“[The marijuana industry has] been held out as an equalizing opportunity,” U.S. Attorney for the Western District of Michigan Mark Totten said at a press conference Thursday. “Yet what we’ve learned today is that one of its key leaders … acted corruptly and did so at a moment that mattered most for those who want to get ahead in this industry.”
The background: Johnson served as a state representative from 1999 to 2004, including three years as House speaker. After leaving office, he ran a lobbying firm in Lansing, before serving as the chair of the Michigan marijuana licensing board from 2017 to 2019, according to court documents.
Johnson was “at the heart of this corrupt scheme,” Totten said, outlining cash payments and other perks like private chartered flights through Dalaly’s companies.
The investigation, which started in 2017, was spearheaded by the FBI.
“Rooting out corruption is exceptionally difficult,” FBI special agent Jim Tarasca told reporters. Tarasca thanked forensic accountants and computer forensic examiners who helped determine the money trail and digital evidence to support the charges.
For years, the FBI has been warning states about the threat of public corruption posed by the cannabis industry. Local officials have been charged with similar crimes from California to Massachusetts, and corruption allegations targeting state officials in Arkansas and Missouri have been swirling for years.
More details: Dalaly operated a company that was seeking a medical marijuana license from the board. Pierce and Brown lobbied on behalf of another company that was seeking a license. Johnson not only voted in favor of those companies obtaining licenses, but also provided “valuable non-public information about the anticipated rules” surrounding the medical marijuana program, court documents allege.
Pierce and Brown attempted to hide payments to Johnson by funneling them through various companies that Johnson controlled, Totten explained. These payments came out of their client’s retainer fees, according to court documents.
David Griem, an attorney for Brown, said his client cooperated with the FBI “like a good citizen” before even hiring a lawyer and that he didn’t “know any of the big fish in this case.”
Attorneys for the other defendants did not immediately return requests for comment.
What’s next: All four defendants are expected to be arraigned and have plea hearings in the next one to two weeks, Totten said.
The investigation is ongoing, and Tarasca asked any members of the public who have information related to the charges to contact the FBI.
The four defendants pledged to cooperate with the ongoing investigation.
Johnson and Dalaly face a maximum of 10 years in prison and a fine of $250,000.
In his plea deal, Johnson agreed to forfeit the $110,000 in bribes and the U.S. Attorney’s Office agreed not to oppose his request for a reduction in offense level, which would impact his sentencing.
Pierce and Brown face a maximum of five years in prison and a fine of $250,000.
