Jefferson probe focus is Nigeria telecom deal

Investors sought to deliver broadband

25 Aug 2005 // The federal criminal probe of Rep. William Jefferson, D-New Orleans, focuses in part on a telecommunications deal he was trying to engineer in Nigeria over the past year, according to documents and those familiar with details of the investigation.

Federal subpoenas and search warrants whose contents have been disclosed to The Times-Picayune include a wide range of names of people and companies involved in the on-again, off-again proposal to deliver high-speed broadband service to some 200,000 people in the West African nation.

Those familiar with the deal say that Jefferson, an eight-term congressman with a long-standing interest in African trade and development, played a central role in bringing investors to the table and keeping the deal together when it appeared ready to unravel.

Jefferson has declined to comment on the investigation, except to say that he is cooperating. The probe came to light Aug. 3 when the FBI raided Jefferson's home in New Orleans and his office, car and home in Washington, D.C.

Nigerian deal probed

The Washington Post, quoting anonymous law enforcement sources, reported that the raids were the culmination of a yearlong sting in which agents were investigating allegations that Jefferson pocketed hundreds of thousands of dollars from a northern Virginia high-tech startup company. The newspaper said the company had agreed to cooperate with investigators. The Post also reported that agents found a large sum of money in Jefferson's freezer during the raid.

Details from the subpoenas indicate that investigators are seeking information about Jefferson's dealings in finding investors to underwrite the deal to bring a novel broadband technology to Nigeria. A small Kentucky-based company, iGate Corp., has patented technology it says can deliver voice, data and video along copper telephone lines faster and more cheaply than a digital subscriber line, which is common in many American households and businesses.

Unable to compete against U.S.-based DSL powerhouses such as Verizon, iGate decided to test the waters in Nigeria, a poor nation but one of the fastest-growing telecommunications markets in the world, the sources said. The company was seeking financing to launch the project in Nigeria.

Tech exec pulls out

One of the investors, according to those familiar with the arrangement, was Lori Mody, a wealthy former technology executive who lives in northern Virginia, in a Washington, D.C. suburb. According to published reports, Mody co-founded a commercial publishing firm in 1987 that evolved into a multimillion-dollar government contractor providing services ranging from updating computer networks to installing sonar and radar on Navy ships. The company was sold in 2002 for a reported $227 million.

Washingtonian magazine named Mody its Washingtonian of the Year in 2002, pointing to her work in Fairfax, Va., persuading technology companies to donate equipment and services to computer centers in low-income communities. She launched Win-Win Strategies Foundation, a nonprofit corporation, to take the campaign nationwide.

Win-Win Strategies Foundation paid for a trip Jefferson took to Ghana last month, according to disclosure documents he recently filed in the House of Representatives. The reason for the five-day, $9,247.85 trip was listed as "education and business development." Jefferson's office said Wednesday that it could not find additional information on the trip. Mody could not be reached for comment.

Sources who have seen subpoenas and search warrants executed by the FBI say that among other things, they sought documents related to Jefferson's dealings in Ghana. However, the bulk of the evidence being sought centered on the proposed telecommunications deal in Nigeria, including the relationship between Jefferson and the Nigerian state-owned telephone company NITEL.

Mody, whose name appears in federal subpoenas along with that of Jefferson's former legislative assistant, Brett Pfeffer, agreed to put an undisclosed amount of money into the Nigeria deal, according to a source familiar with the arrangement. However, late last year, Mody abruptly pulled out, the source said.

Trying to right the ship?

Pfeffer's role is unclear. In a brief telephone interview, he acknowledged knowing Mody but declined to comment further.

Mody doesn't appear to be tied to any political party. She gave $2,000 to the Republican Bush-Cheney re-election committee in 2003; $2,100 to Jefferson's campaign on March 31, 2005; and $250 to the campaign of Democratic New York Sen. Hillary Clinton on March 7, 2004. The contributions to Bush-Cheney and Clinton listed Mody's employer as Win-Win Strategies. The contribution to Jefferson reported her employer as Triple Play Technology. Both companies list addresses in northern Virginia.

When Mody balked at putting more money into the deal, Jefferson intervened in an attempt to get the deal back on track, summoning some of the parties to a meeting in Washington, the source said. But he was unable to persuade Mody to continue her investment and began to seek new sources of capital.

The source said Jefferson was responsible for bringing to the table Norbert Simmons, a wealthy New Orleans businessman and former riverboat casino owner with long-standing political ties to the congressman. Simmons, whose name appears in federal subpoenas, offered to invest money in the faltering deal earlier this year, but the source said that the project fell apart anyway. Simmons could not be reached for comment.

Weeks later, the FBI raided Jefferson's homes and office.