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The Beef Plant Scandal and Ronnie Musgrove
There's definitely smoke . . . but is there fire?
by Alan Lange
8/11/8
Late Monday, the US Attorney delivered what was anticipated by many following the "Beef Plant" scandal case involving the Facility Group of Georgia and one of its top executives, Robert Moultrie. Late Monday, Moultrie pleaded to a one count information involving "unlawfully rewarding an agent of the government of Mississippi with a gratuity". Though in the indictment, the gratuity went to an "unnamed public official", we now know for sure that the public official involved was former Governor Ronnie Musgrove, Democratic candidate for United States Senate.

A reading of the original indictment clearly indicates that the US Attorney at the time stepped very lightly around Musgrove. However, some events have occurred over the last week that have radically changed the circumstances. There has also been a corresponding change of language that is being used with regards to Musgrove's involvement with Moultrie, the Facility Group, and the Beef Plant in general.

Here are the facts as reasonably pulled from the public records . . .

We know that in the government's response to Moultrie et al's Motion to Dismiss that . . .
Documentary evidence proves invitations for the fundraiser for the public official were sent out on July 7, 2003, just days before the contract was signed on July 11, 2003. Less than two weeks later, on July 23, 2003, a fundraiser for the public official was held at Moultrie’s Smyrna, Georgia residence. Moultrie, Cawood and employees of The Facility Group and others raised $25,000 for the public official and (Robin) Williams (a TFG political consultant) provided a check for $25,000 to the Democratic Governors Association.

Then, less than seven days after the fundraiser, The Facility Group created a Political Action Committee, from which it gave two more contributions to the public official in the amounts of
$20,000 and $25,000 respectively for a total of $95,000 raised by Moultrie, Cawood and The Facility Group.


We also know that there is testimony from Robin Williams, a TFG political consultant that is currently in federal prison on other charges, about a phone call he got from Moultrie after meeting with Musgrove and one of his campaign staff at dinner one night . . .
here is what I was told that day. On the phone this is what was told. We got the contract. I’ve (Moultrie) got to do a fundraiser for the (public official). I’ve got to raise $100,000 dollars. Now, in that - - the contract to me took that they had done their deal and this is the date. And the date was pretty quickly after phone call. He said we’re going to be in Smyrna at my home. I need you to bring some money.


We also know from that document that the executives of TFG were basically strawmen whose contributions were reimbursed by TFG, and those contributions were essentially overbilled to the state.


(1) That Moultrie and Robin Williams met with the public official and his campaign employee days before The Facility Group was announced to manage the project, (2) The mailing of invitations to the fundraiser at Moultrie’s Georgia residence for the public official days before the subject Project Management Agreement was signed, (3) Using The Facility Group’s employees as straw contributors to get around corporate donation limits, (4) Reimbursing employees for their campaign contributions under the guise of a “bonus” to the employees salaries, (5) Creating a Political Action committee to deliver additional campaign contributions to the public official, (6) Making two additional contributions from their newly created PAC in
the amounts of $20,000 and $25,000 respectively and (7) Submitting bogus bills to the State of Mississippi to recover the money The Facility Group, Moultrie and Cawood spent on campaign contributions.


Finally, we know that the Beef Plant was in trouble long before it was ever reported and that TFG knew it and that they thought 'ol Ronnie could help bail 'em out. From the factual basis . . .
However, in September 2003, Musgrove contacted Moultrie for another campaign contribution of $25,000. At the time, The Facility Group was aware of potential problems in the design and construction of the plant. Moultrie and Cawood subsequently had a conversation about giving this contribution to Musgrove intending to influence and reward him for the performance of his official duties should his assistance be needed on any potential problems on the project.


On July 21, 2008, Sean Carothers, whose construction company was central to the Beef Plant scheme, was released from prison in the middle of a 21 month sentence for his cooperation against Moultrie et. al.

In the Government's response only two weeks after Carothers' release, the US Attorney started to use the word "bribe" in relation to the "public official".

Then, in the factual basis surrounding the plea agreement on Monday, August 11, Ronnie Musgrove was officially named as the as yet unindicted but named "public official".

Further legal ramifications
One would surmise that Moultrie's co-indictees will plea before trial. Given that Moultrie and Carothers are cooperating, it's hard to imagine any lawyer willing to allow their client to go through that legal buzzsaw.

Musgrove's outlook is a bit murkier. It all boils down to this question . . . Did Ronnie Musgrove specifically direct Moultrie and TFG to raise campaign funds for him (just a few months before a hotly contested election against now Governor Haley Barbour)? If so, and the Feds can prove it, Musgrove is in real trouble. If not, and there truly is no connection between the campaign contributions and TFG's political/business fortunes, Musgrove might can avoid further legal entanglements. However, the fact that the US Attorney is using the word "bribe" specifically to describe TFG's intent and behavior coupled with the fact that they are using Musgrove's name specifically would lead me to believe that they are leaning more toward the former answer than the latter.

The political ramifications
Former Governor Ronnie Musgrove (D) is now the Democratic nominee challenging United States Senator Roger Wicker (R) this November. With the convictions of two of Ronnie Musgrove's trusted inner circle of campaign contributors (Paul Minor and Dickie Scruggs) and now the revelation that there is more to come regarding campaign finance irregularities or illegalities with the Beef Plant, Musgrove has a major political problem. Wicker will likely hang this "culture of corruption" around Musgrove's neck. In fact, the NRSC has already started the damage by releasing on Monday a pretty explicit web-ad attacking Musgrove on these points.

Neither the legal nor the political maneuvering is over by a long shot. Musgrove stated late Monday, through a spokesperson . . .
“If anyone defrauded the taxpayers of the state of Mississippi, they should be prosecuted to the fullest extent of the law”


I couldn't agree more.

Posted August 11, 2008 - 6:56 pm
19 Comments:

Damn that was a long post.  I feel like I just gave birth.

Posted by Alan on 08-11-2008 at 09:08 PM [link]

What would one make of this, also from the factual basis:

The Government would also prove that in 2003, the MDA received in excess of $10,000 in federal assistance and provided oversight of funds administered by the Mississippi Land, Water and Timber Resources Board.  In addition, the public official then Governor Musgrove, was authorized by law to appoint the Director of the Mississippi Development Authority as well as certain members of the Mississippi Land, Water and Resources Board and had lawful authority to veto legislation concerning the funding of the Mississippi Beef Processors Project.

Finally, we would ask the Court to take judicial notice that Yalobusha County, Mississippi, the site of the beef plant is within the Northern Judicial District.

Posted by JDBerry on 08-11-2008 at 09:14 PM [link]

OK, one more question, and then I’m stopping.  Where (oh where) is Jim Hood.  We know that State Auditor Stacey Pickering’s office has been cooperating with the US Attorney’s Office.  Where is Jim Hood? Why isn’t our tough-as-nails DA-turned-AG in the middle of this case?

Could it be he has cousins from Georgia that he hasn’t told us about?

Posted by Alan on 08-11-2008 at 09:31 PM [link]

What would one make of this

Its jurisdictional information.  For it to be a federal crime, it has to touch federal dollars.  The threshold is $10,000 in federal money going to the governmental agency.

In the Scruggs case they proved that the County of Lafayette received in excess of $10k and another Court related group received $10k so they covered their basis two ways.

Posted by Raider on 08-11-2008 at 11:09 PM [link]

In the Daily Journal Article, Musgrove uses the “it’s the land water and timber board” as a defense. 

A poor defense considering he appointed most of the members, and there are many of other stories floating around about Musgrove using that board to shake down for campaign money.

Posted by jdaviscovington on 08-12-2008 at 08:32 AM [link]

If he did use the land water and timber board to shake down for campaign money, as it has also been alleged he did with his health board appointment, it could show a pattern of behavior...maybe its time to depose some of his appointees at the center of those allegations.

Posted by josepacheco on 08-12-2008 at 09:19 AM [link]

Jdavis,

The governor appoints only 6 of the 14 members--the head of MDA, an MDA employee, the Forestry Commission and three at large appointees. “Other stories floating around” is really weak. Political scoundrels of all stripes have been “floating stories around” for centuries.

Where was Phil Bryant when Barbour contributor ($7800) Sean Carothers and his pal Richard Hall were putting the project in jeopardy through mismanagement and fraud before Community Bank brought Facility Group Management into the project?

Posted by Stormdog on 08-12-2008 at 09:24 AM [link]

musgrove fires MDA director in 2001

In the ever-changing soap opera that is /mississippi politics, we’ve got a new twist in the plot.
Recently, Gov. Ronnie Musgrove fired the state’s top economic advisor, J.C. Burns, because Musgrove said “economic developers have lost faith” in Burns.

Musgrove doesn’t give a specific reason why they’ve lost faith or who exactly has mentioned that they’ve lost faith; he just says they have. In fact, after Burns’ dismissal, several developers have come out to say how pleased they were with Burns’ work concerning Mississippi’s economy.

Burns claims he was fired because he clashed with Musgrove when Musgrove became “authoritatively hands-on.” According to Burns, Musgrove used bully tactics to push local communities to go along with his proposed plans.

This could be seen as simply the ramblings of a bitter former-employee, except that Burns is not the only one to criticize Musgrove’s management style. After his recent firing of Health and Human Services Director Bettye Ward Fletcher, several members of the legislature headed by Rep. George Flaggs, D-Vicksburg, wrote a letter to the governor that bashed Musgrove’s “micro-managing style of governing.”

Posted by JDBerry on 08-12-2008 at 09:44 AM [link]

Stormdog,

Haley Barbour and Phil Bryant have nothing to do with this.

Sorry, just not buying it.  This reaks.

Posted by jdaviscovington on 08-12-2008 at 09:47 AM [link]

In May 2003, Robert Rohrlack was replaced as director of MDA and he had questioned the State’s involvement in the Beef Plant and the lack of oversight and bid requirements.

Posted by JDBerry on 08-12-2008 at 09:55 AM [link]

Community Bank brought Facility Group Management into the project

I’ve got a sneaky suspicion Musgrove had more of a roll than Community Bank in bringing in TFG.

(Also, Hall was “brought in” to work with Carothers - they weren’t pals before this project.  However, I understand your point and don’t mean to come across as argumentative about it....just saying.)

Posted by ccvz on 08-12-2008 at 12:09 PM [link]

JDBerry,

Is that true?  Is there an article somewhere?

Posted by jdaviscovington on 08-12-2008 at 12:37 PM [link]

JDBerry, I don’t think there’s an article that addresses that - but you won’t find past records of CCC, Inc. and Richard Hall working together...ibut f you do, please forward them to me!

Posted by ccvz on 08-12-2008 at 12:46 PM [link]
Posted by JDBerry on 08-12-2008 at 01:00 PM [link]

SEC. 69-46-3. Mississippi Land, Water and Timber Resources Board; creation; purpose; composition meetings.

(1) There is created the Mississippi Land, Water and Timber Resources Board, hereinafter referred to as “the board,” for the purpose of assisting Mississippi agricultural industry in the development, marketing and distribution of agricultural products.

(2) The board shall be composed of the following members:

(a) The Chairman of the Senate Agriculture Committee, or a member of the Senate Agriculture Committee designated by the chairman, as a nonvoting member;

(b) The Chairman of the House of Representatives Agriculture Committee or a member of the House of Representatives Agriculture Committee designated by the chairman, as a nonvoting member;

(c) The Chairman of the Senate Forestry Committee, or a member of the Senate Forestry Committee designated by the chairman, as a nonvoting member;

(d) The Executive Director of the Mississippi Development Authority, or his designee;

(e) The Commissioner of the Mississippi Department of Agriculture and Commerce, or his designee;

(f) The President of the Mississippi Farm Bureau Federation, or his designee;

(g) The Director of the Cooperative Extension Service at Mississippi State University, or his designee;

(h) The Executive Director of the Agribusiness and Natural Resource Development Center at Alcorn State University, or his designee;

(i) The Director of the Agricultural Finance Division of the Mississippi Development Authority, or his designee;

(j) The Director of the Agriculture Marketing Division of the Mississippi Department of Agriculture and Commerce, or his designee;

(k) The Executive Director of the Mississippi Forestry Commission, or his designee; and

(l) Three (3) individuals appointed by the Governor who are active producers of Mississippi land, water or timber commodities. The Governor shall appoint one (1) such person from each Supreme Court district.

(3) The Executive Director of the Mississippi Development Authority and the Commissioner of the Mississippi Department of Agriculture and Commerce shall serve as co-chairmen of the board.

(4) The board shall meet at least once each calendar quarter at the call of the co-chairmen. A majority of the members of the board shall constitute a quorum at all meetings. An affirmative vote of a majority of the members present and voting is required in the adoption of any actions taken by the board. All members must be notified, in writing, of all regular and special meetings of the board, which notices must be mailed at least ten (10) days before the dates of the meetings. All meetings shall take place at the State Capitol in Jackson, Mississippi. The board shall provide a copy of the minutes of each of its meetings to the Chairman of the Senate Agriculture Committee and the Chairman of the House of Representatives Agriculture Committee.

(5) Members of the board shall not receive compensation. However, each member may be paid travel expenses and meals and lodging expenses as provided in Section 25-3-41, for such expenses incurred in furtherance of their duties. Travel expenses and meals and lodging expenses and other necessary expenses incurred by the board shall be paid out of funds appropriated to the Mississippi Development Authority.

(6) In carrying out the provisions of the Mississippi Land, Water and Timber Resources Act, the board may utilize the services, facilities and personnel of all departments, agencies, offices and institutions of the state, and all such departments, agencies, offices and institutions shall cooperate with the board in carrying out the provisions of such act.

Posted by JDBerry on 08-12-2008 at 01:17 PM [link]

Sorry, I wasn’t clear on that when I was repsonding to Stormdog...I meant Carothers and Hall didn’t know each other/work together prior to the Beef Plant.
Stormdog referred to Hall and Carothers as “pals” - and I certainly considered that Stormdog didn’t intend to imply a “friendship” b/t Carothers and Hall. But just in case, I thought I’d clear that up.

Posted by ccvz on 08-12-2008 at 01:24 PM [link]

"In March 2003, the State and bank officials chose Facility Construction Management Inc. (FCMI) to manage the project to completion.”

In May 2003, Robert Rohrlack, who questioned the State’s involvement in the Beef plant, was replaced as director of MDA.

“Between May and July, 2003, Robert Moultrie, Chairman nad Chief Executive Officer of The Facility Group, began planning a fund raiser for the public official, then Mississippi Governor Ronnie Musgrove, at his residence in Atlanta, Georgia, in order to obtain his good will.”

“In July, 2003, a construction management contract between FCMI, the Bank, and MDA was finalized and executed.”

Posted by JDBerry on 08-13-2008 at 12:58 PM [link]

"The fund raiser was held on July 23, 2003 and raised approximately $50,000 for Musgrove’s campaign.  In addition to the money provided by the employees of The Facility Group, Moultrie donated $2,000, and Cawood and The Facility Group donated $1,000 each.”

“In July, 2003, Moultrie caused to be created The Facility Group Political Action Committee.  In August, 2003, to complete the amount contemplated to be raised in the July Fund raiser, Moultrie caused the PAC to issue a $20,000 check to Musgrove’s campaign However, in September, 2003, Musgrove contacted Moultrie for another campaign contribution of $25,000.”

Posted by JDBerry on 08-13-2008 at 01:22 PM [link]

give it up guys! it has been swept under the carpet as far as the local politicians and friends.with mississippi being the second most corrupt state in the union,there are too many unethical acts that can be utilized without being implicated for a crime.until campaign contributions are controlled or eliminated,nothing will ever change.

Posted by jim on 08-23-2008 at 04:40 AM [link]
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