Charlotte mayor Cannon resigns after arrest on corruption charges

mwashburn@charlotteobserver.com mgordon@charlotteobserver.comMarch 26, 2014 

— Charlotte Mayor Patrick Cannon was arrested Wednesday on public corruption charges, with the FBI alleging he took tens of thousands of dollars in bribes – including $20,000 in cash delivered in a briefcase last month to the mayor’s office where he also solicited $1 million more.

Cannon resigned Wednesday evening.

The case against him alleges that in return for money, trips, hotel rooms and access to a luxury SouthPark apartment, Cannon promised to help agents posing as potential commercial investors with zoning, parking and other city-related issues.

According to officials, Cannon turned himself in to federal marshals after learning of a warrant for his arrest. He was immediately taken before U.S. Magistrate Judge David Keesler of Charlotte.

Cannon, a Democrat, was charged with theft and bribery after the FBI sting operation, said Anne Tompkins, U.S. Attorney for the Western District of North Carolina. He was released on $25,000 unsecured bond, pending indictment, which could come as early as next week. The court file shows Charlotte attorney James Ferguson is representing Cannon. Ferguson did not return a phone call Wednesday afternoon.

If convicted on all charges, the 47-year-old mayor faces up to 50 years in prison and $1.5 million in fines. He remains mayor until he either resigns or is convicted, according to city officials. The case is still being investigated, according to the U.S. Attorney’s office.

Cannon is the longest-serving elected official in Charlotte, having joined the city council in 1993. He is the region’s highest-ranking official to be charged in a corruption case since former N.C. House speaker Jim Black of Matthews, also a Democrat, pleaded guilty in 2007.

Cannon’s arrest follows a four-year investigation, which stretched from a Las Vegas resort to the mayor’s office on the 15th floor of the Government Center, which Cannon has occupied for only five months.

Authorities said Cannon took bribes from undercover FBI agents five times – the most recent on Feb. 21 when he collected $20,000 in cash in the mayor’s office. Cannon had a meeting scheduled for Wednesday with the agent to collect another payment, according to the affidavit.

Tompkins said undercover agents showered Cannon with more than $48,000 in cash, airline tickets, a trip to Las Vegas, and use of a luxury SouthPark apartment in exchange for “the use of his official position,” Tompkins said.

FBI agents searched the mayor’s office, his home at Cumnor Lane and his offices at E-Z Parking Inc. at 312 West Trade St. They seized financial records, phones, computers and other electronic devices. They were also searching for a leather brief that agents say they stuffed with cash for the February visit to the mayor’s office.

The mayor made a brief court appearance Wednesday at the federal courthouse in uptown where he was told, among other things, that he could not be in possession of firearms, according to WCNC-TV.

Cannon declined to comment when approached by a WCNC-TV reporter as he left the building. “At this point, there’s nothing to respond to,” Cannon said.

Fanning the cash

The federal investigation began in 2010. Originally, the FBI focused on other Charlotte targets but focused on Cannon in 2011, according to an affidavit from Eric Davis, an FBI special agent who specializes in public corruption cases.

At the time the probe began, Cannon was a city council member and mayor pro tem.

An undercover agent passed himself off as a business manager for a venture capital company based in Chicago. According to the affidavit, he met Cannon in November 2010, telling the mayor he and his investors were interested in opening a nightclub and bar in Charlotte.

Ultimately, the agent chose a property in uptown that had parking problems and required zoning changes. In subsequent meetings, Cannon described his relationship and influence over certain city departments and employees, including the zoning board.

On a Dec. 12, 2012, Cannon met an undercover agent at Capitol Grille, an upscale steakhouse on North Tryon Street – and the same restaurant where Black was accused of accepting bribes from a group of chiropractors years earlier.

Cannon asked the undercover agent if he’d be interested in investing in a business Cannon planned to start called HERS, which would sell a feminine hygiene product nationally. The agent agreed to give Cannon a $12,500 “zero-percent return on investment” loan in return for his assistance in getting approval for the zoning needed for the nightclub.

But Cannon said he needed $40,000. “I can do something for around $12,500. Any ideas how I can close the gap and get me some of that capital to get me started to pull this thing in?”

In exchange for the money, the agent asked Cannon to “make sure I don’t run into any problems,” the affidavit said.

Cannon replied: “I will definitely help you out. So you just want me to help you out on that front?”

At a Jan. 17, 2013, meeting in SouthPark, the undercover agent gave Cannon the $12,500 in cash by putting it on a coffee table in front of him. Cannon, according to the affidavit, looked nervously toward a window and covered the money with a folder.

After the agent closed the blinds, Cannon put the bills to his ear and fanned them.

‘That’s not how I flow’

In a later conversation with the undercover agent, Cannon tried to characterize his acceptance of the money as a business investment unrelated to his public office, the affidavit says.

In laying out his philosophy as a public official, Cannon told the agent that he would have helped him even without the $12,500. “I’m not one of those Chicago- or Detroit-type folk. … That’s not how I flow.”

In an ironic aside during that same meeting, Cannon said that he looked good “in an orange necktie, but not in an orange suit.”

Agents said they gave Cannon ample opportunity to return the money, but he never did.

When Cannon announced his candidacy for mayor on May 21, 2013, he invited the undercover agent to attend, the affidavit says.

That month, the city council approved a streetcar line to west Charlotte. Weeks later, a second undercover agent approached Cannon and said his company was interested in investing along the streetcar’s path. He told Cannon he needed his help persuading potential investors, and he’d fly Cannon to Las Vegas to do it.

Las Vegas: Lies for cash

As part of a trip with the agent, Cannon agreed to create “the false impression with the investors” that Cannon had had a long relationship with the undercover agents, the affidavit says.

In June, during discussions before the trip, Cannon raised the question of how he would be compensated for his role. When the agent replied, “I want to take care of you on this,” Cannon immediately suggested a contribution to his ongoing mayoral campaign. But the agent refused to pay Cannon before they took the trip. Cannon, according to affidavit, continued to press for the money up front.

In the end, the agent flew Cannon and his wife to Las Vegas on July 1 and paid for hotel room. He also gave Cannon $1,000 in cash at the hotel.

During the subsequent meeting, four FBI agents posing as businessmen promised to invest up to $25 million each for commercial property along the streetcar line.

Again, Cannon boasted of his ability and willingness to make things happen. “Being around for 20 years has helped me a little bit, I think. I’ve gone through probably four police chiefs, five city managers, three mayors, something like that.”

Asked by one of the investors how long and often Cannon could assist with the project, Cannon replied: “As long as I’m elected.”

A second Vegas payoff

Afterward, the second undercover agent had a private meeting with Cannon. The affidavit says they reached Cannon’s wife, Trenna, by speakerphone, and she personally thanked the agent for the $1,000 from the day before. After the call, the agent paid Cannon another $5,000 in cash for his presentation to the investors. Cannon put the envelope containing the bills in the breast pocket of his suit.

Then Cannon asked whether he could work with the second agent “on some private deals,” the affidavit says. “Your value to us, obviously, is the position that you’re in and that you can pick up the phone and make things happen for us … that, from our perspective, is absolutely invaluable … There’s no reason why it can’t be a win-win relationship for both of us,” the agent told him.

After returning to Charlotte, Cannon met with an undercover agent in a SouthPark apartment rented by the FBI for $2,100 a month and equipped with hidden cameras. Agents gave Cannon an additional $10,000 for his work in Las Vegas.

Throughout the investigation, authorities said, Cannon had asked for keys or access to the apartment. The agent told Cannon that he was about to drop the lease on the apartment but would continue to pay rent if Cannon wanted to use it. When Cannon got his own his key, he told the agent excitedly, “Aw man!”

Payoff in February

On Feb. 21 this year, an undercover agent brought one of the phony Las Vegas investors to Cannon’s office in the Government Center. During that meeting, the affidavit says, Cannon received a leather Fossil briefcase containing $20,000 in cash. Then, Cannon asked for substantially more.

“I told Trenna she has a point,” Cannon told the agents.

“She has what?” the agent responded.

“A point, one percent,” the mayor replied.

According to the affidavit, Cannon was asking for a 1 percent payoff from the potential $125 million project, or $1.25 million in all.

Then the mayor and the agent grappled for the best way to get the $20,000 out of the office. Since the briefcase had passed through security when the agent arrived, they talked about how it would be best if he took it out, and perhaps meet near the airport for the hand-off. In the end, the briefcase stayed in Cannon’s office, the affidavit says.

“I just got to be conscious about that kind of stuff here,” Cannon said.

Attorney: Trial likely

On the morning of his arrest, Cannon spent about an hour on the phone with Gov. Pat McCrory, himself a former Charlotte mayor, to discuss the city’s airport.

According to a WCNC

Now, Cannon faces a probable indictment and a decision whether to negotiate a plea or go before a judge and a jury.

If Cannon is indicted as expected, prominent Charlotte defense attorney Jim Cooney says he expects the case to go to trial.

“If he takes a felony or pleads guilty, it’s over for him. Everything he has always worked for is lost,” Cooney said.

April Bethea, Kathleen Purvis and Gary Schwab contributed to this report.

Washburn: 704-358-5007

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