FBI: Birmingham Mayor arrested on federal charges

Published 10:10 am Monday, December 1, 2008

The mayor of Alabama’s largest city, Larry Langford, was arrested Monday on charges of steering millions of dollars of bond work to a friend in exchange for more than $230,000 in bribes that paid his debts for flashy clothes, jewelry and Rolex watches.

The bond deals — which funded years of work on a substandard county sewer system — went sour and have helped push surrounding Jefferson County to the brink of filing the largest municipal bankruptcy in U.S. history.

Federal prosecutors said Langford, Montgomery investment banker Bill Blount and lobbyist Al LaPierre were charged in a 101-count indictment. The charges also include conspiracy, money laundering and filing false tax returns.

The charges stem from Langford’s time on the Jefferson County Commission, which he left after being elected mayor in a landslide last year.

Langford, arrested by FBI agents at a beer distributor where he also has a public relations job, appeared in federal court in leg irons and pleaded not guilty through his lawyer.

“I’m going to work today,” Langford told reporters outside the courthouse after being freed on $50,000 bond. A Democrat, Langford has said for months that he expected to be indicted in what he referred to as a witchhunt by Republican prosecutors.

U.S. Attorney Alice Martin said the charges were about public corruption, not partisanship.

“It was a classic pay-to-play scheme,” said Martin.

She said Langford, 62, needed money because of a “crushing personal debt” stemming from lavish purchases of jewelry, high-priced watches and a wardrobe of clothes from exclusive men’s stores.

The indictment said Blount paid Langford $235,000 in bribes, sometimes with the money routed through LaPierre, to influence the bond deals that earned Blount’s firm $7.1 million in fees. Some money went straight to Langford, while thousands went to pay off Langford’s debts, prosecutors charged.

The indictment also says Blount paid $219,500 to LaPierre for his help.

LaPierre also pleaded not guilty and was released on bond. Blount was due in court for an afternoon hearing.

The three men have already denied similar allegations contained in a lawsuit earlier this year by the Securities and Exchange Commission, which accused Langford of taking more than $156,000 from Blount and routed through LaPierre.

Jefferson County is trying to avoid filing bankruptcy over $3.2 billion in bond debt, which would nearly double the record for a municipal bankruptcy of $1.7 billion set in 1994 by Orange County, Calif.

The sewer bonds went sour as the mortgage crisis hit and banks tightened up on lending, sending credit costs for the bonds skyrocketing.

The mayor’s chief of staff said city business would go on as usual. In a statement, Deborah Vance-Bowie also said the indictment of Langford was “certainly no surprise to us” and that they had expected some action from Martin, a Republican appointee, as she nears a possible end of her appointment with the swearing in of Democratic President-elect Barack Obama in January.

“We are glad the mayor will finally have his day in court,” the chief of staff’s statement said.

Langford, who was elected mayor in a nonpartisan vote, was a Democrat when he served on the commission. Blount, 55, is a former state Democratic Party chairman and LaPierre, 58, is a former state Democratic Party executive director.

Martin has denied any political motivation behind her office’s investigations and prosecutions. An attorney for LaPierre, Tommy Spina, said he did not anticipate politics becoming a major part of his defense.

“We think it’s a case we can try on the merits,” said Spina.

Langford has drawn attention for a series of colorful stunts since taking office last year, many of which are aimed at trying to turn around an old steel city-turned-medical hub.

He walked into a business meeting with two police officers carrying submachine guns, props meant to generate interest in his “top secret” finance plans. He also announced a longshot bid to bring the 2020 Olympics to Birmingham, and his critics have even gone as far as to call him “Mayor LaLa.”

The former promoter and television reporter has been unapologetic about his conduct, saying it’s his job to sell the city. Just last week he gave a $10,000 city consulting contract to a 13-year-old girl who appeared before council members to discuss improving parks.