Feds unveil corruption charges in Mich. marijuana probe involving Rick Johnson
Another example of corrupt government officials stealing money for giving out licenses, just sickening, put them in prison.
Robert Snell
Craig Mauger
The Detroit News
Lansing — Former Michigan House Speaker Rick Johnson and three others were charged in a bribery scandal Thursday following a years-long investigation involving the state’s marijuana licensing operations, according to prosecutors who unveiled the largest public corruption scandal in the state’s capital in 30 years.
Johnson, 70, a Republican from LeRoy, pocketed more than $100,000 from multiple people who were pursuing bribes in exchange for licenses to operate marijuana facilities at the dawn of Michigan's cannabis industry, federal officials said. The bribes included free private jet flights from Oakland County businessmen John Dawood Dalaly, Grand Rapids U.S. Attorney Mark Totten said Thursday.
Johnson was charged with accepting bribes, including approximately $68,000 from Dalaly. Dalaly, 70, of West Bloomfield, was charged with paying bribes to Johnson.
Also charged Thursday are two lobbyists who were charged with conspiracy to commit bribery:
? Brian Pierce, 45, of Midland.
? Vincent Brown, 32, of Royal Oak.
All four have reached plea agreements with the government and are cooperating with the FBI and U.S. Attorney's Office, Totten said.
“Johnson accepted these bribes corruptly…with the understanding that these bribes were offered to influence him or reward him for actions he might take,” Totten told reporters at a press conference outside of the Michigan Capitol.
Totten was joined by James Tarasca, special agent in charge of the FBI in Michigan, who helped in the investigation.
The criminal cases are expected to amount to the largest federal corruption case in Michigan's capital in a generation. The Detroit News' reporting about the investigation has raised new questions about financial pressures on Lansing, the state's ethics policies while the GOP controlled the Legislature and whether politicians, businessmen and lobbyists rigged Michigan's burgeoning marijuana industry.
Rick Johnson chairs the committee as it meets before a capacity crowd in Lansing, Monday, June 26, 2017, at the first open meeting of the Michigan Medical Marijuana Board.
The News exclusively revealed the investigation in February, reporting that FBI agents were scrutinizing Johnson's nearly two-year tenure as chairman of the state board that determined which businesses could sell and grow medical marijuana.
The News later reported that former marijuana lobbyist Brian Pierce, 45, of Midland, was under investigation and that FBI agents had searched his home in August 2020 as part of a broader series of raids targeting people central to the probe. Pierce is expected to be charged alongside Johnson on Thursday, sources familiar with the investigation said. The sources requested anonymity because they were not authorized to discuss the secret grand jury investigation.
Johnson, 70, a Republican from LeRoy who held the top position in the Michigan House from 2001 through 2004, was appointed by then-Gov. Rick Snyder to serve as the Medical Marihuana Licensing Board's chairman in May 2017, a decision that drew sharp criticism because of Johnson's work as a lobbyist.
Dalaly’s website portrays him as a prolific Michigan businessman who developed and marketed international health care services.
Prosecutors said he had two marijuana-related businesses, including one that sought state licensese to operate provisioning centers and one firm that explored creating a digital currency platform for marijuana transactions.
Johnson voted in support of a marijuana business during his tenure leading the board and then accepted a $75,000 loan from an investor with a stake in the deal, a Detroit News investigation revealed.
Court records pointed to a tangled, troubled deal between the Republican farmer from LeRoy who led the Medical Marihuana Licensing Board for two years and Bloomfield Hills-based real estate investment company MSY Capital Partners.
The loan violated the spirit of a state law aimed at preventing corruption, according to the legislator who sponsored the policy, and raised new concerns about secret financial arrangements at the dawn of Michigan's marijuana industry, which generated more than $2 billion in sales in 2022.
On April 25, 2019 — the date of the final meeting of the medical marijuana board before it was disbanded — Johnson and two other panel members voted to "pre-qualify" JAR Capital LLC for a pot license. One of the investors in JAR Capital was Metro Detroit lawyer Gregory Yatooma.
Then, on June 24, 2019, MSY Capital Partners, a firm run by members of the Yatooma family, loaned Johnson $75,000, according to court records and internal documents provided by MSY. Those documents show Johnson personally emailed Gregory Yatooma on June 18, 2019, seeking a $75,000 loan to "pay off" another short-term loan from a "business associate" and to gain "funds for finishing up spring 2019 planting."
A 2016 law creating the marijuana licensing board prohibited board members from entering into a contract with an applicant, including those with a 10% ownership interest in an applicant or those who manage the applicant, for four years after their service on the board. While Gregory Yatooma's name was listed in the JAR Capital application, Gregory Yatooma spokesman Mort Meisner said he was a minority investor of less than 10% ownership in the marijuana company.
Meisner, speaking on behalf of brothers Christopher and Gregory Yatooma, two members of MSY Capital Partners, said in a statement the $75,000 loan had nothing to do with Johnson's role on the licensing board. MSY also provided emails that showed attempts to collect on the loan throughout most of 2020 before Johnson eventually repaid them. The loan had a 60-day term with varying interest rates depending on the status of repayment.
"MSY regrets providing the loan, as they did not know the issues surrounding Mr. Johnson, and unequivocally the loan was not made for any actions during Mr. Johnson’s time on the board," Meisner said, referencing what he called “Johnson’s consistent record of bad behavior.”
