JACKSON The trial of Downtown Jackson Partners President Ben Allen began this morning with opening statements and testimony from an attorney who formerly worked with the state auditor's office asserting the money DJP collects from downtown property owners is public money.
A former special assistant attorney general, Melissa Patterson, testified first for the prosecution this morning, explaining her role in the original State Auditor's Office investigation of the downtown business improvement district starting in 2014. She currently works at the Mississippi Department of Human Services.
Hinds County District Attorney Robert Shuler Smith charged Allen with 10 counts, leading to a grand-jury indictment in early 2016, after Allen's former assistant, Linda Brune, registered as a whistle-blower. The indictment alleges that Allen spent organization funds collected from DJP member business owners on personal expenses and that the organization funneled money to an inaugural gala for Mayor Tony Yarber in 2015 after he won the special election for mayor.
Sue Perry, an assistant district attorney for Hinds County, asked Patterson if she had determined whether the money the organization requires property owners within the BID to pay or private or public. DJP is a 501(c)(4) nonprofit organization.
"I determined that the funds were taxed funds and were public funds," Patterson told the jury.
This difference is crucial because the majority of the counts that Allen faces center around a public official misusing public money. Patterson told the court that the money was public because the county tax collector collected and passed the funds through the city council to DJP. The kicker, though, was that when the money is added to private money already in the DJP coffers, Patterson said, all the funds become public as well.
"It's my opinion the funds coming from the state, the tax collector and the City of Jackson are public funds," Patterson said, citing state statutes and her "working knowledge" of the law. She compared the use of those public funds to being under the same laws as "trusts."
"So when you put public money and private money together, it's all public money. If you have private money, you should keep it in a separate account, and Downtown Jackson Partners did not, so it is all public funding," Patterson said.
Hinds County Circuit Judge Winston Kidd is presiding over the case. He explained to the jury before the opening statements that they could keep notes during the trial but should not take in any media concerning the case or discuss the trial with anyone during the proceedings.
This morning, Kidd ruled that the jury could see a resolution that the board of Downtown Jackson Partners passed in support of Allen. That resolution includes an investigative report for DJP by attorney Robert Gibbs that states that DJP is accusing her of embezzling more than $40,000 in forged checks on the organization's corporate account. DJP is suing her in a Madison County court in order to collect the money it says she embezzled. DJP discovered the alleged embezzlement in August 2014, Gibbs states in his report. (See Brune's response to DJP's initial complaint here.)
Documents filed with the court, including canceled checks and other documents, also show that DJP tried to get the Hinds County District Attorney's Office to prosecute Brune for the alleged embezzlement, but it refused, scribbling that the case was "retaliation for whistle-blowing" on a "Recommendation for No-Bill" dated May 29, 2015.
Brune has not consented to an interview, but wrote in a comment on the Jackson Free Press website that the DJP allegations against her are "bogus." She also had strong words for DJP's board of directors, posting: "As for the Board who sprinkles their holy water on the shenanigans on Ben's little Faux Pas, they are in it up to their hair follicles so they HAVE to back him...more trials to come on that one!"
Assistant District Attorney Randy Harris had asked Judge Kidd through a motion to prohibit Allen's defense from mentioning Brune's alleged theft during the trial because the effect "would certainly be more prejudicial than probative." The judge has not yet ruled on that motion, but the alleged embezzlement accusation is part of the DJP resolution package. Brune is expected to testify for the prosecution.
And in a hint of the defense's anticipated strategy, the court issued a subpoena for Dr. Daniel Quon, a Jackson oral surgeon, to appear and produce business records to show why Brune allegedly wrote him checks on DJP's account in 2009. The motion attached copies of the checks to Quon totaling over $2,500.
Smith, who recently went through his own trial that ended in a mistrial, delivered the opening statement for the prosecution. He argued that the key element to the case was that Downtown Jackson Partners was a public entity with public funds.
Merrida Coxwell, Allen's defense attorney, told the jury during his opening statements that DJP is a private organization and as such its internal expenditures and practices do not fall under the laws governing the use of public funds.
"It's not public money," Coxwell said.
In the afternoon, however, Hinds County Tax Collector Eddie Fair testified that his office collects the assessment that go to DJP and gives it to the City, which then writes DJP a check. If the businesses do not pay their taxes, which include the assessment, his office will eventually place a lien on the business.
Editor's Note: The above story is updated to reflect that Judge Kidd allowed the DJP resolution on behalf of Allen into the trial and to add motions to quash DJP's allegations of Linda Brune and a related subpoena. We also added information about Tax Collector Eddie Fair's testimony in the afternoon.
Email city reporter Tim Summers Jr. at [email protected]. Follow Ben Allen's trial coverage, with documents and context, at jfp.ms/djp. Donna Ladd contributed to this report.