About a year ago, Jackie Welch drove downtown for an appointment at the federal building. The FBI had invited Welch and another man to meet with agents looking into possible political corruption on the Memphis City Council.
Welch is a suburban developer whose special prowess is selling school sites to the Shelby County Board of Education and adjacent land parcels to homebuilders to put in subdivisions and commercial properties on the major roads around them. He is also a prolific contributor to political candidates and frequently hosts fund-raisers at his expansive suburban home. Less known outside of political circles is his role as an unofficial sub-prime lender. One of his many clients was former city councilman Edmund Ford. Another was Joe Cooper.
As Welch told the Flyer last week, the agents asked him if he had a lawyer. Welch said no. They asked if he wanted a lawyer before answering their questions. Again Welch said no. In that case, the agents said, would he mind answering some questions? Fire away, Welch said. He had a notebook full of paperwork and documents with him. "I told them, 'Ask anything you want, and I'll tell you anything you want to know.'"
The agents asked Welch to wait about 20 minutes while they questioned someone else. One of the agents was from South Dakota, and Welch, an avid turkey hunter, made small talk with him about hunting. A few minutes later the agents called Welch in. The other witness, it seems, had taken the Fifth Amendment to each of their questions, reading word for word from a card pulled from his pocket. After three questions, the man was allowed to leave. That man was Rusty Hyneman, also a developer and frequent contributor to political candidates.
Last week, the names of Welch and Hyneman came up several times in Edmund Ford's bribery trial. In his closing argument, Assistant U.S. attorney Larry Laurenzi said of the government's star witness, two-time loser Joe Cooper, "There are no swans in the sewer." Laurenzi said Ford was motivated by greed, and that "the Rusty Hynemans of the world" and "the Jackie Welches of the world" enabled him to stay in business and live a nice lifestyle despite Ford's history of bankruptcies and bad credit.
The next day, jurors acquitted Ford on all six counts of the indictment after about seven hours of deliberations, despite videotapes that clearly showed Ford taking $8,900 in payments from Cooper. Ford's political future is uncertain, because he still faces high legal bills and another indictment in a case involving former MLGW chief executive Joseph Lee.
Despite last week's courtroom setback, federal prosecutors have signaled that public corruption investigations are not over and could include not only politicians but also the developers and companies that hire them as consultants or make loans to them.
Former state senator John Ford, already serving five years in prison, is scheduled to go on trial in Nashville on June 24th. The charges are related to his consulting work for Doral Dental and United American Health Care that earned him more than $800,000.
In the Edmund Ford trial, FBI agent Dan Netemeyer testified that defendant Ford was predicated, or formally put under investigation, on the basis of a Cadillac lease co-signed by Hyneman and loans for his funeral home from Welch, as well as other information given by Cooper. Netemeyer said the secrecy of the Memphis City Council investigation dubbed "Operation Main Street Sweeper" would have been jeopardized if the government had gone ahead with investigations of Ford's dealings with Hyneman and Welch before Ford and colleague Rickey Peete were arrested on November 30th, 2006.
It's not known whether other members of the Memphis City Council besides Ford and Peete (who pleaded guilty last year to taking bribes from Cooper and is in prison) were predicated but not indicted. Seven City Council members mentioned on the Cooper-Ford tapes have retired or resigned to take other jobs since 2006, part of the biggest mass turnover in the council's 40-year history.
The acquittal of Edmund Ford leaves some questions hanging. Since it was undisputed that Cooper gave Ford $8,900 — his attorney even offered an entrapment defense — were the exchanges really car and loan payments rather than payoffs, as jurors apparently believed? Were they illegal, no matter what they were intended for, if they were for Ford's benefit, as Laurenzi argued?
And why did the government bring up Hyneman and Welch in such an unflattering light, although neither man was called as a witness and neither has been charged with any wrongdoing?
While Hyneman avoids media interviews and declined comment for this story, Welch has been quite open about the political aspects of his world for several years. In fact, the ties between local politicians, developers, and lobbyists are so extensive that Memphis politics for the last 25 years cannot be understood without accounting for Jackie Welch and Joe Cooper.
Waymon "Jackie" Welch Jr. grew up in Whitehaven in the 1950s and 1960s. His father, Waymon Welch, was in the real estate business, head of the Homebuilders Association, and later head of the Office of Construction Code Enforcement for Shelby County. Jackie learned the business by buying and selling property along such major roads as Elvis Presley Boulevard and Winchester Road, when they were rezoned from residential to commercial and the neighborhoods around them changed because of white flight and suburban sprawl. In a span of about 15 years in the 1980s and 1990s, Welch Realty sold the Shelby County Board of Education nine school sites. As Welch said in an interview several years ago, "I kind of had the franchise for a while."
Welch got rich off the subdivisions and commercial strips and corner drug stores and gas stations that grew up around the schools. He does not seek media attention, but he does not shun it either. If a reporter is patient and interested, Welch will show him numbers, profit margins, residential growth patterns, and his own subdivisions either on paper or through the windshield of his Cadillac. It is like getting an intensive course in the recent history of Memphis real estate.
As Welch's wealth grew, so did his political influence. The FBI got a glimpse of this when they interviewed Welch last year at the federal building and at the office of Welch Realty in Germantown.
Agents wanted to know if Welch had any political contributions to Edmund Ford. Welch, who knows Ford as "Ed," wasn't sure, but he said he had probably made contributions and even held fund-raisers for most if not all members of the City Council and County Commission, as well as several mayors and governors.
Agents also asked Welch about loans he made to Edmund Ford.
"Do you have a note?" the agents asked.
"I said, 'Sure, I got a note,' and I handed them a book with 30 or 40 loans in it," Welch recalls.
Welch says he told the FBI that Cooper asked him a few years ago if he would make a loan to Ford for his funeral home. Welch personally looked at the property, which was partially complete. Welch asked Ford about his credit, which Ford admitted was "terrible." But Ford told him he had so much embalming business that he could pay $2,000 a month from it alone, apart from the funeral-home business. Welch agreed to lend him $20,000 at 10 percent annual interest, which was 3 or 4 percent higher than the interest rate banks were charging.
Welch says Ford made the payments for the first few months and then wanted to borrow another $20,000 to expand his business. Welch agreed, but that made the monthly payment $4,000. "Ed got more and more behind," Welch says. He agreed to lower the payment to $2,000 a month on the first loan and interest only on the second loan. By the time he was indicted in November 2006, Ford had paid Welch $42,000, including late fees and bounced-check charges. He paid off both loans in full after the indictment was returned, Welch says.
Ford also was facing foreclosure on his home. Again, Welch came to his rescue. Through a friend in Whitehaven who buys properties under threat of foreclosure, he arranged a sale for $70,000. Out of that, Welch was paid the balance of the money owed to him by Ford.
"Ed's slick with me," Welch says.
Welch also loaned money to Joe Cooper.
About five years ago, as Welch recalls, Cooper told him a family member had cancer and was going to die unless he could raise $5,000. Welch asked Cooper why he didn't get the money from Cooper's friend and former employer, wealthy billboard king William B. Tanner. Cooper told him he already owed Tanner too much money.
"I don't know why, but in a weak moment I loaned him $5,000," Welch says.
Meanwhile, Cooper began lobbying for William Thomas, who was also in the billboard business. Cooper asked Welch if he wanted to sell a billboard that Welch's father had owned on American Way. Welch agreed to sell it to Thomas through Cooper. Then Cooper asked Welch for another $50,000 loan, this time saying that he himself had cancer. Welch agreed to do it if Cooper would get a co-signer on the loan, which turned out to be Thomas. Welch said he deducted what he was owed on the previous loan plus a $5,000 late fee.
"So it was about half of what he needed," Welch says. "Maybe they fixed half his cancer."
Welch said his lawyers contacted Thomas a few days later, and Thomas wrote him a check.
"I raked Joe Cooper," Welch said. "I got more than even."
Welch says he came out ahead with both Cooper and Ford, and "very few people can say that about Joe Cooper."
Cooper says he does not remember the exact numbers, but that Welch keeps meticulous records and his recollection of the loans is probably correct. He says he told Welch that a loan to Edmund Ford would be "a good investment" whether or not it was repaid because of Ford's political clout. Cooper says Thomas was not aware that Cooper was making payments to Ford on his behalf.
"He thought I was lobbying," Cooper says. "He didn't care. All my clients want to do is win. Like they say in that movie about football — just win, baby."
Cooper called the jury verdict in Ford's case "a travesty."
Welch did not attend the trial last week but followed news reports as it reached its conclusion.
"I believe Joe set Ed up," Welch says. "I don't believe he ever asked to be paid. But he may have done wrong by taking it."
Videotapes of the payments show Ford and Cooper conducting their business in a disarmingly open manner, in sharp contrast to the behavior of other defendants in recent political corruption cases. According to his indictment, Rickey Peete used code words and hand gestures and told Cooper to leave a payment on the toilet in the bathroom of his office. On secret tapes played at his trial, former state senator Roscoe Dixon, convicted in a Tennessee Waltz case in 2006, was obviously nervous before uttering the fateful words, "Hand me one of them stacks" of money. On tapes played at his trial, former senator John Ford threatens to kill his benefactor if he finds out that he is an informant, and Ford appears to nervously search the informant's office pictures and potted plants for hidden microphones or cameras before taking one payment.
The unthreatening, matter-of-fact relationship between Cooper and Edmund Ford may have helped Ford's case with jurors. If the Dixon and John Ford tapes were often "R"-rated for crude banter and rough language, Edmund Ford's tapes would have earned a family-friendly "G" rating. Both on the tapes and in the courtroom, Edmund Ford was direct, pleasant, and businesslike. Each morning, he made a point of shaking hands with courtroom spectators, including reporters. After leaving the witness stand during a recess, he gave Laurenzi a friendly pat on the shoulder, and he practically hugged FBI agent Mark Post after the agent testified and jurors had left the courtroom.
Presiding judge Samuel H. Mays kept attorneys, jurors, and spectators smiling with his stories, friendly drawl, and occasional wisecracks. "Fish a little closer to the shore," he advised Ford attorney Michael Scholl after one long question. This is not to suggest that Mays was in any way unprofessional. In fact, he specifically reminded jurors that sympathy should play no part in their verdict. But one has to wonder if a smiling jury is a hanging jury.
When all is said and done, a trial is a mini-drama, a movie if you will, performed for the benefit of an audience called the jury. There are scripted lines, a plot, heroes and villains, and, in Ford's case, a parade of character witnesses attesting to his work ethic and honesty. The trial's leading lady, Ford's wife, Myrna, certainly helped his case. She was attractive, pleasant, and willing to stand by her man. "I love my husband, but I fear God more," she said.
There is little doubt that the contrast between Myrna Ford testifying about her hard-working husband of 28 years and Joe Cooper testifying about laundering money for drug dealers was ultimately devastating to the government's case and is the principal reason Edmund Ford is a free man. At least, for now.
See also A Well-Connected Man.