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Former Michigan House Speaker Rick Johnson faces a federal prison sentence Thursday for rigging the state's marijuana licensing system in a scandal that has cost four people their reputations and lucrative careers and forced weed lobbyists into bankruptcy and exile, including one who bought a $190,000 Lamborghini Huracán after bribing the powerful politician.
The full impact of a rare bribery scandal on the west side of Michigan is coming into focus five months after prosecutors unveiled federal criminal charges in the largest public corruption case in Michigan's capital in 30 years. Three people — two lobbyists and an Oakland County businessman — have admitted paying Johnson approximately $110,200 in bribes during his tenure as chairman of the Michigan Medical Marihuana Licensing Board in return for state-issued licenses to grow and sell marijuana, an illicit agreement that reaped short-term rewards.
Clockwise from left: Rick Johnson, Vincent Brown, Brian Pierce and John Dawood Dalaly. Detroit News
Publicly available federal court filings suggest Johnson, once one of the most powerful Republican lawmakers in Michigan, blew his shot at a shorter prison sentence by failing to provide substantial cooperation to FBI agents and prosecutors. Johnson negotiated a deal to plead guilty that spared his wife from being charged with a crime, and the expectation was that Johnson would provide damaging information that would lead to criminal charges against other marijuana industry figures.
But no one else has been charged. Now, instead of requesting a shorter prison sentence, prosecutors earlier this month requested Johnson spend nearly six years in prison — at least — and divulged embarrassing details about Johnson's personal life, including that he had sex repeatedly with a prostitute who called him "Batman." “They’re looking at him as somebody who takes more than bribes; someone who takes bribes as part of an ongoing lifestyle of lawlessness,” said Detroit criminal defense lawyer Kevin Mulcahy, a former federal prosecutor.
Federal court records, interviews and bankruptcy documents describe the impact of a scandal that could lead to a new benchmark of punishment for public corruption in west Michigan. Lobbyists Brian Pierce and Vince Brown face up to five years in prison next month, while businessman John Dawood Dalaly was sentenced earlier this month to 28 months in prison for providing $68,200 in bribes to Johnson.
The trio and Johnson struck deals to cooperate with the government, leading to an expectation that the cases would be the first wave of criminal charges against public officials and others tied to the marijuana industry.
"There’s no doubt in my mind that other people were involved in this corruption scheme, and the question now is whether the prosecutors can bring additional charges before the statute of limitations expires," said Detroit criminal defense lawyer Matthew Schneider, a former U.S. attorney in the Eastern District of Michigan. "Every day that clock ticks means it’s less likely anyone else will be charged." The investigation is ongoing and "there may or may not be further charges," Tiffany Brown, spokeswoman for the U.S. Attorney's Office in the Western District of Michigan, wrote in a Monday email to The Detroit News.
How Michigan bribery sentences compare
Defendants in federal bribery cases on the west side of Michigan fare slightly better at sentencing than crooked politicians and bribe-payers on the eastern half of the state. Only three people have been convicted of bribery/corruption in federal court in west Michigan since 2015. They were sentenced to an average of 21 months in federal prison, according to the U.S. Sentencing Commission.
By comparison, 112 people convicted of bribery and corruption on the east side of Michigan since 2015 were sentenced to an average of 23 months in federal prison, commission data shows.
"Loved ones abandon you. Spouses can’t take the separation. Children forget about you. It’s like you come out of prison and there is nobody waiting for you. Financially, many people find themselves completely crippled," said Bloomfield Township criminal defense lawyer Anjali Prasad, a former federal prosecutor. "If you had assets to begin with, the government has taken them. And if you were relying on your profession to make a living, well, nobody wants to hire you. You cannot imagine the mental and emotional baggage you carry with you out of prison."
Prosecutors pushed for 30 months in prison for Dalaly.
Oakland County businessman John Dalaly appeared in federal court on April 21, 2023, to plead guilty to bribing former Michigan marijuana licensing board chairman Rick Johnson. Dalaly was sentenced earlier this month to 28 months in federal prison. Katy Batdorff, Special To The Detroit News
Dalaly admitted that Johnson directed him to hire his wife, Jan Johnson, as a consultant for $4,000 a month. Under the terms of Johnson's deal to plead guilty, federal prosecutors agreed not to bring charges against Jan Johnson. His lawyer argued Dalaly, 71, deserved a much lower sentence because he cooperated with investigators, is remorseful, accepted responsibility and is suffering from several health problems. That includes coronary disease and hypertension, according to his lawyer, Raymond Cassar. The bribes, which prosecutors said were paid at least 25 times between January 2018 and February 2019, represent unusual conduct from a man who has led an otherwise upstanding, charitable life, his lawyer wrote in a sentencing memo.
"His regret and remorse are apparent to everyone, especially his family," Cassar wrote. "Since last summer, he has been treated for depression and anxiety. Unable to sleep through the night because of shame, John has been prescribed Xanas and Sertaline and is seeing a counselor at Rochester Psychology."
Dalaly is “suffering gravely,” wife Vivian Ajlouny Dalaly wrote in a letter to U.S. District Judge Jane Beckering.
“Not a minute of his day passes without dwelling on his actions,” she wrote. “It haunts him and is eating him alive.”
But in pushing for a 30-month sentence, prosecutors filed paperwork saying Dalaly deserved a break for providing substantial assistance. There has not been any such filing, at least publicly, in Johnson's case.
"A defendant's cooperation must lead to the investigation and prosecution of another person," Mulcahy said, "and if it doesn't, they don't get credit." Lobbyists helped shape pot rules
The scandal has derailed the career trajectories of two marijuana lobbyists who displayed outward signs of success amid the rise of Michigan's marijuana industry. Michigan voters approved a ballot proposal to legalize recreational marijuana in 2018. The industry generated more than $2 billion in sales in 2022, is on track to top $3 billion this year and, according to Crain's Detroit Business, Michigan is the nation's top market based on per-capita sales.
Brown and Pierce were positioned to capitalize on the burgeoning industry. Lobbyist Vince Brown pleaded guilty to conspiracy to bribe the chairman of Michigan's now-defunct marijuana licensing board, Rick Johnson. Katy Batdorff, Special To The Detroit News
Brown, 33, worked as a legislative director for former Rep. Robert Kosowoski, a Democrat from Westland, while Pierce served as legislative director for former state Rep. Klint Kesto, an Oakland County Republican, from January 2013 through November 2015.
Pierce and Johnson were involved in crafting the 2016 law that enacted regulations for medical marijuana and created a licensing board for businesses that hoped to enter the market.
The House Judiciary Committee and the full state House approved the bill in the fall of 2015. Weeks later, Pierce registered as a lobbyist on Dec. 1, 2015.
One week later, Brown left his legislative job and registered as a lobbyist. He was part of two lobbying firms with Pierce: Michigan Growers Consultants and Philip Alan Brown Consulting and lobbied "on behalf of various businesses seeking operating licenses from the state of Michigan’s Medical Marihuana Licensing Board," according to his plea agreement.
In May 2017, then-Gov. Rick Snyder appointed Johnson chairman of the five-member Michigan Medical Marihuana Licensing Board. Johnson had been working as a registered lobbyist until Nov. 30, 2016, according to state disclosures.
"Johnson and others used his past and current political connections as leverage to obtain nearly $2 million in payments for his lobbying services from individuals and entities related to the medical marijuana industry prior to his appointment," prosecutors wrote.
U.S. Attorney Mark Totten described Johnson as "one of the key gatekeepers" for the industry, which expanded significantly after state voters approved recreational marijuana in 2018. Johnson served as chairman of the licensing board from May 2017 through April 2019.
"He was put in a position to police himself and the other board members, and he took advantage of that position to solicit and accept bribes," Assistant U.S. Attorneys Christopher O’Connor and Clay Stiffler wrote in a court filing last week.
"As the old saying goes, Johnson was 'the fox guarding the henhouse,'" they added. A lobbyist's shopping spree
By the time medical marijuana was legalized in Michigan, Brown was living in a $519,000 colonial near downtown Royal Oak.
In 2020, the first year of adult-use marijuana sales in Michigan, as prosecutors say Brown leveraged his relationship with Johnson to woo clients and generate "substantial revenue," the lobbyist went on a shopping spree.
That May, he bought the Lamborghini Huracán from an import company in Indianapolis, Ind., according to vehicle records.
The Lamborghini Huracán that was owned by Vince Brown.
The Huracán, an automatic, was painted pearlescent white — Lamborghini calls it Bianco Monocerus — and featured Rosso Andra red leather seats. The sports car was three years old, had 4,567 miles on the odometer and a 5.2-liter V-10 engine.
The sticker price: $190,248.
In August 2020, three months after buying the Lamborghini, there was a knock on Brown's door in Royal Oak. It was the FBI.
Agents arrived at the same time as investigators showed up at Johnson's farm 80 miles north of Grand Rapids and as investigators arrived at Pierce's home in Midland. The coordinated searches were intended to uncover evidence of bribery.
What investigators learned is that from June 8, 2017, to Feb. 15, 2018, Brown and Pierce transferred $19,000 from their lobbying firms to business entities connected to Johnson, according to a court filing.
In all, investigators say Brown and Pierce gave at least $42,000 in cash to Johnson to influence his decisions.
"Additionally, at Johnson’s request, Pierce paid a total of $2,000 to the woman who had commercial sex with Johnson," prosecutors wrote.
By December 2022, lobbyist Vince Brown had bought and sold real estate in Oakland County worth, collectively, more than $1 million, according to property records. City Of Royal Oak, Google Maps, Redfin
As for the Lamborghini, it appears that Brown no longer owns the sports car. The Michigan title was canceled at the end of 2021, according to state records, and it was listed for sale as recently as last month for $208,500. Pot careers get derailed
Brown faces up to five years in federal prison and a $250,000 fine when he is scheduled to be sentenced Oct. 18 — the same day as Pierce.
As part of his bond conditions, U.S. Magistrate Judge Phillip Green said Brown cannot be involved in marijuana consulting. That is because marijuana, though legal under Michigan law, is prohibited under federal law.
Brown's lawyer, Mark Kriger, noted that Brown's consulting firm, Artemis Consulting, works "exclusively" with marijuana clients.
"I guess he needs to find another line of business," the magistrate judge said during an April court hearing.
Pierce also is banned from the marijuana industry while on bond, and has financial problems.
Lobbyist Brian Pierce walks out of federal court in April in Grand Rapids. He entered his guilty plea for conspiracy to commit bribery of Rick Johnson, the former chairman of Michigan's marijuana licensing board. Katy Batdorff, Special To The Detroit News In July, two months after pleading guilty to paying bribes, Pierce had $10 in the bank, no cash and his 100% stake in the lobbying firm at the heart of the corruption scandal, Philip Alan Brown Consulting, was almost worthless. That is according to Pierce's Chapter 7 bankruptcy petition filed in July.
The filing capped a long career in Michigan politics and a brief, successful and corrupt lobbying career.
Pierce, 45, was previously the executive director of the Kent County Republican Party and a consultant. Pierce worked as legislative director for Kesto, a Commerce Township Republican, from January 2013 through November 2015, according to his LinkedIn page. Kesto chaired the House Judiciary Committee, which handled the medical marijuana bill that created the licensing board.
He worked with two marijuana-focused firms, according to lobbying disclosures: Michigan Growers Consultants and Philip Alan Brown Consulting.
The firms were based out of the same downtown Lansing office building out of which Johnson's old firm, Dodak Johnson, operated.
The bankruptcy case paints a dire picture of Pierce's finances.
He estimated as much as $1 million in liabilities and as much as $500,000 in assets. Pierce has not made a mortgage payment in almost three years on his $450,000 home in Midland. He owes so much — $128,995 — that he plans on surrendering the home, according to a bankruptcy filing.
Earlier this month, a bankruptcy judge approved a process that is expected to end in the home being foreclosed and sold.
The personal damage suffered by Pierce and the others is not unique, Schneider said. "It is easy to see the public parts of a corruption case, such as as the guilty plea," he wrote in a text message to The News. "But behind the scenes, I’ve often seen cases where the defendants lose their retirement savings, get divorced, and separate from their families because of their legal problems. The collateral damage can be devastating."
What's next for Johnson?
At age 70, with a federal conviction on his record, Johnson's career in politics is likely finished.
Donald Bailey of Traverse City, who worked for the Michigan State Police for 36 years, served on the medical marijuana licensing board with Johnson.
“To have somebody behind the scenes, greasing the skids to make things happen in their favor, is frustrating,” Bailey said. “It’s not the way it should be.”
Bailey said the crimes Johnson committed would likely end the former House speaker's career in politics. He also questioned whether Johnson would ever be able to rehabilitate his integrity.
“If you have compromised your integrity, how do you come back from that?” Bailey asked. “My answer is you can’t.”
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