Louisiana judge returns to further explain bribe allegation

Melinda Deslatte

Thursday, Sept. 21, 2000 | 10:22 a.m.

BATON ROUGE, La. - The man who was in charge of insurance company liquidations has testified that former Gov. Edwin Edwards tried to bribe him to set up a sweetheart settlement for an insolvent company.

Retired State District Judge Foster "Foxy" Sanders began his testimony Wednesday in federal district court, followed by cross examination from the defense.

On trial with Edwards is State Insurance Commissioner Jim Brown and Shreveport attorney Ronald Weems. They are accused of rigging a deal for the owner of the defunct Cascade Insurance Co., which was being liquidated by the state.

On Thursday, U.S. District Judge Edith Brown Clement filed a document explaining why she decided to close jury selection to the media and the public, an action that is being appealed by the media.

Neither the prosecutor nor any of the defendants objected to her order, Clement wrote. She said she closed the proceeding because questioning of potential jurors dealt with possible bias.

"The answers to the questions asked were not appropriate for public disclosure," Clement said.

The judge also said she wanted to preserve the anonymity of the jury.

On Wednesday, Sanders testified that Edwards offered to help him in a separate case in a manner that escalated to bribery.

"I felt like it was a carrot," Sanders said of Edwards' first approach to him. "But it got worse as time went on. He got more direct."

Prosecutors opened their case Wednesday by calling Sanders, who testified under a plea agreement he made with federal prosecutors. Sanders pleaded guilty in October to one count of conspiracy to commit mail fraud and to witness tampering. He will be sentenced after the trial.

Sanders said Edwards spoke with him after he had completed his last term as governor and said he was going to begin working with his son, Stephen, on a land dispute case Sanders was involved in. Sanders owned a third of a corporation suing the state in the case.

"He said, 'I'm going to get you a lot of money for that lawsuit,"' Sanders said.

Sanders said Edwards also brought up the Cascade investigation and asked Sanders to discuss the issue with Disiere. Sanders said the request made him feel uncomfortable since he was overseeing the investigation of Cascade.

"Within the same breath, he brought up this other case," Sanders said. "I knew I had a terrible conflict, but later I felt like I was being bribed."

Sanders said he made a bad decision when he decided to continue the Cascade case, instead of handing it to another judge.

Earlier Wednesday, Sanders told the jury why he took over from Brown control of the state insurance receivership office that liquidates defunct insurance companies.

He said he was concerned about possible conflicts of interest between Brown's office and the receivership office, and he noted that Brown had received large campaign contributions from David Disiere, owner of the failed Cascade.

Sanders said Brown asked him why he was "rocking the boat."

"I wasn't trying to do anything to him personally," Sanders said. "I was just trying to enforce the code."

With Sanders' testimony, prosecutors hoped to show that Brown joined Edwards in trying to broker a good deal for Disiere because Brown thought Edwards would help him regain control of the receivership office, a source of political power and patronage. Edwards was out of office by the time of the alleged scheme in 1996 but still wielded considerable political influence.

The defendants, who are muzzled under a sweeping gag order, are accused of helping Disiere create a sham settlement and try to derail a proposed $27 million lawsuit related to Cascade's liquidation.

The state took over the firm, which sold automobile insurance, in 1993 because the company could not pay its debts. The state collected $2.5 million. Prosecutors say much more money should have been collected.

Edwards, Brown and Weems are charged with insurance, mail and wire fraud and conspiracy in the 57-count indictment. Brown and Weems also are charged with lying to investigators. All three men deny wrongdoing.