CLOSE OF DAY TUESDAY:
ABERDEEN – FBI agent Hal Neilson’s business partner John Covington reluctantly answered prosecution questions about their dealings to own an Oxford building, which now houses the FBI.
Covington testified throughout Tuesday afternoon, sometimes seeming annoyed by prosecution questions. He also admitted to having an immunity agreement for truthful testimony, although he insisted he has done nothing wrong and was not threatened with criminal charges about anything.
Covington and Dino Grisanti were partners in C&G Properties LLC in 2005, when they invited Neilson to join them.
He assured them that his FBI legal counsel in Jackson, Michael Turner, advised him it was OK, but only if he were in a non-managing role.
Ultimately, Covington and Neilson bought out Grisanti after he and Covington fell out.
Covington swore that he never asked Neilson for anything as C&G sought to gain a government contract to lease the $2.2 million building they planned to build on east University Avenue in Oxford.
The jury must sort through scores of business and bank records related to their dealings, especially in separating Covington and Neilson’s association with another real estate business, which Covington described as a money pit that has sucked away most profits gained from the C&G projects.
He also said that prior to Neilson’s official association with C&G, he, Grisanti and Neilson received a $50,000 check each with the promise to pay it back when their building was leased.
He said his and Grisanti’s checks came from C&G, while Neilson’s came from the money-pit company.
Covington will take the stand again Wednesday morning.
ABERDEEN – Government ethics expert Patrick Kelly said Tuesday that he never was told that FBI agent Hal Neilson ever acted unethically.
Under cross-examination from Neilson’s attorney Christi McCoy, Kelly said Neilson’s supervising division counsel, Michael Turner, did not act ethically or appropriately when he signed another agent’s name to Neilson’s financial reports.
Neilson, 49, of Oxford is on trial in federal court on a five-count indictment that he lied about his financial interests in a building, which the FBI leases in Oxford. He insists he is innocent and that his legal troubles began after years of feuding with then-U.S. Attorney Jim Greenlee.
Greenlee, now in private practice, has declined to comment.
Trial testimony began with Kelly. Opening statements from each side came late Monday after it took about six hours to pick 12-member jury and two alternates.
McCoy’s questions also brought Kelly to conclude that Neilson appeared not to have received appropriate training from Turner in the proper way to fill out his financial disclosure reports. Later Kelly, said instructions on the forms should have been followed.
FBI employees in supervisory posts, such as Neilson, are required to report financial holdings, assets, debts and other information for their superiors to consider the possibility of inappropriate connections or conflicts of interests.
If Neilson secured Turner’s approval for a silent partnership in a business venture, even if that advice were wrong, McCoy asked, could he has been protected against indictment?
“With the wrong advice, he would be covered,” Kelly told her.
Kelly said his office relied upon Turner to ensure that reports from his office were correct and that staff were appropriately trained to file them.
McCoy showed Kelly various financial disclosure forms Neilson filed, at least one which showed detailed information about his real estate holdings.
Did anyone say his investments were a problem? Should they have? McCoy asked him.
Kelly said someone should have.
“Hal Neilson says he owned three businesses,” McCoy said about one of the reports. “Did anyone question that?”
“Not to my knowledge,” Kelly said.
You depended on intermediate reviewers, and they said the reports were in compliance? McCoy said.
Yes, Kelly answered.
Did they question Hal Neilson about this? she said.
I don’t know, Kelly said. They should have.
He also said he wasn’t aware of any disciplinary action the FBI took against Neilson throughout the time he filed reports, although most lately he said the FBI would not step into a Department of Justice investigation.
Kelly said Neilson was not given an opportunity to divest himself of any interests that might have been questioned as conflicts. Why? “I don’t know,” he added.
“Can you say, under your oath, that Hal Neilson was adequately apprised of what a conflict would be?” McCoy said.
“No, I can’t,” was his answer.
But on re-direct questioning from Bourgeois, the prosecution shored up some of McCoy’s hit, telling the jury that if Neilson had gained a “unreported $50,000 loan” and failed to report new corporate connections, what would Kelly think of that?
They should have been reported, Kelly said.
Court resumes at 1:15 p.m. after the lunch break.
• Come back to NEMS360.com or read Wednesday’s Daily Journal for more.
Patsy R. Brumfield / Daily Journal