"Give Us This Day Our Daily" Beef….

We have still more Beef Plant legal filings for you and these are some of the most informative documents to date concerning what we should expect from the prosecutors when the Moultrie trial starts. In the Government’s response to the defense motion to dismiss we find out a good bit more about which TFG employee will be singing on the stand and what he already told the grand jury:

The United States is not required to allege or prove a quid pro quo to convict Moultrie, Cawood or The Facility Group. But even if it was, Moultrie’s former employee Robin WIlliams’ Grand Jury testimony eviscerates Moultrie’s entire argument about the lack of any quid pro quo.

Robin Williams was a member of the Georgia Legislature while employed as a “consultant” for Robert Moultrie and The Facility Group. Williams attended an April 2, 2003 dinner with the public official, one of the public official’s campaign employees and Robert Moultrie. The dinner took place in Jackson, Mississippi just days before The Facility Group was announced as Project Manager of Mississippi Beef Processors, LLC. After dining with the public official, Moultrie and The Facility Group billed the costs of the dinner with the public official as well as Moultrie’s travel to the dinner back to the State of Mississippi as a business expense.

Concerning the Project Management Agreement and the related fundraiser, Williams offered the Grand Jury the following testimony about a conversation he had with Robert Moultrie:

Grand Juror: You said it (the fundraiser) was already planned. So the
(public official) knew there was going to be a (sic) fundraiser before the
contract was signed?

Robin Williams: I – – this – – 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.

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 Williams 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.

Besides learning of one former TFG insider slated to talk before the jury we find out a good bit more about other witnesses including TFG’s former outside independent CPA who audited their books who will be speaking about his work and how TFG overbilled Mississippi Beef Processors:

Dickinson is will testify about The Facility Group’s use of a multiplier and their aggressive accounting procedures to generate profits. Dickinson will testify that his audits revealed there was a breakdown in internal controls within Facility Holdings Corp. and its related entities.

Dickinson will testify that The Facility Group’s multiplier contains a mark up designed to make a profit in addition to recouping labor costs. Dickinson will offer the opinion that pursuant to the terms of the subject Project Management Agreement, The Facility Group was merely allowed to recoup costs, and was forbidden under the contract from incurring or obtaining any profit under the guise of cost.

Dickinson will testify that according to the terms of the Project Management Agreement, insurance was to be billed at cost. He will testify that to charge insurance in an amount far greater than its actual cost was fraudulent under the terms of the contract and that any portion of insurance recouped in excess of the actual cost of insurance was profit to The Facility Group.

Dickinson will testify about his opinion that the Facility Holding Corp. and its subsidiaries had problems substantiating that employees who were charged to projects actually performed work on the projects.

It gets better though because we find out what more about what Bll Purdy will be saying as well as the expected testimony of Sean Carothers:

Messrs. William Purdy and Ralph Germany will testify about general construction law principles and construction contract principles. They will testify regarding the Letter of Intent and Project Management Agreement, to which The Facility Group was a party. They will testify that a review of the contracts at hand reveals that The Facility Group did not include any provision in the subject contracts that memorializes or makes known to the State of Mississippi, Richard Hall, Mississippi Beef Processors, LLC or Community Bank that The facility Group intended to use an alleged multiplier. The will also testify based on the contractual language, The Facility Group was only permitted to bill for actual costs incurred.

Messrs. Germany and Purdy are expected to testify that The Facility Group overbilled the Mississippi Beef Processors project for at least .7 of the 2.0 of the alleged multiplier used by The Facility Group to recoup labor costs. They are also expected to testify that that submitting bills as “costs” that contained profit built in under the disguise of cost constitutes fraud.

Purdy and Germany are also expected to testify that the “inefficiency” factor allegedly contained in the alleged multiplier likewise does not constitute a cost and as such is nonreimbursable.

Messrs. Germany and Purdy will also testify that based on their experience with construction and contractual matters, certain costs billed to the project, such as printers, accounting, data processing, etc, were general overhead expenses and should not have been billed to the project. In addition, they will testify that The Facility Group grossly inflated their costs of insurance and to the specific dollar amounts. This in their opinion also constitutes fraud.

Messrs. Germany and Purdy will also testify that based upon their observations of the records, that it is apparent that The Facility Group billed items from a budget that they produced at the beginning of the project rather than billing actual costs. They will testify also that the schedule of billable hours generated by The Facility Group for the accounting department was fictitious and could not possibly represent actual hours worked. They will testify that the above constitutes fraud.

Mr. Sean Carothers, President of Carothers Construction Company, will testify to the above. In addition, Mr. Carothers, aided and assisted in the creation of a notebook of schedules derived mainly from records obtained from The Facility Group which demonstrates overbilling in labor, insurance, design and accounting. Mr. Carothers will testify as to the origin of the figures containing within the notebook, the rationale for their inclusion, and the totals of the calculated amounts of overbilling.

Finally the prosecution also reveals something those of us who work in the construction industry here in Mississippi already knew. Bill Purdy and his partner know their construction law. As Nowdy observed to me in an email Bill Purdy doesn’t just know the book on construction law in Mississippi, he wrote it.

In addition to the new filings linked about we have the government’s response to team Moultrie’s motion for a higher legal standard for conspiracy evidence. All these can be found on our Moultrie legal page.

sop

22 thoughts on “"Give Us This Day Our Daily" Beef….”

  1. Sop, killer post…I have got to tell some people that don’t blog often to check this one out.
    Questions: Why would the gov’t show some of it’s cards at this point? Why reveal what some witnesses will testify to?
    I bet this sure makes Moultrie a bit nervous and gets him wondering how many more aces the gov’t is holding.
    Mr. Moultrie, it’s time to consider whatever the gov’t is offering in terms of a D E A L.
    The new gov’t bumper sticker: “Team Moultrie – it’s what’s for dinner.”

  2. The government has to share Jack though the rules differ between civil and criminal cases.

    There is an implication about Ronnie Musgrove in the grand jury testimony of Robin WIlliams. Musgrove knew before the contract was signed money was coming back his way. “Quid Pro Quo” Ronnie Musgrove…..

    sop

  3. That’s where I hope some testimony spews…directly at Musgrove.
    Even though Musgrove is not on trial (or even indicted, that we know of) do you expect enough to come out about him to possibly ruin his latest political effort?

  4. I don’t see where it can help him Jack.

    Just a sheer semi educated guess on why Musgrove isn’t charged too would be the layers of seperation between his office, the legislature which created the concept and the MDA which was charged with spending the money. His office did not award the bids so again there is a degree of seperation from the process.

    Robert Moultrie could solve that problem for Greenlee. How this unfolds will be very interesting to watch.

    sop

  5. i also question exactly how those bids were awarded…and I’m not totally convinced they didn’t, at least in part come from his office.

  6. Thanks HD. In fairness Yallpolitics covers it some. We’re the only ones pulling PACER docs.

    Such transparency of the judicial process is healthy IMHO.

    sop

  7. Sop,

    You are right on target about the layers of separation between Musgrove and the contract. The contract was between The Facility Group and Community Bank and the Land, Water and Timber Resources Board. That board has 14 or so members and only one of those (the head of MDA) was responsible to the Governor.

    I find it interesting that Robin Williams has surfaced in this case. He is currently serving 10 years in a federal pen after being convicted of bribery, theft and other charges related to a Georgia Mental Health Center. In the news coverage of his indictment, it was reported that he was flying Haley Barbour around in a private plane during Barbour’s campaign for governor.

    Didn’t Williams also also get involved as a government witness in the Siegleman case? I remember reading something about that in the Augusta Chronicle.

    Won’t the fact that the government is relying on three convicted felons–Hall, Carothers and Williams–make their case more difficult?

  8. HD, I’ve always enjoyed Freeland’s food-related posts and comments and bet he’s a great cook, but, I do believe he puts “yeast” in his motions as you start pulling one down and the number of exhibits seems to increase.

    However, I just sent Sop one from the government about the size of a side of beef – it’s a 22 page motion in opposition to Moultrie’s motions challenging carothers as a witness and the request for daubert hearing with16 exhibits and it’s 322 pages total.

  9. Hard to tell Mr Mktpro though certainly team Moultrie will bring that up. If these guys were choir boys there wouldn’t be a case now would there?

    Williams sounds like the kind of guy you wouldn’t want to have on payroll. I wonder what that also says about the people that hired him?

    sop

  10. Sop, I’ve always had the understanding that there were no bids on this whole process, and that then AG Mike Moore put out an AG’s Opinion that a bid wasn’t necessary.

  11. Carothers bid the project too JW. They were already in place as the GC when Community Bank and MDA decided to hire a construction manager.

    In Mississippi there is latitude under the public purchasing laws to hire professioanl services. That latitude also elevates the risk for public corruption.

    In any event Carothers also bid the CM. TFG was awarded the work and the rest is history.

    sop

  12. hi my MS friends,

    Thanks for your reporting. The Georgia newspapers are not printing anything. Guess Moultrie & Gang still own the media here in Georgia.

    Interesting hearing Georgia ex-state rep Robin Williams name. He was indicted last year for fraud in Augusta, and yes Robins was in on the Alabama Governor deal.

    And Robin Williams and the now resigned from Facility Group, Ways and Means State Legislative Earl Erhart, is buddies with Robin

    Wonder if and when State Rep Erhart will be connected with all this craziness

  13. You’re not hearing much in Georgia because this type pretrial news is not considered “newsworthy” by journalist.

    As we’ve found out there is a public appitite for more in depth coverage of legal matters. None of us are lawyers and we generally prefer to let the docs speak for themselves though we do have opinions as you’ve found. We welcome our new readers from the Augusta Georgia area.

    Erhart is connected in that the entire company is under indictment. It seems Mr Moultrie likes employing politicians.

    In Mississippi it appears he found it easier to just pay them and not pretend about the rest.

    sop

  14. You guys may be interested in TFG’s forays into NC. They placed Gordon Myers on their BOD a couple of years ago. Myers is tight with the powers that control all the corruption in NC, He jets around with the governor, and collects cash from state employees to pass up the line. He had been named to the lottery commission, but had to quickly resign following public uproar and drunk driving accident. Boss Leake, who runs my county, brought in TFG to build our new jail/justice complex, but then had to back off following the MS mess. Leake runs our state board of elections so we don’t have much chance to vote the bums out of office.

  15. Ann we’ve been there. If you got to our “where’s the beef” thread you’ll find that entire discussion about Myers in the comments. Thank you for stopping in and commenting with us.

    sop

  16. Our pleasure Ann. I hope you take time to read our latest post on the topic. Team Moultrie has taken exception to one of the filings we featured on this very thread.

    sop

  17. JW Spencer – please reconsider your position (and source) that gave you the understanding that there were no bids made for this project – keep your mindset open on that subject.
    I hope all of that will come out at trial. However, to be fair, I’ll wait for the govt’s proof to show us…if in fact they have that proof. Until then, TFG is not guilty.

  18. Jack, I’m having trouble following you. Are you saying TFG will be guilty or not guilty depending on whether there was a bid process?

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