Opening arguments in a federal corruption trial gave two vastly different explanations for why Mobile County License Commissioner Kim Hastie and Deputy License Commissioner Ramona Yeager found themselves in court last week. In a 17-count indictment originally handed down last November, the U.S. Attorney’s Office accused the pair of conspiring to defraud taxpayers and the Mobile County Commission by falsifying invoices and misusing earmarked funds for political purposes.
The allegations include mail fraud, wire fraud and conspiracy. Additionally, Hastie is charged with five counts of extortion under the Hobbs Act and a 17th count alleging she illegally provided thousands of email addresses from the license commission’s database to the mayoral campaign of Sandy Stimpson in 2013.
To the contrary, defense attorneys Neil Hanley and Dennis Kinzley claimed Hastie and her second in command were simply political victims of “disgruntled employees” bitter about being held accountable for performance at work for the first time in years.
In the first week of the trial, Hanley painted whistleblower Victor Crawford as an overpaid contractor who turned on his friend Hastie after he became desperate to cling to the single lucrative government contract that sustained his company.
Though a jury will weigh the entirety of the evidence, the charges against Hastie can be simplified into four events: more than $10,000 of public relations work Hastie paid for through her usual billing for IT services from Crawford’s APL Software Engineering; a $10,000 fee she paid from a restricted account to political consultant Jonathan Gray to write legislation on her behalf; the allegations of extortion Crawford says caused him to turn in Hastie to the FBI; and finally, the leaked emails to the Stimpson campaign.
Stimpson campaign emails (September 2013)
The final charge, added to Hastie’s federal indictment in January 2015, accuses her of intentionally disseminating more than 30,000 private email addresses from the license commission’s database — one containing restricted personal information from every registered motor vehicle, mobile home and boat owner in the county.
A federal law prohibiting the disclosure of that information serves as a disclaimer on the license commission’s website, yet Hastie herself instructed a subordinate to provide the email addresses to the Stimpson campaign.
The defense has argued the law does not specifically recognize email addresses as “personal information,” but acknowledges it was enacted in a time before the widespread use of email.
Despite testimony from several witnesses at trial, Hastie’s attorneys made no immediate attempt to refute her involvement with an email blast sent to the addresses the day before Stimpson defeated incumbent mayor Samuel Jones.
Brad Bray, an employee of the license commission since 2007, was the prosecution’s first witness. He testified that Hastie initially asked him to “send an email she had already written up” expressing her support for Stimpson sometime in August 2013.
According to Bray, when he declined the order, Hastie asked him to aggregate a list of email addresses from the database. Bray said he delivered a thumb drive with the email addresses to Hastie’s assistant just days before the election. According to his testimony, he had narrowed his search to only include residents of Mobile at Hastie’s request.
As their second witness, prosecutors called Candace Cooksey, finance director for the 2013 Stimpson campaign. Under direct examination, Cooksey testified to working directly with Hastie preparing to send out the mass email in support of Stimpson.
It what seemed unusual for a legitimate agreement, Cooksey said all the emails she exchanged with Hastie regarding the statement of support originated from an address registered to her daughter, Hannah Hastie.
Cooksey testified she didn’t remember the exact date she received the list of email address, but did say she knew it came from Hastie. She forwarded the thumb drive to Webjed, a Mobile-based online branding firm.
Despite all the evidence supporting the allegation of Count 17, defense attorneys focused much of their cross-examination on Bray and his attitude around the office. Hanley asked Bray about attempts to align colleagues against Hastie and Yeager, which he denied, along with an allegation he’d passed around a petition to have another license commission employee terminated. Though Bray also denied that allegation, Crawford later testified that Bray had indeed taken part in the petition.
On the stand, Bray only admitted to “discussing Hastie in a negative way,” but only with other employees who “shared the same negative experiences.”
Alleged extortion of Crawford (2012 to 2014)
Opening the trial, which is expected to continue through this week, more than two straight days of testimony focused on the witness who alerted the federal government to Hastie’s alleged conspiracy — computer contractor Victor T. Crawford.
The original indictment suggested Hastie used intimidation to extort Crawford into making contributions to her political campaign, to purchase gifts for office Christmas parties and to cover payments to Strateco LLC for political work performed on Hastie’s behalf.
In opening statements, defense attorneys suggested those expenses were “gifts,” but Crawford testified he only agreed to the payments because he “feared for his job” with the license commission — a contract worth millions of dollars that he’s maintained since 1991. Crawford also testified Hastie routinely fired employees who crossed her and made working conditions so difficult for some, they decided to quit on their own.
“(In an office meeting), Hastie stated she was ‘really easygoing until you cross her, then it’s hell,’” Crawford testified. “If she said, ‘I needed to pay for things,’ then I paid for things. If I didn’t, I thought I would see a letter written and I would be let go by the county.”
Crawford said Hastie encouraged him to “pad his bills” in order to make up for the unrelated expenses his business was paying on behalf of her office. Because of Crawford’s large monthly invoices, the extra charges went largely unnoticed by the Mobile County Commission.
Federal prosecutors declared Crawford a “whistleblower,” which means his $150 per hour salary is currently secure. Prior to Hastie’s indictment, county records indicate APL Software Engineering billed the license commission $292,958 between November 2013 and June 2014.
According to his testimony, Crawford only had one employee at the time and paid no rent or utilities. With virtually nonexistent overhead, the majority of the billings found their way back to Crawford — a fact the defense quickly pounced upon.
During cross-examination, Hanley questioned the combined millions of dollars Crawford has billed Mobile County since the early ‘90s. Particularly, Hanley scrutinized a series of invoices APL Software Engineering submitted to the county from 2012 through 2014.
According to the invoices, Mobile County was billed $75 per hour for work performed by an APL Software employee named Katie Williamson. However, in Crawford’s testimony, he admitted he only paid Williamson around $25 an hour, while he put the other $50 per hour in the company’s coffers.
Defense attorneys also established that throughout its history with the county, APL Software typically operated with very few employees, if any at all. Hanley asked Crawford if he was “pocketing the money,” an accusation he didn’t deny. But Crawford also testified he never “over-billed” the county and emphasized he wasn’t being paid “for doing nothing.”
According to invoices, Crawford was making an average of $7,500 per month for hours billed to Williamson on top of the $150-an-hour rate he was already receiving for his own work. Altogether, those expenses totaled nearly $195,000 over two years, according to Hanley’s calculations.
However, in his direct examination, Crawford said Hastie had him pay for Williamson’s tuition at Auburn for a course on Alabama taxes. The class was unrelated to work she performed for Crawford, but does apply to Williamson’s new position as chief clerk at the license commission — a position she has held since May 2014.
It was also revealed that Crawford was required to pay back $82,000 to the county’s engineering department in 2007, with which he had a contract at the time. Hanley asked Crawford if the payback was necessary for “listing people’s tasks in his bills” his employees “didn’t have the ability to perform.”
Hastie’s corruption trial is not the first time Crawford’s lucrative contracts with Mobile County have been scrutinized. According to records supplied to Lagniappe last year, APL Software was paid $6,312,462 by the county since 1999, but evidence suggests their relationship began in the late 1980s.
In a midday motion June 1, defense attorneys seemed confident they’d beat the government’s allegations of extortion — filing a motion for acquittal through Yeager’s attorneys. From the bench, U.S. District Court Judge Kristi DuBose seemed to agree, at least in part, with the defense in that the government’s claims had fallen short in the courtroom.
“There has to be proof [Crawford] was in fear for his job. Where’s that explicitly?” DuBose asked. “It can’t be just something [he] might be think in his own mind, there has to be a meeting of the minds, not that he was fearful if he didn’t provide the gifts he would be fired. The Hobbs Act is a very serious allegation of extortion that requires explicit promise and proof of a quid pro quo.”
Assistant U.S. Attorney Gregory Bordenkircher pointed to a handwritten note Hastie left Crawford detailing what Christmas presents she wanted him to purchase for the party. Bordenkircher referred to it as a “demand,” but DuBose said his characterization was one “most favorable to the prosecution,” considering Hastie thanks Crawford at the end of the same note.
Despite the back and forth, DuBose said she would take the motion under advisement, which means she could issue a ruling from the bench.
Strateco paid through APL Software (January 2014 to May 2014)
It’s undisputed that Crawford’s company paid marketing agency Strateco LLC at least four times in 2014 for work related to the license commission, but the legality of those payments could likely boil down to the jury’s interpretation of Crawford’s contract with Mobile County.
In 2014, Strateco created a newsletter that discussed, among other things, Hastie’s self-promoted campaign to merge the offices of the county’s license and revenue commissions. Instead of being submitted to the Mobile County Commission separately, Strateco’s invoices were added to Crawford’s monthly billings.
Hanley argued Strateco’s payments were legal and proper because the county’s contract with APL Software Engineering allows for “other related services” to be added at the discretion of the license commissioner.
However, Crawford said his business has nothing to do with marketing, political consulting, social media or any of the services Strateco provided. He also denied any knowledge of the scope of work Strateco was performing for Hastie.
Meanwhile, Strateco CEO Chad Tucker testified that when Hastie first sought his services in 2014, “initially it was about running for revenue commissioner.” Later, it “transitioned into merging the two offices together” after Hastie realized she was the only candidate qualified for the position. Tucker further testified that he assumed Hastie was paying him through Crawford because of budgetary restrictions.
Charges related to the payments Strateco received for the work in 2014 constitute most of the wire and mail fraud charges against Hastie and almost all of the charges against her co-defendant, Yeager.
According to FBI Forensic Accountant Kathryn Scott, the invoices Strateco submitted underwent several changes before they were finally submitted to the county. Scott tracked the payments in their entirety, and detailed how the descriptions of the work Tucker performed changed over time. Before they reached the county commission, four versions of Strateco’s bills were sent between the company, Hastie and Yeager.
As a part of their investigation, the FBI had Crawford wear a camera during certain conversations with Hastie and Yeager. In one recording, Hastie is seen discussing attempts to reclassify Strateco’s expenses to make them seem related to computer work.
“I realized I can’t have it saying that, if it’s going to have my name I need to pay it,” Hastie says in the video. “If anybody was to ask you, that’s what it’s for. It’ll be the newsletter, social media and Facebook [because] that’s kind of like IT and that’s what it’s all about. It’s easy and it justifies it because that’s all [Strateco] does. I just want to run it through you because I didn’t want to listen to [County Commissioner] Merceria [Ludgood] and them.”
Ludgood is among two other county commissioners who approve the expenses of the license commission each month. In other recordings, both Hastie and Yeager discuss organizing Crawford’s invoices in such a way that they wouldn’t “draw too much attention.”
In Hastie’s defense, Hanley argued she changed the invoices to “make the descriptions more accurate.”
$10,000 payment to Strategy Inc. (January 2014 to May 2014)
Hastie also sought the services of public relations firm Strategy Inc. and specifically its founder, political consultant Jonathan Gray. It’s undisputed Hastie paid Gray $10,000 to help author the legislation aimed at combining the offices of the license and revenue commissions. It’s also undisputed that those funds were improperly pulled from a segregated account funded by a $1.25 fee assessed to all electronic transactions at the license commission. According to a law Hastie championed, that “$1.25 fund” is required by statute to be used explicitly for computer and IT purchases.
Her defense attorneys claim the payment was “a mistake,” but prosecutors have pointed to comments Hastie and Gray made to the media suggesting the pair may have known they were skirting the law all along.
Prior to her indictment, Hastie told Lagniappe in recorded conversations introduced into evidence that Gray was never compensated for his services offering: “Chad [Tucker, of Strateco] is who we pay. Jon? No.”
Gray eventually returned the money a few weeks after FBI agents raided Hastie’s office.
When asked why he returned the money, Gray described it as “blood money.”
“I don’t want somebody to go to prison because they wrote me a check out of an account they shouldn’t have and didn’t know it,” Gray said. “I don’t think Kim intended to break the law in writing me that check, but that’s my opinion.”
When Gray initially returned the money, Hastie told Lagniappe “no one asked” or “suggested” he do so, but Gray’s testimony to a grand jury prior to the trial suggested he was indeed approached by the FBI and one of Hastie’s attorneys about refunding the account. The attorney, Buzz Jordan, wrote a letter to Gray requesting he return the money to the license commission.
Gray however, maintains he and his business partner had already decided they wanted to return the $10,000 of their own volition.
Testimony in the trial concluded Tuesday. If Hastie is convicted, she faces automatic removal from office, as well as fines and prison time. Daily updates are available on lagniappemobile.com.
Dale Liesch contributed to this report.