U.S. Indicts Gov. Edwards; Fraud Charged

Louisiana Gov. Edwin W. Edwards, who has described himself as the most investigated governor in his state’s corruption-plagued history, was indicted by a federal grand jury Thursday on charges of using his office to benefit himself and former business associates.

Edwards, 57, a third-term Democrat, had proclaimed his innocence in advance of the grand jury’s action and depicted himself as the “political” victim of New Orleans U.S. Atty. John Volz, a Republican. He is the third governor in the nation to be indicted while in office in the last 50 years and has vowed that he will not step down.

Edwards, approached by reporters outside the governor’s mansion in Baton Rouge, refused to comment on the indictment until he had read it. He scheduled a news conference for today. But he quipped: “I’m healthier now than I was a year ago. I’ll be able to live out any sentence I might receive from this.”

The 51-count indictment accused Edwards and six other men, including his brother, Marion, 56, and his nephew, Charles David Isbell, 40, of a racketeering conspiracy and wire and mail fraud in a multimillion-dollar hospital and nursing home development scheme.

The alleged conspiracy began Feb. 10, 1982, when Edwards, then out of office and in between terms as governor, joined with two of the other defendants in forming an enterprise to obtain state certificates for corporations to build federally aided health care facilities in Louisiana.

The two others were Ronald F. Falgout, 45, vice president of Health Services Development Corp., who was a state Health and Human Resources official in an earlier Edwards administration, and James J. Wyllie Jr., 36, president of Health Services Development.

Edwards, Falgout and Wyllie--aided by the other defendants--sold the required certificates to the corporations, the grand jury charged.

The state hospital and nursing home certification process is designed to prevent construction of unneeded facilities. The federal investigation was opened after complaints from backers of the other projects that did not have certification.

Elected to Third Term

Edwards was elected to his third term Oct. 22, 1983, and took office the following March 12. The indictment alleged that Falgout told employees of the state Department of Health and Human Resources in 1982 that Edwards was interested in projects submitted by the enterprise and implied that their future careers would reflect the assistance they provided, once Edwards was reelected.

Between February, 1982, and now, the enterprise obtained certificates for 15 medical centers, hospitals and nursing homes.

Other defendants include Gus Mijalis, 50, a Shreveport, La., businessman and associate of the governor, and Perry J. Segura, 55, a principal in a hospital architectural firm.

Mijalis, whose alleged role included contacting persons interested in obtaining the certificates, also was charged with obstruction of justice. The indictment charged that he advised two individuals who had paid him for the certificates to withhold that information from the grand jury.

Brother’s Alleged Role

Marion Edwards’ role, the indictment charged, was to receive his brother’s share of the projects once his brother took office as governor. Marion Edwards allegedly received $1 million. The indictment alleged that the governor received $1.95 million through the enterprise and Falgout and Wyllie more than $2.6 million each.

Because the indictment alleged violations of the Racketeer Influenced and Corrupt Organizations Act, the money that the defendants realized is subject to criminal forfeiture if they are convicted. Edwards, if convicted on all counts, could be sentenced to a maximum of 265 years in prison and be fined $74,000.

Edwards has been the subject of six previous grand jury investigations during his stormy political career but has not been charged.