By: Donald V. Watkins
Copyrighted and Published on June 23, 2022
SPECIAL INVESTIGATIVE REPORT ---
When U.S. District Court Judge Abdul K. Kallon announced his unexpected resignation from his lifetime appointment as a federal judge in Birmingham, Alabama (USA) on April 6, 2022, the public was shocked. Kallon's announcement came as federal investigators are reportedly closing in on obstruction of justice charges arising from the government's handling of the North Birmingham Bribery Case.
Kallon, who was born in the West African country of Sierra Leone, said he resigned because his wife took a position with an organization in another state. The truth regarding Kallon's surprise departure from the federal bench is much deeper and far more complicated than this explanation.
It All Started With the Railroading of Birmingham Businessman Jonathan W. Dunning
Abdul Kallon was an attorney with the prestigious Birmingham-based law firm of Bradley Arant Boult Cummings, LLP (Bradley Arant) from 1994 until President Barack Obama nominated him to the federal bench on July 31, 2009. Kallon and his law firm provided legal services to a Birmingham-based non-profit healthcare organization headed by Birmingham businessman Jonathan W. Dunning that became the focus of a federal criminal investigation in 2013.
Judge Kallon and Jonathan Dunning were also very close personal friends. Kallon was a bachelor when he and Dunning met and developed a professional and personal relationship. Dunning was married with children, but he also had a longtime relationship (and two children) with a woman outside of his marriage.
Kallon and Dunning engaged in social activities, some of which could have been extremely embarrassing and compromising for a sitting federal judge if they had been disclosed publicly or discovered by local political operatives who trafficked in exploiting the "dirty secrets" of public officials.
In 2013, Judge Kallon became entangled in a federal criminal investigation of Jonathan Dunning and his companies. Dunning was the former CEO of Birmingham Health Care (BHC) and Central Alabama Comprehensive Health (CACH), both of which are non-profit organizations. Dunning also owned and operated several "for-profit" companies, including Synergy Real Estate Holdings (SREH), Synergy Medical Solutions, Legacy Consulting Group, Drake Hogan Pharmacy, and Dunning Partners. Dunning Partners operated La Dolce Vita and Villagio Italian restaurants in Hoover.
In 2014, a federal grand jury in Birmingham indicted Dunning on 112 counts of conspiracy, bank fraud, wire fraud, and money laundering. Federal prosecutors claimed that Dunning diverted $14 million in federal grant money from BHC and CACH over a period of seven years and used this money to support his private businesses and personal lifestyle.
Dunning's Synergy Medical Solutions provided a wide range of professional services and products to BHC and CACH (e.g., patient billing, healthcare management services, medical supplies, etc.), all with the knowledge and approval of the board of directors of BHC and CACH, Kallon, and Bradley Arant.
In 2006, BHC purchased the Medical Plaza building in Birmingham for $2.6 million and used it for BHC's headquarters. In 2007, Dunning formed SREH, which purchased the building from BHC on February 28, 2008 for $2.8 million. Upon the closing of the purchase, BHC leased-back space in the building as a tenant.
In support of their fraud charges, prosecutors claimed that Dunning secured an internal appraisal that was prepared for SREH at this time that valued the building at $6 million.
On February 25, 2008, Kallon and Bradley Arant presented SREH's initial proposal to purchase the building for $2.5 million in a meeting of BHC's board of directors. BHC rejected the $2.5 million offer and counter-offered to sell the building for $3.2 million, which was the value reflected in BHC's internal appraisal of the property.
On February 28, 2008, board members voted unanimously to accept Dunning's final offer of $2.8 million. Prior to the vote, BHC board treasurer Terry Burney noted that Dunning's offer was "90% of the appraised [$3.2 million] value for the building and represented a fair and reasonable offer."
The Board's action was based upon "the current softening of the real estate market, the decreasing values of real estate, and the fact that the building sat on the market for more than five years prior to BHC's purchase of the building ... the Agency's debt would be greatly reduced making it more viable ... cash flow would be increased due to lower facility and utility cost."
After the sale closed, commercial real estate values across America tanked due to the Great Recession of 2008.
Throughout it all, Kallon and Bradley Arant advised BHC that Dunning's purchase of the building and lease-back arrangement were legal.
On August 1, 2008, Kallon invested $56,000 in SREH for a 2% equity interest in Dunning's office building. The purchase price reflected the $2.8 million valuation for the building.
After Kallon became an equity partner in SREH, he and Bradley Arant continued to represent BHC in its dealings with Dunning's private companies. It is unclear whether Kallon disclosed his equity interest in the building to BHC in 2008. However, Kallon did list the money he received from SREH on his annual judicial disclosure forms. Dunning had no legal duty to make this disclosure to BHC.
Judge Kallon shared in the $25,000 per month rental payments Dunning collected from BHC, as evidenced by IRS Form 1099s and K-1s that SREH issued to him from 2008 to 2011.
In November 2008, Dunning resigned from BHC to operate his private companies on a full-time basis. Dunning also assumed control of the Birmingham Financial Federal Credit Union (BFFCU), which he ran from August 2008 to October 2011.
On October 18, 2012, in response to a media inquiry regarding Dunning's purchase of BHC's office building, Kallon affirmed that Dunning's acquisition of the property was perfectly legal. By this time, Kallon was a sitting federal judge and Dunning's business partner in the building.
Even though Abdul Kallon and Bradley Arant represented BHC's legal interests in the purchase transaction and other business relationships involving Dunning, neither Kallon, nor Bradley Arant, were charged as co-conspirators in Dunning's case.
After Judge Kallon and Bradley Arant became aware of the "secret" grand jury probe of the BHC-Synergy business deals in 2013, Kallon sold his interest in the office building back to Dunning at a "significant loss."
After his 2014 Indictment, Dunning's case was set for trial in May 2016, with visiting U.S. District judge Barbara Rothstein presiding over the trial.
On February 11, 2016, President Barack Obama nominated Judge Kallon to a vacant judgeship on the Eleventh Circuit Court of Appeals.
While Dunning was awaiting trial, Judge Kallon was able to use his status as (a) a sitting federal judge, (b) a popular courthouse "insider," and (c) presidential nominee to a Court of Appeals judgeship to finagle a favorable court ruling from Judge Rothstein that severely limited the Dunning defense team's trial evidence of Kallon's direct involvement in the business conduct and transactions that prosecutors identified as fraudulent. Judge Kallon was represented in the evidence limitation hearing by retired U.S. District Court Judge U. W. Clemon, the man whom Kallon replaced on the bench.
Following a trial in May and June 2016, Dunning was found guilty on 98 of these 112 counts. In October 2016, Judge Rothstein sentenced Dunning to 18 years in prison and ordered him to pay restitution of $13.5 million.
The North Birmingham Bribery Investigation and Trial
In 2018, Judge Kallon presided over the North Birmingham Bribery Trial involving charges that Balch & Bingham law partner Joel I. Gilbert and Drummond Company executive David Roberson bribed state Rep. Oliver Robinson. A fourth defendant was indicted in the case, but charges against him were dismissed during the trial.
Oliver Robinson pled guilty early in the case and agreed to cooperate with prosecutors to develop evidence against other co-conspirators.
The purpose of the bribery scheme was to defeat an initiative by the U.S. Environmental Protection Agency (EPA) to designate a predominantly black neighborhood in North Birmingham as a Superfund clean-up site. This designation would have forced the industrial polluters who poisoned the air, ground, and water in this neighborhood to clean it up at their corporate expense. The polluters are longtime business and political allies of Alabama Power Company.
The criminal investigation that led to charges in this case was supervised by Jay Town, the U.S. Attorney for the Northern District of Alabama, and Town's handpicked First Assistant U.S. Attorney, Lloyd Peeples. Both men have checkered backgrounds.
During the trial, Judge Kallon reportedly instructed defense counsel to avoid any mention of Alabama Power and its role in the bribery scheme without first clearing it with Alabama Power's criminal attorney. This instruction was bizarre, in light of the fact that Alabama Power provided $30,000 of the $360,000 that was used to bribe Oliver Robinson.
Jay Town refused to charge Alabama Power and/or any of its top executives as co-conspirators in the case, despite evidence of their willing participation in the bribery and money laundering scheme.
Drummond's general counsel, Blake Andrews, and at least 21 of Balch and Bingham's attorneys also played a key role in the bribery scheme. Yet, Town refused to charge these individuals as co-conspirators in the case.
Balch & Bingham is Alabama Power's main law firm. Alabama Power's CEO, Mark Crosswhite, is an ex-partner in Balch & Bingham. Jay Town actively steered the investigation clear of Alabama Power and Crosswhite.
Drummond is Alabama Power's longtime coal supplier. Evidence in the case showed that Drummond CEO Mike Tracy personally approved payments to two ethically-conflicted consultants who lobbied the Alabama Department of Environmental Management to officially oppose the EPA cleanup initiative in North Birmingham. Yet, Jay Town refused to charge Drummond Company and/or Mike Tracy as co-conspirators in the case.
In 2018, Jay Town met with Mark Crosswhite at an obscure lounge where the two men chugged down cocktails amid mounting evidence that Alabama Power, Drummond, and Balch & Bingham, as well as their top executives, may have knowingly and willingly participated in the scheme to bribe Oliver Robinson.
After his meeting with Crosswhite, Jay Town decided to (a) portray Roberson and Gilbert as "lone wolves" in the bribery scheme and (b) close the investigation, over the objections of career law enforcement officials.
Abrupt Resignations, an Early Retirement, and a Suicide
After a surprise photograph surfaced in 2020 of Jay Town having cocktails with Mark Crosswhite in a festive celebration of Town's agreement to shield Alabama Power, Crosswhite, Drummond, Mike Tracy, Balch & Bingham, Blake Andrews, and 21 of Balch & Bingham lawyers from criminal charges in the case, Town abruptly resigned as U.S. Attorney.
U.S. Senator Richard Shelby arranged a high paying general counsel's job for Town with Huntsville-based defense contractor Gray Analytics. Shelby has been the longtime beneficiary of major campaign contributions from Alabama Power, Drummond, Balch & Bingham, and their network of corporate executives, partners, and political friends.
Mike Tracy took a sudden and unexpected early "retirement" from the Drummond Company, effective on October 31, 2019.
In April 2022, Balch & Bingham attorney William Dice Lineberry sadly committed suicide. Mr. Lineberry helped set up the money laundering entity that was used to: (a) receive corporate donations from Alabama Power and other willing participants in the bribery scheme and (b) funnel over $360,000 in bribery money to Rep. Oliver Robinson.
On April 7, 2022, two assistant U.S. Attorneys with reported connections to the Office's investigation of the North Birmingham Bribery Scheme reportedly resigned.
Judge Kallon's resignation becomes effective on August 31, 2022.
In response to written complaints by Mr. Kevin Forbes and Consejo de Latinos Unidos in 2019 and 2020 that detailed credible allegations of public corruption and obstruction of justice by Jay Town, the U.S. Department of Justice opened an investigation into Town's highly-suspect handling of the North Birmingham Bribery Case.
The stench from the railroading of Jonathan Dunning and Jay Town's prosecutorial pardons for Alabama Power, Mark Crosswhite, Drummond, Mike Tracy, Blake Andrews, Balch and Bingham and 21 of the Balch and Bingham lawyers in the North Birmingham Bribery Case is unbearable.
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