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Ex-Interior Official Admits Kickback Scheme

POSTED: 04:56 PM ET, 01/30/2009 by Derek Kravitz

By Derek Kravitz
Washington Post Staff Writer

A former Interior Department official pleaded guilty to felony fraud today for accepting $15,000 in kickbacks from an insurance company in exchange for arranging meetings with government officials in the U.S. Virgin Islands.

Edgar A. Johnson, 60, of Bowie, who left his position at Interior's Office of Insular Affairs last year, was charged in November in U.S. District Court in Washington with one count of honest services wire fraud.

Johnson faces between 12 to 18 months in prison under federal sentencing guidelines. He will be sentenced April 10.

Johnson did not return phone calls seeking comment. His attorney, Stephen O'Neal Russell, declined to comment on the case.

On Dec. 1, 2006, Johnson met an old fraternity brother, who authorities used as a confidential informant, at Johnson's Maryland home. Johnson was introduced by the friend to representatives of a New Jersey firm looking to sell insurance to government agencies, according to court documents.

That night, the men went to a nearby restaurant and ironed out details.

"I'm the Virgin Islands desk officer for the government," Johnson said, according to court documents. "I know people but I got to be careful there for the whole idea of what we can do."

The insurance company, which is not named, offered to pay Johnson and a "relative" working in Detroit's city government for helping set up insurance contracts.

A copy of the plea agreement

The deal on the table was a 10 percent cut of the contract for Johnson and 15 percent for the "relative," according to court documents. By January, the Detroit deal had fallen through but, during a meeting at a highway service area on Interstate 95, Johnson told his old fraternity brother and friend that he could introduce the firm to high-level Virgin Islands officials in charge of selecting government insurance plans, adding that it was his job to "spur economic development" in the territories.

During that February 2007 meeting, Johnson was given $5,000 in $100 bills. He was given another $10,000 in cash in August 2007.

Johnson, who held federal jobs for nearly 30 years, most recently was director of the technical assistance division, which provides funding to U.S. territories and private companies to increase self-sufficiency and encourage private-sector investment. He told prosecutors that he was struggling to pay private school tuition for one of children and that he was looking to "maintain his lifestyle" after his retirement. Johnson was paid $121,000 per year, plus benefits, when he retired last year.

The case is unusual in that it involves two relatives -- Johnson and a family member working in Detroit's city government.

"I assume this is not the last you'll see of this case, considering the family relationship and the intricate web of connections that was formed," said Glen Donath, a former assistant U.S. attorney who now works as a partner in the Washington firm of Sonnenschein, Nath & Rosenthal LLC.

The case also comes on the heels of new Interior Secretary Ken Salazar's pledge this week for a "long term-effort to enact comprehensive, top-to-bottom reforms."

Salazar, a former Democratic senator from Colorado, told a group of reporters at the White House that the agency "has been tarnished by ethical lapses and criminal behavior that has extended to the very highest levels of government."

He specifically referred to two scandals: the conviction of J. Steven Griles, the former deputy Interior secretary who pleaded guilty in 2007 to lying about his connections to disgraced uber-lobbyist Jack Abramoff; and the sex-and-drugs scandal that surfaced this summer involving more than a dozen employees at the Minerals Management Service, which handles domestic drilling revenues.

By Derek Kravitz |  January 30, 2009; 4:56 PM ET Hot Documents
Previous: Blagojevich is Out, Obama Calls Bonuses 'Shameful' and More Spy Stories | Next: Court Revives Lawsuits Against Pfizer by Nigerian Families

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