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FBI suspected Dayton Mayor Whaley of bribery in 2014, court documents show

Search warrants were filed in 2013 and 2014 amid city corruption probe
Nan Whaley
Posted at 7:17 AM, Sep 08, 2021
and last updated 2021-09-08 14:47:58-04

The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.

The FBI suspected Dayton Mayor and Democratic gubernatorial candidate Nan Whaley in 2014 of accepting cash bribes from a city contractor, according to unsealed search warrant applications filed in federal court.

Whaley was not charged with any crime. The warrants detail sworn statements from FBI agents to a federal judge outlining their suspicion of impropriety. In both instances, federal magistrates found probable cause to grant the warrants.

In the documents, the agents told the judge that a controller for demolition company Steve Rauch Inc. — which pleaded guilty last year to a charge of conspiracy to engage in mail fraud regarding subcontracting work — said in recorded phone calls with another company official that Whaley accepted cash bribes from Rauch on multiple occasions.

The search warrant requests were filed for phone records and permission to place a GPS tracker on the vehicle of Willis Blackshear Sr., then the Montgomery County recorder, who the FBI agents alleged worked as a courier between Rauch and Whaley. Whaley served on the Dayton city commission and was running for mayor at the time.

“What he [Blackshear] does is he acts as the intermediary, so Nan [Whaley] doesn’t have to come out here,” said the controller, identified as Dan Feucht, in a recorded phone call detailed by the FBI.

“You know the City of Dayton Commission doesn’t have to come out here. So he [Blackshear] does all the running. He comes out here and collects all the money.”

The other party to the phone call, identified only as a former project manager for Rauch’s company, asked if “even Nan Whaley is in on that deal?” Feucht responded, “Oh yeah, very much so.”

Whaley, through her campaign, declined an interview. In a statement, she denied any wrongdoing.

“These seven-year-old claims are baseless and categorically untrue,” she said. “In the course of federal investigations into illegal activity in Dayton, unfounded claims were made against me. Investigators did exactly what they should do: thoroughly looked into it and found nothing. I can only assume investigators saw through these claims because I only learned about them this week, but I’m glad they were taken seriously and I’m grateful for the FBI’s work to root out corruption.”

(UPDATE): The Whaley campaign put out a research document Wednesday to Ohio reporters and editors [ohiocapitaljournal.com] disputing various aspects of the allegations in the warrant request affidavits. The campaign said in the document that Whaley has never interacted with or met Feaucht, who made the allegations against her. It also states that Whaley never inserted herself into the city’s contracting process, and that “Dayton city elected officials have little to no influence over contracts with the city.” Whaley’s campaign also says she was never contacted by the FBI, and WDTN in Dayton reports the Department of Justice says there is no ongoing investigation involving Whaley [wdtn.com].

About six months before announcing the Rauch indictment in October 2019, federal prosecutors announced indictments against Dayton City Commissioner Joey Williams and city employee RoShawn Winburn alleging bribery involving the procurement of city contracts. All eventually pleaded guilty.

The search warrant applications also accuse then-Dayton Mayor Rhine McLin of accepting bribes and steering demolition contracts to Rauch. Feucht estimated Rauch gave McLin $100,000 a year, according to the FBI affidavit.

McLin was not charged with a crime. She declined to comment Tuesday on claims lodged within the search warrant affidavits, as did Rauch.

Whaley allegations
According to the FBI’s description of Feucht’s statements in interviews, recorded calls and meetings, Feucht attended a meeting in Rauch’s office in the summer of 2013. There, the agents wrote, Rauch handed Feucht an envelope that Feucht believed — given its weight, size, and previous experience with Rauch — contained cash. Rauch, they wrote, asked Feucht to give it to Blackshear.

Again in October 2013, just before Whaley won her first mayoral election, Rauch handed Feucht a similar white envelope and asked Feucht to give it to Blackshear, according to the FBI.

“Specifically, Rauch told [Feucht] he gave [Whaley] $50,000 in cash, and has ways to get the cash to Whaley that is not detectable,” the FBI wrote in the search warrant application.

“On another occasion, Rauch told [Feucht] he is using Blackshear as a ‘go between’ to Whaley.”

Additionally, Feucht claimed he witnessed Rauch, during a March 21, 2014 meeting with Blackshear at his office, reach into his front pocket and grab a roll of cash wrapped with a rubber band. He then removed an “unknown amount of cash” and gave it to Blackshear, per the FBI.

The affidavit attached to the warrant is comparatively light on detail regarding any supposed favors from Whaley in return for the alleged payments. Agents who wrote the affidavit cite two instances, without specific dates, where they say Rauch was having “issues” on a project and allegedly told Feucht that Rauch “gave Whaley money and she needs to take care of it.”

Additionally, the agents told the judge they needed to record a looming meeting between Rauch and Blackshear.

“The meeting is expected to include a payment from Rauch to Blackshear for Blackshear’s involvement in [Steve Rauch Inc.’s] City of Dayton contracts in furtherance of the above described violations of federal law,” the agents wrote.

Feucht now operates Ajena Services, a commercial cleaning company. He did not respond to a message left with a company employee.

Willis Blackshear Sr. died of cancer at the age of 57 on Feb. 19, 2018, according to his obituary. He was not charged with a crime.

The two search warrants were filed under seal in October 2013 and July 2014. Ben Glassman, the U.S. attorney for the Southern District of Ohio who was appointed under Democratic President Barack Obama, declined comment.

Related indictments, plea deals
Starting in spring 2019, prosecutors publicly began to unveil a cascade of indictments all tracing back to either Rauch or city contracts.

On April 30, 2019, the U.S. Department of Justice announced indictments against Dayton City Commissioner Joey Williams; Director of Dayton’s Minority Business Assistance Center RoShawn Winburn; and local businessmen Clayton Luckie (a former state representative) and Brian Higgins.

According to his indictment, Williams and “Individual A” discussed the anonymous businessman’s trouble procuring a city contract. The businessman provided at least $50,000 in “free benefits” to Williams, including cash payments and the construction of a patio at his home. In exchange, Williams used his influence with the commission to award state contracts worth at least $150,000 to “Individual A’s” business.

Williams later “demanded” that “Individual A” provide a fraudulent invoice for the patio for $50,000 to conceal the bribe, according to the indictment.

Williams pleaded guilty in January 2020 to one count of theft or bribery concerning programs receiving federal funds. He was sentenced to one year in prison and $28,000 in restitution.

Rauch’s company pleaded guilty to a comparatively narrow indictment in November 2020; he was accused of failing to subcontract demolition work to “socially or economically disadvantaged” businesses, as the city required. Instead, Rauch allegedly paid a “fee” worth thousands of dollars to Joyce and James Cameron of Green Star Trucking, a purportedly disadvantaged business, and fraudulently represented them as debris haulers to the city on various documents.

Prosecutors dismissed the case against Rauch personally; his company instead pleaded guilty to a count of conspiring to commit mail fraud.

He was sentenced to pay a fine of $15,000 earlier this year, according to the Dayton Daily News. An investigation by the newspaper found Rauch owns nearly $4 million worth of property in Montgomery County. The city had paid his companies at least $2.5 million between 2012 and 2019 on top of federal contracting work.

Winburn was accused of accepting at least $20,000 in cash payments in exchange for credentialing businesses as disadvantaged without verifying, and for disclosing non-public contract bidding information to provide companies with an unfair advantage over other bidders, according to an indictment.

He pleaded guilty to one count of the theft or bribery concerning programs receiving federal funds. He was sentenced to six months in prison and $8,500 in restitution.

The warrants
Federal law enforcement officers requested and obtained two search warrants identifying Blackshear as a target.

The first was approved and ordered sealed by U.S. Magistrate Judge Michael Merz on Oct. 22, 2013. Agents sought to apply a GPS tracking device onto Blackshear’s vehicle.

The warrant was unsealed in August 2017, but has not been publicly reported. It identifies Dan Feucht as a company controller and attributes the allegations of bribery against Whaley to him.

The second warrant seeking Blackshear’s phone records was filed and ordered sealed on July 8, 2014 by U.S. Magistrate Judge Michael Newman. The warrant contains verbatim statements as those Feucht provided in the prior warrant; however, it attributes them to “Confidential Human Source 4,” identified as a company controller. It notes the informant became a government witness in February 2014.

The second warrant was unsealed Sept. 1, 2021, when it was first noticed by Seamus Hughes, an author, researcher, and Deputy Director of the George Washington University Program on Extremism.

Jennifer Thornton, a spokeswoman for the U.S. Attorney’s office, declined to commen