Lee Case Twists and Turns

By Andy Meek

Joseph Lee

Within the past few days, each side in the pending federal corruption case against former Memphis Light, Gas & Water Division president Joseph Lee has considerably upped the ante.

First, prosecutors altered their trial strategy in a major way, returning to the grand jury to procure separate indictments Jan. 7 against Lee and his original co-defendant, former Memphis City Councilmember Edmund Ford. They did so to satisfy a federal judge's ruling last month asserting that bribery and corruption charges against both men had been improperly combined into one 11-count indictment.

Lee's attorneys, meanwhile, pounced on several perceived flaws in the government's case Friday, filing a motion to dismiss the case against their client altogether. An unmistakably confrontational tone characterized the filing, which decried what Lee's attorneys said was a racially motivated and selective prosecution of MLGW's former top executive.

'Scorched-earth defense'

Certain actions by federal prosecutors, wrote attorneys Robert Spence and David Howard, amounted to an "implicit concession as to the speculative nature of the charges levied against Lee." Elsewhere, they charged that "the government's prosecutorial selectivity cannot be rationalized."

The move harkened back to July 11, the day the indictment against Lee was handed down. That's when Spence, his frustration visible as he spoke to reporters outside the Downtown federal building, promised a "scorched-earth defense" of Lee.

All of the above could pave the way for a surprise or two in the federal case born out of a scandal that dramatically rocked the Memphis utility company last year. The big question: What happens next?

For starters, all three sides - prosecutors, Ford and Lee - are due back in court Jan. 25. By that date, it will have become apparent whether the newly issued indictments against Ford and Lee will stand.

One thing already clear is that the new indictments include restructured charges that run counter to an order issued Dec. 19 by U.S. District Judge Samuel H. Mays.

That order, which said prosecutors could not proceed with their broad criminal case against Ford and Lee together because some of the charges did not apply to both men, handed Lee's attorneys a minor victory. They had wanted the judge to correct the indictment by separating the defendants instead of separating the charges. And that's what Mays did.

Plot and subplots

Ford had been charged in a separate corruption matter in addition to allegedly using his influence as a councilman with Lee to temporarily avoid paying his utility bill. Ford's attorney, Michael Scholl, for reasons he did not specify, said last month he was not opposed to splitting off those earlier charges and allowing Ford and Lee to be tried together on the MLGW issue.

Dividing the indictment in that way would have entailed separating the charges against both men. Mays' ruling, however, ordered the defendants to be separated.

"It's very clear that if you'd filed the matters separately, this wouldn't be an issue," he said in a half-hour hearing last month.

The government was given until last Thursday to file a motion asking Mays to reconsider his decision. Mays said he would consider any new argument prosecutors presented to him.

But rather than take another shot at proving their point, prosecutors went back to the grand jury to get new indictments. New bribery and corruption charges were handed down last week against Ford in the original matter, which involved him allegedly taking a bribe to support a development project that needed City Council approval.

A separate set of charges was handed down to cover the MLGW issue involving Lee and Ford.

Billowing waves

Since Mays' order said that trying both Ford's earlier matter together with the one that involved Ford and Lee would unfairly prejudice Lee's case, prosecutors reasoned that their return trip to the grand jury cleared up that problem. However, the new MLGW-related charges still include one count of extortion against both men, in addition to separate charges against them.

Prosecutors had asked Mays to separate only the charges against Ford and Lee so they would not have to try the same MLGW-related case twice.

But Mays' ruling clearly states: "Such a remedy would be inappropriate in this case."

Meanwhile, Lee's attorneys now are arguing that the case against him is tantamount to "selective prosecution" based on the way prosecutors treated a third man who was indicted with Ford and Lee in July. The man is Dennis Churchwell, the former landlord of Ford's funeral business.

Churchwell was charged with perjury for lying to a grand jury about whether he forgave rent to Ford in exchange for Ford supporting Churchwell's interests before the City Council. But Churchwell was not charged with bribery or extortion, as Lee was.

To Lee's attorneys, there are similarities between what Lee and Churchwell are suspected of doing, but the attorneys believe they are more pronounced in Churchwell's situation. For example, Churchwell stood to gain a direct financial benefit from the favor he sought from Ford.

But "Lee supposedly had some unspoken agreement to reward Ford for supporting his nomination (as MLGW president) years earlier," Lee's attorneys wrote.

No matter how the cases against Ford and Lee play out, the corruption scandal that brought about the cases in the first place already has had a major ripple effect throughout Shelby County. Specifically, its aftermath continues to be felt in the $1.7 billion operation that is MLGW.

Lee's ouster following the scandal last year led to the installation of Jerry Collins as president and CEO of the utility company. Collins and other top utility officials took major steps at the end of last year to balance the MLGW budget, including winning council approval for the first local rate hike in four years for MLGW customers.