U.S. Attorney Anne Tompkins and John Strong, FBI special agent in charge for North Carolina, comments at a news conference Tuesday:
Anne Tompkins: March 26, 2014, was a shocking day for Charlotte. A city, which prided itself on a tradition of honest government and public service, learned that its newly elected mayor was not honest and had sold his public office for personal gain. Today, Patrick Cannon has admitted that he violated his duty of honest services by taking bribes. But it is a new day for Charlotte. Mr. Cannon has pled guilty and will be held accountable for his breach of trust, and he will face the consequences for his offense.
The city of Charlotte is on the path to reclaiming the public’s trust and its good reputation through its cooperation in a thorough and complete investigation. Our duty as prosecutors is to follow the facts wherever they lead. This process will not be easy and it will not be fast. But at the end of the day Charlotte will be better for it. Mr. Cannon used his elected position not only as an opportunity to serve the public that put him there, but as an opportunity to unlawfully enrich himself.
For some in the business community, Patrick Cannon’s help, which should have otherwise been constituent services, came with a price tag. Cannon engaged in a bribery scheme through which he sold his official influence for both specific help and on an as-needed basis to those who secretly paid him. Mr. Cannon’s corrupt actions betrayed all of us. He betrayed the trust of his constituents, he betrayed the trust of his peers, and he compromised the integrity of our local government. But most significantly, Mr. Cannon’s actions damaged Charlotte’s good reputation as a city that conducts its business in an honest way.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
Let me spend a few minutes explaining the charge to which former mayor Cannon has pled guilty today:
Today he appeared before magistrate judge David Cayer and pleaded guilty to one count of honest services wire fraud. The bill of information charges Mr. Cannon with devising a scheme to defraud the citizens of Charlotte and Charlotte’s city government of their right to Cannon’s honest and faithful services through bribery and concealment of material information.
More simply, as an elected official, Mr. Cannon had a fiduciary duty to provide honest services to the public, meaning he had a special duty to act with honesty and loyalty in the public’s interest and not for his own enrichment. When an elected official such as Cannon devises or participates in a bribery scheme, he violates the public’s right to his honest services.
The term bribery here means quid pro quo. Quid pro quo means literally something for something. In the legal context, it can mean this for that. And in more common language it means you scratch my back, I’ll scratch yours. Mr. Cannon, as he admitted today, solicited and accepted cash and other things of value totaling at least $50,000 in exchange for the use of his official position to engage in official acts to benefit those who were willing to pay him.
In this case, cash payments and things of value that Mr. Cannon accepted were sometimes directed in a single specific official act. For example, in January of 2013, Mr. Cannon accepted a $2,000 cash payment from a Charlotte businessman identified in the charging document as Businessman No. 1. In exchange, Mr. Cannon urged a council member to intervene with a city official on behalf of Businessman No. 1 regarding an issue stemming from the light rail’s Blue Line extension and the negative impact that project would have on the businessman’s club.
This case also involved a stream of benefits, wherein Mr. Cannon accepted bribes with the agreement that he would be retained by certain payors on an as-needed basis. Mr. Cannon therefore was involved in a course of conduct in which cash and other things of value flowed to him in exchange for a pattern of official acts favorable to those secretly paying him.
More specifically on January 17, 2013, Mr. Cannon accepted $12,500 from an undercover agent known as Undercover Agent No. 1 posing as an investor. In exchange, Mr. Cannon promised to use his influence on an as needed basis for necessary permits, licenses or other paperwork associated with that potential businessman’s investment and put those needs to the top of the pile. Six months later, on July 1st, 2013, Mr. Cannon flew to Las Vegas and the next day gave a presentation in his capacity as mayor pro tem to a group of federal undercover agents he believed to be potential foreign investors. In speaking with investors, Mr. Cannon promised to use his official position to take care of any issues that may arise associated with real estate developments in Charlotte. His presentation also included a false representation that he had previously used his influence on behalf of undercover agent No. 2 in a mixed-use development in Charlotte.
The price tag for that presentation was $5,000, airfare, hotel and $1,000 in spending money. Finally on Feb. 21st, 2014, in a bold move and with complete disregard of the fiduciary duty to the public, Mr. Cannon used the mayor’s office as a backdrop and his position as mayor as a sales pitch to help Undercover Agent No. 2 close a $25 million deal with another undercover agent posing as a skeptical investor. For that brazen event, Mr. Cannon received $20,000 in cash. Each time Mr. Cannon accepted money or some other thing of value he deprived the citizens of Charlotte of his honest services. As you can see on the chart, Mr. Cannon has pled guilty to engaging in this conduct on at least seven different occasions. In a period of a little over a year, Cannon solicited and accepted more than $50,000 in cash, as well as airfare, a hotel room, access to a luxury apartment in exchange for using his official position in the favor of those who bribed him.
Now as I have noted, the federal honest services charge has an interstate wire fraud component. This includes the use of any type of wire communication in interstate commerce, such as a telephone, to carry out the fraudulent scheme. This aspect of the bribery scheme is important. It’s important not only because it’s the basis of federal jurisdiction in this case, but it also demonstrates that as the mayor of Charlotte, Mr. Cannon’s influence extended far beyond the city limits and the borders of this state. For example, on July 19, 2013, Mr. Cannon caused a city employee to transmit an interstate wire communication, otherwise known as a telephone call, from Charlotte to a person in Miami who was posing as a real estate developer from Chicago. Mr. Cannon accepted $10,000 in cash on the day he made that call. To be clear, the charge does not allege and the law does not require that the city employee knew about or was involved in Mr. Cannon’s bribery scheme.
Mr. Cannon also admitted today that he made or caused the following interstate communications to carry out his bribery scheme. On January 14, 2013, Mr. Cannon sent an email to an undercover agent in Atlanta seeking an investment in his now infamous HERS venture (an apparently fictitious company that Cannon used to solicit investments). On March 17, 2013, Mr. Cannon sent a text message to the same undercover agent in Atlanta seeking a duplicate key for the apartment used by the undercover agents. On June 13, Mr. Cannon made a call to Florida to make arrangements for the trip to Las Vegas where he accepted $6,000 to make a speech as mayor pro tem. On Feb. 11, 2014, Mr. Cannon accepted a call in Charlotte from an undercover agent in Connecticut to make plans to meet the so-called investor in the mayor’s office, where he accepted $20,000 in cash. On March 9, 2014, Mr. Cannon, who was then on official city business in Washington, D.C., accepted a call from an undercover agent in Charlotte to make arrangements for their next meeting in which future payments would be discussed.
Now, I’m certain that Mr. Cannon’s guilty plea today answers some questions, and I’m also certain that it raises many more. Now, while I cannot discuss this ongoing investigation, what I can tell you is that we will continue to follow all leads, and we will follow those leads wherever they take us. As federal prosecutors in this case and as federal agents in this case, we have a duty to determine the depth and breadth of this fraud. And we need to determine whether this bribery scheme was only Cannon-deep and Cannon-wide or if it extended beyond the mayor’s office. What I can tell you is this: We are working tirelessly to follow every lead and sift through the evidence and we are determined to get to the bottom of any additional wrongdoing. Our goal is to bring this unfortunate chapter in Charlotte’s history to a quick end so this city can begin to move beyond this scandal and regain its citizens’ trust in our city government and in our elected officials. But as we move forward, let one message be crystal clear: My office and our law enforcement partners will continue to investigate allegations of public corruption in Charlotte and beyond and we will go after anyone who uses public office as a means of self-dealing.
John Strong: This nearly four-year investigation was complex and required a great deal of diligence and dedication from the FBI special agents and the prosecutors involved. By its very nature, public corruption can be difficult to detect. It is conducted in a shroud of secrecy. Fortunately, the FBI has the capability to use a number of lawful sophisticated techniques and tools, including undercover operations and electronic surveillance to capture key evidence. … Both techniques were used during the course of this investigation. Because of the specialized training and experience of our special agents, the FBI was able to gather overwhelming evidence substantiating and ultimately proving the allegations against Mr. Cannon, originally brought to our attention by a valued law enforcement partner. This investigation does not end with today’s guilty plea. Agents continue to follow the trail of evidence in this case and are looking into related allegations, which could result in more charges and additional parties.
In order to protect the integrity of this ongoing and active investigation, the FBI and the United States’ Attorney’s Office cannot discuss it further at this time. The FBI has an obligation to protect the interest of citizens who do not have access to the same authority and power elected or appointed public officials have. This case serves as an example that there are severe consequences for abusing your official position. If you hold public office at any level, you are held to a higher standard for a reason. People have put faith in you to be honest and put their interests above your own.
The FBI remains uniquely positioned to root out public corruption. And we will continue to expose public officials who choose to undermine the integrity of our government. We cannot do it alone. The FBI relies heavily on our local, state and federal partners. However, perhaps the most important partner in our ongoing fight against corruption is the public. Many of our investigations begin with a tip from someone who encounters public corruption. The American people have grown intolerant of abuse by public officials. If you have credible information corruption is happening in North Carolina, I would ask you to call our local FBI office at 704-672-6100. In closing, the criminal actions of Patrick Cannon brought undeserved shame and embarrassment upon the city of Charlotte. I would point out that most of our elected and appointed officials are hardworking, honest people who truly have the best interest of the community at heart. Those who do not will be held accountable for their actions.