Ex-Charlotte mayor to plead guilty Tuesday to corruption charge

The Charlotte ObserverJune 2, 2014 

— Former mayor Patrick Cannon is expected to plead guilty Tuesday to a federal public corruption charge that carries up to a 20-year prison sentence and a $250,000 fine.

According to court documents released to the public early Monday, Cannon will appear in federal court at 10:45 a.m. Tuesday before U.S. Magistrate Judge David Cayer. At that time, he will plead to one count of honest services wire fraud, an umbrella charge commonly used in cases where public officials take kickbacks or bribes, documents say.

The charge basically means the 48-year-old Democrat used his mayoral and city council posts for illegal gain, depriving city residents of his “honest services” as their elected representative.

Cannon did not answer the door at his house Monday morning. Asked why his client had agreed to plead guilty rather than fight the charges in court, attorney James Ferguson said Monday morning that he could not comment.

Honest services fraud is one of the three corruption charges leveled against Cannon at his March 26 arrest. At the time, the U.S. Attorney’s Office accused him of accepting almost $50,000 in bribes. In exchange, Cannon promised to use his office to assist real estate deals pitched by undercover FBI agents posing as out-of-town investors.

Cannon, who is free on a $25,000 unsecured bond, will be sentenced at a later date.

The so-called Bill of Information released Monday does not include charges against any new targets. But those are still possible.

“This investigation did not end with Patrick Cannon’s arrest,” U.S. Attorney Anne Tompkins told the Observer on Monday.

Tompkins and John Strong, special agent in charge of the FBI office in Charlotte, will hold a 1 p.m. Tuesday press conference in Tompkins’ office near the courthouse.

According to the new document, Cannon is accused of soliciting and accepting a series of bribes from a Charlotte businessman, identified as “Businessman #1,” whose adult entertainment club was in the path of the Blue Line Extension through north Charlotte.

In January 2013, prosecutors say Cannon pocketed $2,000 from the club’s owner to influence zoning, planning and transportation department to make it easier for the night spot to stay in business.

Twin Peeks, owned by Charlotte strip club mogul David “Slim” Baucom, fits the description of the property. Baucom’s club, adjoining the Blue Line Extension, was demolished in June 2013 but could be rebuilt on the remainder of the lot, according to Charlotte Area Transit System documents.

Contacted by the Observer earlier this year, Baucom said he barely knew Cannon and had not been questioned by the FBI.

An Observer reporter who was outside of Baucom’s home in Cabarrus County on Monday morning was ordered off the property. An employee at Baucom’s MAL Entertainment on North Tryon Street said the businessman was not at his office. His reserved parking space was empty.

In 2006, Baucom came under scrutiny for making a $4,000 campaign contribution to a Charlotte-based political action committee, which had funneled the money to then-N.C. House Speaker Jim Black without reporting it.

Asked Monday afternoon if action is pending against Baucom in connection with the Cannon case, a spokeswoman for Tompkins said prosecutors cannot comment on an open investigation.

Tompkins said earlier in the day that the charge against Cannon covers illegal conduct stretching from his return to the city council in December 2009 through his March arrest, which took place less than four months after he was sworn in as mayor.

Bills of information take the place of a formal grand jury indictment and are often used in cases involving plea negotiations between the parties.

The other two charges against Cannon involving theft, bribery and extortion that were used in his arrest are not included in the new filing.

Under federal sentencing rules, those additional charges would have had little influence on Cannon’s punishment, legal experts say.

As part of his plea, Cannon has promised to assist the ongoing investigation. In return, prosecutors, led by Assistant U.S. Attorney Michael Savage, say they will not use future evidence turned up in the case to push for a harsher sentence against him.

If Cannon fails to meet the standards of cooperation set out in the agreement, however, prosecutors can lobby the judge to hand down the full 20-year sentence.

After Cannon’s arrest, federal prosecutors subpoenaed both city and Mecklenburg County governments, demanding mountains of records while raising questions across the city and county about the honesty of local government. The FBI is believed to be checking into everything from the city’s airport taxi contracts, to zoning and liquor permits, as well as the county’s tourism and hospitality sector.

So far, Tompkins said she’s been impressed by the “high level of professionalism in our city and county governments.”

Both government groups are cooperating with the investigation, she said, “so that the public can have confidence that our government and our elected officials are fulfilling their duty of honest and faithful service to the community.”

Cannon’s fall has been breath-taking.

In 1993, the son a single mother who grew up in public housing became the youngest candidate ever elected to the city council. In November, voters chose him to be mayor. Now the man whom the FBI says bragged openly about his government clout, including connections that reached as far and high as the White House, stands to become the city’s first mayor ever sent to prison.

Cannon became a federal target in August 2010, less than a year after he returned to the city council following a four-year absence. The FBI says that starting in January 2013, Cannon took five bribes totaling about $50,000 plus gifts over a 14-month period.

The last bribe came in February. In what was clearly the zenith of the federal case, the FBI says Cannon accepted $20,000 in the mayor’s office, then solicited an undercover agent for more than $1 million in additional kickbacks.

He was arrested a month later. He stepped down as mayor the same day. Tuesday, he will be back in federal court for the first time since his arraignment.

For now, federal sentencing guidelines offer a starting point for penalties. But federal judges are given wide discretion to enlarge or reduce the terms. Legal experts say Cannon’s relative lack of a criminal background will be considered, but so will the fact that he violated the public trust, first as a city council member, then as mayor.

“If you were a restaurant inspector it would be a different case,” said Sam Buell, a Duke University law professor and a former federal prosecutor. “But the fact that you were a mayor, the seriousness of the breach of trust will be higher with the more responsibility that you had.”

Though the size of Cannon’s eventual sentence depends on numerous variables, including the frequency of his corruption and the amount of illegal money involved, recent cases targeting mayors of other U.S. cities offer a glimpse of the penalties he could face.

FBI stings in Trenton, N.J., and the Miami suburb of Sweetwater, Fla., led to prison sentences this year of five years and 31/2 years for those respective mayors. Both of those cases appear to have involved smaller amounts of illegal money than Cannon is accused of taking.

Consolidating charges is a common part of plea agreements, says Randall Eliason, a George Washington University law professor, former federal prosecutor, and an expert in public corruption cases.

Prosecutors often reduce the charges in return for a guilty plea. But the remaining counts must “fairly reflect the seriousness of what they’ve done,” Eliason says.

They also must carry what prosecutors believe to be the appropriate penalty.

When Cannon was sworn in as mayor last December, he became only the third African-American to lead the city.

He was arrested at a SouthPark apartment used by the FBI as one of its meeting places with Cannon. The mayor had gone there to receive another illegal payment, according to a source familiar with the case.

Shortly after his arrest, Ferguson waived Cannon’s right to a preliminary hearing. That freed federal prosecutors from having to indict Cannon within 30 days. Experts say it also sent the signal that Cannon was willing to deal.

Cannon and his lawyers signed the plea agreement on May 8, but the terms have remained secret until being unsealed by a judge Monday morning.

Few public corruption cases ever reach trial, particularly when the FBI has video and tape recordings of an elected official breaking the law. According to the affidavit filed the day of Cannon’s arrest, agents have both forms of evidence in his case.

That helps undermine the most popular defense in public corruption cases – entrapment, which holds that the government tricked or pressured their targets into committing crimes they otherwise would not commit.

“There’s nothing better than those recordings,” says Jennifer Rodgers, a former federal prosecutor who now heads Columbia Law School’s Center for the Advance of Public Integrity. “There’s nothing you want more than a defendant in his own voice committing a crime. That’s the best.”

The new filing does not mention Cannon’s wife Trenna, who accompanied her husband last summer on a Las Vegas trip paid for by the undercover agents. Upon arriving, according to earlier documents, Cannon received $1,000 in spending money from an FBI agent posing as the Cannons’ host for the trip. Later, Trenna Cannon thanked the agent for the gift over the phone.

Since his arrest, Cannon has kept a low profile and has declined all interviews. He has surfaced occasionally on Twitter and at baseball games involving his son.

His name has been removed as chief executive officer of E-Z Parking from the website of a company he helped start 26 years ago. His status with the company is not clear.

During his dealings with the undercover agents, Cannon often bragged about his influence over zoning, police and other government departments. At one point, he told an agent of his upcoming Christmas dinner in the White House with President Barack Obama.

With Cannon’s sentencing pending, the agent’s response carries more irony today than before.

“Good for you,” he said, according to the FBI’s affidavit. “You know, you haven’t even hit the pinnacle of your political career yet, have you, Patrick? It will be fun to watch you the next 10, 15, 20 years. Watch where you go.”

Jim Morrill, Ely Portillo, Elizabeth Leland, Joe Marusak and Maria David also contributed.

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