One ex-legislator acquitted, another convicted

Friday, June 27, 1997 | 11:17 a.m.

His former colleague in the Senate, Larry Bankston, was convicted of two counts of interstate communication in aid of racketeering, and acquitted on all other charges, including racketeering.

Other verdicts in the wide-ranging case based on 1995 wiretaps of legislators, lobbyists and video poker operators:

- Fred Goodson, 57, operator of the now-defunct O'Aces truck stop poker parlor in Slidell, convicted of racketeering, conspiracy, mail fraud, money laundering and interstate communication in aid of racketeering; acquitted on six charges.

- Carl Cleveland, 54, his attorney, convicted of racketeering, conspiracy, mail fraud, and money laundering and tax conspiracy; acquitted on five other charges.

- Goodson's daughter, Maria, 28, convicted on one count of mail fraud, acquitted of all others.

- Goodson's accountant, Joe Morgan, 56, acquitted of all charges.

It took the jury more than seven days of deliberations to work through all 69 counts in the case. Courthouse veterans said the deliberations were the longest in a criminal case in New Orleans federal court in a decade.

Prosecutors contended that Bankston and Rayburn took bribes from Goodson to scuttle local-option votes on video poker machines in 1994 and 1995.

Rayburn, 80, who was forbidden by the court from talking publicly about the case during the trial, lashed out at the prosecution.

"They broke me, and I have to start all over in life, but that's OK," he said. He said the case was based on lies told by the FBI to a grand jury.

Carl Cleveland left quickly without comment. Joe Morgan said simply, "I'm going home."

Bankston slipped out the side door and avoided news reporters. He appeared upset.

"I'm just disgusted and disappointed," said Bankston's attorney, Lewis Unglesby. He said there was "no intellectual basis for the decision" since Bankston was acquitted on the most serious charges he faced. He said he would appeal.

U.S. District Judge Sarah Vance set no sentencing date. Those convicted were allowed to remain free pending background checks. Vance ordered written briefs filed on the government's intention to seize as much as $1.3 million prosecutors call illegal gains from Goodson's video poker operation.

The jury was escorted into the parking garage under orders from Vance not to talk. One woman juror was asked if it was difficult: "Yeah, very. I'm tired."

The case was first outlined in FBI affidavits filed in August 1995 that led to a major legislative turnover that year. Bankston, who headed the Senate oversight committee on gambling, did not seek re-election. Rayburn was booted by voters after 48 years in the Legislature.

U.S. Attorney L.J. Hymel of Baton Rouge, who spearheaded the initial investigation, was asked if there would be further prosecutions based on the affidavits. He said it was premature to speculate, and he and New Orleans U.S. Attorney Eddie Jordan must confer on it.

"This was a case of the corruption of our legislative process," Jordan said. "I think the jury clearly said today, in terms more forceful than I ever could, that it will not be tolerated."

Jordan said he would not quarrel with the jury's verdict on Rayburn.

Goodson said he was certain he could find grounds for an appeal.

"I hope to get back to some sort of normalcy after these last seven or eight weeks," he said. "...I just want to get back to my family and enjoy them right now."

His daughter said, "I feel as though I've been holding my breath for a couple of years. Unfortunately with the one count I'll have to hold my breath a little bit longer."

Although the case ran through a wide swath of allegations, including whether Goodson used his adult children as sham owners of the poker parlor for licensing purposes, the main issue was whether Rayburn and Bankston were bribed by Goodson to block legislative bills to throw out the machines.

Bills calling for the referendums failed in the Legislature in 1994 and 1995, the period in question in the trial, but passed in 1996. Last November, 33 of 64 parishes voted out the machines.

Much of the government's case rested on secretly recorded conversations. Affidavits of those conversations tracked a wide investigation into allegations of bribery involving legislators and the gambling industry.

A grand jury alleged that bribes to Bankston consisted of a $1,500 payment from Goodson for time at Bankston's Alabama coastal condominium that Goodson never used and the promise of $100,000 in stock in a waste disposal company. Bankston also allegedly wanted shares of future video poker parlors.

For Rayburn, the graft allegedly consisted of a 4.99 percent share of Goodson's video poker company for his three children, a $2,500 campaign contribution in 1994 and a $400 hunting trip paid by another truck stop operator through Goodson.

During the five-week trial, prosecutors and defense attorneys presented sharply different interpretations of votes taken in 1994 and 1995 on the failed video poker proposals before the Legislature - and the roles that Bankston and Rayburn played in them.

Also at issue was whether Goodson and Cleveland used Maria Goodson and her brother, Alex Goodson, as sham owners of Truck Stop Gaming Ltd. Prosecutors said Goodson and Cleveland could not have qualified for a license because of financial problems. Alex Goodson was not charged.

Defense attorneys said Truck Stop's entire structure - including a $245,000 loan from Cleveland's law firm to Maria Goodson as well as Fred Goodson's management of O'Aces - was clearly disclosed to state police.

Cleveland, the Goodsons and Morgan also were accused of manufacturing management and legal fees to help Truck Stop Gaming avoid a huge tax liability for 1994. The defense said the fees were legitimate and the way they were used to cut taxes is a widely accepted and legal practice.