Louisiana governor going to trial. Fraud charges against Edwards stem from hospital-permit scheme
New Orleans — For the first time in a legendary political career that survived several federal grand jury investigations, Louisiana Gov. Edwin W. Edwards faces trial tomorrow on a 50-count indictment involving a $10 million hospital scandal. Governor Edwards, along with his brother, Marion Edwards, his nephew, and five associates are charged with federal racketeering, mail fraud, and wire fraud. One of the defendants is also charged with obstructing justice.
The accused are alleged to have rigged the state's hospital permit procedure in order to obtain and sell lucrative permits for hospitals and nursing homes.
The governor was indicted by a federal grand jury in New Orleans Feb. 28. US attorney John Volz is prosecuting the case, which is expected to last at least a month. During the trial Edwards will be a criminal defendant four days of the week and governor on the other three.
If found guilty, Edwards has said he will resign from office. Lt. Gov. Bobby Freeman would take over as governor, according to the state's constitution. Freeman himself was recently cleared of an investigation by another federal grand jury. That one probed results of an FBI sting operation involving contractors at the 1984 World's Fair in New Orleans. Edwards acknowledges he received $2 million from the hospital deal, but maintains it involved ``legitimate business'' while he was ``a private citizen'' b efore taking office in 1983.
But, according to the charges, the governor collected the money for favors he was to render in office, while his brother and the others collected additional millions of dollars in profit. The alleged scenario that resulted in the indictment is this:
In 1982, a year before assuming his third (but not consecutive) term in office, Edwards and his co-defendants who are campaign supporters and friends as well as relatives, formed an enterprise called Health Services Development Corporation. Through the company, the indictment says, they planned to obtain state permits necessary to qualify for federal medicare and medicaid payments.
The indictment says that lands for hospitals and nursing homes were secured through Edwards's nephew, Charles Isbell, a real estate broker, and plans were drawn by architect Perry Segura, another participant in the scheme. Businessman Marion Edwards, the governor's brother, steered hospital developers eager to purchase the permits to Isbell for purchase of property, according to the charges.
Others accused in the scheme are a former business associate of the governor, a businessman who is a former bank executive, a hospital development consultant, and a lawyer.
The group is accused of concealing Edwards's role in the enterprise ``in order to utilize the powers and influences of the office of the governor,'' the indictment says.
Upon his return in 1983 to the governor's mansion in Baton Rouge, Edwards approved the hospital company's five projects despite a state moratorium on such permits.
At question is whether Edwards allowed the company an exemption from the moratorium in exchange for $2 million. US district judge Marcel Livaudais Jr., who will preside over the case, has prohibited the defendants from commenting on the case by issuing a gag order.
Edwards, known for being glib and a gambling man, offers 2-to-1 odds that he won't be convicted. He has joked about being healthy enough to outlive any sentence that may come. (A maximum sentence on all 50 counts amounts to more than 250 years in prison.) Adds his press secretary, Meg Curtis: ``This [the trial] is just an inconvenience for him.''
Even if Edwards is cleared in this case, he faces the possibility of another indictment from a separate federal grand jury in Baton Rouge. That jury is investigating the governor's ties with Texaco Inc., and other oil companies. It began interviewing witnesses last Wednesday.
In the past, Edwards has escaped indictment in a number of grand jury investigations, including one involving his 1971 gubernatorial campaign. That year Tongsun Park, the Korean lobbyist who caused an uproar in Washington, D.C., contributed $10,000 to Edwards's campaign and presented Mrs. Edwards with a gift of $10,000. In the end, Edwards was cleared.
John Maginnis, who wrote about Edwards's 1983 gubernatorial election in his book ``The Last Hayride,'' doesn't share Edwards's confidence about the outcome of the trial. The odds for ``a straight acquittal or straight conviction are short,'' he says, since both verdicts require a unanimous vote. ``The better odds are that it's going to be a divided opinion among the jury [a hung jury] just like there's a divided opinion among the people of Louisiana.'' A hung jury would result in a new trial for Edwards .
The ``Cajun King,'' as the governor is sometimes referred to, is known for living to the fullest the motto so familiar to Louisianians: laissez les bons temps rouler, or ``let the good times roll.''
But the good times may be over for Edwards whether he wins or loses in court, say some political analysts.
``I don't think he'll run again no matter what happens,'' says Ed Renwick, a pollster and director of The Institute of Politics at Loyola University in New Orleans. ``I don't think he can win again, and he's never run except when he thought he'd have a very good chance. . . .''
In a statewide poll Mr. Renwick conducted within two weeks of the indictment, about one-third of the voters gave Edwards a positive rating, Renwick says. ``Of course, just a year before he had gotten 62 percent of the votes [in the election against incumbent Dave Treen], so basically he lost half his support. It was a dramatic drop.''