FORMER ALABAMA STATE OFFICIAL NICHOLAS BAILEY, BUSINESSMAN CLAYTON "LANNY" YOUNG AND WILLIAM "CURTIS" KIRSCH PLEAD GUILTY
TO FEDERAL CORRUPTION CHARGES

Montgomery, Alabama – Acting United States Attorney Louis V. Franklin, Sr. of the United States Attorney's Office for the Middle District of Alabama, Acting Assistant Attorney General Christopher A. Wray of the Criminal Division, U.S. Department of Justice, and Alabama Attorney General Bill Pryor announced today that Nicholas Bailey, age 35, the former acting director of the Alabama Department of Economic and Community Affairs ("ADECA"), pleaded guilty to two counts of conspiracy to commit bribery in connection with federal programs and wire and honest services fraud, felony violations of 18 U.S.C. § 371, and filing a false tax return, a felony violation of 26 U.S.C. § 7206(1). Montgomery, Alabama businessman and consultant Clayton "Lanny" Young, Jr. age 42, pleaded guilty to conspiracy to commit bribery and embezzlement in connection with federal programs and mail and honest services fraud, as well as filing a false tax return. Montgomery, Alabama architect William "Curtis" Kirsch, age 69, also pleaded guilty to felony conspiracy to commit bribery and embezzlement in connection with federal programs and mail and honest services fraud.

"Honest Services Fraud" is a violation of federal law regarding theft and bribery related to public funds and refers to the principal that the people are entitled to honest services from public officials.

The pleas occurred today before the Honorable Magistrate Judge Delores Boyd of the United States District Court for the Middle District of Alabama.

Franklin stated "We are pleased with the outcome of this investigation thus far. This office will continue to closely examine and vigorously prosecute public corruption at all levels of government."

"The buying and selling of public influence must not be tolerated, " Pryor said. "Actions undertaken by a public official must be based upon the public good, not the price of the highest bidder. These crimes are an utter betrayal of the citizens' trust. Rest assured that my office, working with the Department of Justice and the U.S. Attorney's Office for the Middle District, will investigate thoroughly allegations of public corruption, and wrongdoers, regardless of their station, will be prosecuted vigorously."

The charges against the defendants stemmed from Bailey's corrupt arrangement with Young and Kirsch. Bailey admitted to soliciting and receiving over $100,000 of cash payments and other things of value from Young between January 1996 and April 2001, in exchange for which Bailey used his authority and power, and caused other officials to use their authority and power, to advance Young's business interests with the State of Alabama. Bailey also admitted after he resigned from state government in early 1998 to work for a candidate in the Alabama governor's campaign, Young gave him $19,000 in so-called consulting fees which Bailey never reported to the Internal Revenue Service. Bailey also admitted to soliciting and receiving over $21,000 of cash payments and other things of value from Kirsch between January 1999 and April 2001, in exchange for which Bailey used his authority and power, and caused other officials to use their authority and power, to advance Kirsch's business interests with the State of Alabama.

Young and Kirsh each admitted they gave the cash payments and other things of value to Bailey intending to influence him to use his authority and power, and cause other officials to use their authority and power, to advance their business interests with the State of Alabama. Young also admits that in 1999, as a result of Bailey's assistance, the Alabama Department of Revenue issued a tax reduction resulting in substantial financial savings to one of Young's corporate clients, the owner of a large landfill located in Emelle, Alabama. Young was paid $500,000 by his client for his lobbying effort which he did not report on his 1999 income tax return.

As part of their plea agreements, all three defendants agreed to cooperate with an ongoing investigation being conducted by the Department of Justice and the Alabama Attorney General's Office. All three defendants have agreed to plead guilty to felony violation of the state ethics law. They are to admit that they violated Section 36-25-7 of the Code of Alabama, which prohibits a public employee from soliciting something of value in return for influencing official action, and which further prohibits a person from offering something of value to a public official in return for influencing public action. These crimes are punishable by two (2) to twenty (20) years imprisonment and a fine of up to $10,000. The state charges will be prosecuted by the Alabama Attorney General's Office.

The maximum penalty for conspiracy is five (5) years of imprisonment and a fine of $250,000, and the maximum penalty for filing a false tax return is three (3) years of imprisonment and a fine of $250,000.

The federal case is being prosecuted by Senior Trial Attorney John W. Scott of the Public Integrity Section of the Criminal Division, U.S. Department of Justice, headed by Section Chief Noel L. Hillman; First Assistant U.S. Attorney Julia J. Weller of the U.S. Attorney's Office for the Middle District of Alabama; and Assistant Attorney General John Gibbs, chief of the Attorney General's Public Corruption and White Collar Crime Division, who is cross-designated as an Assistant U.S. Attorney for this case. The investigation was conducted jointly by the Federal Bureau of Investigation, agents of the Internal Revenue Service from both Birmingham and Mobile and agents from the Alabama Attorney General's Office.

The ongoing joint federal and state prosecution grew out of an investigation into a transaction under which G.H. Construction was awarded a contract to construct two state warehouses in Northern Montgomery. Three previous convictions have resulted:

* Roland H. Vaughan was convicted on March 15, 2002, in Montgomery County Circuit Court for failing to disclose a conflict of interest to the State of Alabama. The conviction arises from acts committed by Vaughan related to the acquisition of property under consideration for purchase by the State to build two warehouses. Vaughan is president of the architectural and engineering firm Sherlock, Smith and Adams, Inc., in Montgomery. At the same time Vaughan was acting as a consultant to advise the State about which land to purchase for the prospective warehouses, he was negotiating to buy the piece of land that he would recommend for the site and from which he would profit.

* The president of G. H. Construction Co. was convicted on a charge related to the acquisition of property for two state warehouses. Bryan Broderick pleaded guilty on January 11, 2002, to providing false information to the State Licensing Board for General Contractors.

* The president of Alabama Design and Construction, Inc., Richard Campbell, pleaded guilty on January 30, 2002, to filing false information with the State Licensing Board for General Contractors.