By: Donald V. Watkins
Copyrighted and Published on December 30, 2021
An Editorial Opinion
Most Alabamians have never heard of Walter F. Johnsey (1924-2007). Johnsey was a longtime political operator for Alabama Power Company (APC) and the Drummond Company. By the time Johnsey was 50-years-old, he was APC's senior vice president and chief financial officer. Johnsey reported directly to Joseph Farley, APC's chief executive officer.
During this time, Johnsey also served as a consultant to and director of the Drummond Company, the chief supplier of coal for APC's coal-fired power plants. The two companies had an incestuous relationship for decades.
As the 1972 presidential election approached, Walter Johnsey, Joseph Farley, Winton Blount, Gary Neal Drummond, and other Alabama political power brokers were able to persuade President Richard Nixon to have Governor George C. Wallace and his brother Gerald investigated by the U.S. Department of Justice (DOJ) on federal charges of bid-rigging, soliciting and receiving illegal campaign contributions, and accepting kickbacks. These men knew that the DOJ had been weaponized against political adversaries during J. Edgar Hoover's reign as FBI director (1925 to 1972) and could be used to jail their chief political enemy -- George Wallace.
Winton Blount was Nixon's U.S. Postmaster General. He was also the co-founder and owner of Blount Brothers Construction Company, a privately-owned, Montgomery, Alabama-based company that became a major defense contractor as a result of its construction projects for the U.S. military worldwide. In 1986, Blount's company went public on the New York Stock Exchange.
From 1951 until 1988, Winton Blount effectively decided who would be appointed as federal judges and U.S. Attorneys in Alabama. The only two exceptions to Blount's grip on these presidential appointments occurred when Alabama U.S. Senator Howell Heflin bucked the APC/Drummond/Blount oligarchy and asked President Jimmy Carter to appoint black civil rights attorneys U.W. Clemon and Myron Thompson to U.S. District Court judgeships in Birmingham and Montgomery in 1980.
At first, President Nixon went along with APC's scheme to jail Wallace because he thought the populist governor's potential candidacy as an independent party presidential nominee would take votes from his re-election. When Wallace announced that he might seek the Democratic Party nomination in 1972, rather than run as a presidential candidate on the American Independent Party ticket (as he did in 1968), the DOJ dropped its investigation of the Wallace brothers.
APC's Walter Johnson and Three Drummond Executives Were Indicted on Federal RICO and Fraud Charges in 1979
In April 1977 federal prosecutors convened a grand jury in Birmingham to investigate Drummond CEO Gary Neal Drummond and company executives Elbert Drummond and Clyde Black. Other targets of the investigation were APC's Walter F. Johnsey, who was Joseph Farley's right-hand man, state Senator Joe L. Fine, state Representative Jack Biddle, and Herbert Gilmore.
When it became apparent that Johnsey would be indicted in 1979, he took an early retirement from his senior executive position at APC. Johnsey was out of the APC job he loved, but he was not out of power.
In October 1979, Johnsey was indicted by a federal grand jury in Birmingham, Alabama, along with the three Drummond Company executives, Fine, Biddle, and Gilmore. All seven defendants were charged with one RICO conspiracy count alleging that they ran an ongoing criminal racketeering enterprise. The three Drummond executives were also charged with 10 counts of mail fraud. Johnsey and the Drummonds were charged with one count of wire fraud. Fine was charged with one count of using his state Senator's office to extort money from Gerald Ingle. Johnsey and Fine were also charged with five counts of defrauding Alabama Power Company of the loyal services of its employee (Johnsey) by fixing the price of coal sold to APC and conducting other criminal activities with Johnsey.
The defendants' trial, known locally as the "Coal Fraud Trial," commenced on May 5, 1980. Chief U.S. District Court Judge Frank H. McFadden, the man whom Winton Blount had gotten President Nixon to appoint as a federal judge in July 1969 and who became chief judge in 1973, presided over the trial.
Judge McFadden was overtly hostile towards federal prosecutors during the trial. Two months into the trial testimony, McFadden gutted the prosecution's case and entered highly-controversial judgments of acquittal for all defendants, except Johnsey and Fine. Privately, courthouse insiders knew something was wrong, but they were afraid to speak out publicly about McFadden's bizarre conduct during the trial. McFadden railroaded the prosecutors in this RICO case, but nobody wanted to say why.
Johnsey and Fine faced further proceedings in the case on the single count of extortion against Fine and the five counts of wire fraud charges against Fine and Johnsey.
Even though prosecutors could not appeal McFadden's acquittal of the Drummonds, Johnsey and Fine appealed McFadden's ruling that left them in the case as the only defendants. The court of appeals affirmed McFadden's ruling on this point.
On remand, Judge McFadden used his clout as chief judge and skillful judicial activism to free Johnsey and Fine. Ultimately, Johnsey was not convicted of any crime.
The "Coal Fraud Trial" was the seminal event where APC, the Drummond Company, Blount, Inc., and other members of the business oligarchy that ran Alabama learned two valuable lessons: (a) They had to groom, sponsor, and control appointees to the President's cabinet who hailed from Alabama, and (b) they had to control the political process for presidential appointments to all federal judgeships and U.S. Attorneys positions in Alabama.
To accomplish these two goals, they had to "buy" or "rent" a succession of Alabama U.S. Senators, including Jeremiah Denton, Richard Shelby, Jeff Sessions, Luther Strange, and Tommy Tuberville. Their prize political trophies were Senators Richard Shelby and Jeff Sessions. The only Alabama U.S. Senator who resisted the oligarchy's dictatorial grip and exhibited personal integrity and political independence was Howell Heflin.
After all of the defendants were freed, Judge McFadden resigned from the federal bench. McFadden was immediately rewarded for his extraordinary judicial work in the "Coal Fraud Trial" with a cushy, high-paying job as General Counsel for Blount Construction Company.
After the trial, Johnsey became Drummond's executive vice president in charge of external affairs, where he remained until he retired for good.
Joe Perkins Emulated and Enhanced Walter Johnsey's Art of Political Influence-Peddling
Walter Johnsey perfected the art of cultivating aspiring politicians with financial aid for college and mentorship. Johnsey's personal financial contributions, leveraged with corporate donations he directed, made up the majority of campaign funds collected by the majority in the Alabama Senate. He commissioned monthly polls and orchestrated influence through an array of political action committees and business leagues. Johnsey also had a superb ability to capture and control the voices and votes of black public officials on matters of concern to APC and Drummond.
On January 9, 1981, Tuscaloosa, Alabama native Joe Perkins began emulating and enhancing Walter Johnson's influence-peddling playbook in Alabama. Operating under the name of Perkins & Associates (P&A), Perkins bagged the Alabama Education Association (AEA) as his first big client. Over a four-decade career, Perkins rose from a political nobody to the Number 5 person on Yellowhammer News' April 30, 2021 "Power and Influence" list.
Perkins expanded his operations into Georgia and Florida. Perkins added the following companies to his portfolio of clients: APC, the Southern Company, Florida Power & Light (FPL), AEA, BP America, Inc., the Alabama Jobs Foundation, Airbus' Cassidian Communications, the Alabama Nursing Home Association, Auburn University, and a host of other corporate clients that found his influence-peddling skills and schemes desirable.
Perkins' greatest enhancement to the Johnsey playbook was his highly successful scheme to capture and control Alabama's media organizations by hiring away their big-name investigative journalists. He also devised creative and clandestine ways to financially support Cliff Sim's Yellowhammer News (which was founded in 2011) and Bill Britt's Alabama Political Reporter (which was also founded in 2011). In 2016, Perkins was able to assist APC in capturing Alabama's oldest black-owned newspaper -- The Birmingham Times -- and placing it under the direct control of APC. Now, the Times, which used to be the voice of the black Alabamians during the civil rights movement, is used to sedate the state's black community with a steady stream of "Happy News" on non-controversial topics.
For all intents and purposes, Joe Perkins is the political reincarnation of Walter F. Johnsey.
Like Johnsey, Joe Perkins Has Attracted Law Enforcement Scrutiny for His Influence-Peddling Schemes
Between January 1, 2018 and July 31, 2019, alone, APC funneled $2.5 million in ratepayer money, without invoicing, to Joe Perkins, who is a confessed federal lawbreaker. Perkins is a known federal lawbreaker within the state's tight corporate oligarchy and political power-players.
Despite Perkins' 1992 confession to the Federal Election Commission (FEC) that he organized and implemented a scheme to make illegal campaign contributions to the 1986 Congressional campaign of ex-felon and close friend Roy Johnson, Perkins was able to register with the Alabama Ethics Commission from 2008 to 2017 as a lobbyist for a number of powerful domestic and international corporations.
The FBI originally believed that AEA was the source of the money Perkins used to pay his employees at P&A a $1,000 "bonus" apiece. These employee, in turn, wrote $1,000 checks on the same day to Johnson's Congressional campaign from the "bonus" money. AEA was named a Respondent in the FEC's "Matter Under Review," along with Perkins and the P&A employees who participated his illegal campaign financing scheme.
[Click here to read the FEC file on Perkins and the AEA. The file includes a Flow Chart depicting the flow of money from AEA into P&A, and the laundering of this money through P&A's employees to Roy Johnson's campaign, all in violation of federal election laws.]
After AEA was formally notified that it was a target of the FEC investigation into Perkins' illegal scheme, AEA solicited to help of the powerful and very politically-connected National Education Association (NEA). NEA had supported Democratic Bill Clinton for president with large sums of campaign money and block-voting from its members. Once NEA got involved in the case, AEA was freed of the investigative grip of the FEC.
With AEA no longer a target of the investigation, Perkins "fell on his sword" on March 30, 1992 and confessed to the illegal campaign financing scheme. Perkins paid a $5,000 civil penalty and pledged in writing that he would not conduct political fundraising business in the future.
Several years later, Perkins formed a number of companies, including Perkins Communications, LLC, and Matrix, Inc. and plunged back into the political thicket. The political work that Perkins performed for AEA fascinated APC, which saw Perkins as the perfect replacement for Walter Johnsey.
By 2018, Perkins was taking $2.5 millions out of APC's bank accounts, without invoicing.
Epilogue
The political tricks deployed by Joe Perkins and his companies in Florida on behalf of FPL bubbled up to the surface in 2021 because of three events. First, former Matrix CEO Jeff Pitts broke ranks with Perkins and is suing him in Florida for conducting RICO activities, extortion, and abuse of the legal process. Perkins' effort to throw shade on Pitts has backfired. Second, the Orlando Sentinel and Florida Times-Union have top-rate journalists publishing investigative articles on the work Perkins' companies performed for FPL. Third, state and federal law enforcement agencies in Florida are digging deep into Matrix, its portfolio of clients, and network of subcontractors.
Unlike Perkins' activities in Alabama, which are closely guarded by APC and its strategic business partners, no U.S. Senator or chief federal judge can call off the Florida investigations. The "fixer" that APC uses to control state and federal prosecutors in Alabama is in no position to "fix" Perkins' Florida legal problems.
Silencing the media, which works well for Perkins in Alabama, is not an option in Florida.
Stay tuned!
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