3rd Ga. exec pleads in Mississippi beef plant case

Published 6:35 pm Friday, August 15, 2008

A Georgia executive pleaded guilty Thursday to withholding information during a federal probe of a failed Mississippi beef plant and illegal political contributions given to then-Gov. Ronnie Musgrove.

Charles K. Morehead is the third executive of the Facility Group of Smyrna, Ga., to plead guilty this week in the case in U.S. District Court in Oxford.

The Facility Group was responsible for the design and construction of Mississippi Beef Processors LLC, a cattle processing plant that closed just three months after it opened in 2004. The plant’s failure left 400 people out of work and Mississippi taxpayers stuck with $55 million in state-backed loans.

Sign up for our daily email newsletter

Get the latest news sent to your inbox

Morehead, 57, entered the plea to one count of concealing material facts. In doing so, he admitted withholding information from federal investigators during an April 2007 interview when asked about inflating prices related to the beef plant’s construction and campaign contributions given to Musgrove in 2003.

Morehead’s attorney, Jerry Froelich of Atlanta, said Thursday his client was a minor player in the beef plant debacle who hedged when questioned by authorities.

“He made a mistake. He’s apologized for that and he’s cooperated with authorities,” Froelich said. “He’s really looking forward to moving on.”

Musgrove, a Democrat who was running for re-election to the governor’s office at the time, says he did nothing wrong and has not been charged. He lost the governor’s race to Republican Haley Barbour. Musgrove is currently in a tight race for the U.S. Senate seat left open by the early retirement of Republican Trent Lott.

Robert Moultrie and Nixon Cawood Jr., also Facility Group executives, pleaded guilty earlier this week to giving Musgrove an illegal $25,000 “gratuity” in order “to obtain his goodwill.”

At Cawood’s direction, Morehead gave Musgrove $1,000 and was reimbursed with a bonus from the Facility Group, according to court records.

Adam Bozzi, Musgrove’s campaign spokesman, has said there’s nothing in court records that “shows Musgrove’s involvement in this in any way.”

Musgrove is running against Republican Sen. Roger Wicker, whom Barbour moved from the U.S. House to take Lott’s Senate seat when Lott retired last December. The special election for the last four years of Lott’s term is Nov. 4.

Morehead also acknowledged inflating the hours that Facility Group employees worked on the beef plant, according to court records.

The plant, backed by the Mississippi Legislature and two state agencies, ran into trouble soon after Richard Hall, a Tennessee businessman, was given millions for the project. In response, the state hired the Facility Group to oversee the work.

As part of deals struck with the Facility Group executives, prosecutors agreed not to pursue more than a dozen other charges in the indictment.

Prosecutors recommended a sentence of 10 to 16 months for Morehead in exchange for his cooperation. Recommendations were made for Moultrie not to serve more than 34 months and for Cawood to serve no more than 30 months. Prosecutors also suggested using a sentencing guideline range of one year to 18 months for both Moultrie and Cawood if they cooperate.

It’s not clear where the investigation is headed.

“Moultrie, Cawood and Morehead have agreed to cooperate with the United States Attorney’s office and the Department of Justice. Therefore, commenting further on the investigation would be premature,” U.S. Attorney Jim Greenlee said Thursday in a news release.

Hall, who had owned the beef plant, was sentenced to eight years in prison after admitting that he kept $751,000 in public and corporate funds for himself during the debacle.

Sean Carothers, a construction company owner, was sentenced to 21 months in prison. He admitted paying Hall a kickback and helping him hide the money.