Former Michigan House speaker, 3 others plead guilty to cannabis bribery scheme

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A former Republican Michigan House speaker accepted more than $100,000 in bribes from would-be cannabis business operators in exchange for help obtaining licenses, federal prosecutors said Thursday.

The corruption allegations unveiled Thursday against Rick Johnson, 70, and three others amount to “the largest public corruption scandal in the state’s capital in 30 years,” according to The Detroit News.

Johnson served as speaker of the state House from 2001 to 2004 and later chaired Michigan’s medical marijuana board from 2017 to 2019,

It is also the latest example of public corruption connected to preferential licensing in legal marijuana – and perhaps the most high-profile case to date.

According to U.S. Attorney Mark Totten of the Western District of Michigan, Johnson, took “cash and benefits from at least two companies” and later voted in favor of granting them licenses.

The companies were not identified, but one was operated by Michigan businessperson John Dawood Dalaly, according to court filings.

Two of the companies sought “various operating licenses … in what was a new and highly lucrative market,” prosecutors said in court filings.

A third was “exploring the licensing of a digital currency platform for medical marijuana financial transactions,” according to filings.

Johnson agreed to plead guilty to accepting a bribe, according to a plea deal filed in federal court.

Dalaly and his co-defendants – lobbyists Brian Pierce and Vincent Brown, both of whom were charged with conspiracy to commit bribery – have also pleaded guilty.

Johnson and Dalaly’s charges are punishable by up to 10 years in federal prison and a $250,000 fine.

Brown and Pierce face up to five years in prison and a $250,000 fine.

In addition to accepting cash, Johnson accepted flights on private jets arranged by Dalaly, according to court documents.

In exchange for the bribes, Johnson “provided valuable non-public information about the anticipated rules and operation of the board and assistance with license applications” to his co-defendants, according to the filings.

Observers, including the FBI, have long warned that limited-license marijuana markets – where the number of MJ operations are capped, creating intense demand for what are lucrative business permits – is a “recipe for corruption.”

Major marijuana corruption cases include:

  • A California union official being indicted for accepting bribes and interfering with organizing.
  • Jasiel Correia, a former mayor of Fall River, Massachusetts, being found guilty of “old-school pay-to-play political corruption” connected to licensing in that city.
  • Richard Kerr, a former mayor of Adelanto, California, being indicted for bribery and wire fraud charges tied to marijuana business licenses.
  • California entrepreneur Helios Dayspring, pleading guilty to bribing officials in that state.

Former associates of ex-New York City mayor Rudy Giuliani went to prison for a straw-donor scheme in which they tried to use foreign money to bribe officials in Nevada for marijuana business licenses in that state that failed to materialize.

Charges against Johnson were expected for months, ever since a former attorney sued him for unpaid legal fees in an as-yet undisclosed “United States vs. Johnson” case that dated to 2020.

FBI agents had seized Johnson’s phone and bank records as part of a probe, the Associated Press reported in February.

Michigan Gov. Gretchen Whitmer dissolved the Michigan Marihuana Licensing Board that Johnson chaired shortly after she took office in 2019.

U.S. Attorney Totten seemed to suggest during a Thursday news conference more allegations could be coming.

“I suspect there may be more to follow-up about what, in fact, the result of all this was,” he said, according to MLive.com.

“Certainly, what I have described today should give anybody reason to question the process.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.