Ex-House speaker Rick Johnson charged in marijuana scandal

LANSING — Former Michigan House Speaker Rick Johnson and three others, including two lobbyists, will plead guilty to a bribery scheme in which Johnson accepted more than $100,000 in cash and benefits while chairing the state’s former medical marijuana licensing board, federal authorities said Thursday.

The charges and plea agreements were announced concurrently. U.S. Attorney Mark Totten with the Western District of Michigan said the investigation, which began more than five years ago, is ongoing — an indication that more people may be snagged in a probe that could further jolt Lansing’s political circles and the industry.

The defendants include Johnson, who led the now-disbanded board from 2017 to 2019; lobbyists Brian Pierce and Vincent Brown; and John Dalaly, who operated two marijuana businesses listed in court documents as Company A and Company B.

“Public corruption is a poison to any democracy,” Totten said during a news conference outside the Lansing federal building, across the street from the Capitol. “Those who wield the power of the state have a sacred responsibility to serve the people they represent. And when a government official takes a bribe, they violate that solemn duty in favor of the connected, the crooked and ultimately themselves.”

Johnson and those with power and influence around him, he said, “acted corruptly and did so at a moment that mattered for those who want to get ahead in this industry.”

Johnson, a 70-year-old Republican from Leroy who led the House from 2001 through 2004 before becoming a lobbyist, will plead guilty to accepting $110,200 in money and benefits in exchange for giving valuable non-public information to and voting to grant medical marijuana licenses to Company A and a third business, Company C. The maximum penalty is 10 years in prison and a $250,000 fine.

Then-Republican Gov. Rick Snyder appointed Johnson and four others to the board in May 2017, after he and lawmakers enacted a 2016 law to further regulate medical marijuana almost eight years after its use was authorized by voters. The main bill imposed a new tax and establish a state licensing system to grow, process, sell, transport or test marijuana.

Johnson had been nominated by former Republican Senate Majority Leader Arlan Meekhof. The appointment was criticized at the time due to Johnson’s work as a lobbyist.

Dalaly, 70, of West Bloomfield, will plead guilty to bribing Johnson with $68,200 in cash and benefits, including two private jet flights to Canada. He helped to establish and operate Company A, a medical marijuana provisioning center. He helped to create Company B, which was formed with the purpose of exploring the licensing of a digital currency platform for medical marijuana financial transactions but ultimately did not seek a license. The maximum is 10 years and a $250,000 fine.

Pierce and Brown will plead guilty to conspiring to commit bribery. They paid Johnson at least $42,000 via two entities, Michigan Grower’s Consultants and Philip Alan Brown Consulting, for two purposes — to land clients by promoting their access to Johnson and to influence Johnson to help their clients obtain licenses, according to the charges. They tried to hide the bribes by sending cash to various limited liability companies controlled by Johnson.

Pierce, 45, of Midland, was an aide to former Republican state Rep. Klint Kesto of Commerce Township from 2013 to 2015. Pierce is the registered agent for both Michigan Grower’s Consultants (which was dissolved in 2018) and Philip Alan Brown Consulting, according to state records. Brown, 32, is from Royal Oak.

The maximum penalty for Pierce and Brown is five years and a $250,000 fine.

The defendants’ arraignments and plea hearings likely will be held in the next one to two weeks, Totten said.

Matthew Schneider, former U.S. Attorney for the Eastern District of Michigan and a partner at Detroit-based law firm Honigman LLP, noted the bribes from Brown and Pierce were paid on behalf of another company, whose leader is not named.

“It’s clearly wider than just these people,” Schneider said. “We’re missing some people who were clearly involved. So this doesn’t sound like it’s finished to me.”

Asked if more people will be charged, Totten said the defendants “are cooperating and we will continue to see where the evidence leads.” The investigation began at least as early as December 2017, he said.

Gov. Gretchen Whitmer, a Democrat, abolished the board in April 2019 as part of an executive order creating the Marijuana Regulatory Agency (now the Cannabis Regulatory Agency).

The agency’s executive director, Brian Hanna, issued a statement saying it does not take illegal activity lightly.

“We are currently reviewing the information that has been made available today and will begin investigations as warranted,” he said. “Marijuana industry stakeholders in Michigan can be assured that if we find that any businesses broke the law or rules, disciplinary action will be pursued.”

Read more here: Source link

Leave a Reply

Your email address will not be published. Required fields are marked *