and Bryant. Godwin operates a salon behind her residence on the west corner of Shine Road and Hwy.188 and some of her long-time clients include Craig Bryant’s wife and the mayor’s kin, she testified.
But when Bryant called her about acquiring 2,161 square feet of her property for right-of-way, she initially declined. Later, when she was told the city could condemn her property, Godwin offered to sell for $5 per square foot. Bryant counter-offered she said, saying, "you won’t get five, but you might get three.”
Godwin did eventually settle for $3 per square foot, but only if the agreement also included a privacy fence to separate her property from Safe Harbor, the removal of hurricane debris that had been disposed near her property and the relocation of her driveway further back from the intersection.
The city agreed, but gave money to Godwin for the fence so it would not be responsible for long-term maintenance. Madden used Godwin’s gains as leverage for Wright, noting the city also had to remove trees to relocate her driveway and match the clam shells that were used for its original surface.
"I know how to take care of myself,” she said. "I sold it involuntarily and I was not going to give it to them for nothing. The city accommodated me beautifully.”
WITNESS KATHERYN SCOTT
The day ended with the first part of testimony from FBI Forensic Accountant Katheryn Scott. Scott showed, using public records and bank statements, how Mary Cook, then Mary Strahan, divorced in June 2007 and was awarded the couple’s house, along with its mortgage. As a condition, Cook had to refinance to remove her ex-husband from the mortgage and in doing so incurred a $21,000 debt. At the time, she had just $348 in the bank.
Scott then explained how Stan Wright and his wife Robin took money from their own checking and savings accounts and deposited it in Cook’s, which was then used to pay off the debt. At the same time, Wright was deeding the property to Cook, who sold it back to the city, depositing the proceeds in separate checks — $10,000, $10,000, $5,000 and $2,000 back into her parent’s accounts.
Testimony continues Feb. 27.
