Source: Arrest teams back in place in Virgin Islands bribery scandal, just ‘waiting’ for Holder to green light action

Matthew Boyle | Investigative Reporter

Arrest teams are now in place in the U.S. Virgin Islands in the wake of the territory’s financial crime and bribery scandal, a source within the Department of Justice told The Daily Caller. According to the source, the teams are now waiting now “waiting” for Attorney General Eric Holder to give the green light for “execution.”

“Everything is in place now,” the source said. “We’re just waiting for them to say ‘execute.’”

Daily Caller investigation earlier this year unearthed allegations that USVI Gov. John de Jongh accepted part of at least $20 million in cash bribes in exchange for facilitating the sale of a telecommunications company to a politically embattled U.S. telecommunications cooperative.

According to the DOJ source – who served on a team put in place to arrest finance executives close to that telecommunications deal – de Jongh accepted a portion of at least $20 million in cash bribes that floated throughout the U.S. Virgin Islands government.

The bribes, according to the source, were for de Jongh, Virgin Islands Attorney General Vincent Frazer and other Virgin Islands legislators — all aimed at quashing local concerns about financial irregularities identified on the books of the National Rural Utilities Cooperative Finance Cooperative.

The DOJ, the source said, never acted on the sealed indictments related to a years-long criminal scheme involving bank fraud and other financial crimes because two prosecutors on a team of more than 25 also accepted bribes. Five other prosecutors, the source said, were compromised in some other unspecified way.

Since TheDC broke and continued covering the story, however, the source said the investigation got back on track due to political pressure the Obama administration faced from adversaries and supporters — many of whom receive lucrative tax breaks from the local Virgin Islands government.

As of this weekend, TheDC’s DOJ source said, law enforcement teams are now ready to make arrests. “The final decision, again, is on Holder’s desk,” the source said. “The final decision is up to him.”

If and when Holder gives the green light, the source said, USVI senators will be the “first” to be taken in into custody by law enforcement. That first step, the source said, will take “less than 24 hours” to complete.

After the senators are taken in, the source said it’s then “the administrative staff and the governor.” After that, the source said, the final step is law enforcement taking in people from the different financial institutions who were involved in the scandal.

The whole process, from the first step through the last step, will take “no more than a week,” the source said.

But, the source said, it’s Holder who ultimately “calls the shots on when it goes.”

“There’s nothing that hasn’t been done that would prevent a nod of confidence,” the source said. “It’s all up to him now to say, ‘yes, go ahead.’”

Holder spokeswoman Tracy Schmaler didn’t respond when asked why the attorney general hasn’t given the go-ahead yet. But, TheDC’s DOJ source speculates Holder’s hesitance is for political reasons.

“This election, there’s a lot of players who have been very, very lucrative for [Obama’s campaign] and it will affect a lot of these people if the hammer is dropped,” the source said. “It isn’t about the wellbeing of the American public. It isn’t about the Department of Justice trying to fight for fiduciary responsibility. It is about political position.”

In late February, Assistant Attorney General Ronald Weich issued a carefully worded denial of certain parts of financial crimes and bribery scandal in a letter to Iowa Republican Sen. Chuck Grassley, the ranking member of the Senate Judiciary Committee.

In that letter, Weich addressed few specifics in TheDC’s reporting or in the request by Grassley that prompted Weich’s reply. Weich’s response makes no mention of the sealed indictments, or of the lengthy investigation the DOJ conducted into CFC’s financial irregularities. Instead, Weich challenged only TheDC’s decision to give its source protection through anonymity, claiming the DOJ has no knowledge of the bribes explored in the story.

“The Department is not aware of facts supporting any allegations of bribery, as purported by the article,” Weich wrote.

After being shown Weich’s letter, TheDC’s source said it was by no means comprehensive and appears to be an attempt to dodge certain questions with careful wording.

“He left out portions of the letter to him from Sen. Grassley, like the indictments, all the things against CFC and everything to that end,” the source said in an interview at the time, while clarifying that proof of the bribery exists “internally, based on documents.”

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