Courtroom Chronicles

Wednesday Afternoon Testimony

Mr. Paul Bowlin, the bureau chief of the Right of Way Bureau, is on the stand and being questioned by Mr. Franklin.

Bowlin has been with the DOT since 1960.  Bowlin says he first heard of Rainline in the mid-90s.  Bowlin was Highway Director in 2001 and he elected to stop using Rainline.  He said he had been in office a few months.

Bowlin says DOT had been looking at the cost and benefits of the product.  Bowlin says he doesn't remember anyone talking about Rainline not being a good product, it was always about the cost.

Bowlin says he received numerous complaints from asphalt pavers about the product.  Bowlin says he instructed his senior staff not to put Rainline in any more contracts.

Bowlin says he reconsidered the Rainline decision.  Bowlin says he doesn't remember exactly when a meeting with the governor happened, but at the end of the meeting the governor met with him briefly and the governor suggested that rather than taking the product out of the program altogether some guidelines should be established for the use of product.  Mr. Bowlin is paraphrasing the governor's comments.

Bowlin says when Roberts was still highway director there were comparisons made with other states about the costs of Rainline, the DOT commissioned the University of Alabama study about Rainline, and there was a committee set up.

Bowlin agrees when the actual funding for the research began, he was the one who signed the authorization.

Bowlin agrees when he became director Rainline was in wide use.  Bowlin says he and Roberts had no conversations shortly before Roberts retired about Rainline.

Bowlin says he was talking about the entire senior staff when he talked about conversations with Rainline.

Bowlin is asked if there was a product evaluation board and he says there was.  Mr. Franklin asks for a moment.

Bowlin is asked what position Vaughn had when Bowlin was director.  Bowlin says Vaughn was the assistant director.  Bowlin indicates Ray Bass was the chief engineer.

Bowlin says he does not recall that he talked to Bass about the decision to stop using Rainline.

Bowlin says after he talked to the governor he may have talked to Bass about the reinstatement of Rainline but he does not remember an exchange about Rainline.

Bowlin says he left the director's position in 2003 and went back to being bureau chief of the Right of Way Bureau.  Bowlin says he had not received a finished report in writing from the University of Alabama before he left office.  He says he did get a preliminary report.

Bowlin says the report factored in to his decision to stop using Rainline.

Bowlin says he has known Mack Roberts since the summer of fall of 1963.  Bowlin says they took scuba lessons together so they could inspect the footings of bridges themselves instead of hiring contractors.  Bowlin says he has always found it to be the case Roberts brings projects in on time and under budget.  Bowlin agrees Roberts is a good person who would not do anything to hurt the public interest.

The judge has a brief meeting and there will be a recess at this point for 15-20 minutes.

Mr. Franklin questions Mr. Bowlin.  Franklin is asking about Bowlin's stopping to use Rainline.  Bowlin agrees he stopped using the product because he thought it was the right thing to do.  Bowlin agrees there was no one else in the room when he met briefly with the governor.  Bowlin says he does not remember details about the meeting except the meeting was very brief.  Bowlin says he does not believe he told Siegleman Rainline was too expensive or had not been through the product evaluation process.

Bowlin recognizes the document but he says he can't honestly say he remembers it.  Bowlin says it is a document from Mr. Brown where Brown asked and Bowlin approved the continuation of the study of Rainline.

Bowlin says he does not know why the study was not funded prior to July 2001.  Mr. Franklin is wondering why Mr. Roberts did not get the funding for the study earlier when Rainline had been in use for at least 2.5 years when the study was started.

Mr. Franklin asks if the study should have been done before the state started laying down Rainline on state roads.

Mr. Bowlin says he assumes since the product had been in use since the 1990s it had already been studied and tested.

Mr. Bowlin agrees he started using Rainline again after his meeting with Siegelman which Mr. Franklin earlier characterized as Bowlin being pulled into a private room.

Bowlin says Siegelman "did not" tell him to turn Rainline back on because Seigelman needed to get some more money from the Marcatos for the election.

Mr. Kilborn will question Bowlin.  Mr. Bowlin says he did not perceive anything sneaky going on when Siegelman talked to him in private.  Bowlin says he took it that the DOT should go back to using Rainline but that Bowlin should come up with some guidelines for its use.  Bowlin agrees the meeting lasted about one minute.

The next witness is Steven D. Arnberg.  Arnberg is 48 years old.  He was born in Kansas and now lives in Montgomery.  He has been in real estate since 1981.  Arnberg says he came to know Jim Allen in the course of business.  He says he knew Allen in the real estate development business.  Arnberg says his financial dealing with Allen about June of 1997.  They worked out of an office at Emerald Mountain. 

Arnberg says he knew Mack Roberts because Roberts was working for Allen when Arnberg went into business with Allen.  Arnberg says he saw Roberts in the office frequently.  Arnberg says when he was introduced to Roberts he was told Roberts developed toll roads and bridges for Allen.

Arnberg says in 1998 he became aware Roberts was going to stop working for Mr. Allen.  Arnberg says he helped Roberts sell his personal real estate and residence off Dalraida Road and buy a new residence.

Arnberg says Allen told him Roberts wanted to move to Emerald Mountain.  Arnberg says he went to look at Roberts' house and told Allen he thought the house was worth between $95-100,000.

Arnberg says the house at Emerald Mountain was on the market for $191,000.

Arnberg says the anticipated lender told him that they could not make the loan for the house to Roberts.  Arnberg told Allen this.

Arnberg had a meeting with Allen.  Arnberg says Allen was on the phone, Arnberg left the room while Allen talked to the lender and when he came back in the loan was going to be approved.  The final price on the house was $175,000.

Allen had agreed to buy Roberts' house for $98,000 and then someone else made an offer on the Dailraida house for $93,000.  A lady ended up purchasing the house from Jim Allen.  Roberts put down $35,000 on the house in Emerald Mountain in December 1998 according to Arnberg.

Arnberg says he was not aware that Allen had paid Roberts a bonues of $71,000.

Arnberg says Roberts stopped working for Allen some time after the house was purchased.  Arnberg says he worked with Roberts on the purchase of another home in 2003.

After another sidebar, Mr. Franklin continues the questioning.  Arnberg is asked if Roberts drove a company car.  Arnberg says he doesn't think it was a company car but just a car owned by Mr. Allen.

Arnberg says Allen lost $5,000 on the Dalraida house.  Arnberg says there were no fees on the Emerald Mountain house, which normally would have been about $9,000 in real estate commission.  Arnberg says it is fair to say Roberts benefited by $16,000 on the reduced price of the house in Emerald Mountain.

Arnberg says he believes the second closing of the Dalraida house was in January of 1999 or December of 1998.  Arnberg says the real estate fee was not charged in this case either.

Arnberg says it was always understood Allen was going to buy the house in Dalraida so Roberts could get the house in Emerald Mountain.  The negotiations were between Roberts and Allen.  Arnberg says he only handled the paperwork.

Mr. McKnight will again question the witness.

The judge tells the lawyers it's not true that the court can't afford more than one wireless mic, but that the system can only handle one frequencey.

Arnberg is asked to look at a closing statement for the house on the Emerald Mountain property that was sold for $175,000.  There were loans against the property for $125,000.  The house was completed in the summer of 1997 according to Arnberg.  Arnberg says he knew Roberts had been looking into getting into the development for a while, but Arnberg did not know exactly how long.

Arnberg is asked to look at two documents.  Arnberg says he has not seen one of the documents before today.  As to the other, Arnberg says he is familiar with the form but he doesn't recognize this specific form.

Arnberg says the form looks like a deposit form for the Emerald Mountain golf course.  He says it may have been for a lot on the golf course on which someone could build a house.  Arnberg says in 1997 Roberts appeared to be out there looking.  Arnberg says there was no deposit put down.

Arnberg says he doesn't recall 100 percent that Roberts was putting his house up for sale around the same time.

Arnberg agrees the Emerald Mountain house was on the market a while when Allen bought it. 

One of the documents is the closing statement is for the house Allen purchased from Roberts in Dalraida.

McKnight says Roberts lived in Dalraida for 17 years, Mr. Allen buys the property for $98,000 and sells it for $93,000.

Arnberg says Allen bought the house in Dalraida, Roberts bought the house in Emerald Mountain and then Mrs. Teague bought the Dalraida house for $93,000.

Arnberg says he knew Roberts had children in college.  Arnberg says he was not aware of the medical bills for Mrs. Roberts due to two life threatening surgeries.

Arnberg says it was hard to get into chit-chat at the office.

Arnberg says he was not aware that if Roberts completed four bridges, Roberts was entitled to a $1 million.

Arnberg says Roberts was a very good employee.  Arnberg says he didn't work with Roberts but he knew Roberts was a "valueable person."

Arnberg says Mr. Roberts sold a house for $4,000 more than the market would bear.  He perchased a house for $16,000 less than it was appraised for.

Arnberg says he can not say the Allen profited from the deal.

Arnberg says Roberts house was average size, price, and condition.  Arnberg says Roberts sold an old house for a new house in a new subdivision no one had ever lived in.  Arnberg says at the time there was not a golf course at Emerald Mountain.  Arnberg says it was a four bedroom vs a three bedroom house.

Arnberg says its a pretty good deal when you don't have to put a house on the market but still get it sold.  Arnberg says most everyone wants to own a house.  Arnberg says the Dalraida house was put on the market for $103,000 that was eventually sold for $93,000.  Arnberg says it was Allen's decision to sell at the lower price.  McKnight asks Arnberg if larger houses come with larger payments and Arnberg says they do.

The next witness will be Mac Marcato.  There is a motion from Kilborn to be argued before the witness can come in.  The judge is going to let the jury leave while the motion is argued.

Rainline and More

Transportation Director McInnes will still be on the stand as things get started around 8:30 a.m. today.

Mr. Kilborn is questioning Mr. McInnes.  McInnes is being asked about a letter of July 25, 2003 and the Product Evaluation Board and something called the Product Advisory Committee allegedly formed by the Riley administration.

Mr. Kilborn shows a letter dated November 5, 2003 to McInnes.  The letter is from a Mr. Harper, assistant chief engineer, to a program director at the University of Alabama.

McInnes agrees the letter refers to a product advisory committee which authorized expenditure of continuing the study on profile pavement marking at the University of Alabama.  The cost over $134,000.

Mcinnes says prior to seeing the letter, he had no recollection of the specific committee.

McInnes is asked if he knew anything about a general agreement on July 7, 2003.  McInnes says he does not remember.

McInnes says hundreds of doucments cross his desk daily and he cannot remember them all.

McInness agrees if he approves something, Governor Riley goes along with it.

McInnes is asked if three weeks prior to the letter there was an agreement to continue the study of Rainline.  McInnes is asked if he shouldn't have waited until the study was finished to make a decision.

McInnes says the information they had that Rainline had no inherent safety factors over thermo-plastic led them to stop the use of Rainline.

McInnes says he did not review Rainline documentation before coming to trial.  McInness agrees Mr. Wilkerson formerly of the Federal Highway Administration was now retired.

Mcinnes says Gov. Riley did not know specifically about the committee.  Mr. McInnes says he has not talked to Gordon Brown from the Federal Highway Administration about the study.

McInnes says if the research study showed different results from before he would take that information into consideration as it concerns Rainline, but McInnes says that is only part of any consideration.

McInnes agrees since he was called to testify at the last minute he didn't have much time to prepare for his testimony.

McInnes says he did not check the status of the study last night.  McInnes says he does not know if Gov. Riley knows he's testifying.  This brings a strong "Mr. Kilborn" from the judge.

Mr. Franklin is now questioning Mr. McInnes.  McInnes agrees the University of Alabama is still studying Rainline.  McInnes says he has no information from the University of Alabama about the study which would now lead him to change his mind.

Mr. Franklin asks McInness about $71,000 which draws an objection which is sustained.  The $71,000 is in reference to the severance given to Mack Roberts by Jim Allen.

McInnes says he did read the letter prior to his testimony and he remembered what had happened.  McInnes agrees the governmnet did not ask him to review other documents prior to coming to court.

Mcinnes says Mr. Marcato and his daughter came to him on two or three occasions to make their case for Rainline to be used again by the state. 

Mcinnes says at the time of the Marcato meeting he knew Marcato had the patent for Rainline.

McInnes is asked if he knew Crum Foshee had lobbied for the product Rainline and had been paid $800,000 for his efforts.  The judge rules the question outside the scope and Mr. Franklin decides he has no more questions.

We have been hit with technical problems.  Mr. Derickson a sports car driver and a former research engineer with the Department of Transportation is on the stand. 

Derickson says he became familiar with Rainline in the early 1990s.  He says the product was tested and there were problems with durability of the product and that the product did not stay put when the pavement went through its normal heat cycle.

He has been talking about the similarities between Rainline and normal thermo-plastic.  He says there are glass beads in both Rainline and normal thermo-plastic.  Derickson agrees Rainline and products like it cost more than regular thermo-plastic.

Derickson is been asked about a document that appears to be a summary of a board meeting.  Derickson says the document has his name spelled wrong.  The date is January 2, 1996.  He says a statement on the document is not a statement he made.

He says he saw Rainline in demonstration mode and then in field testing where the product was having problems with durability and the DOT notified the makers of the product of the problem and as of January 2, 1996 the problem had not been fixed.

Derickson says the document as to his alleged statements are "fabricated."

The witness says a test was set up in which they wanted four different manufacturers' products to be used in a performance evaluation at the test deck south of Montgomery on U.S. 231.  The witness says the section to be put down would have been a one mile or one kilometer section for each one of the manufacturer's materials to be placed.

One of the manufacturers moved back to Europe, Spot Flex.  There were three products left to be evaluated.  One manufacturer could not get more than a quarter mile of their product down due to technical dificulties.  The Aqua Light product was put down successfully on its entire mile of road.  The Rainline people, according to Derickson, did not participate.  He says he dealt directly with Mac Marcato.  Rainline did not come and put down their product on the test deck.

Mr. Derickson wants to talk about what Marcato told him and the judge explains to him why that is not allowed.

Derickson left DOT in 2002 and he says at that time Rainline did not place or have much interest in doing any product type testing or evaluation.

Derickson says he did question why Rainline was used in contract work when the product had not been through a full evaluation.  Derickson says "definitely not" when asked if he got a sound answer as to why Rainline was being used.

Derickson says the DOT deals with federal and state routes.  Derickson says more than two-thirds of those roads will meet the average daily traffic count in a memo of 3,000 per day.

Derickson says the high performance products were to be used on roads with no lighting, rural areas, and curved road areas to enhance safety.

Derickson says Rainline was not put down with a focus on safety.  He says the placement was based on traffic volume.

Mr. McKnight will now question the witness.

Derickson says initially he was intrigued by Rainline.  He says the product did enhance visibility when it was raining and at night than othe products.  He says however there were durability issues.

Derickson is asked to look at the document from January 2, 1996 meeting of the Product Evaluation Board.  He says he remembers the issue coming before the board on multiple occasions.

This is the document that quotes Derickson as saying the product was "fully tested and approved."

He says he "knows for a fact he didn't say it."  Derickson says he had no idea where the document formulated from.  He says he reviewed the document and says it was not a product of the board and it was not composed by him.  He says this is what he told the government. 

On August 5, 2005 Derickson made a statement to a DOT special agent.

Derickson says DOT wanted to have more than one manufacturer for products available for contracts.  He says DOT never wanted a sole source.

The witness agrees he had concerns about the durability of Rainline.  Derickson agrees he did not state those concerns to Mack Roberts or Ray Bass.  Bass was the chief engineer.  Derickson says it was not normal standard practice but he took his information to the Product Evaluation Board.

Derickson says Roberts and Bass were not in his normal line of contact.  He again says the information was brought to the board and the board wanted to see more testing after changes were made to the product.

Derickson agrees he wanted a higher job.  He agrees he filed a complaint against DOT.  Mr.McKnight asks Derickson about Mr.Roberts appointing an African-American to the position Derickson wanted.  Derickson says that was not the basis of the complaint.

We're back from recess and Mr. Mcknight is still questioning the witness.

The witness identifies the document as an organizational chart.

Mr. Derickson is asked to tap the screen to show where his name is on the chart.  He is listed in the Research and Development Bureau and his boss was a Mr. Brown, who was brought in to the bureau chief position.

Derickson agrees there were two assistant chief engineer's over Mr. Brown and then above them chief engineer Ray Bass.

The judge asks to see a document.  McKnight says the document was procured by subpoena from DOT.  The judge wants to have a brief sidebar.

Derickson says the document's first two pages show how the document was obtained.

The document itself is a grievance filed October 25, 1999 by Derickson.  Derickson says he does not recollect the exact date without checking his records.

There is a complaint form that shows Derickson's job ttiles as assistant research and development engineer.  Derickson claimed discrimination based on race.  Derickson says his lawyer's told him that was the only category available to him based on the nature of the grievance.

Derickson says the information is correct and he agrees he signed it.  Derickson says his signature shows he was in agreement with the form of the document.

Derickson agrees race was the discriminatory action taken.  Derickson says it is probably true that Mack Roberts appointed Mr. Brown to the position above him.

Derickson said at the time Roberts and Ron Green had information on the complaint.  Derickson says it had to do with the EEO material and it was a recommendation from counsel.  Derickson says it had nothing to do with Green being an African-American.

Mr. McKnight says "Let's get to that detail."

Derickson agrees he wrote on the form his qualifications.  Derickson says Mr. Brown had no background in research and was hand-picked.

"We might as well show everybody everything," says Derickson.  Mr. Derickson reads from the document.  In the document he states his qualifications over Brown.  Derickson alleges in the document he was "secretly hand-picked."  Derickson also says in the document he and other none black candidates were not considered.  He alleges this was in part this was due to the lawsuit against the Department of Transportation and as a result the department wanted to have blacks in high positions.

Derickson says Brown was brought in under the auspices of the lawsuit.  Derickson says Brown was "leapfrogged" over everybody.  People with a lot more qualifications and experience.

McKnight says the document doesn't state anything about eligible black candidates.  McKnight tells Derickson, "I'm sorry my question was so difficult."

Derickson is asked if he were the spokesman for the white employees of the Department of Transportation.

Derickson says the litigants who brought the lawsuit against the department wanted blacks put in higher positions.

The judge asks Mr. McKnight to move on.

Derickson agrees the document says his complaint was not upheld.

Derickson says Mr. Roberts was informed of some things and other things that employees did were not brought to Roberts as a normal course of events.

Derickson is asked why he told Wilkerson about his conclusions on Rainline and not Roberts or Bass.  Derickson says that is "totally incorrect, my man."  Derickson says again the conclusions were brought to the board.  He says he doesn't know where McKnight got the information about Derickson going straight to Wilkerson but that information is incorrect according to Derickson.

Mr. Derickson is discussing something with the judge.   June 23, 2005 is the date of a document Mr. Derickson is being asked about.  It involves a meeting again with a DOT special agent.

Derickson is questioning Mr. McKnight and tells McKnight the counsel is "hard to predict." 

Derickson is ready after reading part of the document.  The judge asks Derickson if the document refreshes his recollection.  Derickson denies he made the statement saying he did not tell Mr. Roberts or Mr. Bass because they were the ultimate decision making authority.  Derickson says the investigator put that down based on the explanation he gave but that that was not exactly how Derickson put it.

Derickson says he did not contact Wilkerson, Wilkerson contacted him about Rainline problems.  Derickson says Wilkerson asks how Rainline came to be accepted to be used.

Derickson says, "He's badgering me."  This is in reference to the question from McKnight about Derickson not having a discussion with Bass or Roberts.  Derickson says it would not have done that way.  Derickson agrees he did not discuss thing with Mr. Roberts. 

Mr. Kilborn is asking questions and Derickson agrees he was skipped over for promotion in July 1999.

As to the June 23, 2005 interview, Kilborn asks about the test deck.  Derickson says he believes it was probably in the summer of 1999 the test deck was set up.  Derickson says he is not sure if it was July when the tests were done.

Derickson says approximately 8-12 people set on the Product Evaluation Board.  He said particular directors had interest on who was on the board and at other times they didn't.  Derickson says without access to his records he can't say specifically how many board members there were in July 1999.

Derickson says "zero" board members were at the test deck with him because "that was not the board members' job."

Derickson says there were initally four high performance products to be tested.

Derickson says Viberline had problems of machinary and only got a quarter mile done.  The company went home and Derickson says they did not bring anything back up to them.

Derickson says 3M was not in the work plan. He says 3M came to him with a wet weather marking system and they wanted to put down a demo strip, which Derickson says is different than a test strip.  Derickson says it was not being evaluated for approval.  Derickson says 3M came in after the fact.  3M was not considered to be a test section according to Derickson.

Spot Flex, according to Derickson, went back to Europe.  Derickson says Aqua Light was evaluated.

Derickson says it was a sad situation after all the effort was put into the test deck.

Derickson says he can't say if the test deck was in operation before Mr. Brown "was annointed" to that position, the position above Derickson.

A March 15, 2001 document talks relates to another panel.  Derickson says he was not in contact with this panel.  Derickson agrees Wilkerson was from the Federal Highway Administration.  Derickson says Mr. Bass was the chief engineer at the time of the document.  Derickson says Harper was also above him.  He is asked about a Mr. Lorentson, who was a burea chief in another area,  Larry Lockett, a materials and test engineer, and Wes Elrod.

Derickson agrees he was not on the panel.  He says he was not told about it.  Derickson is asked to read the recommendation of the panel.  The recommendation basically approves the continued use of Rainline and asks for continued testing.

Derickson agrees Wilkerson was on the committee.  He says Wilkerson raised questions about the widespread use of Rainline.

Kilborn says Derickson was unhappy and got left behind by the "blue-ribbon" panel.  Derickson denies this and says, "It's not anywhere near the truth and people shouldn't listen to crap like that," says Derickson.

Kilborn brings up Michael Brown and FEMA and asks  Derickson if people should be qualified for the positions they take.

"I don't know what Michael Brown did..You go off the hearsay on the news..," says Derickson.  The judge tells Kilborn to move on.

Mr. Kilborn asks the judge if Kilborn can go to the charts and the judge agrees Mr. Kilborn can move to the chart.

Kilborn is talking about flat striping with Derickson.  Derickson is describing the high performance standard and agrees it is perferable in bad weather.

Kilborn is drawing and discussing the drawing he did in kindergarten.

"If it had looked like the drawing we would have disqualified it," says Derickson.

"I don't want to get an engineering degree in this," says Kilborn.

Kilborn and Derickson discuss the way the water is channeled on the high profile stuff and the reflective property of the high performance stripe.

Derickson reiterates he graduated from the DOT in 2002.

Derickson says when Rainline was first brought up for evaluation the cost of Rainline was only 1.5 times that of the flat striping.

Derickson agrees high performance striping should be used in certain circumstances for safety, but it should not be widespread on normal road conditions.

Derickson says the flat striping has pavement markers that are used and that profile makes the striping stand out and be reflective.  Derickson says the pavement markers are required when using flat striping.

Derickson is asked about the document that the statements that he said Rainline "had been fully tested and approved" were not made by him.

Derickson says Kilborn is intermingling things and to the best of his knowledge the complaint about Mr. Brown contained the truth.

Mr. Feaga has the witness and is asking questions.  Feaga says Derickson seems to "have a strong desire" to talk more about the complaint, about not getting promoted.

Derickson says the line of Mr. Kilborn's questions were "totally unrelated subject matter and about defamation to character."

Derickson is asked if he was familiar with the case Reynolds vs the State of Alabama and he says he was very familiar with the case.

Derickson agrees the complaint was about discrimination in the DOT against black employees.  The judge says with a raised voice, "This is not an issue in this criminal case."

Derickson says supposedly the pattern of discrimination was previous to the 1993 determination.  Feaga says he thinks it is a fair question that about who was in charge of the Department of Transportation.

Derickson says Roberts was director of DOT twice that he knows of.  Derickson says one time frame was 1999-2003 and he believes in the 1993 time frame Roberts had another stint as director.  Derickson says he believes Roberts was a long time employee.

Derickson agrees Roberts held high positions in the DOT as well as Bass.  Feaga asks Derickson who could have done something about discrimination and Derickson says the higher ups.

Derickson says neither Roberts nor Bass came to him as an engineer and asked him about Rainline. 

Derickson says Don Vaughn told him after Derickson expressed concerns and complaints about why Rainline was being bought that "that was the direct order from the director and that's the way it is."

Derickson continues to say it wasn't in the normal routing of his job to go to the director.

Another Week Begins

Things are scheduled to get started this morning around 8:30 a.m. 

Mr. Courson from the DOT is on the stand.  He distributes money to counties from both federal and state funds for roads.  Mr. Feaga continues the questioning.  Feaga is asking again about why highway projects don't get built.  Courson says there are "numerous" projects that people would like built to help alleviate traffic problems.

We're having problems hearing Mr. Feaga again when he steps away from the podium. 

Mr. Courson agrees he remembers the letter asking Jim Allen to build a bridge.  The witness agrees the building got built.  Mr. Feaga is showing Courson the map.  Mr. Feaga is asking about January 1999.  Siegelman was governor, Roberts was highway director.

Mr. Feaga wants to know from Courson what roads near the bridge were in existence at the time.  Folks this is hard to describe so bear with me.  Feaga is pointing to a road near a high school.  The road in question is from Highway 43 to the high school.  Courson says the project started in early 1999.  Courson says the school couldn't get traffic to it without the road.

Mr. Feaga asks about another road and Courson says the road to the school gets built first.  In question now is the Black Warrior Parkway.  Courson says the Black Warrior Parkway was built by then, January 1999, to the best of his knowledge.

Feaga asks Mr. Courson to look at some documents.  The judge tells Mr. Baxley he can look at the documents before things continue.

Mr. Courson says one document is to initiate the design for the road to the school from Highway 43.  The witness is asked about a 2010 master plan.  He says he didn't have anything to do with it, but knew the plan had been in existence for years.

Mr. Feaga goes back to the charts.  Jeff Deen is saying Mr. Feaga has picked up his chart.  "You going to use a whole lot of it...I don't mind if you use a little of it."

The judge reminds lawyers they should only mark on their own charts not on other charts.

Chart WARS continues.  Mr. Feaga has now got some paper to write on and all's well with the world as we continue.

Mr. Feaga returns to questions about Western Blvd.  The letter says May 24, 1999 is the date the high school road agreement was executed.  It was authorized by Roberts.  Courson says the road provides access to the school.  Mr. Feaga calls it #18.

Courson says there is another road from the high school over to Highway 171 also executed on May 24, 1999.  Mr. Feaga calls this project #20.

Courson says project #21 is from Highway 171 around to the parkway and Feaga adds "to Jim Allen's bridge."

Mr. Feaga asks why #21 had to be built.  Courson says the road was to provide access all the way around and it benefited the people of Tuscaloosa County, Northport, and Jim Allen's bridge.

Courson says he was not aware that Allen's bridge was losing money in March 1999 as describe by Mr. Rawls in earlier testimony.

Courson is asked if Mack Roberts eventually recused himself from these matters.  He says, "Yes."  Courson looks at a letter from June 29, 1999 as Mr. Feaga continues to write on his charts.

This letter shows Roberts recusing himself from further dealings with the projects.

Courson says the total construction costs were around $42 million for the projects approved on May 24.  The witness says it was paid for with 100 percent by state dollars.

Mr. Feaga now asks about matching state and federal funds.  Mr. Courson says the projects did not meet the federal requirements for matching funds.  Courson says there would have been a delay if they had used matching funds.  There are things involved like environmental clearance and public hearings and other things the use of state funds does not require.

Courson says if the federal funds had been available other roads could have been built of around $140 million.

Courson says project letters are sent out to the county for execution and then returned to the state.  The witness says the project can not go forward without the letters.  It looks like Mr. Feaga is introducing the letters as a basis for the charges against Mr. Roberts.  Courson agrees all the letters introduced were executed and returned to the state.  They are all dated after May 24, 1999.

Mr. Feaga asks what would have happened if the Mitlary Road had been started and then for whatever reason hadn't been finished.  Courson says it would have been a "waste of money."

The witness is asked to read the recusal letter.  The letter was written to Gov. Siegelman.  Mr. Feaga introduces four more letters from November 24, 1999.  The judge again reminds Mr. Feaga not to lead.

Mr. Feaga annotates his charts after asking the witness the dates of the documents.

Courson says the letters talk about the county opening bids and asks for the state concurrence and award to the low bidder.  Courson says he had to concur before the county could award the contract.  Courson says he concurred, but not immediately.

The witness says he was made aware that the right of way acquisition had not been completed by November 24, 1999.  Courson says you can't spend state funds on public right of way.  Courson says the right of way had not been fully acquired.  Courson says there was considerable right of way left to be acquired not a small bit.

Courson says he went to the front office to notify the assistant transportation director the day before Thanksgiving.  A call was placed to Roberts by the asst. transportation director on the Southern Link radio and Courson could hear.  He says Roberts said there was a permit and the project needed to keep going.  According to the witness this was November 24, 1999 after Roberts had earlier recused himself from the project.

Courson says he was told to get the letters ready and get them signed and back to the county to authorize them to proceed with the project.

Courson says he would normally dictate letters to a secretary but he typed these letters himself.  Courson says he was told a Corps of Engineers permit was about to expire for the project.  He says they would have reapplied or gotten an extension and it would have delayed the project two or three months probably.

The witness is asked again to identify some documents by Mr. Feaga.  Courson says they are all construction portions for the project including utility approval and other things that needed to be approved before the project could go forward.

After getting some more exhibits in the questioning continues.

Mr. Feaga asks if the Alabama Department of Transportation engages in interstate commerce and the witness agrees it does.

Mr. Feaga is back to the May 24 projects, #18, #20, #21.  Feaga is asking Courson who executed and approved the projects.  Courson answers Mr. Roberts.  Courson agrees Gov. Siegelman also signed on May 21, 1999 and Courson says the document was mailed on May 24.

Courson is asked about $71,000 being mentioned in a document.  Courson says it is not mentioned.  This I believe has something to do with project #18, but I am not sure.

There is a note on the project #18 about avoiding a conflict of interest but the note does not appear on the others says Courson.

Judge asks attorneys to approach the bench.

We're back.  Burke-Kleinpeter was the consulting and engineering firm that did the work on the road to the bridge according to Mr. Feaga and Courson agrees they are a reputable firm.

Courson says the documents do not reflect Burke-Kleinpeter was the contractor on the project.  Mr. Feaga would like a break.  He will be talking to Mr. Baxley during the break.

There has been a stipulation agreed to between the U.S. and Mr. Roberts concerning the interchange being built by Burke-Kleinpeter.    More on this later.

Courson is being asked how engineering firms are selected.  Courson says the transportation director selects the consulting engineering firm.  He says a selection committee makes a recommendation to the director and then the director picks one if the projects is administered by the state.

In a county project the county would have selected the engineering firm.

Courson is asked if he has heard of Tuscaloosa Testing Laboratories (TTL).  Courson says they were a sub-contractor for Burke-Kleinpeter to do testing on the Mitlary Rd. extension.  Burke-Kleinpeter would have been hired by the county for this project.

Mr. Baxley now has the witness.

Mr. Baxley says Burke-Kleinpeter was hired for the interchange with Highway 59 and this was during the James administration.

Courson says based on his experience the project was good for the people of Tuscaloosa County.

Courson agrees the cost would have been more if the project had been funded under a federal-state split.

Mr. Baxley says there is not a road it is a corridor.  Courson agrees it is not unusual for it to be moved from the original plan.  Courson says the eastern part was a state project while the western part was a county project.

Mr. Baxley is now asking about documents signed by Roberts in May 1999.  Courson agrees the documents are for the entire route.  #18 is the road to the school, #20 is from the school to Alabama Highway 171, and #21.  All these were signed by Roberts.

Mr. Baxley asks about the "stink" with Steve Windom having a problem with the project.  Courson says he was not aware of that issue.

Mr. Baxley now turns to the charges in the indictment.

Mr. Courson is asked to look at some documents.

One document concerns a document mailed to the Tuscaloosa County on May 23.  The cost of this project was over $10 million.  Another project concerning bridges for more than $4 million was document in another document and also one mailed in September.  This was all part of the same project and this part was for over $13 million.

Courson agrees the project was good for the people of the area.  Courson says he signed the agreement, the legal counsel signed it, the assistant director of transportation signed it Mr. Bowlin, the governor, and the head of the county project.  Mack Roberts' name is not on the document.

Courson is taken through the other two documents and their signature pages.  Bowlin signed two documents as assistant transportation director and the last document as transportation director.  Roberts had retired.

Courson agrees Mr. Bowlin would not have signed a fraudulent document nor would Courson have signed a fraudulent agreement.

Courson is asked to review his grand jury testimony.  Courson says he approved construction to start on the project.

Courson agrees Mack Roberts is a "doer" who wants to get things done.  Courson disagrees he told the grand jury that he and Bowlin discussed the project and called Roberts and told him "we" wanted to proceed with the project.

Courson agrees he was told to proceed.

Courson says to his knowledge there was no fraud involved.  Courson agrees people had been calling for the particular project for years.

Courson says he has been in the county assistance division 32 years and head of it 17 years.  Baxley is asking if Mack Roberts did more to help the county roads programs more than any other director and Courson says, "Yes."

Courson agrees the documents Feaga showed him before the break would not contain the name of the engineering firm.

"If it had been a company called Mickey Mouse and Donald Duck called the Mouse and Duck Company it would not have been in there would it?" asks Baxley.  Mr. Courson answers, "No"

Mr. Kilborn is up.

Mr. Courson is asked about a 2010 plan developed by the county and submitted to the state.  Courson agrees the county was looking into the future to plan where the traffic will be.  Courson agrees it is difficult to do and come up with a suggested corridor.

Courson agrees the plan is the general vicinity for the road and sometimes the plans are done away with in their entirety.

Courson agrees the work on the plan would have started in the 1980s.  Courson says the county and city engineers and planners sit on the board to develop the plan.  Courson says the Federal Highway Administration and the state usually look over the plan because a lot of times combined state and federal funds are used.

Courson agrees this project to the west of Tuscaloosa was a county project.  Courson agrees Tuscaloosa County felt the state owed them some money because the county had spent money on the Mercedes plant.

Courson says when he signed the agreement he was recommending the approval of the agreement.  Courson agrees he would not have recommended the project for approval if he thought something was wrong.

Courson says he started with the highway department right out of high school.  Courson agrees he has not wasted money.

Courson says it was a legal project.

Courson is shown another document with a Tuscaloosa County resolution attached.  Courson says the county has to adopt a resolution into their minutes approving the agreement.  The date was September 9, 1998.  This was during the James administration.  Courson agrees for the high school road Tuscaloosa County was making resolutions during the James administration.

Another document with a revision to 9/9/98 resolution adds to the original resolution and Courson agrees it extends the road further from the school all the way to to U.S. Highway 82.

Courson says his best guess is March for the updated resolution.  Courson says this resolution gave the chairman the ability to enter into other agreements.

Courson agrees there was only a small distance left to cover to the toll bridge.  Courson agrees some school buses could not cross some of the bridges because the bridges were too old.

Courson says he has no evidence Siegelman's signature was not in the best interest of the people of the state of Alabama.

Mr. Feaga is back questioning the witness and the judge again asks Mr. Feaga not to lead.  Mr. Feaga says Mr. Baxley brought up federal matching funds.

Courson says he is not aware of any other county project being paid for entirely with state funds.  He agrees this was the largest in his career.

Courson agrees Roberts did not recuse himself in the conversation about going ahead with the project.

Mr. Feaga is asking if Courson knew about the $40,000 Allen allegedly paid to Siegelman.  Courson says he was not aware of it.  Now Mr. Feaga is asking a hypothetical involving Roberts and Allen and Siegelman and if Allen made made the contribution and got to pick the highway director would that change Courson's mind.  Courson says "yes" it would change his mind about things being illegal or improper with these projects.

Courson says he was not aware Allen gave Roberts $71,000 about 12 days before Roberts became highway director and Roberts said he would "get it done."  Courson says it would change his mind about the project if he had known this.

Mr. Feaga asks Courson if he knew that Roberts was trying to help the bridge builder by approving the project.  Courson says no.

Mr. Feaga says the defense opened the door about illegality and improper conduct questions.

Mr. Feaga asks about payment from Burke-Kleinpeter and whether or not that would have changed Courson's opinion of the project and he says, "Yes."

Mr. Kilborn asking questions.  Courson says he did not get any bribes and he would not have agreed to do so.

Mr. Baxley is up.  Courson agrees Burke-Kleinpeter was hired by the Tuscaloosa County Commission.

Mr. Vaughn an engineer for DOT.  Mr. Pilger is doing the questioning.  Vaughn went to Auburn and got a civil engineering degree.

Vaughn says he knows who Mack Roberts is.

The witness says he is familiar with the product called Rainline, the road striping product.

Vaughn says DOT first used the product in 1984.  He says the use became more widespread in 2000 when they started using the product exclusively.  The witness says the use in 1984 was on a trial basis.

Vaughn says when Butts was highway director Rainline was the alternative that could be used.  Vaughn says Roberts became highway director for the final time in 1999.  Vaughn says the DOT started using the product a lot more.  Vaughn says the product had not undergone the extensive tests required.

Vaughn is asked about a memo from and to engineers in DOT about Rainline.  The memo is dated February 9, 1999.

Vaughn says the memo was right after Roberts became Transportation Director but Vaughn does not know the exact date Roberts became director.

Vaughn says the first paragraph says Mr. Bass said to increase the use the Rainline striping.  Vaughn says at this point Rainline was not in wide use in Alabama.

ADT means Average Daily Traffic and with an ADT of 3,000 or greater Rainline was to be used on two-lane routes.  Vaughn says this covers about two-thirds of all the state routes in Alabama.

There is another guideline from December 20, 2000.  Mr. Baxley has an objection.  Mr. Pilger says he will lay a foundation and the judge withholds a ruling on the objection.

Vaughn says he is familiar with Mr. Roberts' signature.

Mr. Vaughn is looking at a document to refresh his recollection as to whether or not Rainline was the only product specified for use.  He says "Yes."

Mr. Vaughn says the document said the Average Annual Daily Traffic exceeded 2,500 Rainline was required to be used except for lighted roads and city and county roads.

Mr. Vaughn says a February 9th memo meant Rainline was used "as a matter of course" on roads.  Vaughn says he did not see people using their discretion not to use Rainline.

Vaughn agrees Roberts left office on July 1, 2001.  Vaughn says the new director stopped the use of Rainline shortly thereafter.  Vaughn says Bowlin was the new director and he stopped the use of Rainline because of a report from the Transportation Center at the University of Alabama.

Vaughn says DOT started using Rainline again a few months later.  Vaughn says Bowlin asked him to develop a criteria for the use of Rainline on half of the resurfacing projects.  Vaughn says Bowlin didn't tell him who indicated to Bowlin to turn Rainline back on.  Vaughn says Bowlin did not indicate whether or not it was Bowlin's idea.  Vaughn says the way it was brought to him, "it did not appear it was his idea."

Pilger asks Vaughn about product and process testing of products.  Vaughn says DOT tests the products and processes before they are used.  Vaughn says once the product is placed they continue to evaluate the product against the claims made by the company's assertions.

Vaughn says in this case they looked at durability and reflectivity of the product.  The group that evaluates this is the Product Evaluation Board.  Vaughn says he has been on the board.  Vaughn says the board did not do a scientific review of Rainline.

Vaughn says he has been at the Highway Department since 1972.  Vaughn says Rainline could not have been turned on without the approval of the highway director.

Vaughn says in his experience he has not seen a product used without some testing.

Vaughn says $42  million was spent on Rainline after Mr. Roberts came into office.  Vaughn says Rainline was 2-to-2.5 times the cost of regular thermo plastic.  Vaughn says he believes the regular cost would have been around $14 million.

The jury will get to eat outside the building so we will not be back until about 1:30 p.m.

Mr. Baxley is questioning Mr. Vaughn. Vaughn agrees the biggest proponent of Rainline was Ray Bass.  Mr. Baxley asks if the government subpoenaed Mr. Bass.  This of course brings an objection which is sustained.

Mr. Vaughn is asked to compare two documents.  One document has two pages the other has pages three and four.  The defense has an objection and all have been asked to approach the bench.

The judge apologizes to the jury for the interruption.

Mr. Baxley is asking Mr. Vaughn if the document is a DOT document.  Vaughn indicates it is and it is admitted into evidence.  The document shows it was approved by Ray Bass and then Mack Roberts.  It was recommended by a Mr. Lorentson.  Vaughn agrees this was normal procedure.  The document had to do with road striping as well.

Now there is a comparison of Rainline striping and normal thermo-plastic striping.  Vaughn agrees thermo-plastic is cheaper.  Baxley says when striping first started out they used house paint.  Vaughn says they used paint.

Vaughn says Alabama pays the lowest price per mile of any state for Rainline.  Vaughn says Roberts strongly supported Rainline.

Vaughn agrees it is not unreasonable that since Roberts used Rainline in 1994 as highway director, Roberts believed in the product.

The memo is from Ray Bass to Mr. Roberts, Bowlin, engineers and others.  The subject of the memo is Rainline Demonstration.  According to Baxley, Mr. Bass brought in all the engineers for a demonstration after dark of Rainline.  Vaughn agrees this happened.  Vaughn agrees everyone went to Sinclair's for supper and then went to the demonstration.  He acknowledges someone was there with a water truck, like the fire department uses.  Vaughn is not sure if it was the Montgomery Fire Department.

Vaughn agrees everyone thought after the demonstration that Rainline was a good product.  Vaughn agrees if Rainline lasted twice as long as the other striping there would be no difference in price.  Vaughn says the University of Alabama did a study on the "effectiveness of Rainline."  Vaughn says the study was authorized while Mr. Roberts was transportation director.

Vaughn agrees some people disagree with the results of the study.

Vaughn agrees there is no requirement for a study of the product.  Vaughn is asked to look at the agenda of the Product Evaluation Board from March 1, 1993.

Under new business the second item is Rainline, PEB stands for Product Evaluation Board.  Under the minutes of the board, the second order of business is Rainline and the minutes say the board decided to have the product field tested.

Now there is something about test sections of roads as described by Mr. Marcato in another document.  Marcato handed out copies of the business plan and how Rainline would be installed for testing purposes.  Marcato according to the document told the Product Evaluation Board about the cost of the product.

Vaughn says he has met Mr. Marcato and Marcato lives in the Montgomery area.  Vaughn says he knows Marcato has patents.

Mr. Vaughn is asked to look at a document he says he does not personally know where it came from.

Vaughn says after the demonstration by the company of Rainline he felt it was a good product but that no study as to the product's durability or scientific study was done.  Vaughn says the people doing the demonstration had a financial interest in the product.

Vaughn says the Product Evaluation Board tried to have a test deck where three similar products were to be evaluated but Rainline said they would not participate in that evaluation since the striping was already in use around the state.

Vaughn agrees this would have been the first step in an engineering evaluation of the product.  Vaughn agrees Marcato didn't show up.

Vaughn says the study was funded by the Research Advisory Committee.  The study was from mid-2001 to 2003.  Vaughn says he does not know when the actual funding for the report was established.  This is the Alabama study.

Vaughn says at a regular PEB meeting the subject of Rainline came up and it was decided there was need to set up a test of the product since it was already in use across the state.  Vaughn is asked about the relationship between Ray Bass and Crum Foshee.

Vaughn says the equipment to apply Rainline was proprietary and had to be bought by the stripers or leased.  Vaughn says it was unlikely that contractors would tool up under Rainline and then go out and get another set of equipment for another product.

Mr. Kilborn was asking questions, there was a sidebar and now Mr. Pilger is back.

Vaughn says he was not aware that Foshee got $800,000 from Rainline or that Foshee paid for Ray Bass's retirement party.

Mr. Vaughn is asked if anyone told him what happened on October 16, 1998, at Siegelman's campaign offices in Birmingham, were the meeting between Roberts, Allen, and Siegelman met.  Vaughn says he was not told.

Mr. Vaughn is asked why the regular PEB could not have taken up the Rainline issue.  Vaughn says the regular meeting they were told Ray Bass had mandated it be used.

Vaughn says the document says an experimental plan was being developed and Vaughn says it appears to be right that two years later they were just getting started with the evaluation.  Vaughn says Aqua Light was not put down on any Alabama Roads to his knowledge.

Vaughn says his opinion of the decision to use Rainline is that Bass and Roberts both had the authority to make that decision but that after review of the University of Alabama he believes the high initial cost of the product did not warrant Rainline's use.

Mr. Baxley is asking about the minutes of the Product Evaluation Board from both 1993 and 1993.  Vaughn says he remembers that as being correct.

Vaughn agrees that if the Rainline product lasted twice as long as the normal product the cost would be justified.

Both sides are now through with Mr. Vaughn today.

The prosecution wants to put Mr. Blount back on the stand to correct one part of his testimony from earlier in the trial regarding the bonds for G.H. Construction.

Mr. Blount is taking the stand after a sidebar.  Mr. Feaga will do the questioning about the warehouses.  Mr. Blount says he originally didn't remember the bonds as having been sold but now Mr. Blount says the bonds had been sold and the closing was scheduled for a Monday.

Mr. Blount says he would not have committed to the market if he didn't think the project was going through.  Mr. Blount is now asked by Mr. Leach to identify a document.

The document is a memorandum from May 13, 1999 from Blount to Siegelman on Blount Parrish letterhead.  Blount says the memo was to give Siegelman advise on how the lottery referendum should be run.

Mr. Blount says he was discussing parameters for fund raising for the Alabama Lottery Foundation.

Mr. Blount tells the judge, "Y'all have really gotten high tech over here."

Mr. Blount says they talked about corporate contributions and who should be contacted for contributions as well as "corporate do gooders."

Mr. Blount says the campaign should be designed to attract people not involved in political campaigns before.

Mr. Blount says this would really be a way to engage them and names Richard Scrushy.  Blount says Scrushy had an interest in education.

Mr. Blount says they were targeting several people with a strong business background with an interest in education and agrees one of those was Richard Scrushy.

The director of the Department of Transportation is on the stand.  Mr. McInnes.  McInnes says he stopped the use of Rainline because it costs three times what the normal striping product costs.

Mr. Franklin is asking the questions.  McInnes says by going back through DOT records and numbers from the Federal Highway Administration.

McInnes says he sent the numbers in a letter to a Mr. Carr.  McInnes says Carr didn't believe the difference was that great.  The letter was in or about July 2003.

McInnes says he had by then received the results of the study from the University of Alabama.  McInnes says DOT had spent over $42 million on Rainline by the time the letter was written.  Mr. Franklin is asking Mr. McInnes to do some calculations with a calculator.  Franklin wants the $42 million divided by the number of miles of roads Rainline was used on.  12,497 point something being the number of miles.  McInnes is also asked to divide the cost of regular striping of $14 million by the same number.

McInnes says Marcato asked him to reconsider the use of Rainline which McInnes did but decided not to start using Rainline again.

McInnes says the state of Alabama is not using Rainline today.  McInnes says Rainline has not inherent safety value and it was too expensive.

Mr. Kilborn asks Mr. McInnes to calculate the cost of a child's life.  Mr. Kilborn says the value of a child's life would be more than the cost of anything that could be calculated.

"There is no price to put on a life is it?  "I think juries do it all the time,"says McInnes.  Mr. Kilborn says there is no price to high to pay for Rainline if it saves lives and Mr. McInnes says, "Perhaps so."

Mr. McInnes agrees he has never built or designed or paved or put striping on a road.  McInnes says he did not work for the Blount Foundation.  McInnes says he has thirty years in business.  Kilborn is trying to get Blount to agree he has "zero" experience in highway construction.  McInnes agrees the Highway Director is an appointed position.

McInnes says he had two meeting with the Marcatos and they had questions.  Mr. Kilborn says the Marcatos told McInnes there were "serious flaws" in the study.  Mr. McInnes says he does not remember the specific words "serious flaws."

McInnes is asked about a letter he received from Rainline Corporation written by Marcato's daughter Jennifer.  The letter is from June 2004. McInnes agrees the letter talks about "serious flaws" in the study.

McInnes agrees the letter talks about a 7 percent decrease over the cost of 100 million vehicles miles traveled.  Night accidents are reduced by 20 percent according to the letter as well as a 21 percent in another set of circumstances.

Kilborn again reminds McInnes he doesn't have any highway knowledge which draws another objection from the prosecution.

McInnes says he sent the information to engineers.

McInnes agrees there is a graph showing Alabama paid less than other states.  McInnes agrees there is also another analysis attached.

McInnes says he does not know that the Marcatos found mathematical errors in the University of Alabama report.  McInnes says he doesn't know whether the letter talks about a piece of equipment used in the study being faulty.

McInnes says he does not have any personal knowledge of the $42 million figure used for Rainline cost.  McInnes says he got the numbers from the Federal Highway Administration.  Mr. McInnes says he did not ask how the numbers were calculated.

McInnes is asked if he knew Wilkerson from the Federal Highway Administration was on a panel of experts that had recommended the continued use of Rainline.  McInnes says Wilkerson did not tell him.  McInnes says he would have considered Wilkerson's opinion. McInnes says Wilkerson was qualified to make that decision about Rainline.

Mr. McKnight is now questioning Mr. McInnes for Mack Roberts.  McInnes agrees with McKnight that safety costs in the highway business.  McInnes says he has no knowledge of the cost involved in going from paint on the highway to its successor.

Mr. McInnes says he did not know the study was started by Mack Roberts.  McKnight says the study was of no benefit to Roberts because it didn't come out until two years after Roberts resigned. 

McInnes says he did not get complaints from road builders about Rainline.  McInnes says he has no knowledge that Gov. Riley's contributors were road builders.

McInnes says he got a call this morning from the government and when he got back to Montgomery he was served a subpoena.

McInnes says he doubts he would have changed his mind about Rainline if he knew the study was flawed.  McInnes says the cost of Rainline being three times that of normal thermo-plastic would be a contributing factor in any decision.

"You're choosing money over lives aren't you Mr. McInnes? " asks McKnight I" would put down airport runway lights if that were the case," says McInnes.

McInnes says the University of Alabama did not benefit from the study.  McInnes says the study was in progress when he took the job. McInnes agrees he based his decision based in large part on the study.  McInnes says there was nothing prohibiting Roberts from funding a study on Rainline.

McInnes says the results of the study had been given to Don Vaughn and Wilkerson of the Federal Highway Administration and also to McInnes.  McInnes says that information was enough for him to stop using the product.

McInnes says he does not know where Jennifer Marcato got her information from that was put in the letter.  He says he does not know if she has any background or training that would give her special knowledge that would help her come up with the information she provided in the letter.

McInnes says he doesn't know if Jim Allen has any experience in building roads nor does he know of any road building experience Crum Foshee may have.

McInnes says he does not know what decision Wilkerson made in 2001 about Rainline.  McInnes says in 2003 Wilkerson was adamant about stopping the utilization of Rainline.

Mr. Franklin asks if the state of Alabama had saved $28 million instead of spending it on Rainline could the state have striped more roads and saved more lives.  Mr. McInnes says the state "certainly could have."

Mr. McInnes says he does not know Jim Allen.  Mr. McInnes is asked if Jim Allen had a financial interest with Mack Roberts.  Mr. McInnes says he does not know.

Mr. Kilborn is now questioning Mr. McInnes.  Kilborn asks if McInnes has ever seen Rainline tested.  McInnes says no.  McInnes says he has no knowledge of the Riley administration specifically testing Rainline.

McInnes is asked if the Product Evaluation Committee is still in existence.  McInnes says "yes" but he can not state who is on the committee.  McInnes says he does not know whether or not Rainline has been tested.

McInnes says Rainline has some glass beads in the paint mixture that reflect light.  Kilborn says he doesn't remember the portion of the film Mr. Kilborn is talking about.  McInnes says he has no idea when Rainline use started in Alabama.

McInnes says there were specifications in the contracts about Rainline.  McInnes agrees he doesn't know anything about the specifications and whether or not they were changed.

McInnes says he has no knowledge that the University of Alabama is still studying Rainline.  McInnes says he does not know whether or not DOT has continued the contract with the University of Alabama for the study.  McInnes says he has no specific recollection.  McInnes says he does not know that money has been authorized for the study and he does not know why they would continue to fund the study.

Mr. Kilborn says its time to end for the day.  Mr. McInnes asks if that means he has to come back and Judge Fuller tells him it does.

Prosecution says Marcato would be called as well as someone for the University of Alabama.  Mr. Feaga says he has no way to predict when they will be through. There were all kinds of rumors going around this afternoon about when the prosecution might rest.

We'll meet again at 8:30 a.m. Wednesday.

Jim Allen One More Time

Good morning!  We're about ready to get started.

Mr. Kilborn is doing the questioning for the defense.  Allen is asked about his relationship with lawyer George Beck.  Allen agrees he knew Beck's firm also represented Nick Bailey.

Allen agrees he said yesterday he was scared and had fears at the meeting with Siegelman in Birmingham.

Allen agrees the checks were dated November 2.  These were the checks Allen says he gave to Siegelman.

Allen agrees it was a very busy time at Siegelman's headquarters.  Allen says he doesn't recall what Siegelman was doing the day before the election.

Mr. Kilborn puts the map back up on the ELMO.

October 16, 1998 is the date in question.  Kilborn is asking about Mitlary Road.

Mr. Kilborn is trying to pin down what roads were already completed and which ones were in progress.

Kilborn says there was no road to Tuscaloosa High School at that time.  Kilborn says the county wanted to build the road to the high school.

Allen says his fear was that there would be a free road built next to his toll road and this would eliminate his revenue.  Allen says there was a plan to put the road in a different location than Allen was going to put his road.

Allen says he wasn't afraid of the county commission because the commission had approved his project.  Allen says he was concerned DOT would get the other road built.

Allen says DOT could also just have gone around the bridge.  Allen says it would have cost the government about $40 million to build the project he was concerned about.

Allen agrees it is a complicated, lengthy process. 

Mr. Pilger has an objection.  Mr. Kilborn makes it clear what he is talking about.

Mr. Kilborn says people like highways built past their business but don't won't one built next to their house and Allen agrees.

Allen gives another estimate for another road to be built.   Allen says it would take about $40 million and two or three years for the government to get things done.  Allen says it only took him 12 months to build his part of the road.

Allen agrees he feared if he didn't give Siegelman $40,000 he would lose business because DOT would go around his bridge.

Allen says it was his fear that Siegelman would do something to hurt his business.

Kilborn mentions reporter Eddie Curran and says if something like that happened reporters would be on Siegelman so fast he'd have to leave office with his pants on fire.

Allen agrees Marcato fired him in 2001.  Allen denies he told Marcato he was getting out of the bridge building business.

Allen says he does not remember Marcato's letter saying Allen had misrepresented himself to Marcato.

Mr. Kilborn gets the e-mail and shows it to Mr. Allen.  Mr. Kilborn acknowledges it is an e-mail and not a letter.

Mr. Pilger is objecting on hearsay.  The judge asks Pilger if he filed a written objection per the courts order and Pilger says he did not.  The e-mail is admitted.

Allen is asked to look at line four.  "We've already discussed and agreed on numerous occasions that you have failed to market Rainline much to the detriment of Rainline."

The e-mail goes on to say Allen made representations that Allen would be getting out of the toll bridge business and get into Rainline.

Allen says these e-mail allegations are not true.  Allen says he does not know why Marcato would lie in the e-mail.

The e-mail says Allen had told Marcato he would hire a salesman and Marcato had not seen a salesman.  Marcato says he felt Allen violated his trust and later says the contract was a "total scam."

Marcato alleges in the e-mail he was doing Allen's job as well as his own.  Marcato says Allen's actions were to the financial detriment to Rainline.  Marcato says Allen owes him $2,375,000.

Marcato says he has been trying to settle this matter for a year.

Allen denies he lied and that the contract was a scam.  Allen says he indicated to Marcato that he would be working through a third party, Crum Foshee, and when Marcato terminated the agreement Marcato hired Foshee.  Allen says the e-mail was not what was in the agreement.

Allen says Marcato gets emotional but he doesn't won't to state that Marcato exaggerates the facts.

Allen is asked how many interviews he had with the FBI or the attorneys of the Attorney General's office or the government.  Allen says he thinks about four.

Pilger objects.  Mr. Kilborn says he understands how to ask a question.  Mr. Kilborn gives Allen a copy of the first interview with the government.  The date was October 5, 2000.   Allen agrees he was represented by George Beck.  He is also asked to look at two other interviews.

Kilborn goes back to the first interview with Long and Brennan.  Allen agrees he was being questioned about the Mitlary Road and Allen's contact with the Tuscaloosa County commissioners.  Allen agrees he said he had gone out and flown around the area.  Allen says he doesn't remember anything about political contributions.

Allen is asked in the document if he paid money to Hardy McCullum, a probate judge and chairman of the Tuscaloosa County Commission.  Allen says he doesn't know why that question was asked.  Allen says the road project was a combined effort of Tuscaloosa County and the City of Northport.

Allen agrees it was not a Highway Department project and they did not hire engineers or anything.

Allen agrees he was also asked if he gave any money to Mike Richardson's father.  Allen said according to the document he had not given anything.

Allen says he remembers discussing a threat was made to him.  Allen agrees he said a threat had been made to him to kill his road project.  Allen says the threat was made in a public place in front of people.  Allen says the incident occurred at Shelton State around the same time Siegelman had a function there, but Allen says the two were unrelated.

Allen says the public official who made the threat was Commissioner Bobby Miller of the Tuscaloosa County Commission.  According to Allen, Miller wanted the road to go through his wife's property and off of his brother-in-law's property. The commission kicked Allen off the project August 25, 1999.

Allen says according to the document.  The governor was not involved.  In the document Allen says this was a conversation between Miller and himself.  Allen agrees his lawyer George Beck said to be careful but he does not know what Beck's intent was.

According to the document Miller said he didn't care if it cost the the county $50 million he was going to end the project.

Allen says the entire interview had to do with two county commissioners.  Allen agrees he did not mention the conversation with Siegelman in October 1998 .

Allen says it was not the topic of the conversation and so he wasn't thinking about it.

Allen says Siegelman was standing over him and pointing at him in an angry manner and he agrees he felt abused and mistreated.  Allen agrees it was burned in his mind.

Allen is asked why if it was so burned into his mind he didn't tell the government about it in his first interview.  Allen again says that was because that was not the topic.

Allen agrees that in the second interview with FBI agents in the attorney general's office in February 2005, Allen said he gave the $40,000 to have a voice in the governor's office.  Allen says according to the document that he and Mack Roberts discussed the conversation and they both had conversations about the contributions with Siegelman.  Allen says he did not recall giving the checks to Siegelman at that time.

Allen agrees he talks about the $100,000 being reduced to $40,000.

Allen agrees the document says he gave $40,000 but it was not to benefit Roberts.

Allen says there are errors in the document, most likely a 302.

Allen is asked if on February 17, 2005 he said he couldn't remember who he gave the checks to and Allen agrees he couldn't at that time remember who he gave the checks to.

Allen agrees the document he is looking at says he met Siegelman with Roberts on several occasions.

Allen agrees in his February 17, 2005 interview he did not tell the government that Siegelman had told him if he gave $40,000 he could appoint the highway director.

Allen says the bottom of page three begins.  "Allen stated he resisted giving any amount of money ..."

Allen says he told them he was pressured.  Allen says he answered as they asked.  Allen says he told them about the $100,000 and the $40,000 and that he resisted.

Allen says the government didn't go further in that discussion.  Kilborn says Allen didn't wait to get specific in describing the incident involving Miller.  Allen agrees.

Kilborn is now having Allen read from February 22, 2005 interview.  Allen agrees he went to an apartment off of Monticello according to the document and at the Sheriff's Association and at a location at Forest Hills.  These were the locations Allen recalled meetings with Siegelman.  Allen agrees he did not tell them Siegelman shook him down for $40,000.

Allen says he did not tell any agent in interviews what he specifically testified to on yesterday.

Allen says he was not contacted by the government again.  There is an attorney proffer letter of August 11, 2005 to Mr. Feaga.

Allen says he understood this was an offer from his attorney to the government about what he knew about this issue.

Allen asks if the letter doesn't fall under attorney client privilege.  Kilborn says no it is between his attorney and the government.

The judge admits the letter after the sidebar.

The letter talks about the schedule for the grand jury appearance and a August 21 interview with agents at Maxwell.  Allen says he was aware that the offer was being made and he is aware of the information attached to the letter.

The letter describes the Siegelman event as described earlier.

Kilborn asks Allen if this was the first time he wrote about the description of the Siegelman meeting for anyone.

Allen says he does not know what "run this up the flagpole" as referenced in the letter meant.  He says that was his lawyer.

Allen says again he does not know what his attorney meant.  Allen agrees with Kilborn that typically it means run the flag up the pole and see what it does in the wind.  Allen says he didn't see the cover letter and doesn't know what it means.  The judge asks Mr. Kilborn to move on.

Allen shortly after the August 11, 2005 proffer got an immunity agreement.  Allen is asked to look at the immunity agreement.  Allen says he doesn't recall when his grand jury testimony was.  Kilborn infers the immunity agreement was one day before Allen's grand jury testimony of August 22, 2005.  Allen now agrees the immunity agreement was one day before the testimony.

Allen says he believed anything he stated or used in the trial it would not be used against him.  Allen agrees his words would not be used to prosecute him for any crime.

Allen is asked if the prosecutors threatened him with possible criminal prosecution.  Allen says the government told him was not a target of the investigation.  Allen says he does not believe he committed any crime.

Allen agrees he entered into a settlement agreement with the government.  Allen says he recalls the agreement entered into on March 28, 2006.  Allen says he knew trial was set for May 1.

Allen says he settled any claims arising out of second superseding indictment of Dec. 12, 2005.  Allen agrees he paid the state $843,000.  Allen agrees he is immune from prosecution based on anything he says and he no longer has to worry about paying anything else.

Allen agrees the $843,000 was strictly from Rainline profits.

Allen is asked to look at the agreement.  Allen says he was not under duress or undue government influence when he signed the document.

Allen agrees he denies any wrongdoing or liability for any money.  Allen agrees the agreement refers to the indictment.

Mr. Kilborn is asking for the morning break, but the judge wants to forge ahead.

Allen is asked to look at a calculation of the initial number he thought he would owe.  Allen says he was not involved in the calculation.  He asked his attorney and accountant to calculate the numbers.  The judge reminds Mr.Kilborn the witness has stated he didn't know anything about the numbers.

Allen is asked if he ever had to pay back the $40,000.  He says he did not have to pay that.  Allen says he was not involved in the agreement between the government and his lawyers concerning the money.

The judge is fighting a cold this morning.  We're taking morning recess.

Mr. Pilger is back up to question Mr. Allen.

Mr. Baxley has an objection but the objection is overruled.

Allen is asked again about running it up the flagpole.  Allen says he didn't know the specific people it was going to but it was his understanding that it would be going by other people.

Allen agrees the letter came about because Allen told his lawyers about Siegelman demanding $100,000 from him.  Allen says his lawyers felt if he was going to testify he would need immunity.  Allen says the lawyers created a proffer letter and sent it to the government.

Allen is asked about a civil agreement.  Allen says he did not have the $40,000 he says he had already given the money to Siegelman.  Mr. Kilborn has an objection.  Mr. Pilger decides to move on.

Allen says he paid back his profit from the Rainline project.  Allen says he got no state money from the Mitlary Road project.

Allen says he didn't have the checks at the time of the interview, the checks he says he gave to Siegelman.  Allen agrees he had nothing at the interview to refresh his memory during the government interview.

Allen is asked to recall again the story about  Miller and the threat.  Mr. Pilger asks Allen if he learned from the Miller incident the some politicians don't care what it will cost to get what they want done.  Allen agrees.

Allen is asked again about the road map and about rights of way.  Allen agrees you have to secure the property either way.

Allen says the Tuscaloosa area has a good amount of hilly terrain.  Allen says the mountain problems could impact both projects.

Allen is asked if there was newspaper coverage from Phillip Rawls about the Mitlary Road project.  Allen says he doesn't recall a specific article he just knows there was one.

Allen says again part of the reason he got out of the bridge business was because of what happened with Siegelman.  Allen says he had lost Mr. Roberts and he decided to go in a different direction.

Allen is asked again about his contract with Roberts.  Allen again says the $1 million bonus is only if there are four bridges done.  Allen says there was one built that qualified under the contract.

Small blog break.

More objections.  The judge tells Mr. Pilger to move on.

The judge keeps asking Mr. Pilger to move on.  Then the judge says if it lays to foundation he will permit it.

Allen says he wrote nine checks to the PACs.  Another objection overruled.  Allen says he did not know a $40,000 check to Siegelman's political campaign would be illegal.

Allen says initially he was embarrassed by the whole Siegelman event and the interviewers did not ask him that specific question.

Allen says as he understands it now he did something wrong in paying the $40,000.  Allen says it was embarrassing.

Allen says he didn't view it as bribery.  Another objection as to a question about bribery.

Allen says at that time he did not view it as a bribery.  Allen says he thought if he gave the checks above board to PACs there wasn't anything wrong with it.

Mr. Deen gets an objection sustained.

Allen agrees he was concerned about his business interests.  Allen says he was concerned about the $20 million he had invested in his toll roads including the just completed bridge.

More objections.

Allen says Roberts came to him about the highway director's job.  Allen agrees Roberts was in the room when the events with Siegelman transpired.

Allen agrees he paid $40,000 to pick the highway director and the Mack Roberts knew that.  Allen agrees yet again that Roberts came to him about the job.  Allen agrees about two weeks later Siegelman called and spoke about Mack Roberts becoming the highway director.

Allen says Siegelman wanted his approval to appoint Mack Roberts.  Allen says he assumes if he had not agreed he and Siegelman would have discussed it and that Allen would have been able to select someone else in accordance with the deal.

Allen is asked about "all Mack's big connection's in other states."  This is in an e-mail from Marcato to Allen.  Allen agrees the document was to terminate a relationship.  It is dated September 29, 2001.  Allen agrees Roberts had left the highway department in June or July.

Allen says he was probably not much use to Marcato at that time.  Allen says he was not doing any more work on Rainline.  Allen says he hired Foshee as a lobbyist and that was Allen's role in Rainline.

The judge keeps telling Mr. Pilger to "move on" as Pilger walks Allen back through his grand jury testimony.

More objections.

Allen says the road in blue on the map is the one he wanted built.  The road that went to his bridge.  the road was started under the Siegelman administration and just got finished this year according to Allen.  This is the Mitlary Road Extension project in Tuscaloosa County.

Allen says he does not know the cost of the project.  We're back to Burke-Kleinpeter, a civil engineering firm.  Allen says Burke-Kleinpeter was involved in the road extension project.

Mr. Pilger decides he's finished.

Mr. Baxley is asking Allen questions now.  Allen agrees he saw Siegelman in November and December to ask Siegelman to appoint Ray Bass.  Allen says Roberts talked to him in mid-December about becoming highway director.

Allen is asked about the map again and the yellow road.  This road was never built.   

Allen agrees that Tuscaloosa County officials agreed the blue road was preferable to the proposed yellow road.  (I'm going to try and get a copy of this map.)

Mr. Kilborn is asking questions.  Kilborn says the right thing for the government to have done would have been to show Allen the checks to the PACs.  Allen agrees.

Reporter Phillip Rawls will be the nest witness.  Mr. Fitzpatrick.  Rawls works for the Associated Press.  He has worked for AP since 1979.  Rawls says he cover everything from politics to a tornado.

Rawls says the AP is a news cooperative and the AP sends stories to various news outlets.  Rawls says he now lives in Montgomery but once lived in Tennessee.

Rawls says he knows Mack Roberts.  Rawls says he has met Jim Allen.  Rawls says he knew Roberts when he was transportation director in several administrations.

Rawls is asked about a March 23, 1999 story.  Rawls says he talked to Roberts on March 22nd but he does not remember the exact details of where the meeting happened.  Rawls says he saw Roberts at a news event but he doesn't recall the exact circumstances.

Rawls says Roberts said the bridge wasn't doing the business it needed to be doing and that's what he put in the article.

Mr. Baxley questions Rawls.  Rawls agrees in April he did another story about Jim Allen.   Rawls says Allen told him it took about five years for people to change their driving patterns.

Rawls agrees Roberts talked to him in his interview about reducing traffic and improving safety.  Rawls agrees there are a lot of mobile homes manufactured in the area. Rawls agrees Roberts talked about the impact of mobile homes on the roads clogging up the traffic.

The next witness will be John Frank Coursan.  The witness is the county transportation engineer for the DOT.

The witness says his office administers funds to 67 counties in the state.  Coursan says the counties receive federal funds administered by the state also various counties and cities received state grants to build roads.  He's had his current job 17 years and been working for 37 years.

Coursan says he knows Mack Roberts.  He says Roberts has about 40 years of service with the Highway Department.  Coursan says they have seen a lot of roads being built.

Mr.Feaga takes us on a short history lesson of some Alabama roads.

Coursan agrees there are sometimes a shortage of funds to build roads.  The witness says a delegation, county commissioners or representatives come and request funding.

Coursan says people always want to build roads,  but there's a lack of funds to build roads.  Coursan agrees people like Mr. Allen help to get roads built.  Coursan agrees there is not enough money to build all the roads everyone wants built.

Mr. Feaga agrees he's at a breaking point.  We're breaking early today as a courtesy to a juror with something to do.  The judge reissues jury instructions about media coverage.

Reconvening time is 8:30 a.m. Tuesday morning.

The judge is again giving limiting instructions to the jury.  The jury is not to consider evidence from any of the witnesses today as evidence against Mr. Scrushy.

Jim Allen Still on the Stand

While we're waiting to get started, I just talked for a second to Richard Scrushy about the Enron verdict.  Scrushy says he feels for the two guys that got convicted, but reiterated how the Enron trial was different from his trial in Birmingham.

More on that later.  Mr. Allen is back on the stand.  Mr. Pilger from the DOJ is doing the questioning.

Allen says when Siegelman asked for $100,000 he told Siegelman he had $20 million invested in bridges and didn't have that kind of money.

Allen says it takes a long time to recoup your investment in the toll bridge business and even to cover operating costs.

Allen says he was shocked at Siegelman's anger at the time.  Allen says he knew Siegelman was very upset.  Allen says he had invested a large amount of money in facilities and the Department of Transportation could have circumvented his roads and eliminated Allen's revenue from the bridges.

At the time of the episode Siegelman was running for governor.  Allen says he allowed Roberts to assist Siegelman in fund raising in 1998 for the campaign. Allen says he supported Fob James.

Mr. Allen is asked to look at a map showing a road going out of Tuscaloosa to the west of the city.

The map is of a road proposed to be built by 2010.  This was in 1995 and it did not get built.

A portion of the road did get built.

Allen says the map also shows the first phase of the Black Warrior Parkway.  Allen says he built the bridge.  This bridge and road are marked in red.  The blue road is another extension, Mitlary (sp) Road.

The blue road started in the James administration.  The red road was started under the Siegelman administration according to Allen.

Allen agrees he had concerns about a bridge being built by  a competitor if he did not give the money to Siegelman.  Allen agrees he had an economic concern.

Allen agrees Mack Roberts was in the room during the conversation and that Roberts was an employee of his when Siegelman made the comments about the $40,000 and naming a highway director.

Allen says he and Roberts were surprised at how they had been treated.  Allen says a decision was reached to monitor the political polls to see what was happening before Allen would agree to give Siegelman the money.  Allen says Roberts monitored the AEA polls.  The day before the election it seemed according to the polls that Siegelman was going to win, according to Allen.  Allen says he decided to pay the $40,000.

Allen says he paid the $40,000 in nine checks to various PACs.  Allen says he was told by either Siegelman, Hamrick, or Bailey to make the checks out to the PACs.  Allen says he personally handed the nine checks to Siegelman at an old shopping center in the Forest Hills area.

Allen identifies the nine checks he says he gave to Siegelman.

Allen is looking at the back of the checks.  He says the checks were deposited to Colonial Bank in Hoover, Alabama.

Allen says all but one check is made out for $4,444.44.  The other check is made out for $4,444.48.

Allen says the total amount was $40,000.  Allen says he believes Mack Roberts was with him when the checks were delivered.

Allen says Roberts approached him during mid-to-end December of 1998 about being highway director.

Allen says he was asked by Siegelman to serve on Siegelman's transition team.

Allen says this was after he paid the $40,000.  Allen says Mack Roberts was a member of the team as well.

Allen says they looked at the Department of Transportation issues.

Allen says during the transition team he favored Mr. Bass to be highway director.  Allen says during the transition Crum Foshee worked with him as a lobbyist.  Foshee had a relationship with Bass.  Bass did not get the job.

Allen says Siegelman called him about Mack Roberts. Siegelman called to tell Allen he had selected Mack Roberts to be highway director and want to know if Allen approved.

Mr. Kilborn objects.  The judge reminds Kilborn about no speaking objections.

Allen says he felt Siegelman was keeping the agreement they had and was calling for Siegelman's approval.

Allen says Roberts took office on inauguration day.  Mr. Kilborn gets his objection sustained and then gets another one overruled.

Now Kilborn gets another objection sustained.

"I didn't want to be harmed.  I wasn't looking at the benefit...I wanted to be sure I was protected," says Allen.

Allen says the Roberts appointment allayed his fears.  "Mack Roberts is a friend and I didn't anticipate anything from him that would harm me."

Allen says Roberts took office on January 19th.  Allen agrees he closed out the employment relationship with Mack Roberts.  Allen paid Roberts $115,000, a vehicle worth about $10,000, and Roberts' regular pay for one or two weeks.  Allen says he deducted payroll taxes.

Allen agree the check was from United Toll Systems, Allen's technology company.  The check was for $71,000.

Allen says he talked to Roberts about Rainline, a road striping system that separates lanes and also goes on the edge of the road.  With Rainline, there was a raised service every couple of inches.  The light bounces back up into the driver's eyes and makes the striping more visible.

Mr. Marcato asked Allen to help promote the product.

Mr. Baxley is objecting but it is overruled.  At the time of the check, Allen says he did not have a contractual obligation with the Rainline product.  Allen says he had been having discussions with Mr. Marcato.

Allen says a verbal agreement was reached in January 1999, but the deal was finalized in March 1999.  All Allen remembers was this was during the middle of January.

Allen says he incorporated a company to deal with the Rainline product on January 21, 1999 after reviewing a document.  Allen incorporated Rainline Technologies Inc.

According to Allen, Roberts told him he liked Rainline and would use the product when he became highway director.

Allen is looking at an agreement between his company, Rainline Technologies and Rainline Corporation.

March 12, 1999 the agreement was finalized.

According to Allen, Rainline had only been used a few times before Roberts became highway director.  Allen says all new construction or resurfacing projects included the use of Rainline.

Allen says he didn't make money before Roberts became highway director.  Mr. Baxley is objecting, he wants the period of the indictment only covered which ends in 2003.  The judge sustains the objection.

Allen agrees he broke off his relationship with Marcato in September 2001.  Allen says gross receipts were $2.8-$2.9 million.

Allen says a third party was paid according to volume.  Crum Foshee made about $800,000 according to Allen.

In February or March 1999, Hamrick asked Allen to make a presentation to the governor about Rainline.

Allen says he played a 3-4 minute video for Siegelman and Hamrick.  Siegelman said he liked the product and knew Alabama was using the product.

Mr. Kilborn objects.  The judge asks Mr. Pilger where he is going with the questioning.  Pilger says this is a 701.  Mr. Kilborn is talking again.  The judge overrules Mr. Kilborn's objection.

Allen says he perceived Siegelman wanted him to know Rainline was being used at the Alabama Department of Transportation.

Allen says he was asked by investigators about Gov. Siegelman in 2005.  Allen says he did tell them he had felt pressured when Siegelman asked for $100,000.  Allen says he did not say specifically that Siegelman had said he could pick the highway director.

Mr. Kilborn objects.  After Pilger explains what he is trying to ask, the judge says,"Well ask him that."

Allen says he answered the questions they asked.  He says he didn't tell investigators because that's not what he was asked.

Allen is asked to look at his immunity agreement with the government.

Allen says he is looking at a settlement agreement from March 2006.  Allen says he paid the government $843,820.  These were his profits from Rainline.  Allen says he made the check out to the Alabama Department of Transportation.

Allen says he hired Crum Foshee to represent Rainline in front of the Department of Transportation and in other states.  Allen says marketing involved setting up relationships like the one he had with Foshee and contracting other departments of transportation.

Mr. Foshee went to DOT, according to Allen, to work with the chief engineer, Ray Bass, and Foshee worked with the testing labs.  Foshee also met with the Federal Highway Administration and  Marcato put Rainline on some roads.  Allen says he and Foshee were the marketing arm.

Allen says Foshee's relationship was with Bass.  Allen says he had a relationship with Roberts.  Allen says he made money through the marketing of Rainline and his relationships.

Allen says he wanted to stay out of the process so he turned it over to his attorneys and they calculated out his profit on Rainline after taxes, fees and expenses were taken out.  Allen says he was asked to bring documents with him and he has the documents.

Allen says he negotiated the settlement with the Office of the Attorney General.  Allen says the negotiation was not with anyone at the prosecution's table.

Mr. Pilger turns over the witness.  Mr. Baxley will be up for the defense representing Mack Roberts.

Mr. Allen is asked about the Intermodal ...Act.  Allen says the act encourages private-public partnership to build and maintain infrastructure in the country.

Allen talks about Emerald Mountain.  He says it was built as a master plan community with its own fire department, shopping, etc.  Allen says without the bridge the drive was a 20-30 miles and with the bridge it was about 4 miles.

Allen agrees after this other officials came to him about a bridge crossing the Alabama River, connecting Montgomery to Coosada, Prattville and Millbrook.

Allen says he hired Roberts as a consultant part time in early 1996.  Later he hired Roberts full time in December 1996 as a regular employee.

Allen says he had been represented to him as someone who knew a lot about bridges.

Allen says he wanted Roberts' services full time.  Allen agrees Roberts was working for others as well.  Allen offered Roberts $100,000 a year.  Allen says this was very cheap.  Allen also offered Roberts a promise that if he worked with Allen and developed four bridges Roberts would be paid $1 million.

Allen says Roberts worked on two toll bridges - the Coosada are bridge and the Tuscaloosa bridge.

Allen agrees the agreement for the $1 million was in a written contract.

Allen agrees the two bridges Roberts worked on came in on time and under budget.  Allen agrees there are typically cost overruns in most of these types of projects.

Allen agrees he also got calls from officials in Tuscaloosa County.  Allen is looking at a document which has to do with the mayor of Northport, Alabama.

Mr. Baxley says he is old fashioned and not too familiar with the Elmo so he has made copies of the document for the jury.  The judge allows Mr. Baxley to hand the copies out to the jury.

Mr. Baxley asks Mr. Allen to read the letter from the mayor of Northport.

The letter talks about the rate of growth in the area and traffic gridlock.  The mayor says they have tried to locate state and federal funding but have not been able to procure additional bridge crossing funding.

The mayor says the area can't wait and he praises Allen's work on the Emerald Mountain toll road.  He asks Allen to build a toll bridge to ease the traffic in Northport.

The mayor says he believes Allen will find strong support in the community for this effort.

Allen agrees he accepted the offer and built the bridge.  Allen says he put in with reserves around $13 million.  Allen says he doesn't know what the final totals were.

Allen is asked about the original plan drawn in 1995 for 2010.  Allen agrees he put his bridge in a different place because Allen's placing made more sense.

Allen says he built the bridge and its approach ramp.  Allen agrees the county and the city built roads to connect to the bridge.

Allen is asked about U.S. 82 and U.S. 43 and Alabama 69 and Alabama 171.  Baxley's point seems to be all these roads are heavily traveled. 

Allen says the roads do converge into one intersection.  Allen agrees this creates a bottleneck in Northport across from Tuscaloosa.

Allen agrees it made sense to build the bridge to the west to try to eliminate the bottleneck.

Mr. Baxley and Mr. Pilger agree to stipulate the bridge helped ease the traffic flow in that part of Northport in Tuscaloosa County.  The judge tells the jury they have to accept this as a fact.

Afternoon recess time.

There seems to be some question over an exhibit.

Mr. Allen is asked to read a letter from Tuscaloosa County community leaders to Gov. Fob James which praises the project.  The letter states there was basically no one in the community who voiced opposition to the project.

Mr. Baxley asks Allen about the $40,000 worth of checks.  Allen agrees Mack Roberts has never been authorized to sign Allen's firm's business checks.

Allen agrees he was part of the Siegelman transition team.  Allen says Roberts was part of the transition team.  Allen agrees there were three names originally thrown out for highway director - Ray Bass, Horsely, and Brown.

Allen agrees Mr. Bass had been in the highway department a long time.  Allen agrees Mack Roberts was not one of the three finalists.  Allen agrees he was pushing Ray Bass.  Allen agrees he was satisfied Mack Roberts was working for his company.  He wanted Roberts to help develop more toll bridges.  Allen says Senator Barron and others were asking Roberts to be highway director.  Allen agrees he did not call the governor and ask him to appoint Roberts.  Allen agrees to start with Roberts had no interest in the job and told Allen during the campaign Roberts had no interest in the job.

Allen says it was his decision to pay the $40,000.  Allen agrees Roberts was drawing retirement and would have to stop drawing his retirement if he went back to work for the state.

Allen says he told Roberts he would give him half the money from the one bridge finished under Roberts as a severance.  Allen agrees he owed Mack Roberts for the work he had done.

Talk has turned to Marcato and Rainline.  Allen agrees he went to California and Oregon to market Rainline.  Allen agrees California and Oregon still use Rainline.  Allen agrees Rainline is not a fraudulent product.  Allen agrees it saved lives and he used it on his roads.

There is a meeting of the minds about another stipulation.   Baxley says one of them says yes and one of them says no.  So, no stipulation.

Allen says he believes in the product and chose to use it on his bridges and approaches.  Allen says he has no connection with Rainline any longer.

Allen agrees the asphalt people are against Rainline.  Allen agrees the initial price is higher but it lasts longer.  Allen says he has the same product on some of his roads since 1994.

Allen agrees highway striping started with house paint.  Th judge asks Mr. Baxley to move on.

Mr. Baxley wants to take the jury to view Rainline against another product.  The judge says we'll take that up outside the presence of the jury.

Allen agrees he has seen the DVD that shows how Rainline works.  Mr. Baxley wants to play the DVD for the jury.  The government and Mr. Baxley are conferring over whether or not the DVD is the same video played for Gov. Siegelman by Mr. Allen.

The government is not going to object to the playing of the video.

The judge asks Mr. Baxley if he's going to play the video.  Mr. Baxley says, "No sir.  I'd erase it or something."

The video is now being played for the jury.  It shows striping at night and during the day.  It shows how the striping is put down.  It shows a road without Rainline at night in the rain as well.  Then the video shows Rainline on the side of the road during the day.

You can see a small difference during the day.  Then there is a night video where the regular stripe disappears but you can still see the Rainline.  This is according to Mr. Allen reviewing the video.

Allen agrees Rainline is wider and thicker than other common striping.  Rainline is about 50% wider.  Rainline has more reflective properties and makes noise when tires run over it according to Allen.

Allen agrees Alabama got a cheaper price than many other states on Rainline.  Allen says he has seen Marcato's chart of prices comparing the price paid in Alabama to that paid in other states.

Allen says he does not know that Roberts used Rainline on some state roads as a test in 1994.

Allen is looking at a document that depicts prices paid for Rainline in Alabama and other states.  These are sample bid prices for various states.

Allen agrees the only way he can get in trouble is to not tell the truth.  Allen agrees he doesn't feel he hasn't done anything to need immunity.

Mr. Baxley is asking a hypothetical. "If the highway department sent a check to a Hunstville, Alabama contractor in the mail for $36,3000 and the contractor put down Rainline in that amount, do you believe that constitutes a fraud?"  There is an objection from the government which is sustained.

Mr. Baxley is asking the judge if there is any way he can ask the question so it can be admitted.  The judge tells Mr. Baxley unless the witness has personal knowledge of the events he's about to ask about, Mr. Baxley needs to move on."

Mr. Baxley asks if there was anything wrong with the adoption and use of Rainline by the state and Mr. Allen answers,"No."

Mr. Kilborn is now asking questions.  Kilborn asks Allen if he thinks he's ever bribed a public official.  "Not intentionally," answers Allen.

Allen agrees Roberts was a loyal employee and a good and faithful friend.  Allen agrees Roberts was with him when he met Siegelman in Birmingham.

Allen agrees he would not have done anything dishonest or illegal in front of Roberts.

Allen says he thought what was taking place at the meeting with Siegelman was inappropriate but Allen agrees he didn't think Allen was doing anything improper.

Mr. Pilger follows up on where Kilborn left off all of a sudden.  Allen says again he felt what the governor did was inappropriate.  Allen says he had supported Fob James in a small amount but he felt pressured by Siegelman. 

Allen agrees Siegelman told him he could pick the highway director for $40,000.

Mr. Pilger now continues and goes back to the letter to Fob James.  Allen says he believes the letter was concerning the interchange.

Allen agrees the interchange connected Allen's bridge to the Black Warrior Parkway.

Allen agrees the state under Siegelman eventually built the blue road, another road.

Allen agrees a portion of the road that got built was an access road to a school.  Allen says it was possible the road could have gone on down and hit Allen's bridge.

Pilger asks Allen again about the checks which are dated November 2.  These are the checks Allen says he gave to Siegelman.  These were made out the day before the election.

Allen says his company signed Mack Roberts' checks.  Allen says the company that employed Mr. Roberts at the time of the check was United Toll Systems.

Mr. Pilger is saying the Mr. Roberts told Allen that Roberts was going to get Rainline done and Mr. Allen agrees.  Allen agrees his company gave Roberts the check for $71,000 in the same time frame.

Mr. Pilger now asks Mr. Allen about the $1 million bonus.  Allen says Roberts completed one that counted toward the contract.  Allen says after that he got out of the bridge building business and went into the toll collection systems business.

Allen says there were several factors that influenced his getting out of the business.  Allen agrees at the time he no longer wanted to build bridges after what happened in Birmingham.  Allen says Roberts leaving also had an impact on his deciding to get out of the business along with another business opportunity.

Allen agrees again he had wanted Ray Bass to be highway director.  Allen says Crum Foshee, who was a lobbyist for Allen, had a close relationship with Bass.

Allen says Rainline was on the test tracks for a number of years and also went through the testing laboratory and at first Rainline didn't pass the heat test and Marcato had to make some adjustments to the product.

Allen agrees asphalt people did not like Rainline because they could not put down the amount of asphalt they wanted to if they had to use Rainline.

Mr. Pilger and Mr. Baxley are conferring.

Allen agrees striping contractors and asphalt contractors are impacted by Rainline.

Allen says the striping contractors were given the equipment for their trucks.  Allen says the asphalt contractors had to pay more to the striping contractors.

Allen says he agrees Rainline is a good product.  Allen says an insignificant amount was put down on Alabama roads before Mack Roberts became highway director.  Allen says after that the amount put down was substantial.

Allen is asked about a consulting fee he got from another company.  Allen says he doesn't recall if Roberts knew about Allen's consulting.

Allen says now he thought he talked to Roberts about this consulting.  Allen says he was paid $31,000 per month until Roberts left office by Burke-Kleinpeter.

Allen agrees he knew there was a study from the University of Alabama about Rainline.

The judge has counselors at the bench.

Mr. Allen doesn't have any direct knowledge of the question being asked as to the state stopping the use of Rainline at a time after Roberts left as highway director.

Allen agrees more Rainline was used in Alabama than anyplace else in the country.

Mr. Baxley will now come back to again question the witness.

Mr. Allen is asked to read from a document.  Allen agrees the master plan for the Black Warrior Parkway happened two years before Mack Roberts became highway director.  Allen agrees Roberts got none of the commission Allen got for Rainline.

Allen agrees he gave Roberts a severance package because Roberts had served him well and Allen believes he owed him.

Thursday' Testimony

We'll be starting in just a few minutes. Lee Miller is on the stand.  He was an attorney with the Alabama Department of Finance.

I do not know at this time why there was a delay in getting started of about 30 minutes.  I will hopefully find out later today and let you know.

Mr. Miller served as general counsel from January 1987 until he retired in September 1, 2003.  Mr. Feaga is doing the questioning for the prosecution.

Miller is asked about the latter part of 2000 and whether or not he became aware of warehouse projects to be built for the ABC Board and ADECA.

Miller says it had been discussed and he went to a meeting at ADECA.  Henry Mabry, Director of the Department of Finance, sent Miller to the meeting.  The meeting discussed the financing of the warehouse project.  Miller says he is unsure of the date of the meeting but believes it was before December of 2000.

Miller agrees he is aware of the lease to build the warehouses.  Miller agrees the meeting happened before the lease was executed.

Miller says he, Nick Bailey, staff attorney Eddie Davis, Lanny Young, and Fred Sempler were at the meeting to discuss the financing for the warehouse project.

Miller is looking at the lease agreement between the Montgomery Downtown Development Authority and ADECA.  Miller agrees his signature is on the document.  Miller says he reviewed most of the contracts presented for the finance director's signature and he approved the lease as to the legal form of the document.

Miller says there are two signature lines for the Montgomery Downtown Development Authority, a signature line for the acting director of ADECA, an approval signature line for the director of finance, and a signature line for the governor.

Miller says after he signed it he would have sent it to the director of finance.  Miller is asked about Ted Hosp, who served as a legal adviser for the governor.

Miller says Hosp sometimes signed the governor's name to documents.  Miller says in every administration he'd worked under, the governor usually designates signature authority to people in the administration due to the volume of documents that need the governor's signature.

Miller says an employee of the governor's legal office was the notary.  Kathy Faulk is the notary and she notarized Nick Bailey's signature.  Miller says the notary did not work for Nick Bailey.

Miller is asked about Curtis Kirsch.  Miller says Kirsch was an architect who did work on various state projects on and off for a number of years.

Miller says he discussed Kirsch with Mabry.  Mr. McDonald objects as to hearsay.  Miller says a contract between Kirsch and a state agency came to his office.  Kirsch had been hired to design a pressurization system for a stairwell.  Kirsch could not ever meet the standards of the Montgomery Fire Department and Kirsch had to have his services terminated.

Miller says when he got the contract he wanted Mabry to be aware of the difficulties that the state had had with Kirsch earlier so he would have all the information to make a decision on the contract.

Mr. McDonald is objecting and the judge quickly overrules the objection.

Miller says Mabry took the documents and a few days later Mabry told Miller he did not need to be concerned with who contracts were being awarded to.

Miller says he does not remember which agency the contract was with.

Mr. Feaga brings Mr. Miller back to the meeting in Bailey's office.  Miller says it was a discussion about bonds and all the people were politically connected.

Mr. Deen objects and the judge overrules the objection.

Mr. Deen gets his next objection sustained when Feaga asks Miller why he thought Young was politically connected.

Then another objection and this one is overruled.

Miller says he based his thoughts that Young was politically connected because Young was a lobbyist.

Mr. Miller asks for some water.  Mr. Feaga asks for a five minute break for Mr. Miller and the judge agrees and let's the jury leave the courtroom.

As to the 30 minute delay in things getting started this morning all we know is the judge apologized for the late start but did not elaborate.

Mr. Feaga is relating information regarding yesterday's testimony by Mr. Blount.  Mr. Blount got back with the government and admitted he was wrong about the bonds having not been sold.  Mr. Blount after checking says now the bonds were sold.

Mr. McDonald raises questions.  Mr. Feaga says it strictly goes to the veracity of those who say the project was going on until the Eddie Curran story came out.   Mr. McDonald says now he will hold his tongue.

Mr. Deen says there were differences in dates between Sempler and Blount.  Mr. Deen says he agrees to a stipulation.

The judge says it would have to include some reference to Blount.  Mr. Leach is talking but we can't hear his argument.  The same goes for Mr. Baxley.

The judge says Blount will be allowed to be brought back in the normal flow of things for the limited purpose of what was just talked about.

The jury will now come back in.

Mr. Miller has suffered this week from a bout of vertigo during the week.  Mr. Feaga tells Miller they can bring him back later if he needs that.  Mr. Miller is ready to continue.

Mr. Deen is objecting again to the whole politically connected issue.  The judge overrules the objection.

Mr. Feaga continues.  Miller says he based his perceptions on making a differentiation between those politically connected and those just conducting normal state business.

Miller says when he walked in the room he felt the discussion was going to be with those with political connections.  Miller says he did not go back and tell Mabry because Mabry had told him earlier it was not for him to worry about who was involved in projects.

Mr. Miller is looking at a document that he provided to the prosecution in his role as general counsel.  The document is a report to the governor on the ABC/ADECA warehouse project.  It is buy former Chief Justice of the Alabama Supreme Court, Torbert (sp).

The report is from May 4, 2001.  Miller says the report indicates "the need for the warehouse facility appears to be well justified.  The implementation of the project was a problem for Torbert and he indicated in the report the current implementation should be terminated.  He questioned the qualifications of the construction manager and Torbert thought the 12% fee was too high and should be renegotiated according to Miller's reading of the report.

Miller says he was aware the former judge was being hired to do the report.  Miller says he is not sure when he heard the judge was going to do the report.  Millers says he remembers reading Mr. Curran's article.  Miller says he believes it was all happening around the same time.

Mr. Miller is looking at a time line for ADECA/ABC warehouse project.  Mr. McDonald would like a sidebar or a chance to question the witness before proceeding.

Mr. McDonald may question the witness about the document.  Mr. Miller says he did not write the document nor does he know who wrote the document.  Mr.Miller says he did not participate in any way in the preparation of the document.  Mr. Miller says he did not rely on this document for decisions he made.  Mr. Miller agrees all he did was turn the document over in a stack of documents.

Mr. Feaga is back with the witness.  Mr. Miller says the document was provided to him as a result of his request to divisions of the Finance Department for records in response to the subpoena issued by the government.

Mr. McDonald is questioning again.  Miller says he can't testify this is the complete document.  Miller agrees he can't say whether the document is a draft or a final document.

The judge admits the record and overrules the objection.

Mr. Miller is looking at the document and is asked about Ram Garber.  Garber worked in Mabry's office and in purchasing later for the Department of Finance.

Feaga goes to March of 2000.  Miller says Garber was in and out of the office at times as a consultant but Miller says he does not know when Garber was hired.

Feaga now moves to the October 2000 entry.  This entry refers to a Sherlock, Smith, and Adams report and a cost benefit analysis Mabry asks for.

Now November 2000.  Dr. Mabry wants to know who owns the property.  Miller says they had to buy some land to build the warehouse on.

December 8, 2000 entry.  Mr. Miller says he did not attend the meeting talked about.

End of December entry.  Indicates agreement signed by Mabry, Bailey and Ted Hosp.

February 2001 entry.  This entry indicates Nick Bailey was given invoices for work done or work that needed to be done.  Young is in the office with Bailey.  Garber asks questions and then decides the invoices look reasonable.  Garber worked for Mabry.

Miller says the document was created by Garber as indicated on the bottom of the page.

Small blog break.

Mr. Miller is looking at a fax that was faxed on February 28, 2001.  The date on the document is January 9, 2001.  Mr. Miller says he saw the document when he got it in response to the subpoena.  The document is addressed to Gov. Siegelman and is purportedly from Henry Mabry.

Miller agrees this is a report from Mabry to Siegelman recommending the warehouse project go forward.

Miller is asked about another document.  Miller says it looks like a signed version of a document.  Miller says this document is on letterhead of the finance director.  The previous faxed copy is not on letterhead.  This current document is signed by Mabry.  Miller says he recognizes Mabry's signature.

Miller agrees there is handwriting on the document that says, "Dated 1/10/01, Approved, Don Siegelman."

Mr. Feaga is going back to the lease.  Miller says it looks like Mabry's signature.

Miller says he worked for Mabry for four years.

Mr. Feaga is through for the moment.  Mr. McDonald is up.  There will be a morning recess before Mr.McDonald's starts asking questions.  The judge wants this one to be quick.

For people following Enron the jury will be back in shortly.  I talked to Art Leach a moment ago and he says the government did a great job prosecuting that case and he believes if Ken Lay gets convicted Lay only has himself to blame.  We'll let you know as soon as we hear the verdict.

The judge calls Mr. McDonald "Mr. Kilborn" which draws a laugh.  Mr. McDonald will question Mr. Miller.

McDonald and Miller agrees Miller's job was not to develop policy but to make sure the policy was implemented legally.

Miller agrees he would not participate knowingly in any policy he was convinced violated the law.

Miller agrees he did not mean to imply that when the governor appoints members to boards the governor is not controlling the board.  Miller agrees the governor can't operate the state himself.  Miller agrees the governor does not micro-manage the operation of the boards.

Mr. Miller he does not think the executive branch of Alabama government was involved in a RICO conspiracy.

Miller says Mabry relied on his advice on some instances.  Miller agrees sometimes Mabry did not follow that advice.  Miller agrees the director had that prerogative.

Miller is asked about Torbert, the former Chief Justice of the Alabama Supreme Court.  McDonald is asking about the report Torbert authored. 

Miller says he does not know who hired Torbert to do a report.  Miller says he would hire Torbert to represent him if Miller were ever charged with a crime.  Miller agrees he would not hire Torbert to write a report about him if Miller were charged with a crime.

Miller is reading from the report which says the facilities were inadequate and the rent was too high for the state of the facilities.  The facilities according to the report also were not technologically up to date.

Miller says David Bronner heads the Retirement Systems of Alabama and oversees millions of dollars in pension funds and builds numerous projects.  This has to do with the time line.

May 1, 2001 entry.  This talks about the attorney general beginning an investigation into the matter.  Torbert says he met with the attorney general and turned over documents on May 1, 2001.

Enron's Lay, Skilling found guilty of conspiracy to commit fraud.  Lay convicted on all six counts.  Skilling guilty of securities and wire fraud in 19 of the 28 counts against him.

Torbert says in the report the implementation of the project had been done incorrectly.  Miller says he was not involved in the review but he does recall Torbert coming by his office.

Miller says he doesn't remember the details of the conversation.  Torbert says in the report the project should be handled by the Department of Finance.

Miller agrees the problems of the warehouses had been debated for almost a year.

Miller says he didn't revue studies of how the state could save money on the project.

One entry says Bronner had interest in the warehouse project.  Miller says there were discussions to the effect that Bronner had an interest in the project.

On June 9, 2000 according to the document Ron Blount attended a meeting about the warehouse project.

Mr. Miller is asked to look at a document and is asked if the name Lanny Young is anywhere in the document.  Miller says there is no mention of Lanny Young.  This is the document from Mabry to Siegelman on which Siegelman wrote "approved" on the document.

Miller agrees most boards and large departments have their own attorneys.

Miller agrees he looks at documents to make sure they are legal documents.

December 21, 2000 lease agreement is again shown to Miller.  Miller agrees he signed the document as to proof of legal form.  Miller says he reviewed it do make sure the proper items were included in the contract.  He agrees he made sure it measured up to the law and if it had not he would not have signed it.

Mr. McDonald and Mr. Feaga are working to get an exhibit straight.  Mr.McDonald says he believes he was the culprit that got the pages out of order.

Mr. Feaga asks Mr. Miller about a document.  In the document Torbert says "In light of the attorney general's investigation" he did not believe he should continue with his report.

We're back to the memo on which Siegelman wrote approved.  Feaga asks Miller if there was a mention of a $9,2000 check written by Young to Siegelman.  Feaga asks about the $13,000 worth of mugs, Feaga asks about a BMW which draws objections from Mr. Deen.  The judge let's Feaga continue.

Miller says he does not see any of that in the document.  Miller agrees Nick Bailey continued to work for Siegelman after the project came to its end.

Mr. McDonald will come back to question Mr. Miller.  Thursday April 26, 2001 is the date on which Torbert got involved in the investigation.  On May 4, 2001 Torbert concluded his report.  Torbert says the attorney general was the best to investigate.  McDonald asks Miller if Torbert would have thought the investigation would have taken five years.  This of course brings an objection from the prosecution.

McDonald asks, "He didn't have 20 people and five years investigating this did he? " "No," answers Miller.

Miller is asked if someone obstructs an investigation does that make an investigation take longer and Miller answers probably.

Jim Allen will be the next witness.

Allen says he now lives in Elmore County.  He says he attended college but did not graduate.  He says he started a kitchen cabinet business, sold it and then started a construction and real estate company.

Allen says he started in the toll bridge business in 1994.  He says he opened his first road in 1994.  He says he was building a development in Elmore County and build a bridge to connect with Montgomery.  Emerald Mountain opened since December 1994.

Allen says when that bridge opened he was approached to build a bridge in Coosada in spring of 1998.  The Alabama River bridge.

Allen says Northport came to him to build an outer loop around the city of Tuscaloosa to Northport and he did get involved in the project.  The Northport bridge in October 1998 was about two weeks from opening.

Allen agrees there was a newspaper article that came out about him.  The date was October 14, 1998.

According to Allen, Siegelman called Mack Roberts at Allen's office and asked them to come to Birmingham.  Allen says Roberts told him immediately about the call.

The newspaper article was from the Birmingham News.  The judge is looking at the article.  The judge says he doesn't intend to let the trial be run by newspapers and charts, however, he admits the article and overrules objections.

Allen says Roberts told him they were to meet Siegelman in Birmingham.  Allen says they traveled to Birmingham the next day.  Roberts had worked for Allen since 1996 according to Allen.

Allen says Roberts had worked with Siegelman to raise funds for the campaign.  Allen says they did not know what the purpose of the meeting was.  Allen says he thought they were going to be thanked for Roberts' help in 1998 in the campaign.

Allen says he supported Fob James.  Allen says the date was October 16, 1998.  Allen says they went into the lobby and were greeted by Nick Bailey and several other people who he does not remember.  Allen says Roberts was with him the entire time.

Allen says it was an older home that had been converted into an antique dealership.  Allen says he and Roberts went into a parlor area where they met Siegelman.  There was no one else at the meeting.  Allen says Siegelman got upset and angry with him.  Allen says he and Roberts were sitting and Siegelman was standing. "He was pointing at me and said, "You have not helped me one bit in this campaign and I am going to remember it."'

Allen says Siegelman wanted $100,000 and then then he asked for $50,000 and then Siegelman asked for $40,000.  "If you give me $40,000 I'll let you pick the next highway director,"  Siegelman said according to Allen. Allen says he responded,"Okay, but I'll have to get a loan."

Allen says he and Roberts drove up in the car and then drove back.  Allen says he asked Roberts what he thought of the meeting.  Roberts says he had never been treated as such, according to Allen .

Lunch recess will be over an hour.

New Post.

More G.H. Construction Stuff and Mr. Blount is on the Stand

Mr. McDonald will cross Mr. Sempler.

Mr. Sempler says he has 24 years of experience and his expertise is on bonds and public finance.

Mr. Sempler is going into commercial development authorities and others.  Sempler says the bonds are issued from public corporations.  The bonds are tax exempt.  The authorities issue bonds to get around the prohibition on debt.  Bonds are issued for essential buildings.  The leases are year-to-year and Simpler says it is not unusual across the U.S.

Sempler agrees authorities are used for such things as schools and to build the Alabama Supreme Court building.

Sempler agrees there was nothing out of the ordinary about the process that was started for the warehouses to be built.

Sempler agrees it takes someone with experience to lead people through the process.

Sempler went to college with Bill Blount.  Sempler says for the most part his relationship with Bill Blount was on the up and up.

Sempler says the ABC warehouse was building out of space and he heating and ventilation was also a problem.  They were paying over $7 per square foot for the lease.  Sempler says he does not remember how big the building was.  Mr. McDonald is going to show him a document to help refresh his memory.  The new ABC building was going to be 155,000 square feet the ADECA building was going to be 231,000 square feet.  Sempler did not know what was being paid for ADECA.

Mr. Sempler says the construction cost for the ABC building was going to be over $5 million.  Sempler says the total cost would be $4 per square foot plus the state would own the building at the end of the 25-year period.

Mr. Sempler did what was called due diligence to compare what the state was paying versus what the state would have to pay with  the G.H.Construction project.

Sempler learned that the owner of the leased buildings was Mr. Aronov.  Sempler says he did not know Aronov and the governor were friends.

Sempler agrees he never had a conversation with Siegelman about G.H. Construction.  Sempler agrees his conversations were with Nick Bailey.

Sempler to look at December 21, 2000 original lease agreement.  McDonald wants Sempler to look at the signature page.  Sempler agrees Nick Bailey was acting director of ADECA at the time.

Sempler says he did not see Siegelman sign the document.  Sempler says all the signatures are required to execute the lease.

Sempler is asked to remember his grand jury testimony.  Sempler agrees he said that Nick Bailey executed the lease.  Sempler agrees all the other signatures were approving the form of the document.  The actual person who executes the document is Nick Bailey according to Sempler.

McDonald says there is a notary on the document and the signatory confirms the document was executed by Nick Bailey.  Sempler says the sworn statement by the notary indicates Bailey appeared before the notary to sign the document.  The only requirement was for Bailey's signature to be notarized.

The second notary about the Downtown Redevelopment Authority.

Sempler agrees there are no other notaries needed to execute the lease.

Sempler says the date on the lease is December 21, 2000.  The Montgomery Redevelopment Authority did not sign until February 14, 2001.  The lawyer for the Montgomery authority wanted some changes made.  Sempler agrees there was an addendum made to the lease.

Mr. Sempler agrees G.H. Construction was not done in the dark and there was no conspiracy.

Mr. Sempler says James Farrier, Nick Bailey, and a secretary of the Montgomery Redevelopment Authority signed the addendum to the lease and these are all that were required according to Sempler.

Mr. Sempler agrees there was a third agreement to make things cleaner.  The lease was never signed according to Sempler and the document.

Sempler says it was never executed.  Simpler again agrees he never discussed G.H. Construction with Siegelman and that Siegelman did not sign the addendum nor the third non-executed lease.

Sempler says timing, the project in general and who would do what were discussed during the kickoff of the project.  Sempler says neither Siegelman nor Hamrick were at the meeting.

Sempler agrees everything with G.H. Construction was on the up and up.  Sempler agrees he did not see any professional fees out of line with other bond issues he had worked on.  Sempler says he can't speak to construction charges.

Sempler agrees he drafted the two construction management agreements under the direction of Nick Bailey.  Sempler says he gave them a construction management agreement with blanks for fees to be negotiated between G.H. Construction and Nick Bailey.  Sempler agrees in doing due diligence on the project he did not find any evidence that Siegelman was involved in the details of the G.H. Construction project.  Sempler agrees he found no fraud or anything untoward about the project.  Sempler agrees he would have pulled out if he had a whiff of anything wrong.

Mr. Sempler says he still believes this was a good project.

Mr. Deen is questioning Mr. Sempler now.  Sempler agrees in the G.H. Construction project his client was the transaction itself and to the bondholders to whom the bonds are sold.

Sempler says he had the first conversations on the project with Bill Blount but Blount was not his client.

Sempler says Blount called around December 13th.  Sempler says he has to prepare all the closing documents and federal and state law issues he has to give opinions on.  Sempler agrees he was not working for the state.

Sempler says SIDA was not an option for this project.  Sempler says it simply did not apply.

Sempler's job was to show the legal apparatus by which the project could be built.

According to Sempler the issuer of the bonds was the Montgomery Downtown Redevelopment Authority.  This authority sold the bonds to Bill Blount and then Blount sold the bonds to investors.

In early January 2001 there was a meeting at Nick Bailey's office.  Sempler says the meeting was in the building ADECA was in, in 2001.  This office was not with the governor's office.

Sempler says Eddie Davis was the legal counsel for ADECA.  Sempler agrees it was Bailey's job to make sure it was good for the state.

Rolan Vaughan was an architect there at the meeting also.  Ram Garber was there also according to  Sempler.  Garber was there in some capacity with the state.

Sempler says he is not sure where he met Lanny Young.  Sempler says he does remember testifying before the grand jury.  Sempler says his best recollection was it was at the time of the first meeting at Bailey's office but he cannot recall specifically where he met Young.

Sempler agrees it wasn't until he met Nick Bailey that he met Lanny Young.  Sempler was told Young was a consultant to G.H. Construction.  Sempler agrees he didn't have any responsibility for the state.

Sempler says Bailey asked for a construction management contract.  Sempler says he gave Bailey a sample contract with blanks but he told Young he didn't represent anybody.  Sempler says the contract came back to him with the blanks filled in.

Sempler says he wouldn't know what a good or bad rate for a construction manager would be.

Sempler agrees Hamrick was not at the meeting in Bailey's office.  Sempler says he knew Hamrick 13-14 years.  Sempler says he had no contact with Hamrick at all in this project.

Sempler says he saw Hamrick socially. Sempler says he would like to think that Hamrick would have called him if he had any questions.

Mr. Feaga is questioning the witness.  Sempler says it is his understanding the governor appoints the head of ADECA.  Sempler agrees the governor was ultimately responsible for making sure it was a good deal for the state.

Sempler says to be valid the document had to be signed by the governor and finance director.  Sempler says all three had the responsibility to sign the lease to make it valid.

Sempler says he does not know the notary who signed the lease.

Sempler says again he has done many projects with Bill Blount.  Sempler says $38,600,000 was the total cost for the lease.

Sempler says Blount has never paid anybody a construction fee.  Sempler says he does not know the percentages on any other deals.

Mr. McDonald is back.  McDonald asks Sempler if it is still his opinion that the G.H. Construction project was good for the state of Alabama.  Sempler says he thinks it was a good deal for the state.  Sempler agrees that in 4.5 months of due diligence he saw no evidence of illegality in the project.  Sempler agrees Siegelman did nothing improper with regard to this project.

Mr. Feaga is asking Sempler if Sempler knew G.H. Construction was a front for Lanny Young and that Siegelman was getting campaign and other things from Young would that change his opinion about the deal. Sempler says he would not have been part of the deal if the hypothetical were true.

"If I took off and flew around this courtroom today would that change your opinion on the laws of gravity?" asks McDonald.  "Yes," says Sempler.

James D. Ramage III, President and CEO of First National Bank of Brundidge.  The witness says he met Blount in the late 1970s through the Univ. of Alabama Alumni Association.  The witness is the mayor of the city.

The witness agrees the bank loaned money to G.H. Construction.  Blount called him about the ABC warehouse and told him it would be paid off through a bond issue.  The bank made a loan on January 12, 2001.  The loan was for $540,000.  Mr. Feaga is back at his charts.

The bank required security from all the parties involved according to Ramage.  He says they got guarantees of David Green and Brian Broderick as well as Bill Blount, an investment banker.  Ramage says he believes he met Young with Blount in his office.

Blount called to ask Ramage to help Young refinance Young's house and land.  Mr. Deen objects as to hearsay and Judge Fuller sustains the objection.  Ramage says he believes he loaned Young about $560,000.

The loan was signed on March 19, 2001.  Ramage says the loan was paid back but he had trouble getting it paid back.

Ramage says he had contact with AL-America bank in Birmingham.  AL-America foreclosed on the loan and the Bank of Brundidge bought the property mortgage from AL-America.

Ramage says the bank paid over $1 million.  Ramage says he sold the project for $1.9 million.

Ramage is asked to examine bank records.

Mr. Deen wants a copy of the records to review.  Mr. Feaga says the defense should have the documents.

The notary says the mortgage was taken out March 8, 2001.  On March 19, 2001 the bank loaned Young the $560,000.

The mortgage at AL-America bank was taken out on March 8, 2001.  AL-America had a first mortgage and Ramage's bank had the second mortgage.  The witness says the money was wired to the Banker's Bank in Birmingham for disbursement to Al-America.

The mortgage was $1,464,000.

Ramage says all of the necessary ingredients on doing a bond issue had been done.  This is for G.H. Construction project.  Ramage says Blount called in January 2001 about the loan.  Ramage says Blount was supposed to provide the performance bond.  Ramage says Blount said some of the first proceeds would be to pay the bank back.  The prospectus listed the First National Bank of Brundidge.

Mr. Feaga says, "I think I'm confused."  Mr. Feaga apologizes to the court and the jury.

The $560,000 loan on March 19th was to Mr. Young.  The March 8 , 2001 loan to AL-America Blount did sign.  The G.H. Construction loan was January 12, 2001.  This loan was for $583,000.  It started at $540,000.

Ramage says he understood with the G.H. Construction project he would be out in April or May 2001.  Ramage says if Young got the land fill in Lowndes County he was to pay the banks off.

Ramage says on occasion the bank engages in commerce between states.

Mr. Kilborn is questioning the witness.

Ramage says he met Siegelman in 1966 of 1967.  Ramage says he was helping Siegelman run for SGA president.  Ramage says Siegelman helped Brundidge.  Ramage says they worked on a Wal-Mart distribution center.  There is an objection on relevance.

Ramage says he has files on Lanny young and his wife Kim.  She is involved because it was a mortgage on their residence.  She had to sign on the loan and an environmental indemnity form.

Ramage is asked to look at a borrower's affidavit.  Ramage says the document is another affidavit to reaffirm the bank has a mortgage on the property.

Ramage says the property was foreclosed on by AL-America.  The Brundidge bank bought the loan and then later sold the property.

Ramage says he knows who Beth Crain is.  Mr. Kilborn asks Ramage if Young ever told him Beth Crain was his girlfriend.  Ramage says no.

Ramage says he worked close with Young trying to get the bank's money.  Ramage says he never met Kim Young.

Now Mr. Deen will question the witness and he is going to move to a chart.  Chart Wars continues.

Ramage says one loan in January 2001 was for G.H. Construction $540-580,000.  Ramage says he didn't know Young was involved until later.  Ramage says he had a note and a mortgage on 259 acres.

Ramage says later he had to fall back to Blount to get the bank's money back on G.H. Construction because there was no bond issued.  Ramage says the bank got its money back in 2003.

Ramage agrees in March of 2001 Lanny young and his wife got the loan.  Ramage says the bank had a mortgage on the property and worked with Young to try and help sell the property.

Ramage says AL-America had a first mortgage which the Brundidge bank bought.  There were 900 acres and a house.  Ramage says the property was sold for $1.9 million.  Ramage says he got his money back in March 2004.

Ramage says he doesn't know Mr. Hamrick.

Mr. Feaga is back with the witness.  Feaga wants Ramage's opinion of Lanny Young.  "He's quite a character.  He worked with us to try to get our money back."  Ramage says Young was usually reliable.

Ramage says the bank is a national bank, The First National Bank of Brundidge.

Mr. Blount is on the stand.  Mr. Feaga is asking about checks from Blount Parrish to Tillman and Young.

Mr. Blount is describing Sunbelt Environmental which he says handles tree limbs, rebar, non-hazardous waste, construction debris according to Blount.

Blount is asked to recount a conversation with Young.  Volume Cap is the subject.

Blount says the federal government has a program for private companies to finance projects through bonds.  The state does not loan money it just allows the private companies to go borrow money in the tax exempt market.

Back to the conversation with Young on July 27, 2000.  Blount says he was trying to get private activity bond allocation for Sunbelt.

Blount says he has no knowledge of the meeting on September 8, 2000 at which approval for Sunbelt Environmental was given.  Blount acknowledges he was undergoing treatment for cancer during this period.  Mr. Feaga says and Mr. Blount agrees his memory of that period is not as good as it otherwise might have been.

Mr. Blount says he does not remember a memo.  Mr. Deen is objecting says Mr. Blount has already said the witness can not recollect.  The judge decides on sidebar, then Mr. Feaga says he can ask a different question.

Mr. Feaga asks Mr. Blount if the talk on the tape is about getting funding for Sunbelt Environmental.  Mr. Blount says he was not getting funding, he was getting an allocation to go out and get funding.  Blount agrees he was ultimately successful in attaining the allocation.

Blount agrees he signed checks from Blount Parrish to Tillman and Young.

Blount says today he does not remember specifically why the checks were written.  Mr. Blount does say it was not for lobbying or consulting.  Blount says that if he was going to hire a lobbyist it would not have been Lanny Young.

Blount is asked about G.H. Construction.  Blount Parrish was the investment banker for the project.  Blount says they would have financed it, bought the bonds, and sold them to investors in the market.

Mr. Blount says they were less than two weeks away from finishing.  Blount says in March 2001 he believes.

Blount says he would not argue with Sempler's statement saying he learned the project would not go forward was April 25th.

Blount says the bonds were not in the market yet when they learned the project would not go forward.  "I'm 99% positive the bonds had not gone into the market yet."

Blount says the preliminary official statement had been finished and was circulating.  "I do not argue we were ready to go to market."  Blount says he still believes they were more than one day away.

Blount says he met Young briefly at a function.  Blount says he was at a restaurant when he got a call from Siegelman and Siegelman told him Hamrick would call him back in a few minutes.  Hamrick asked Blount if he knew Lanny Young and Blount said he did.  Hamrick asked if Blount would meet with Young and help Lanny with a little problem.

Blount says he discovered Young had bought some property and built a house and Gov. Beasley was threatening foreclosure.  Blount says he thought the land and buildings had more value.  Blount says he talked to several banks over a period of time to see if he could help Young.

Blount agrees he signed on a loan on March 8, 2000.

"Could I ask the relevance of the past 20 minutes of this case?" asks Mr. McDonald.  The judge says, "Let's move on."  Judge Fuller overrules the objection.

Rolan Vaughn met Blount at Sinclair's to discuss the economic benefits of building new warehouses.  Blount says he still thinks G.H. Construction project was a good idea.  Young was at the meeting also.

Blount says he told the governor the project needed to go forward.  Blount says he had never used G.H. Construction before in any of his projects.  Blount says he used G.H. Construction because G.H. Construction was part of the project before Blount was part of the project.

Blount agrees the governor held a press conference and at the press conference Blount thought Siegelman was hurtful to him.  Blount says he thought the governor impugned Blount's integrity.  "He had two young people in the press office I referred to as Frick and Frack."

Mr. McDonald is questioning Mr. Blount.

Blount agrees he does due diligence on every project.  Blount agrees he concluded it was a good deal for the state.  Blount agrees it was an appropriate thing to do.

Blount agrees he told the governor to get rid of him or Lanny Young but the project needed to go forward.

Blount says it's fair to say he had several meetings with prosecutors.  Blount says he did not do anything wrong with G.H. Construction.

Blount says during due diligence he did not find that Gov. Siegelman had done anything illegal or improper.  Blount says he would have told them if he had.  Blount says he did not find out anything about Young bribing the governor.

Blount says Siegelman would eventually return his calls.  Blount agrees he didn't need Lanny Young to give him access to Siegelman or Hamrick or anyone in the governor's office.

Jeff Deen will now question Mr. Blount.

Blount says the July 27, 2000  phone call was taped without his knowledge.  Blount says the Italian restaurant call was in the spring of 2000.

Blount says he never talked to the bank in Birmingham.  Blount says he co-signed the note with AL-America on Young's house and property.  Blount agrees he felt his interest was protected due to the lien he would have on the property.  Blount says he did look at it as an investment.  Blount says he got no return on the investment other then getting off the note.

Blount agrees he is an investment banker.

Blount says the company issues the bonds and guarantees them.  Blount says he doesn't borrow money from the bank, he borrows money from the market.

Blount says a hurricane helps out the company in Gulf Shores, Sunbelt Environmental.

Blount agrees there is a risk in a very simple way.  Blount agrees there is nothing wrong with Capitalism.

Blount says Hamrick didn't have any further conversations with him about Lanny Young's house problems.  Blount says Hamrick did not follow up on that conversation.

Blount says Hamrick didn't threaten him.  Blount agrees anything between himself and Lanny Young was between Blount and Young.

Blount says the tape refreshed his memory about what was going on at that time.  Blount says he thought the whole allocation process was a bad way to do things.  Blount says most of the bond lawyers and other companies like his were unhappy.

Blount says he would be shocked if he didn't call Hamrick himself.  Blount says he did call Mabry.  Blount says he is sure he called Hamrick on the issue.  Blount says they felt like Ken Funderburk at Merchant Capital, a rival company, was managing the process.

Blount says he doesn't remember talking to Hamrick.  He says if the conversation hadn't been taped he probably would not have remembered it.

Blount is looking at the transcript of the phone call which was taped.  Blount says it was allocation not bonds and agrees he was explaining the process to Young during the phone call.

Blount again says he does not know why Blount Parrish paid Lanny Young but he does know it was not for lobbying or consulting.

Blount says he does not remember meetings about the G.H. Construction project other than the meeting at Sinclair's.

Blount says he seems to recall a meeting at Nick Bailey's office.  Blount says he thought they were going over specifics and trying to get the numbers straight about the costs.

Blount agrees Sempler was not acting in the capacity of Blount's lawyer.  Blount says he does not believe anything was signed at that meeting.

Blount says he does not recall any conversations with Hamrick about the G.H. Construction project.

Blount says the Bank of Brundidge took a second mortgage on Young's house and property.

Blount says he did not have anything else to do with the Young loan after the loan was purchased by the Bank of Brundidge.

Blount says he was a guarantor of the G.H. Construction loan.

David Campbell will be the next witness.  Campbell currently lives in Nashville.  He guarantees construction companies, bonding.  He has been in the business 28 years.

Payment and performance bond guarantees a project will be built on time and at cost, according to Campbell.  He says he has done thousands of these worth over $100 billion.

Campbell says he worked for Gulf Insurance Group from 2000-2001.  Campbell says the G.H. project was submitted to Gulf Insurance Group by Brook Smith.

Smith death with Blount Parrish and G.H. Construction.  Campbell says the Gulf Insurance Group would issue payment and performance bonds for G.H. Construction.

Campbell says his company looked into doing business with G.H. Construction.  Campbell says this was the spring of 2001.  Campbell says the financial status of G.H. Construction was "substantially inadequate" for a project the size of the proposed project.

Mr. Campbell is looking at a document of the finances of G.H. Construction.  Mr. Perrine puts a document on the overhead.  The document had been faxed.

The fax was received on March 15, 2001 according to the fax date at the top of the document.

The document is the financial statement of G.H. Construction.   Campbell  says the net worth of G.H. Construction was $350,000 and the company had $31,000 in cash.  The project was well in excess of $10 million.

Campbell says the standard industry practice should have had liquidity of about 10 percent of the project which would have meant G.H. would have needed at least $1 million.

Campbell says,"It's a level of risk we wouldn't accept."  He was referring to financing a $10 million project with only $31,000 cash.

Campbell says Broderick and Green had construction experience but the company was a new company and had no operating history.

Campbell believed the information he received was accurate.

Campbell says they looked at the cost breakdown as well as Bill Blount's financial.

Campbell says they decided initially to decline to issue payment and performance bonds.  Campbell says the company was asked by Brook Smith to restructure the project.  Campbell says they put an architectural and engineering firm with good finances and experience would oversee the project and they would use Blount and his financial backing and then they decided to issue the bonds.

After the restructuring, G.H. Construction was removed from every critical function so all they would do is be contractor in name only, according to Campbell.  G.H. would get money in the end.

Campbell says G.H. was a no-bid project.

Campbell says an analyst reviewed the file when the application was first received and it was on this recommendation that the company at first decided not to write the bonds.  The memo was faxed March 23, 2001.

There is another document faxed on April 6, 2001.  Rolan Vaughan was contacted to be used to take over from G.H. Construction.  The fax contained resumes of Broderick and Green, the owners of G.H. Construction as related to Campbell.

There is also a cost breakdown for the ABC warehouse.  The cost breakdown includes the monies G.H. Construction was going to receive.  These were the numbers involved when Campbell's firm decided it could issue the bonds.

G.H. Construction was going to be paid $1,139, 137.  The construction management fee was roughly 10 percent.  Campbell says G.H. was to be the contractor in name only.  They were just to receive the money at the end of the project according to Campbell.

The surplus building, or ADECA, building is talked about next.  G.H. Construction was to get $644,751.  G.H. was to get about 11 percent of the cost of the ADECA warehouse.

Campbell says the industry standard for construction management is between three and five percent.  Campbell agrees G.H. Construction was to receive at least twice the standard.

Campbell says the bonds were issued, but they were never used or never paid for.  The project never commenced according to Campbell.

Campbell says Blount gave a personal guarantee to Campbell's company if there was a problem with the construction project.

Campbell agrees that if his company had not neutralized G.H. the bonds would not have been issued.

The defense will not cross this witness.

The judge is again giving limiting instructions to the jury not to consider any of today's testimony as having anything to do with Mack Roberts or Richard Scrushy.

U.S. vs Gross 1981 and U.S. vs Diamond and others 1988 referenced for Mr. Baxley.

Miller, Phillip Rawls, Frank Corsan, Jim Allen, Snipes, Keith Andrews, Audrey Strickland, John Lorentson and another person are possible witnesses tomorrow.

The judge is asking to expedite witnesses if they are fact witnesses.

Friday will run from 8 a.m. to 11:30 a.m.

Wednesday Testimony Starts

Loretta Nelson who works in the Department of Revenue is on the stand.

She works in the office that maintains the records for hazardous waste fees and disperses the money from the fees.  Most of the money goes to the general fund and to Sumter County.

Mr. Kilborn requests a sidebar. 

Ms. Nelson is talking about a spreadsheet containing data from September 1997 to May 2004.  This information is from the hazardous waste fee report.

The judge is looking at some documents, Mr. Kilborn is objecting as to relevancy.

The judge says the witness may be questioned about the exhibit prior to the revenue ruling of July 1999.  Otherwise the objection is sustained as to any testimony about any evidence occurring after January 20, 2004.

The hazardous waste fee reports were submitted by Chem Waste and have to do with the facility at Emelle.  FY 1998 fees were  $4,515,000 according to Ms. Nelson.

Another objection from Mr. Kilborn is overruled.

Ms. Nelson says July 1999 was the time of the agreement between the Department of Revenue and Chem Waste.  Nelson says the rate changed from $41.60 to $11.60.  The FY 1999 tax collected was. $4, 583,000.  Chem Waste paid $3,331,000 in taxes in FY 2000.

In FY2001 the tax paid according to Nelson was $2,631,000.  FY2002 tax paid was $3,343,000.

From July 1999 - August 2002 Chem Waste paid $30 less per ton says the prosecution. The witness says she assumes they did pay less but she says there is no way for her to know that.

The judge tells Mr. Kilborn he will give Kilborn wide latitude on cross examination and then overrules an objection.

Nelson says Chem Waste paid less in tax in FY 2000 than they did in FY1999.  Nelson agrees her spreadsheet is from the hazardous waste fee reports submitted by Waste Management.

Another objection.  The judge is reserving ruling on a part of the objection until later in the trial.

Mr. Kilborn will question the witness.

Ms. Nelson says she has been with the Revenue Department 33 years.  She says she knew of Jim Hayes when Hayes was commissioner.

Mr. Kilborn has moved to the charts.  Mr. Kilborn is writing the difference in tax rates on the chart.

• First year up $68,000 even after the rate went down $30 ton.  This is FY1999.
• FY2000 the difference from FY 1999 was about $1.2 million less.
• FY2001 the tax went down from FY 1999 about $1.9 million.
• FY2002 the tax went down $1.2 million when compared to FY 1999.

Mr. Kilborn does some calculations and says the net decrease in fees was $4, 233,000 with a little help from Mr. Perrine.

Mr. Kilborn brings up the petition for refund in which Chem Waste dismissed a $4.62 claim against the state.  Ms. Nelson agrees according to Kilborn's figures the state came out ahead.

Mr. Kilborn says there was a decrease in hazardous waste tonnage across the country.  Ms. Nelson says she did not know this.

Prosecution objects there is no foundation, but judge lets Kilborn ask his hypothetical question.

Kilborn says with the tonnage going down for other reasons taxes would naturally decrease.  Nelson agrees that with less waste there are less taxes.

Nelson agrees collections for the first year after the agreement were higher.  Nelson says she does not know if there was a decrease in tonnage as well as a decrease in waste.  Nelson says she goes on information reported by Chem Waste Management.  Nelson agrees she doesn't know what the tonnage was.

Mr. Deen will now ask questions.

Deen asks Nelson to look at her documents.  Deen says and Nelson agrees with the following.

• For FY1998 118,452 was the tonnage in all categories. 
• For FY199 117,884 was the total tonnage in all categories. 
• For FY2000 the tonnage was 110,672.
• For FY2001 total tonnage in all categories was 98,146. 
• For FY2002 the total tonnage reported for all categories was 121,817.

The tonnage is for the Emelle land fill as reported by Chem Waste.

The judge says he is doing math in his mind at the moment.

The government comes back on redirect.  Mr. Perrine is using Mr. Deen's chart and then uses his money chart from before.  Nelson agrees more tons were disposed of in FY2002 than in FY1999.

Nelson agrees there were more taxes paid in FY1999 than in FY2002 by Chem Waste.

Nelson agrees there were only two months after the July 1999 agreement which were part of FY1999.

Mr. Kilborn is back.  Nelson says she does not know what rate was supposed to be charged before the change.  Nelson agrees the rate is currently the same now as it was then, the lower rate.

Pat Haigler is the next witness. 

The judge is calling the lawyers to the front.

Mr. Feaga will question Ms. Haigler.  Haigler works in the Finance Department in the division handling debt management.

Haigler says her division handles bonds among other things.  She has worked for the state 20 years.  She is a CPA.

Haigler says the State Industrial Development Authority gives grants to local entities for site prep for bringing business in.  Volume Cap has to do with tax exempt bonds.

Haigler is talking about tax exempt bonds.  The entity selling the bond is at a lower interest rate.

Haigler says tax exempt bonds fall into four categories.  One of those is exempt facilities like landfills, airports, etc.  Things that benefit the general public.

Haigler says in 2000 people had to hand deliver applications to the office.  The applications were time and date stamped and placed in the order in which they were received.  Haigler says there was more demand for Volume Cap than was available in 2000.

Small blog break sorry.

Mr. Feaga is talking to Ms. Haigler about the minutes of a meeting concerning Volume Cap applications.

There are numerous objections coming from the defense.  I can't hear all of them.  Mr. Kilborn's objection has been overruled.

Mr. Feaga is asking about the #4 application and he wants to know if #4 is next to receive an allocation.  Mead Coated Board is the company next in line to receive the allocation.  At the meeting Mr. Feaga is discussing the #4 allocation was funded.  Application #5 was not funded.  There was a note that another company would be allowed, the #13, would be allowed to move ahead.

Sunbelt was the #13 allowed to move ahead.  The witness left her records in the witness room.  She is going to retrieve the records and the jury will get their morning recess.

We're back Mr. Feaga is having the witness look at a document.

The witness says the name of the #13 company is Sunbelt Environmental.

The witness says #13 received allocation but #s6-12 did not receive allocations and would be rolled over to the next year.

Haigler says there is a letter attached to the minutes.  The letter from Mead Coated Board. dated September 5, 2000, says that they agree #5 moving down the list.  There is a letter from Merchant Capital, who represented #6-12, and says they agree that #s6- 12 can be passed as well. This letter is from Doug Sellers on September 5, 2000.

Haigler has a report from an access database that indicates that #4 and #13 were funded.  Haigler says she knows several people that work at Merchant Capital.  Haigler says she understands Ken Funderburk works with Merchant Capital.

Haigler says Funderburk was at one time the director of the Alabama Development Office (ADO).

The director of ADO is the president of the State Industrial Development Authority.

Funderburk was not ADO director at the time of the September 8, 2000 meeting.

Mr. Deen will question the witness.

Haigler says she started with the division in September 2000.  Haigler says she houses the documents that have been talked about.  The SIDA meeting took place in September 2000.

Haigler says the state gives allocations for people to issue bonds.

Haigler says there are four areas for allocation, plus a discretionary.  Haigler says the federal guidelines allow bonds to be issued in the four categories.

The law establish what percent can be in each category, but the board can move money around.  Haigler says she knows who Hamrick is.  Haigler says Hamrick is not in the minutes or letters.  Haigler says she has not heard of Hamrick trying to get anything done with the Dept.of Finance.

Haigler says the allocation program is based on a calendar year but allocations are made throughout the year.  Allocations start January 1st.

Haigler agrees the applications are date and time stamped and placed in order of receipt.

Haigler is asked if there was a request for $10 million but only $7 million was available, the applicant could take the $7 million or money might be able to be transferred by the board to make the money match the $10 million.

Haigler agrees if the paperwork is fine whoever is first in line gets #1 etc.

Haigler agrees that around 1999, 2000 there was a big demand for the allocations.

Haigler agrees there was competition between groups.

#5 was Mead, represented by a law firm. #6, #7, #10 was Alabama Power represented by Merchant Capital.

Haigler says Sunbelt Environmental was a solid waste disposal authority for the city of Gulf Shores.

Haigler says #5 would be first in line next year for an allocation.  Haigler says they all got allocations the next year.

Haigler agrees Hamrick had nothing to do with the allocations that were made to #4 and #13.

Haigler says the allocation is only good for 60 days.  Haigler says there can be an extension up to 30 days.  A second extension can be approved by the board of directors.  If the money goes back to the authority, other allocations can be funded.

Mr. Deen says he is objecting to himself.  Judge Fuller sustains the objection.

Mr. Feaga ran off to the charts without his mic again.

I think Feaga is asking about there not being enough money to fund the allocations.  Haigler says more than $10 million was moved in to fund #4.  Sunbelt got $3 million plus.

Haigler agrees without moving the money neither allocation could have been made.

The president of the authority making the allocation was James B. Hayes, who had been commissioner of the Department of Revenue.  Hayes was acting director of ADO in 2000.

Mr. Kilborn is now asking questions.

Haigler says Mr. Hayes was absent from the meeting.

Mr. Feaga asks about the letter from Mead.  Haigler says the letter was written to Hayes.

Fred Sempler will be the next witness.

Mr. Sempler is an attorney who has practiced since 1982.  Simpler specializes in municipal bonds and public finance.  Sempler is asked about a warehouse project.

Sempler says he was called about December 13, 2000 by Bill Blount.  Sempler says he did some research about how to finance an ABC warehouse and another warehouse.

After the first of the year he attended a meeting in Nick Bailey's office.  A lease dated December 21, 2000 is being talked about.

Mr. Feaga is at his charts again but moves back to the witness to have the witness identify the document, the original lease agreement for the financing of the proposed project.  Sempler says the lease was executed on Dec. 21, 2000 by various state officials.

Mr. McDonald has an objection which is overruled.

Sempler says there is a spot for the governor to sign and there is a signature purporting to be that of Siegelman, a signature line for ADECA - Sempler says the signature is Nick Bailey's.  There is a spot for the Finance Department - Henry Mabry.

Sempler says the lease has to be approved for legal form by the legal counsel for the Department of Finance.  The lease was signed by Lee Miller.  Sempler says he has no reason to believe the signatures are not those of the people alleged to have signed the document.

Sempler says he has a lot of experience with these types of documents.  Sempler says he has never been there when the governor signed the documents.  Sempler says he knows there has been a practice in government for someone to sign for the governor but he does not know this was the case this time.

Sempler says there was a meeting in early January 2001 in Nick Bailey's office.  Bailey, Shane Bailey, Bill Blount, Eddie Davis, counsel for ADECA at the time, Rolan Vaughan, an architect, Ram Garber.  Sempler says Garber worked for the state.

Sempler says Blount was the underwriter.  $20,730,000 in bonds.  Sempler says this was a kickoff meeting for the financing.  Simpler says there was discussion of hiring a construction manager.  Sempler says eventually G.H. Construction Co. was named the construction manager.

Sempler says David Green and Brian Broderick were identified as the owners of G.H. Construction.

Sempler says he had never heard of G.H. Construction before then.  Sempler says Lanny Young was around and Sempler says he was told Young was a paid consultant for G.H. Construction.

Sempler brought two construction management agreements with him to court.  Sempler says the total construction budget was a $16.6 million, this included the costs to build the building and to pay the construction manager.  One building for the ABC warehouse and another building.

The ABC building had to have payment performance bonds to ensure completion of the project.

One was $9.5 million and the other was $7.1 million.

Sempler says there are other costs totally $4 million.  Sempler says they had to have a debt service reserve fund of $1.5 million.  Also, one building had a 12 month construction time so there was construction period interest of about $2 million.  Sempler says there were fees for underwriter, insurance, legal fees.

Sempler says the insurance was necessary to get the lowest possible interest rate.

Sempler says there was also another $2-300,000.  Sempler says his fee was $60-80,000.  Blount was to receive in the neighborhood of $200,000.

Small break.

The meeting was actually in January 2001 not in 2000 as may have been stated earlier.

Sempler says the buildings did not get built.  The original final closing date was April 26, 2001.  Sempler says he found out it wasn't going to close on April 25 when he was trying to get some documents executed.

Sempler says the meeting at which he was supposed to have documents signed was canceled.

Sempler says he got an e-mail from Henry Mabry that no one was suppose to go forward with the financing until he heard back from Mabry.

McDonald objects and the objection is sustained.

Sempler says he had no prior information from anyone the project was not going to close.

Sempler says after the initial meeting most of his work was with attorneys including Sam Kaufman of the Montgomery Downtown Development Authority.

Sempler says he met with Blount several times.  Sempler says he knows who Jimmy Ramage is, the Mayor of Brundidge.  Sempler says Ramage's bank helped with funding.

Sempler says there was no indication from anyone that the project was not going to close. The bonds were sold and the documents were prepared, according to Sempler.

Sempler says he first learned of the project December 13, 2000.  Mr. Feaga is at his charts again.  December 21, 2000 somebody signs the lease.

Sempler says the lease had to be signed by the individuals to bind the state.  The bonds could not have been issued without the signed lease.

Sempler says the lease executed on December 21 was not done until February 14, 2001.  Nick Bailey signed the amendment to the lease agreement.  In an attempt to make financing as clear as possible, Sempler had created a new lease that was to happen on April 26.  The new lease would supersede all other documents.

Sempler says ADECA, Finance, the governor, and legal counsel from Dept. of Finance would need to sign the new lease.

Sempler is asked about Curtis Kirsch.  Sempler says he only knows about Kirsch through the papers.

The construction management fee was about 11%.  Sempler says he does not know what the average fee is.

The first lease and the amendment were executed the third lease was never executed.

Talk is about a subpoena associated with contributions made by HealthSouth.  The documents will be given to Mr. Leach on Tuesday.  Documents are coming from HealthSouth.

New Post.

More Claire Austin

Mr. Kilborn continues his questioning.  Talk is about a land fill and has to do with hazardous waste.  Ms.Austin says she is not familiar with all the type's of waste.

Austin says Stalvy of Waste Management asked her to do a paper in early 97 or 98.  This paper had to do with the Emelle land fill and the tax rate.  Austin says the company wanted the tax rate lowered.

Austin said she had done some researcy before she went into business with Lanny Young.  Austin says she did the research on why there was justification to lower the tax rate.

Austin says she went to the land fill well before she started working for Waste Management.

Mr. Kilborn is back at the charts.  Kilborn draws a hole in the ground.  Austin says her research showed the facility had 500 plus employees at one time and then the jobs went down to about 70 at one time.  The facility was not making money.  The tonnage was going down according to Austin because the land fill was taxed at a high rate.

Austin says the only thing she did was do the paper.  She says she did not get hired by them.  Austn agrees when Lanny Young started talking about the problem, she gave him the white paper she had prepared before the Austin and Young firm had come into existence.

Austin says she knew when the ruling was made and the tax was lowered.  She says she did not celebrate with them.  Austin says she doesn't know anything about bribes involving the tax reduction.

Austin says again Young got the checks out of her office.  She says the check was made out to him personally and Young cashed it at the bank.  Austin says she never discussed the issue with Young.  Austin says she discovered Young had taken the checks before she called Eddie Curran or the attorney general.

Austin says she turned the books over to her accountant.  Austin says her accountant suggested the audit.  Austin says Young told her Young and Siegelman were going to Mexico.

Austin agrees Siegelman was not complicit in the theft.  Austin says she does not know whether Siegelman actually went to Mexico.  All she knows she says is what she was told.

Mr. Deen is now questioning Ms. Austin.  Austin says Brazeal was a good lawyer and he set up the partnership.

Austin said she had clients with the Austin Group but that no clients were brought in to this partnership with Lanny Young.

Austin says the whole purpose was to do business with the Siegelman administration.

Austin says G-Tech hired two companies to work on the lottery at the same time.  Austin says she does not know for a fact that Joe Fein nand Siegelman did not get along.  Austin agrees Hamrick thought it was a good idea for one of the top Republican lobbyist to lobby for the lottery.

Austin agrees Bud's is like a neighborhood pub and people like to go there.  Austin says she went between 7-8 p.m.  Austin says she, Young, Hamrick were there and they bumped into the G-Tech people.

Hamrick called Lanny and Austin says she was on the speaker phone.  Austin says she had never experienced that before, someone from the governor's staff calling to say the Austin and Young firm would get the business.

Austin says G-Tech didn't want to keep Young but wanted to keep her on.  Austin says the firm also worked for 3M to try and get new digital license plates.

"No legislation to try and get more prisoners to make them?" asks Deen.  "No," says Austin.

Austin says she did nothing illegal to get the 3M business.  Austin agrees Austin and Young was in business to get clients to lobby for.

At Talladega, Austin says Hamrick wasn't at Talladega.

Austin says the Huntsville Airport Authority contract was an odd period and an odd dollar amount.  Austin agrees Hamrick did not personally talk to her before she got this contract.

Austin agrees the CDG engineering contract had nothing to do with Hamrick.

Austin says she had Waste Management connections in Washington.  Austin agrees Young had Waste Management contacts in Alabama.

Austin says she lobbied the Legislature for Waste Management.  Austin says she did not hire a lobbyist in Mobile for the city council to do work for Waste Management. 

Austin agrees lobbyist sell their access or relationships to government officials to get companies as clients.  Austin agrees Young was a braggart and Austin says she told everybody that he was very close to the Siegelman administration and he could get whatever he wanted out of them.

Austin does not recall a dinner in Mobile in 98 at which Young picked up the tab at a steak house and she says she has not been there with Young and Bailey.

Austin is asked again about the Vintage Year.  Austin says Hamrick came to the dinner by himself and stayed and ate.  Austin says either Waste Management or Lanny Young paid for the meal.  Austin said there was nothing wrong with Hamrick bumming a meal.

Austin agrees lobbyists take people to meals and write it off as an expense.

Austin says she saw Hamrick and Young together a lot and she met them in the lieutenant governor's office in 1995.  Austin says she met Young through Hamrick.

Austin says she met Hamrick two to three months before she met Young.  Austin agrees she took trips with Hamrick and others to Martha's Vineyard and Dauphin Island.

Austin says in the spring of 2000 she was pregnant and in November she had her baby.  Austin agrees she would not have been out drinking during this time.

Austin says she went to places where other people drank while she was pregnant. 

Austin says she was running Bill Pryor's campaign in 1998.  Austin agrees Young had an airplane and flew her and Pryor on occasion.  Austin says she does not recall that Hamrick was ever on the plane at the same time Pryor was on the plane.

Austin says she did not get mad at Hamrick when she broke up with Lanny Young because Hamrick had introduced them.

Austin says she respects what Hamrick does.

Austin says she does not remember hamrick's name being on any G.H. Construction documents that were in her office.

Austin says she didn't know about the $500,000 Young got from Waste Management at first.

Austin says it was a surprise.

July 12, 2004 Austin appeared before a grand jury.  Deen is asking her about her grand jury testimony.  Austin says she does not recall making a statement that she might have been entitled to 50% of the $500,000.  Austin looks at the document ans now agrees she made the statement Mr. Deen read to her.

Austin agrees she knows Lisa Kardell.  Austin agrees Kardell also worked for President Bush, the father.

Austin agrees the National Governors'  meeting goes on every year in Washington.  Austin says 1999 was her first year and she went through 2005.

Austin says Kardell is a friend of hers.  Austin says she talked to Kardell but does not remember seeing Kardell when Kardell was here talking to the grand jury.  Austin says the government got Kardell's name through her.

Austin says the same players went to the NGA meetings in 1999 and in 2000.

Austin agrees there are alwyas dinners and meetings.  Austin is asked if the restaurant meeting she talked about in earlier testimony was in 2000 and not 1999.

Austin says Hamrick was also there in 2000 at a bar.  Austin says she was with Kardell and some other lobbyists and Hamrick came up and talked to them.

Austin says she called Hamrick on his cell phone in 1999.  Austin says she paid for everything by credit card, a firm credit card.  Lanny Young was not on the trip.

Austin agrees there should be a record of Hamrick's travel in 1999.  Austin says she doesn't recall seing Nick Bailey but she assumes Bailey would be with the governor.

Austin says there should be a credential list from the NGA.  She says some people show up and do not have credentials.

Austin agrees Hamrick was not married in 1999.  Hamrick did not have a wife who could use a debit card or writing checks and signing Hamrick's name to it.

Austin is asked if she and Kardell spoke before the grand jury meeting in 2004.  Austin agrees she has talked to prosecutors within the last two weeks.

Austin says no one told her to bring up NAFTA in 1994.  Austin says she had to deal with that issue with her clients.

Mr. Baxley is asking about CDG engineers.  Austin says it is an Alabama regional firm.  Austin agrees CDG does quality work and when they did work for DOT when Mack Roberts was the head of DOT the work was good.

Mr. Leach is up.  Austin says she has never had a drink or meal with Mr. Scrushy and that she has had no type of consultation arrangement with Scrushy or HealthSouth.  Austin says she has had no conversations with Scrushy about the possibility of working for HealthSouth.  Austin agrees there were never any fee agreement divisions with regard to Richard Scrushy.

The U.S. is back up.  Austin is asked if she knows who had access to Hamrick's check card or checks.  Austin says again Young told her Young and the governor were going to Mexico.  Austin says Young's secretary also told her Young was in Mexico with the government.

Austin says she didn't make an issue out of the $500,000.  She just chalked it up.

Austin says the lottery was the campaign issue of Siegelman in 1998.a  Austin says there were three different lottery companies that worked to try and get the lottery passed.

Austin says the governor would have had to sign the legislation for it to become law.  In 1999 Windom was lieutenant governor according to Austin.  Mr. Deen has an objection about scope.

Austin says she had a conversation with Hamrick and that the administration was recommending Austin and Young to G-Tech and G-Tech was going to give business to  the firm.

Austin says Hamrick told her she should go into business with Young as did the governor.

We can't hear Mr. Perrine again.

The judge sustains some objections and tells the prosecutor to move on.

Austin is asked about Young's political contributions which draws an objection which is sustained.

There is a request for a sidebar.

The judge asks the prosecution to ask a question.  Mr. Deen is objecting again and the judge sustains the objectin.  We still cannot hear Mr. Perrine.

Mr. Kilborn asks Ms. Austin if she knows of an agreement.  Austin says she knows of no agreement.  Austin says she has no information Siegelman ever went to Mexico other than what Young and his secretary told her.

Austin says on some occasions Young could be described as a "liar."  Mr. Kilborn asks Ms. Austin, "You wouldn't believe Lanny Young on a stack of Bibles would you?"  Of course this brings an immediate objection which the judge sustains.

The next witness is Johnny Wade Hope.  Hope says he has lived in Montgomery most of his life.  Hope says he works in the legal division of the Alabama Department of Revenue.  He graduated from the Univ. of Alabama in 1968.  He also has a law degree.  Hope says he spent six years in the National Guard during Vietnam.

Hope says he has worked for the Revenue Department a total of 23 years.  Hope says he has worked continuosly for the department since 1985,

Hope agrees he is a merit system employee.  Hope says most employees with the department are merit system employees.

Hope says one of his duties deals with hazardous waste. Hope says anytime anything comes up that has to do with hazardous waste statutes he is the one people come to first.

Hope says there is no other lawyer that has worked on hazardous waste fees but himself since May of 1985.    Mr. kilborn would like a sidebar.

Mr. Hope is asked to look at the state statutes concerning fees for hazardous waste disposal.  Hope says Chemical Waste Management is part of Waste Manangement and owns the land fill in Emelle.  The fees are graduated based on the toxicity level of the waste, according to Hope.

Mr. Hope says there was a change to the way the fees were assessed at Emelle.  This issue that came up was the attempt to make a change from $41.60 to $11..  According to Hope Tom DeBray contacted him about making the change due to changes of environmental regulations.  Hope says he told DeBray that a revenue ruling could be issued if they agreed with the proposal.  Hope says he got the proposal and considered the request.

Hope says he sent the proposal to the tax division followed by more conversations with DeBray and more information from DeBray in March 1997 for the department to review.

The judge will let the jury have a recess.

The judge is asking if DeBray's revenue ruling was issued?  Hope says it was not.  Hope in response to another question says there was not a revenue ruling.

Revenue rulings are authorized by statute and in effect enters into a binding agreement.  A memorandum of understanding was more of an informal document, according to Hope.  Hope says he assumes the Revenue Commissioner has the authority to issue a memorandum of underdanding.

Hope says matters are sometimes settled and sometimes the attorney general is checked with.

Hope says neither of the revenue rulings in exhibits were adopted.  Hope says the memorandum from 1999 was signed and sent to Ellis Brazeal.

Mr. Kilborn is arguing about the petitioun of refund which incorporated many issues says Kilborn. 

According to the prosecutor, Hope's advice was ignored.  Kilborn says the commissioner made a discretionary judgement that he saw as a benefit to the state.

Kilborn says there will be a lot of time spent debating in front of the jury on the change in the law. 

Kilborn says the petition of refund was issued two years later. 

The jury is still out and now so are we.

Hope is asked about the change in fees in 199/  Hope says he told the commissioner the change would have to be done by the Legislature.  When the issue came up again in 1999, Hope says he told Susan Kennedy, chief counsel for Dept. of Revenue, and the commissioner on July 15, 1999 that the change would have to be done by the Legislature.

Hope says the receptionist called him to the commissioner's office and Mr. Hayes and Ms. Kennedy was waiting for him.  Hope says Hayes was on the phone and Hayes told Hope there was going to be an agreement with Chem Waste to lower the tax rate fees.  Hope says he told the commissioner again that the statute had to be changed by the Legislature.

Hope says he told the commissioner that the commissioner should call ADEM and Hope says he offered to call ADEM if needed.  Hope says the commissioner told him not to call ADEM.

Hope is looking at an exhibit.  Hope says the memorandum of understanding was what the commissioner told him they were going to enter into with Chem Waste.

The prosecutor says Susan Kennedy is a co-conspirator.

Hope says the MOU allows a charge of $11.77 a ton.  The petition of refund was June 21, 1999 and the MOU was in July 15, 1999.

Hope says he did a cover letter to Waste Management's lawyer Ellis Brazeal.

Hope says the rate change went into effect on the same day July 15, 1999.

Hope says Commissioner Hayes signed the MOU.  Hope says the commissioner told him to fax the MOU to Ellis Brazeal the attorney for Waste Management as well as send a copy by mail.

Hope says the process took about three weeks.  Hope says he mailed the MOU to Mr. Brazeal at his office in Birmingham.

Mr. Kilborn is questioning Hope.  Hope is asked if Jim Hayes did anything illegal.  Hayes says he is not saying that nor is he saying that there was anything illegal about the MOU.

Mr. Kilborn says Hope was a lawyer for the Department of Revenue when the department went before the Supreme Court and lost a case against Chemical Waste.  Hope agrees.  Kilborn says the state took a horrible whipping.  Hope disagrees.  The potential cost to the state could have been $400 million.  Hope agrees the case ended in 1992.

Hope disagrees the case hurt his rebutation.  Hope disagrees that he failed to take some depositions.  Kilborn alleges Hope got his feelings hurt when Susan Kennedy got the chief counsel job.

Hope says the statute was a direct result of the loss in the Supreme Court.  Hope says Chemical Waste drafted the legislation and got it passed following the lawsuir.  Hope says the law has not changed since 1992.

Hope says the state had to change the statute to make it Constitutional.  Hope says he administered whatever the Legislature passed.

Hope agrees with Kilborn that the commissioner had the right to interpret the statute in the manner in which he did.

Chem Waste had filed a petition for refund in June 1999.  hope is looking at the petition.  He says he was not familiar with the document before July 15, 1999.

Hope says he had been told the petition for refund had been made but he had not seen it until July 15, 1999.

Sidebar time.

Kilborn says the MOU was a two part document in which Waste Management agreed to dismiss the $4.62 million claim against the state for excess tax and in return the rate was lowered from $40 + to $11+.

Hope says he drafted the letter per the request of the commissioner.  Hope says he did not know anything else going on around it.

Hope says the commissioner was sent out to the land fill on July 13, 1999 to take a look at the land fill.  Hope says he doesn't know that ADEM ever confirmed the treatment of hazardous waste.

Hope says ADEM sent a letter to Brazeal and referenced the type of waste talked about.  Hope says he is not sure it gave the Revenue Department the assurances it needed.  Hope says he does not believe Brazeal sent anything else.

Hope says he does not know anything about the workings over at ADEM.

Kilborn says Commissioner Hayes got out of paying Chem Waste $4.62 million.  Objections from the prosecution.

Kilborn says Chemical Waste Management had paid $4.62 million in taxes.  Kilborn says the petition was Chem Waste seeking to get that amount refunded.

Hope says Chem Waste was asking for a refund of monies Chem Waste didn't believed it owed.

Hope says the commissionerr is charged with administering the tax law.

Kilborn says in exchange the fee was reduced for the waste.  Hope agrees.

Jeff Deen is now saying,"To avloid confirming that I'm as dumb as I look I don't have any questions for you."

Hope agrees with proesecution that the commissioner ruled against Hope's advice on the subject.

Kathy Howard is the next witness.

Sorry folks the blog has to shut down a little early today.  See everyone in the morning.

Claire Austin on the Stand

We should be getting started shortly.   The judge is taking the bench and we're ready with Claire Austin on the stand.

Austin says she is a lobbyist and contracts with many firms.  Her firm is the Austin Grouup LLC since 1997.

Austin points out Hamrick to the jury.

She identifies all the other defendants.  Austin says she came to know Hamrick in Feb.-March 1995.  Austin was the assistant finance director and Hamrick was Siegelman's chief of staff.  Austin says the lieutenant governor controlled the agenda in the Senate so she needed to have a close working relationship with the lieutenant governor's office.

Austin says during that time the office of the lieutenant governor were very powerful.  Austin says Siegelman had a lot of senators who would vote "lock, stock, and barrell" in support of the lieutenant governor's agenda.

Austin says she went to work for Jeff Sessions and continued to work with Hamrick.  Sessions was attorney general at that time.  Austin says Siegelman's team ran a pretty tight ship with regard to the Senate.

Austin says she had wo work closely with Hamrick.  Austin says she met Nick Bailey also while she was assistant finance director.  She says this was probably February 1995.

Austin says she met Siegelman around the same time of February - March 1995.  Austin says she met Lanny Young through Paul Hamrick in the spring of 1995.

Austin says she met Young in the lieutenant governor;s office.  She says she was going to see Hamrick on a legislative matter.

Austin says she saw Young a lot.  He was always at the State House.  Austin says Young was in the lieutenant governor's office and around the Legislature.  Austin says he was also out with Hamrick in the evening.

Austin says she saw Bailey and Young together.  She says Bailey was with Siegelman 24-7.  "He was with him all the time."

Austin says she saw Hamrick and Young on social occasions such as receptions in Montgomery or at a restaurant for dinner or a drink.  Austin says sometimes there were other people there who worked in state government.

Austin says Lanny Young always paid for everything.  "He always had tons of cash."  Austin says Hamrick did not pay.  Young always had a lot of 100 dollar bills according to Austin.  Austin says Young loaned Hamrick cash on occasion.

Austin is asked about a profer agreement.  In July 2004 Austin says she told the government she would tell the truth and the government said she would not be prosecuted if this was the case.

Austin says in January 1999 she went into business with Lanny Young.  Austin says she had been talked to by Young and Hamrick about opening up a lobbying firm after the 1998 election.

Austin says she entertained the idea because after her time in Washington she felt it made sense to have a bipartisan firm.  Ellis Brazeal drew up the papers.  Austin and Young were going to be part of the firm and Hamrick was considering it before he was named chief of staff by Siegelman.

Austin says she believes Young was the one to bring in Brazeal.  She says Brazeal was related to Hamrick.

Austin says the firm ended up being her and Young.  Austin says Young had ties to Siegelman and Siegelman's staff including Bailey and Hamrick.

Austin says she had been around Montgomery for five years ans saw Young, Siegelman, Hamrick together.  She says she had no questions that all three were close.

The firm was called Austin and Young Capital Resources.  Austin says she was the managing partner of the firm.  She says the partnership was 50-50 but Austin says she got 80 percent for some PR clients and others.

Austin says both were supposed to lobby but Young never registered to lobby.  Austin says Young needed to register and file quarterly reports.  If a lobbyist spends more than $250 on an elected official it has to be reported unless you can call it educational to learn something about a client.

Austin says since Young didn't register he got to play under a different set of rules and did not have to report.  Also at that time if a lobbyist just lobbied the executive branch they didn't have to report.

Austin says Young told her the governor did not want Young to register.

Austin says Hamrick said the firm would be a good idea. 

Austin says initially the firm was a good idea.  Austin is asked about G-Tech, a company that operates and runs lotteries.

Austin says the G-Tech officials were in Montgomery to meet with the governor and Hamrick.  Austin says the same evening she saw three individuals from G-Tech at Bud's.  Also there were Hamrick and Mabry and "Young. 

Austin says she had talked to Doug Davenport who did government affiars for G-Tech and told him she would like to have G-Tech as a client.  Austin says after the meeting happened with the governor, Hamrick called Young and Austin.  Austin says she was listening on speaker phone.  Austin says Davenport, Switzer, Siegelman, and Hamrick were in the meeting.  She says there may have been others but she did not know.  According to Austin, Hamrick called to tell Young and Austin G-Tech was going to hire their firm.

Austin says G-Tech paid $3,500 a month and the money was splint between Young and Austin 50-50.

Austin is talking about 3M.  3M did the sheeting for Alabama license plates and 3M also had a high tech license plate 3M was trying to get the state of Alabama to adopt.

Austins says she knew 3M officials were coming to town and were going to have meetings in the governor's office.  She says she knows this because Young received a call from Hamrick to tell Young 3M was coming to town.

Mr. Deen is objecting saying Austin lacks first hand knowledge.  Mr. Deen has another problem with Austin's knowledge and now the judge has asked to see the lawyers.

Judge Fuller is asking Ms. Austin to slow down her speech a bit.  She does rattle things off pretty fast.

We're back to 3M.  Austin says Hamrick called and told Young and Austin that the governor and Hamrick recommended 3M hire Austin and Young.  She says within 30 minutes of the phone call 3M came to the office and hired them.  She thinks this was around March.  3M paid a retainer of $3,000 a month which was split 50-50.

Austin says she was at Talladega at the 3M corporate box for a race on a Sunday afternoon.  Austin says Siegelman was not in the 3M box but that she bumped into him outside the box.  Siegelman told her he was glad she was working for 3M and "I got this client for you,"

Austin says she knew it was not the case Siegelman got the client for her.  Austin says the client was gotten for Young.  Austin says she did the work and Young got half the money.

Austin is asked about the Huntsville Airport Authority.  She says the Huntsville Airport Authority became a client.  Austin says in spring 1999, she was advised by Young the firm would be representing the airport authority.  Young told Austin this was something the governor's office was doing for them.  Austin says it had something to do with Navastar.  Austin says it was for a 10 month or 18-month contract.  The retainer was an odd amount like $4,375 and was split 50-50.  Austin says she did not talk with Hamrick about this.

Austin says she talked to Siegelman when Navastar moved into the business park.  Austin says she attended the ceremony after meeting with the airport authority personnel.  Austin says she saw Siegelman and he said Siegelman told her "I am glad we could help you out."

Austin says she did a weekly report for the Huntsville Airport Authority like she did for all her clients but that Austin never heard a lot from them.

After the event Hamrick knew that Austin and Young represented the Huntsville Airport Authority.  Austin says Hamrick said, "We got this client for you."

Austin agrees both Hamrick and Siegelman told her they were responsible for getting the airport authority for Austin and Young.

Next up is CDG Engineers another client of Austin and Young.  Austin says they became a client in February-March 1999.

Mack Roberts was head of DOT at the time.  Austin says engineering firms are selected to do environmental work for the DOT.  CDG had applied to get the work but they were never selected.  Austin says CDG hired Austin and Young to try and get them selected to do the work for the DOT.

Austin says her firm was made up of two people.  Young focused on the executive branch of government which includes the DOT.

Young arranged meetings at the DOT with Mack Roberts and CDG and others according to Austin.

Austin says CDG finally got work with DOT in the spring of 1999.  CDG paid Austin and Young $2,000 per month again split 50-50.

Austin is being asked about Waste Management a client of Austin and Young.  Austin says Waste Management was the first client the firm got at the end of January of 1999.

Austin says Waste Management had a prior relationship with Young.  Austin says she knew people from Waste Management from Washington, D.C.

Austin says Waste Management did not really interview Austin and Young.  Tom Harrington worked in the operations side of Waste Management as opposed to the government affairs side of Waste Management.

Austin says she has known lobbyist Lisa Kardell for around 10 years.  She believes she met Kardell in around 1994.  Kardell was in government affairs.

Austin is asked about Kardell meeting Hamrick.  Austin says Kardell met Hamrick at the Capital Grill in Washington, D.C.  Austin says she was in D.C. at the Governor's Association meeting in 1999.  Austin says she introduced Hamrick to Kardell at the restaurant that evening. 

Mr. Deen has his objection sustained.

Austin says she had seen Hamrick earlier and talked to Hamrick on the phone and told Hamrick to meet her and the others at the restaurant.

Austin says there were a lot of people from Alabama there.  Austin says the lobbyist know this and go to the meetings every year.

Austin says the corporations and lobbyists pay money to associations to be allowed into the meetings to smooze with the politicians and staffs.

Austin again says she called Hamrick to ask him to meet her and Lisa Kardell in February 1999 at the Capital Grill.

Austin says Harrington asked her to draw up the contract with Waste Management.  She said Austin and Young would be paid $10,000 a month.

Austin says most contracts like this are handled by the corporations that hire the lobbyist.  Austin says she came to learn that government affairs people normally handle this process for Waste Management and not through the operations division.  Harrington signed the contract.

Austin says in the spring of 1999 there was a meeting at the Vintage Year.  Two Waste Management officials, Young, Hamrick, Bailey, Siegelman, Brazeal and Austin were at the meeting according to Austin.

Austin says Young had previously told her they would be getting the contract for lobbying.  Austin says Johnny Crawford had represented Waste Management prior to the hiring of Austin and Young. 

Austin says she did not arrange the dinner.  Austin says Young arranged the dinner.  Austin says she assumed Hamrick would be there.

Austin says there about 10 people or less at the meeting.  Austin says her business is all about who you know, what access you have, and what you can get done.  Austin says when the governor is there it is very impressive for the client.

We're at a breaking point for morning recess.

We're back and Austin is talking about the contract with Waste Management.  Austin says Young and she were both to lobby and  Young was to do business development for Waste Management.  Austin says Young asked her to put business development in the contract.

Talk has moved to the Emelle land fill.  Austin says when Young and Brazeal started working on the issue of the tax rate at Emelle they came to Austin in late spring of 1999 and asked her about the tax structure.  Austin says she had done a sheet on this for Waste Management.

Austin says she thought Young was working on this under the current contract.  Austin says this issue did pertain to the Department of Revenue which falls under the executive branch.

According to Austin, Young was successful in getting the tax rate reduced which was something the company had been trying to do for a number of years.

Austin says Lanny Young received $500,000 for the deal.  Austin says she read about it in the paper.  Austin says she got none of the money.  Austin says she still represents Waste Management as a contract lobbyist.  Austin says Young no longer represents Waste Management.

Austin says with regards to the contract they signed, she thinks Young's involvement with Waste Management ended in May 2001, but she can't be sure.

Austin says she saw Siegelman and Hamrick a lot.  She says she also saw Nick Bailey.  Austin says Bailey was with the governor at all times.

Austin says she saw Hamrick and Young socially .  Austin says Young always picked up the tab.

Austin is asked about the legal counsel at the Revenue Department during the Siegelman administration.  Austin says Young picked up the tab.  "He was a man with a lot of cash."

Austin says from 1997-2001 she knew what kind of cars Hamrick drove.  Austin says before the governor's race, Hamrick was driving a Honda.  Then according to Austin, Hamrick had a BMW roadster and then a BMW hardtop sedan.

Austin says she represented Waste Management in 2001 and the company was approached by the governor for a contribution for the 2002 gubernatorial campaign.

Austin says Siegelman solicited funds on many occasions asking for large sums of money.

Austin says Waste Management gave money, $1,500, to Siegelman and gave two contributions of $5,000 to one PAC and another $5,000 to another PAC.

Austin is asked to outline monthly retainers:

• G-Tech, $3,500 per month
• 3M, $3,000 per month
• Huntsville Airport Authority, $4,356 or $4,376 per month
• CDG Engineers, $2,000 per month
• Waste Management $10,000 per month

These clients were gotten in the first part of 1999 according to the prosecution because of Lanny Young's close relationships with Siegelman and Hamrick.

Austin says the money was split between her and Young 50-50.

The judge is reminding the jury about the use of charts and summaries and the weight they are to be given.

Austin says Austin and Young is no longer in business.  Austin says she parted ways with Young in May 2001.

Austin says a number of issues had come up and one issue had to do with a $10,000 check.  Austin says she was in her office around the spring of 2000.  Austin says she was interviewing someone for a job with the firm and she opened the desk drawer and found her checkbook for the firm was missing from her desk.  Two PAC checkbooks were also missing from her office.

Austin says Young had the authority to write checks on the account but Young should not write a check to himself and sign it himself.

Austin says she tried to go into Young's office, but the office was locked.  Austin said she called the RSA building manager named Randy.  Austin says Randy called her back and Austin said Randy sent someone to open Young's office and she found the checkbooks in Young's office.

Austin says she found a check written for $10,000.  Austin says she called Compass Bank and the bank verified Young had come in and cashed the check.  Austin says she tried to get in touch with Lanny Young but Young would not return jpages or phone calls.

Austin says she never after that discussed it with Young, but Austin says she did tell the accountant.  Austin says Young was owed money from the firm.  Austin says Young took some of the money he believed he was owed.

Austin says she asked for an audit of the books and Austin showed where Young had paid himself about $2,000 more.  Eventually things got sorted out and Austin got the money she was entitled to  and Young got the money he was entitled to.  "It all got squared up," says Austin.

Austin is asked about G.H. Construction.  Austin says Young told her he was going to open a construction firm and needed more office space for four or five more people.  Austin says they did not have the office space.

Austin says Young told her he would be getting a state contract.  Austin says she told the attorney general's office and a reporter.  Austin says "It did not smell right."

Austin says she had several things happen to her in the course of her business with Young that led to  her concerns about the issue.  Austin says Eddie Curran at the Mobile Press-Register was the best investigative reporter in the state of Alabama and if anyone could find out what was going on he could so that's why she told him.

Austin says these events happened in the spring of 2001.  Austin says it was a couple of days or a week after her contact that Curran wrote the articles.  Austin says the attorney general's office took about a month do do something.

Austin again says she learned about the Emelle land fill from the newspaper.  The prosecution is finished at this time with Ms. Austin.

There is a sidebar before cross examination begins.  In fact the witness has left the witness chair for a moment.

Mr. Kilborn is now going to question the witness.  Ms. Austin says Tom Kelly is her lawyer.  Austin says she has no partners in her business.  Austin says she has relationships with lobbyists Steve Windom, Amy Herring, and one other.

Austin says she and Windom share some clients - GTL and a health concern.

Austin says she is not involved in the governor's race.  She says she just had a baby.

Austin says she worked for Sessions when he was attorney general and ran his campaign and she agrees she also ran Bill Pryor's campaign for attorney general.  Austin has worked also for two presidents.

Austin agrees she has rubbed shoulders in some pretty high places.

Austin agrees Lanny Young is probably the "biggest con artist she's ever run into."

Austin says there is one bigger con artist in Georgia.

Austin says she worked with Young 2.5 years.   Austin and Young were the only two partners in the firm.  Austin says she often did not go to her office when the Legislature is not in session.

Austin disagrees the partnership was like a marriage.  She says they talked to each other almost every day but did not always see a lot of each other.

Austin agrees Young stole the check books.  Mr. Kilborn says, "If you give back the money you robbed from a bank, you still robbed the bank."

Austin agrees she found out Young  got $500,000 from Waste Management through the newspaper.  Austin says it didn't surprise her.  Austin says she wasn't a part of those conversations.

Austin says it wasn't honest.  Kilborn says Young crooked her out of half the $500,000.  Austin says,"It just happened."

Austin is asked why she didn't know what a thief Young was.  Austin says she thought Hamrick was going to be involved in the firm ans she thought there would be a great deal of success so that's why she agreed to partner in the firm.

Austin says,"It was probably the biggest mistake of my life forming a partnership with Lanny Young."  Austin says she did not trust Young that's why she insisted on being the managing partner of Austin and Young.

Austin says Young could get things done with the administration.  Austin says Young told her the governor did not want him to be a registered lobbyist.

Austin says she had concerns about Young, especially after the first six months.

Austin is asked if she thought something was wrong with Young why didn't she call Bill Pryor.  Austin says she needed hard core evidence.

Austin says 2.5 years is not a long period of time.  Austin says there was one occasion she picked up the firm.  Austin says she was threatened by Young a year into her business.  Young told her the governor's office kept calling him and told him the attorney general's office needed to get off of Nick Bailey and the Bobo case or else the firm wouldn't get any more business.  Austin says she called someone in the attorney gerneral's office.

Kilborn wants to know why she would stay in business with Young.  Austin says the threat was not from Young but from the governor's office.  Austin says she probably called Jack Brennan.

Austin agrees she was sharing more than $11,000 a month in the partnership with Young.  Austin agrees she was still working with Young even though she saw warning flags.

Austin agrees there was a taped conversation at the behest of either the FBI or the attorney general's office.  The conversation was between her and Young.  She says she was more than happy to cooperate.

Austin had told them she would cooperate with the government and she was also scared for her family.

Austin says she didn't know what someone like Lanny Young or Don Siegelman would do to her or her children.

Austin agrees she never got a personal threat from Siegelman.  Austin says Siegelman had plenty of people around him though.

July 12, 2004 cooperation agreement is being reviewed.  Austin is shown a letter addressed to her.  The letter tells her she is a witness of an ongoing federal investigation.  Austin says she had not done anything illegal at the time.

Austin says again she has not done anything illegal.  Austin says she does not know of any statements that would incriminate her.  She says she didn't participate in anyting illegal nor did she commit bribery.  Austin says the money and clients she got were all legal.

Austin says it was part of the deal.  Lanny said we were going to get business out of the governor's office, says Austin.

Austin says she didn't see anything wrong with Siegelman or Hamrick recommending clients.  Austin  agrees at the given time was above board and I am telling the truth.

Austin says she wouldn't take money from a client if she wasn't going to do professional work for them.

Austin says she has never seen the agreement between Waste Management and Lanny Young.  Austin says she did not know about the agreement.  "He didn't volunteer it," says Austin.

Austin says again she met Young in 1995.  Austin says Young did not tell her about his bankruptcies  nor did he tell her about forging documents to get a position with ROTC.  Austin says she knew about Young's company AWDS which was eventually sold.

fAustin says she has no knowledge of his bankruptcy.  Austin says Young didn't personnally tell her of anything in his past that raised a flag.  But Austin says everyone knew what Lanny was.  Austin says Young had total access to the lieutenant governor and was Hamrick's roomate and Young had a lot of cash.

Austin kept thinking Hamrick would be part of the firm.  Austin says Young had the connections with the Siegelman administration and close friendships with the administration.  Austin says it was smart business.  Austin agrees Young was "Mr. Flash and Cash."  Austin says Young boasted about his connections.  Austin agrees Young's wife didn't know about his girlfriend.

Kilborn says Young was telling lies to his wife.  Getting testy Austin says Kilborn's client told them going into business with Young was a good thing.

We're back to the Vintage Year.  Kilborn is asking about a "Grip and Grin."  Austin says you come in and shake hands and talk for  minute and leave.  Austin says Siegelman was there about 30 to 40 minutes.  Austin says she didn't see anything wrong with that.

Austin says she never asked Siegelman if Young was for real.

Mr. Kilborn says he has about 30 minutes left.  The judge and Mr. Kilborn decide this is a good time for lunch.

New post after lunch.