Federal corruption sting nabs 11 public officials

(Published in The Star-Ledger September 7, 2007)

By Jeff Whelan and Mark Mueller

In a sweeping corruption scandal stretching from a small South Jersey school district to the corridors of power in the state’s northern cities, federal agents charged 11 public officials yesterday with taking bribes in exchange for help securing public contracts.

The arrests, carried out yesterday morning, followed an 18-month FBI probe that penetrated almost every layer of government.

Among those charged were state assemblymen, mayors, city council members, school board members and the chief of staff for Newark’s city council president. A 12th defendant, a private individual, allegedly collected payments for one of the politicians.

EXHACK20 11 MUNSON
Orange Mayor Mims Hackett Jr.

“Today we witnessed another example of the disease that affects the state of New Jersey: the disease of public corruption,” U.S. Attorney Christopher Christie said.

Beginning in the Atlantic County community of Pleasantville, just west of Atlantic City, FBI agents were “taken on a corruption tour of New Jersey,” Christie said, “almost as if there is a corrupt-public-officials underground.”

The defendants include the mayors of two cities: Mims Hackett Jr., 65, of Orange and Samuel “Sammy” Rivera, 60, of Passaic. Hackett is also one of two state assemblymen who were arrested. The Rev. Alfred E. Steele, 53, is the Assembly’s deputy speaker and, until resigning under pressure yesterday, was a Passaic County undersheriff.

Passaic Councilman Marcellus Jackson, 37, former Passaic councilman Jonathan Soto, 32, and Keith O. Reid, 48, the chief of staff to Newark Council President Mildred Crump, also were charged.

The criminal complaints unsealed yesterday name five current or former Pleasantville school board members, including board president James Pressley. At 22, Pressley is the youngest school board member in the state.

The private individual charged, Louis Mister, allegedly received $3,000 in payments on behalf of Maurice “Pete” Callaway, a former Pleasantville school board member who now serves on the city council. Callaway, 53, also was charged.

The 12 defendants – all wearing handcuffs, some in leg shackles – appeared briefly yesterday afternoon in federal court in Trenton before their release on $200,000 unsecured bond, which must be paid only if they miss a court appearance.

Nearly all declined comment, scurrying away from the courthouse as reporters swarmed them. Rivera, the Passaic mayor, paused long enough for one sentence.

“I’ll have my day in court,” he said.

U.S. Magistrate Judge Tonianne Bongiovanni ordered the men to turn over their passports and any firearms, but rejected a request by federal prosecutors to bar the defendants from leaving the state without approval.

“These individuals all seem to have substantial ties to the community,” Bongiovanni said.

Each of the men is charged with conspiracy to extort corrupt payments or attempting to extort corrupt payments, counts that carry up to 20 years in prison and fines up to $250,000.

The elected officials gave no immediate indication they would resign their posts. Democratic Party officials in Essex and Passaic counties, however, said party leaders expected both assemblymen to leave office before their terms are up. The sources spoke on condition of anonymity because they were not authorized to discuss the behind-the-scenes maneuvering.

Newark’s Crump said Reid requested a leave of absence and that she would wait for a report by the city inspector general before deciding whether to fire her chief of staff.

TAPES AS EVIDENCE

The criminal complaints contend the 12 defendants accepted cash bribes, ranging from $3,500 to more than $32,000, from cooperating witnesses and undercover agents. In exchange, according to the complaints, the public officials used their influence to help the witnesses and agents win roofing and insurance contracts for towns and the Pleasantville school district.

Hundreds of the encounters were either audiotaped or videotaped, and the complaints contain snippets of what appears to be incriminating conversation.

“We either gonna get this job together or go to jail together,” Jayson Adams, 27, a former Pleasantville school board president, is quoted as saying after allegedly accepting $15,000 in payments.

Jackson, the Passaic City Council member, told one informant, “I appreciate it, baby. Good things is gonna happen,” the complaint states.

Christie and Weysan Dun, special agent in charge of the FBI’s Newark office, said the investigation was initially limited to the board of education in Pleasantville, one of the state’s poorest and most troubled districts.

Thirteen superintendents have presided over the 3,600-student district since 1997, and some in town have long complained about school board members. Earlier this year, the state Department of Education appointed a monitor to oversee the district, contending widespread financial irregularities.

FBI agents set up shop nearby in mid-2006, creating a bogus insurance brokerage that purported to specialize in poor school districts. A roofing company also played a part in the probe.

Neither company was named in the complaint. But sources close to the investigation, who requested anonymity because they were not authorized to discuss details of the case, identified the companies as Aetna Roofing of Trenton and Coastal Solutions LLC of Egg Harbor Township.

Bruce Begg, chairman of Aetna Roofing, declined to comment.

According to its Web site, Aetna Roofing has been in business since 1968. Last summer, Coastal Solutions began operating out of the same address as Aetna and listed Begg as a registered agent, corporate records show. The sources said Coastal was actually the FBI front referred to in the complaint.

‘NETWORK OF CORRUPTION’

With a foothold in Pleasantville, the probe quickly expanded north as members of the school board directed undercover agents and cooperating witnesses to other public officials willing to trade cash for influence, the authorities said.

“Sadly for the citizens of New Jersey, the depth and breadth of this investigation was vast,” Dun said, describing the probe’s findings as “a network of corruption that literally stems from one end of the state to another.”

Assemblyman Steele, a Baptist minister, first met with one of the secret FBI informants about insurance business in March and, according to the complaint, promised to use his self-described “personal touch” with other officials in Paterson to help the firm obtain contracts with city agencies.

“I have all different votes on the city,” he allegedly boasted, adding he had “five votes on the city council.”

It was Steele, according to the complaints, who unwittingly helped connect the undercover agents with Hackett, his fellow assemblyman and the mayor of Orange.

In one taped conversation with a cooperating witness, Steele allegedly said Hackett would be amenable to a bribe in exchange for arranging an insurance contract.

“Mims is cool. . . . He’s gonna do it,” Steele said, according to the complaint.

In May, Hackett met with a cooperating witness at a restaurant in Orange, where he was told he would receive an “upfront” payment of $5,000, to be followed by a $25,000 bribe once the city approved the contract, the complaint says. Asked if that would work for him, Hackett responded, “Oh, yeah,” according to the complaint.

Hackett later accepted the $5,000 cash bribe – stuffed inside the bogus insurance firm’s brochure – just outside City Hall, authorities said.

In some cases, those who came to the investigators’ attention were more wary. Reid, the chief of staff to Newark’s city council president, explained to an informant it was important to use an intermediary like himself as a buffer between the insurance company and elected officials, according to the complaint that names him.

“Why create an atmosphere where they (elected officials) feel like you’re trying to get them locked up?” he asked, the complaint states.

Crump was not identified by name in the complaint, which said that meetings with the council president, though scheduled, never took place.

The arrests, the latest in a steady drumbeat of corruption prosecutions over the past five years, brought new expressions of frustration and outrage.

Gov. Jon Corzine called the charges “beyond disturbing.” Assembly Speaker Joseph Roberts said he felt “absolutely sickened.”

Christie, too, expressed astonishment, saying corruption in New Jersey remained widespread despite more than 100 convictions secured by his office alone.

Two other powerful politicians – state Sen. Sharpe James (D-Essex), the former Newark mayor, and state Sen. Wayne Bryant (D-Camden) – await trial on federal corruption charges.

“I thought I could no longer be surprised by a combination of brazenness, arrogance and stupidity,” Christie said. “But people elected in this state continue to defy description.”

Staff writers Wayne Woolley, Mary Jo Patterson, Robert Schwaneberg, Katie Wang, John P. Martin, John Mooney, Rudy Larini, Josh Margolin, Jeffery C. Mays, Deborah Howlett, Claire Heininger and Beverly Reid contributed to this report.

Arrested in North Jersey

Marcellus Jackson

37, of Passaic Democrat, Passaic City councilman.

Appointed in July 2001 to fill a vacant seat; most recently re-elected on May 8, 2007. When he first ran for office, Jackson was open about a previous drug conviction, saying: “Since then, there’s been a whole change in my life. I’m living right and I’m doing the right thing. … I don’t think society should hold it against you if you did something wrong. Everybody deserves a second chance.”President of the Passaic Democratic Club.Married, three children. Employed as an inspector with the Passaic Valley Sewerage Commission. City salary: $23,444. PVSC salary: $77,663.

Charges: Allegedly accepted $16,500 between January and August 2007 to steer municipal insurance brokerage business

Jonathan David Soto

32, of PassaicRepublican.

Former Passaic City councilman; lost re-election this May. In 2006 he won a primary election in county freeholder race, but later dropped out.Married, one child. Eighth-grade teacher in the Passaic public schools. Chairman of the city of Passaic Redevelopment Authority and a former commissioner of the city Board of Adjustment.Latest salary tables indicate he earns $49,958 as a teacher. (As a councilman he earned $23,227.)

Charges: Allegedly accepted $12,500 between November 2006 and February 2007 to steer municipal business.

The Rev. Alfred E. Steele

53, of Paterson

Democrat, state assemblyman since 1996. Deputy speaker since 2002. Assistant majority leader, 1998-2001. As chairman of the Assembly State Government Committee in 2003, he was instrumental in bottling up legislation that would have curbed campaign contributions from government contractors, claiming he didn’t think lawmakers had “gathered enough proper data” on the topic.Passaic County undersheriff since 2002. Resigned yesterday.Pastor, Seminary Baptist Church, Paterson.B.A. in theology from Northeast Bible College.Assembly salary: $49,000. Undersheriff salary: $89,900.

Charges: Allegedly accepted $14,000 between March and August 2007 from companies seeking local government insurance business.

Mims Hackett Jr.

65, of Orange

Democrat, mayor of Orange since July 1, 1996, currently serving the third year of his third 4-year term. Before becoming mayor, Hackett served eight years as Orange councilman- at-large. He was elected to the state Assembly in 2001 from the 27th Legislative District serving parts of Essex County and is seeking his fourth term in November.In 1977 Hackett was sentenced to prison for the abduction and beating of a 22-year-old man whom Hackett suspected of breaking into his home. In 1980, a U.S. District Judge labeled the prosecution “grossly unfair” and voided Hackett’s conviction.Married, five sons, one daughter. Mayor’s part-time annual salary: $28,672. Assembly: $49,000. Retired from Union City Board of Education/science teacher. Retirement pay: $43,308 a year. As Orange’s part-time emergency management coordinator: $3,500 annual stipend.

Charges: Allegedly accepted $5,000 as an “upfront” payment on Aug. 14, 2007, for steering city of Orange insurance brokerage business to a company. Authorities also allege he agreed to accept an additional $25,000 once the city approved a contract.

Keith O. Reid

48, of Newark

Chief of staff to Newark City Council

President Mildred Crump.He is a lifelong Newarker who lives in the South Ward. His father worked in Kenneth Gibson’s administration.

Reid received his B.A. from Rutgers University in 1986. Formerly worked for the Newark Housing Authority before becoming Crump’s chief of staff July 1, 2006, when she took office.City salary: $72,253

Charges: Allegedly accepted $5,000 on July 25 for promising to influence a Newark official to help companies get business from the city.

Samuel “Sammy” Rivera

60, of Passaic Democrat, Passaic City mayor. First sworn in July 1, 2001, after a contested victory. Re-elected in May 2005. Rivera’s first mayoral victory, won by a large margin, was contested by’s tate Attorney General John Farmer Jr., who maintained that the mayor-elect was disqualified from holding public office because of a prior criminal conviction. State courts refused to block the appointment. Former Passaic City councilman, police officer in Passaic and Puerto Rico, security guard and professional wrestler. A native of Puerto Rico, Rivera is the first Latino mayor of Passaic City. He is divorced.City salary: $115,542

Charges: Allegedly accepted $5,000 on Aug. 13, 2007, from a phony company after saying he could “deliver” four of seven city council votes. Authorities say he also claimed he could steer business from the Passaic Valley Water Commission.

Arrested in Pleasantville

James Pressley

22, of Pleasantville

Named president of the school board in April. Pressley is the state’s youngest school board president. He first ran for a seat on the board two months before getting his high school diploma.

He was arrested twice this June, for allegedly driving while intoxicated and for allegedly threatening someone with a gun. A judge dismissed charges in the latter case.

In July, the Press of Atlantic City reported that Pressley asked vendors seeking to do business with the board to donate to the James A. Pressley Scholarship and Community Youth Build Foundation. Neither the IRS nor the New Jersey Consumer Affairs Division had any record of his charity, the paper reported.

Charges: Allegedly accepted $32,000 between May and October 2006 to direct school insurance and roofing business to companies.

Maurice “Pete” Callaway

53, of Pleasantville

Resigned from the school board after being elected to city council, where he now serves. He is the brother of Craig Callaway, the former Atlantic City council president who is in federal prison for accepting bribes to steer government contracts to a Pleasantville contractor.

Charges: Allegedly accepted $13,000 between May and October 2006 for sending business to companies.

Jayson Adams

27, of Pleasantville

School board member who was defeated in the April 17, 2007, election. Earlier this year Adams threw his hat into the Atlantic County freeholder race. However, the county’s Democratic Party chairman denied him the party line on election ballots, citing Adams’ supposed ties to Craig Callaway.

Charges: Allegedly accepted more than $15,000 between May and October 2006, and arranged payments for other school board members.

James McCormick

50, of Pleasantville Was appointed to fill a vacant seat on the school board and served only a few months. Serves on the board of a local charter school.

Charges: Allegedly took $3,500 for authorizing a contract.

Rafael Valez

47, of Pleasantville

Elected to the school board in April 2006.

Charges: Allegedly accepted $14,000 for steering business to companies.

Louis Mister

56, of Pleasantville

Private citizen.

Charges: Allegedly took $3,000 on Maurice Callaway’s behalf.


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