More cash going out than coming in, FBI witness testifies in Edwards trial

Natalie Gott

Wednesday, March 1, 2000 | 10:13 a.m.

BATON ROUGE, La. - Louisiana's big-spending former governor, Edwin Edwards, parted with nearly $1.6 million in cash from 1994 through 1996, but his records do not show where almost half the money came from, an FBI consultant testified Tuesday.

Edwards, 72, his son Stephen and five other men are accused in a series of extortion and bribery schemes centered on the licensing of riverboat casinos before and after his last term ended in January 1996.

Large bundles of cash play a big part in the government's case. One former casino owner and one former casino consultant already have testified that they paid hundreds of thousands of dollars for Edwards' help in getting licenses and fending off competition.

More than half-dozen witness, many of them contractors or retailers who sold big-ticket goods and services to Edwards and his family, have testified they received tens of thousands of dollars in cash for their services.

Laura East, a former FBI agent on the Edwards case who now does consulting work for the agency, said Edwards apparently never wrote checks for cash or withdrew money from automatic teller machines.

East said Edwards' records indicate that he spent nearly $1.6 million in cash from 1994 through 1996. Only $855,652 could be accounted for through Edwards' ledgers, bank statements, gambling money and tax forms, East said.

East said Edwards spent nearly that amount in cash on the home he built in 1995 in the upscale gated community called Country Club of Louisiana. Edwards paid $733,000 in cash for the $1.3 million house, its landscaping and home furnishings, East said.

Edward had a Merrill-Lynch checking account against which he could not write checks for cash, and there is no indication of automatic teller withdrawals, East said. Edward also kept a joint account with his wife, Candy, at Bank One. That account was mainly for Candy Edwards' to use, East said.

Edwards kept ledger books - seized by the FBI - in which recorded checks he deposited into his account with Merrill-Lynch as well as cash payments he did not deposit into the account. The ledgers were about 99 percent accurate when compared to tax returns and bank statements, East said.

To determine how much money was allegedly unaccounted for, East said she noted that Edwards reported he had about $200,000 in cash or in the bank in January 1994. East said she subtracted the amount of money he had in the bank from $200,000 to get $97,852 as the amount of money Edwards had in cash.

She then added that with the money he denoted as profits in his ledger and his casino earnings. Then she subtracted the money he spent on various items and his casino losses.

From those calculations, East noted that Edwards spent about $742,301 more than he had recorded as earning.

Defense attorneys, waiting to cross examine East, are expected to attack her figures as inaccurate and inflated.

They previewed their claims in arguments outside the jury's presence as they unsuccessfully tried to block some of her testimony.

Edwards' lawyer, Dan Small, said that in some instances, witnesses have testified to paying Edwards much less than what East has recorded in her charts.

For instance, a payment from a witness who said he installed audio equipment in Edwards' home was really only $9,000, instead of the $24,000 that East indicated on her charts, Small said. The witness himself could not remember if Edwards paid him the total bill of $19,000 in cash or if $10,000 of it was paid for with gift certificates.

Prosecutor Mike Magner argued that the government's charts are based on Edwards' records and interviews East conducted.

"He has created his own paper trail in a case where cash is very difficult to trace," Magner said.

Defense lawyers have also noted during questioning of various witnesses that Edwards is an admitted high-stakes gambler, raising the possibility that the bundles of cash he handed out for construction of a Baton Rouge home and other services came from casino winnings.

East said she reviewed a diary that Edwards kept of his gambling wins and losses and said that they were recorded on his income tax forms. For the three year period of 1994-1996, Edwards took home $332,600, even after $410,100 in losses, East testified.

Before East took the stand, prosecutors called Patricia Picou, the mother of Edwards' wife Candy. She was the last of a long list of witnesses, including Edwards' daughter Anna, called to detail various aspects of Edwards' spending.

At one point, Picou was asked about the affection for jewelry that she and her daughter share.

Magner asked whether Candy Edwards had shown her 30 loose diamonds that Candy and Edwin Edwards had purchased on trips to Australia.

"I think something's wrong there. If she had them, believe me, she'd show them to me," Picou said.

Magner asked about Candy's $48,000 opal and diamond ring and $20,300 pair of earrings. Picou said she believed those numbers were greatly inflated and that the ring cost perhaps $20,000 and the earrings as much as $5,000.