The Tear Sheet: Boxed in

Jul 3, 2006 at 8:06 pm

Vernon Jackson had a vision for helping the world. Now he’s caught up in a Congressman’s scandal

Vernon Jackson, the Louisville entrepreneur at the center of the congressional bribery scandal that is currently rocking Capitol Hill, has been up, down and up again so many times that it’s hard to know whether to feel sorry for him or to be excited, eagerly waiting to see how he’ll bounce back this time.

Down in Louisiana: eight-term Democratic Congressman William Jefferson is known as Dollar Bill. Jefferson allegedly solicited bribes, including one from Louisville-based iGate, Inc., to help promote U.S. businesses in Africa. Vernon Jackson, who owns iGate, has pleaded guil
Down in Louisiana: eight-term Democratic Congressman William Jefferson is known as Dollar Bill. Jefferson allegedly solicited bribes, including one from Louisville-based iGate, Inc., to help promote U.S. businesses in Africa. Vernon Jackson, who owns iGate, has pleaded guil

But come July 27, the excitement will certainly be muted. That is the day he’ll be sentenced by a federal judge in Virginia on two bribery-related counts that could send him to prison for 20 years (although no one expects him to receive the maximum).
Curious about Jackson’s involvement in one of the biggest political firestorms in Washington, I got interested in his case a couple weeks ago and dropped by his Jeffersontown house to chat things over.
He didn’t have much to say.

“I want to tell my story so badly,” Jackson said, standing on the front porch overlooking a modest but tidy front lawn, a Ten Commandments sign sticking up from the grass. “But I am under strict orders (to keep quiet). I don’t want to cause any problems for my defense team or for the federal government.”

Causing problems for the federal government would mean interfering with its ongoing case against the man Jackson claims to have bribed with $400,000 in illegal payments, U.S. Rep. William Jefferson, a Louisiana Democrat.

I stood there on the front porch in the sun, sweating and thinking, “So, it’s going to be that old game of, ‘I’d tell you but I can’t."

I’ve heard it before. Every reporter has, the shtick you get from the crook, the embezzler, the drug trafficker. “I’d tell you all about it, how I was framed,” they’ll say, leaning in close as if that intimacy itself will prove their veracity. “But I can’t. They won’t let me.”

In the trade, they call it being “lawyered up.”
I’ll give Jackson this much. He didn’t look like a crook, and he wasn’t sweating like a man headed for the federal pokey. He looked and sounded rather serene.

So I did wonder, as I have a few times before, whether maybe he was telling the truth.
Not that it would matter that much, not in the world of daily newspapers where I came from. Reporters have rules about how we get stories, and they typically involve things more reliable than gut feelings. Still, when you run across someone like that, you file it away — hoping something more bullshit-proof surfaces to prove his story.

I filed my chat with Jackson away and left him standing on the hot porch with his tiny dog fussing in the background and his wife of 33 years bustling around inside. I left to pursue the story the old-fashioned way, because there is always more than one way to get the story. Jackson might be clammed up, but he has already spilled plenty to the FBI.

Indeed, there are hundreds of pages of records — including corporate filings with the Securities and Exchange Commission, court documents, campaign disclosure forms, old news clips and more — that help tell the story Jackson says he’d like to tell but can’t.

By the time Vernon Jackson met William Jefferson, Jackson needed a friend. He thought he had found one in the charismatic fellow black man with a Harvard law degree and what seemed like a shared vision of doing lots of good for lots of folks.

The particular flavor of “good” Jackson had in mind was figuring out how to bring low-cost telephony to developing nations, starting with Africa.

Long ago, in the Bell Labs where he started working as a high-school teen, Jackson learned that videoconferencing and other high-end telephony services could be delivered using copper wires, an old-fashioned and readily available infrastructure. He left Bell Labs, the legendary old telecommunications think-tank run by AT&T, with a dream.

“What we are talking about is bridging the digital divide, doing it for real,” he said last week, noting that developing nations were ready for copper-wire technology long before the higher-tech versions being pushed by traditional carriers.

So he wrapped up his idea in a pretty box and called that box VideoLan, Inc., a Louisville company he founded in the early 1990s. Among his earliest customers was the U.S. Army, which put videoconferencing equipment on the desks of generals.

The news clips from that time make for heady reading. Million-dollar deals, a much-lauded IPO and, later, skyrocketing stock prices.

By the mid-’90s, Jackson owned stock worth at least $14 million on paper, and had a mansion under construction across from the 9th fairway at Lake Forest Country Club.
It was a high point that didn’t last. It’s a long story, of course, but he was forced off the board and VideoLan went into bankruptcy. The slick-talking financiers who had taken over?

“They went to prison,” Jackson told me, recalling the embarrassment of the foreclosed home in Lake Forest.
In 1998, Jackson formed another company and called it iGate Inc. He bought the rights to his technology out of bankruptcy court, along with a million dollars’ worth of videoconferencing inventory.
Two years later, he met Jefferson, who, according to a 95-page affidavit filed by the FBI, told Jackson he could help him get established in Africa. But that help came with a price. For starters, Jackson and his wife Sandra began making contributions to Jefferson’s Louisiana election campaigns. But the real price was paid in ways that didn’t show up on congressional campaign disclosures.

In a statement accompanying his federal plea-agreement, Jackson says that beginning in 2001, his company began making monthly payments of $7,500 to a consulting company owned by Jefferson’s wife, Andrea Green-Jefferson. (The FBI alleges that the company was a shell, controlled by Jefferson, who, incidentally, strenuously denies all wrongdoing. He has yet to be charged.)

Trips with the congressman to Nigeria and elsewhere followed, and Jefferson visited Louisville and began touting iGate’s potential to outside investors. He eventually arranged for Virginia businesswoman Lori Mody to pay iGate more than $3 million for rights she would later come to believe had already been sold to another party.

She got angry and went to the feds. The feds got smart and gave her a wire. She would eventually record conversations with Jefferson, according to the FBI affidavit, in which the Congressman asked for her help in swindling iGate away from Jackson, to snatch the technology for themselves.
According to the FBI, Jefferson wanted $10 million from Mody, and promised her a seat on the board of the new company, along with a few of his own favorites.

“Jefferson proposed buying a controlling interest in iGate by way of ANJ, a Louisiana company controlled by Jefferson and kept ostensibly in the name of his wife and children,” the affidavit says.
A few months later, the FBI was at Jackson’s door. They eventually played the tapes for him. He decided to cop a plea and turn state’s evidence.

Meanwhile, iGate itself is still in business, even as its founder awaits his fate. The company has no employees. It’s based in Louisville and is seeking partners to bring Jackson’s dream of low-cost telephony to the Third World.

David W. Harper, the company’s lawyer and one of its investors, says the company has more than 100 shareholders and holds patents in countries around the globe. He said the company awaits the conclusion of the FBI investigation into Jefferson’s actions, and will consider legal remedies stemming from his possible attempts to wrest control of the company, “through deceit if not fraud.”

As for Jackson, he’s keeping quiet, waiting for his day before the judge. We won’t know what’s in his head until after the 27th. The records don’t say. But you can imagine he’s wondering just how he managed to have a great idea all but stolen from him not once, but twice.

We will have to wait for it, though; stories like this don’t always get told on our timetable. But they do get told. Sooner or later.
And I will find out if my gut feeling is right.

Michael Lindenberger wrote the Tear Sheet column for LEO from 1996-1999, and during that period he also served as the paper’s chief political writer. He rejoins LEO as a contributing writer after reporting stints at The Dallas Morning News and The Courier-Journal, where he was a state correspondent and bureau chief. Send him story ideas at [email protected]