My thanks to Nowdy for sharing some of her beef pictorial collection with me. The Beef Plant appears to have morphed into a case of life imitating art imitating life etc etc etc. as Sean Carothers has taken exception to the recent rule 17 subpoena issued his construction company by Team Moultrie and has moved to quash:
By previous ex parte Motion not served upon Carothers Construction Company, Inc. (“Carothers”), the defendant, Robert L. Moultrie, moved the Court to issue a Rule 17(c) subpoena duces tecum to be served on Carothers.
Ex parte? From Team Moultrie and Folo blogging lawyer Tom Freeland who has written a good bit about the subject as it applied to the judicial bribery case? The first 10 or so pages of the accompanying memorandum of law tells us a good bit more about Carothers’ expected testimony, contains a good bit of background on the case and takes exception to what Team Carothers terms improper ex parte communications between Judge Mills and Team Moultrie:
Carothers Construction Company, Inc. was the general contractor on the beef plant project. Its contract was for approximately 16 to 18 million dollars and was with Mississippi Beef Processors, LLC. It was in two parts: (1) plant design; and, (2) construction of the processing plant.
Richard Hall had a second contract with Mississippi Beef Processors, LLC. It was also in the approximate amount of 16 to 17 million and was for the processing machinery to go in the plant.
Because of innumerable problems in getting the plant on line, The Facility Group (“TFG”) was hired to do a cost estimate to finish the job. When TFG gave its report as to the estimated cost to finish the project; it also made a proposal for it to take over the job as the Construction Manager, and, who in that capacity, would oversee and supervise both the Carothers construction contract and the Hall equipment contract. According to Sean Carothers, TFG’s proposal was simply to add six million dollars for its fee to the bottom line cost for the job. The six million dollar figure to include $3,548,000 as a lump sum fee; and, an additional guaranteed $2,500,000 for reimbursable costs.
When TFG made its proposal, Sean Carothers asked also to be allowed to make a competing proposal. The MDA and the bank wanted to have a “red meat” specialist involved in the project. For this reason Carothers teamed up with Herndon-Redmond, an Ohio process engineering firm, to make a joint proposal.
The Carothers-Herndon proposal was rejected and TFG’s accepted. When installed as Project Manager, TFG, in effect, became the “boss” over both Carothers Construction and Hall.
On February 24, 2003, TFG made a proposal to Community Bank to: (1) evaluate the construction of the beef plant; and, (2) take the project over as project manager to superintend the remainder of the plant’s design and construction. In late March or early April 03, the defendant, Robert Moultrie, CEO of TFG, contacted Robin Williams, a consultant employed by TFG, and asked him to set up a meeting between Moultrie and the public official2 so that Moultrie could promote his desire to have TFG selected as project manager for the remainder of the beef plant project.
Williams did as instructed and on April 2, 2003, Williams and Moultrie met with the public official. Also at this meeting was the chairman for the public official’s re-election campaign committee. On April 29, 2003, TFG submitted an invoice to the state for payment of Moultrie’s time and travel for the meeting with the public official and the chairman of his re-election campaign.
On April 23, 2003, TFG executed a letter of intent with the Mississippi Land, Water & Timber Resources Board stating the parties intent to negotiate a contract, the object of which was to make TFG Project Manager at the beef plant. On June 13, 2003, the defendants signed an “Appointment Agreement” whereby TFG was made the agent of Mississippi Beef Processors for the purpose of managing the remaining design and construction of the beef plant.
On July 7, 2003, Moultrie send out invitations for a political fund-raiser to be held for the Mississippi public official. In mid-July 03 the defendants instructed TFG employees who had been invited to the political fund-raiser to make out their personal checks each in the amount of $1,000 made payable to the public official’s re-election campaign.
Four days after sending out the invitations, on July 11, 2003, TFG entered into a “Project Management Agreement” with the State Board and the bank financing the project. The contract provided for two forms of compensation for TFG. The first was a lump sum payment of $3,548,000. The second was reimbursement of expenses incurred in the beef plant project, at actual cost, with a minimum reimbursement of $2,500,000 and a maximum reimbursement of $3,021,000. The latter compensation was called “Services Compensation.”
The political fund-raiser was held on July 23, 2003, and TFG employees, as instructed, each gave personal checks in the amount of $1,000 to the public official’s reelection campaign. Later in July Moultrie gave TFG’s Controller a list of the employees who had made “contributions” to the re-election campaign and had the Controller issue TFG checks to reimburse them. The Controller disguised the reimbursements as employee “bonuses” and each check was made in an amount sufficient to allow a net of $1,000 after payroll tax deductions.
On July 29, 2003, Moultrie and TFG also created a PAC. On August 13, 2003, it donated $20,000 to the public official’s re-election campaign and the PAC donated another $25,000 on September 30, 2003.
From August 2003 to March 04, TFG submitted inflated costs for reimbursement on the beef plant project in the form of false labor billings for time not spent on the project. These billings for inflated costs were designed and intended by the defendants to reimburse TFG for both the individual employee political donations and the PAC donations.
Team Carothers gives more detail into the myriad of ways he contends Moultrie and TFG inflated their beef plant billings and ends with this observation on the process used to subpoena Carothers Construction:
This subpoena duces tecum was applied for and issued ex parte with no notice given to Carothers Construction Company, Inc. The weight of authority is however that it is improper for a defendant represented by retained counsel with the financial means to defend himself to have a Rule 17(c) subpoena issued ex parte. An indigent may, however, have one issued ex parte but only upon a showing of “exceptional circumstances” which means that having given the subpoenaed party notice prior to issuance would have: (1) divulged trial strategy, witness list or work-product; (2) imperiled the source or integrity of the subpoenaed evidence; or, (3) undermined a fundamental privacy or constitutional interest of the defendant. United States v. Johnson, 2004 WL 877359 (E.D. La. 2004) citing United States v. Beckford, 964 F. Supp. 1010 (E.D. Va. 1997); United States v. Urlacher, 136 F.R.D. 550 (W.D.N.Y. 1991); and, United States v. Hart, 826 F. Supp. 380 (D. Colo. 1993). If the only need is “that of facilitating preparation of the defense” which “is present in every case,” there is no “extraordinary” need. United States v. Bridges, 2006 WL 3716653 (E.D. Tenn. 2006).
In this case Moultrie is not indigent and made no attempt to allege or show any “exceptional” or “extraordinary” circumstances warranting the ex parte issuance of this subpoena. For this reason alone the subpoena should be quashed.
As we get closer to the trial things look to be heating up. As always we’ll have all the big Beef Plant PACER filings on our USA v Moultrie legal page.