Former Republican state House Speaker Rick Johnson, two lobbyists and a medical marijuana business owner were charged Thursday April 6, 2023, in a bribery scheme, the U.S. Attorney for the Western District of Michigan announced at a news conference in Lansing.
Johnson, 70, was the chairman of the state's medical marijuana licensing board, which approved or denied applications from medical marijuana businesses, from 2017-19. He was charged with accepting bribes. Brian Pierce, 45, and Vincent Brown, 32, both registered lobbyists, were charged with conspiracy to commit bribery. John Dalaly, 70, who sought a license to operate a medical marijuana business, was charged with payment of bribes.
Each of the four defendants has signed a plea agreement and admitted to the charges, said U.S. Attorney for the Western District of Michigan Mark Totten. Totten announced the charges at a Lansing news conference Thursday morning, alongside Special Agent in Charge of the FBI in Michigan James Tarasca. “Unfortunately, a small percentage (of public officials) abuse the public trust,” Tarasca said. “Public corruption is a top criminal priority for the FBI. Public corruption erodes confidence and undermines the strength of our democracy.”
The charges come after a five-year-long investigation into whether bribes influenced the state's licensing of medical marijuana businesses. Totten described Johnson as the "heart of this scheme" and said he accepted more than $100,000 in cash payments and other sources from companies and lobbyists seeking licenses. Totten said he accepted those bribes with the understanding that these were bribes "offered to influence or reward him for actions he might take." Dalaly gave at least $68,000 in payments, which included Johnson's travel on private flights, Totten said.
Totten said, as part of their plea agreements, all four defendants have been cooperative with investigators. Per Johnson’s plea agreement, government prosecutors have agreed not to pursue charges against Johnson for any other possible bribes related to his time on the Medical Marihuana Licensing Board outside the $110,200 outlined in the felony filing, although he could still be prosecuted for anything he failed to disclose to the government.
Additionally, thanks to Johnson’s “acceptance of responsibility” for the charges, the government has agreed not to argue against any motion Johnson makes for a reduced sentence from a judge. The plea agreement also states prosecutors will at least consider making a motion for a sentence reduction of their own, commonly referred to as a "5K" motion in the legal system. The maximum prison sentence for Johnson’s charge is 10 years in federal prison and a $250,000 fine. Dalaly also faces up to 10 years in federal prison and a $250,000 fine. Pierce and Brown face up to five years in prison and a $250,000 fine. Totten said he wouldn’t speculate on what a potential sentence would be.
Johnson and others have not been detained thanks to their cooperation, Totten noted, but would be processed during a plea hearing within the next two weeks. Since the four all entered plea agreements, they have waived their right to be indicted by a grand jury. The case has been assigned to U.S. District Judge Jane Beckering in Grand Rapids. The investigation remains ongoing. Totten and Tarasca didn’t share further details of the investigation’s current scope.
Matthew Schneider, a former U.S. Attorney for the Eastern District of Michigan who is now a partner at the Detroit-based law firm Honigman, said this is just the beginning. “There are more people involved in this and we should expect additional charges in the future." He noted, though, that prosecution for most federal crimes must begin within five years of the commitment of the offense and the investigation is running up against the clock. Schneider called the investigation a “generational case” and said a case like this is rare to come out of Lansing.
Details of the investigation first became public in February when, as a result of a lawsuit over unpaid legal bills, records showed that federal investigators were interested in a nonprofit Johnson headed called Michigan's Promise. Johnson, who is from LeRoy in Osceola County, came under scrutiny in 2017 when former Gov. Rick Snyder named Johnson to the Michigan medical marijuana licensing board. Johnson was House Speaker from 2001 to 2004, then a registered lobbyist from 2005 to 2016. While a lobbyist, Johnson confirmed he worked on Michigan's marijuana legislation that created the licensing board, but said he was just lending his expertise and had no paying client. At the time of his nomination to the board, Johnson confirmed he was negotiating the sale of his stake in the lobbying firm, Dodak Johnson & Associates, to a lobbyist for the medical marijuana industry, Pierce, though he later said he ended up instead selling to his business partner, former Speaker of the House Lew Dodak.
Medical marijuana lobbyist Brian Pierce also had a role in developing the state's medical marijuana law. Just before becoming a lobbyist, Pierce was chief of staff to then-House Judiciary Chairman Rep. Klint Kesto, R-Commerce Township, who chaired the House Judiciary Committee that worked on the legislation.
Gov. Gretchen Whitmer abolished the medical marijuana licensing board early in 2019 after voters in Michigan legalized the recreational use of the drug in 2018. Medical marijuana license holders were in a good position to take advantage of the new recreational marijuana industry. Sales began in December 2019, months earlier than expected, after the state had previously said that there was a possibility that no marijuana could be transferred from the medical to the recreational side.
Assistant United States Attorneys Christopher O’Connor and Clay Stiffler will prosecute the case for the government, per Totten's office. O’Connor was one of the government attorneys who argued the second federal trial for the kidnapping plot against Gov. Gretchen Whitmer, when prosecutors were able to secure a pair of guilty verdicts.