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Allegation at trial: Chancellor's kin paid
for no work

HUNTSVILLE (AP) — The trial of a Jasper banker for allegedly obstructing justice in the two-year college system probe has included testimony about accusations that fired Chancellor Roy Johnson's children and others were paid for work they never did.

An investigator, James Kiel, testified Tuesday that he received complaints from state firefighters in July 2004 that Johnson's children were being paid by the Alabama Fire College in Tuscaloosa but did not actually work, The Birmingham News reported Wednesday as the trial neared its end.

Steve Johnson, the fired chancellor's son, received $48,000 a year in 2003 from the school; and Malinda Morgan, Roy Johnson's daughter, received more than $21,000 a year from the college until her contract was canceled last year. The Birmingham News was unable to reach Johnson and Morgan for comment.

The banker on trial, Phillip Grace, was accused of telling a suspect that his financial records were subpoenaed in the investigation.

Grace was charged with obstructing justice by giving the suspect, a bank customer, copies of the subpoenas, and one count of making false statements to federal investigators.

Grace's lawyer, Ronald Brunson, told jurors Tuesday that Grace is a victim in this case who never wanted to interfere with the investigation.

Grace was concerned that customer Winston Hayes, owner of a software company that received two-year college contracts, would have trouble repaying millions he borrowed from First National Bank of Jasper and wanted to know why Hayes would be under investigation, Brunson said.

"It was important that Hayes not leave the bank standing with $3 million in debt," Brunson said.

Possible sentence

If convicted, Grace faces up to five years in prison and $250,000 in fines.

"The defendant had a choice between notifying his good customer or following the law. He chose wrong," Assistant U.S. Attorney George Martin told jurors Tuesday.

Kiel said he also was told that Hayes' company received bogus contracts from the Fire College for work never done.

Hayes told jurors he became a government witness in December 2004, after admitting to prosecutors that he paid kickbacks to state officials who later helped him earn millions from the two-year college system.

Hayes identified only one state official in court Tuesday — former fire college Deputy Director Robert Nix, who has pleaded guilty in the case and is helping prosecutors. He said he also gave a copy of a subpoena Grace sent him to Bevill State Community College President Harold Wade.

Hayes said that, in recent years, he has received more than $2 million a year from the college system.

Other hires

Hayes' company, Access Group, also hired Johnson's daughter and the wife of state Rep. Richard Lindsey, D-Centre, head of the Alabama House Education Budget Committee that writes the state's two-year college budget.

Hayes, in response to Brunson's questions, admitted lying to prosecutors and investigators a number of times, even after he became a government witness in 2004.

He said he tried to avoid implicating others in the investigation and wanted system payments he received to appear legitimate.

The investigation has expanded beyond the fire-training school into other areas of the state's two-year college system.

A state lawmaker has pleaded guilty in the case, and resigned his elected position and his college job; two Fire College employees face criminal charges; and prosecutors have filed a forfeiture claim against Johnson's $1 million Opelika home, although he has not been charged with a crime.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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