The saga surrounding Rick Johnson, a former Republican Michigan House speaker who acted as chairman of the state’s cannabis board for two years until spring 2019, reached new heights on Thursday, as the former head of the licensing board agreed to plead guilty to accepting $110,000 in bribes during his time in the role, according to a Yahoo! News report.
In a signed court filing, Johnson acknowledged that he acted “corruptly” when he accepted cash and other bribes in exchange for his support to companies seeking medical cannabis licenses.
Johnson was charged along with three defendants: John Dalaly, a business owner charged with paying at least $68,200 in bribes to Johnson; and Brian Pierce and Vincent Brown, two lobbyists charged with conspiracy to pass bribes to Johnson.
Dalaly operated a company that sought a medical cannabis license from the board. Pierce and Brown were lobbying on behalf of another company seeking a license. Johnson voted in favor of these companies obtaining licenses, also providing “valuable non-public information about the anticipated rules,” court documents allege.
Pierce and Brown then attempted to hide payments to Johnson by funneling them through various companies controlled by Johnson, Totten said. The payments came out of their client retainer fees, according to court documents.
According to defense attorney David Griem, Brown voluntarily spoke to federal agents for hours in 2020 before he had a lawyer. At the time, he told the Associated Press, “I only fight cases that I can win at trial or the government gives me no choice, the offer is so bad. We’re not going to fight this.”
All of the defendants ultimately signed plea deals admitting their guilt to the charges.
“[The cannabis industry has] been held out as an equalizing opportunity,” said Mark Totten, U.S. Attorney for the Western District of Michigan, at a Thursday press conference. “Yet what we’ve learned today is that one of its key leaders … acted corruptly and did so at a moment that mattered most for those who want to get ahead in this industry.”
Corruption in Michigan
Totten added that public corruption “is a poison to any democracy,” deeming that poison “especially toxic” in relation to the newly emerging cannabis industry.
“The marijuana industry has been likened to a modern-day gold rush, a new frontier where participants can stake their claim and just maybe return big rewards,” Totten said.
Before his time in cannabis, Johnson served as a state representative from 1999 to 2004, including three years as House speaker. After leaving that role, he ran a lobbying firm in Lansing, eventually serving as the chair of the Michigan cannabis licensing board from 2017 to 2019, court documents show.
The Michigan cannabis board reviewed and approved applications for businesses to grow and sell cannabis for medical purposes. Gov. Gretchen Whitmer abolished the medical cannabis board in 2019 after taking office, instead putting oversight of the cannabis industry in the hands of a state agency.
Totten said that Johnson was “at the heart of this corrupt scheme,” sharing cash payments and additional perks, including private chartered flights through Dalaly’s company. The investigation first began in 2017 and was led by the FBI.
Next up, all four dependents will be arraigned and have a plea hearing in the next couple of weeks, according to Totten. The four defendants pledged to cooperate with the ongoing investigation, and any members of the public with information related to the charaged are asked to contact the FBI.
Johnson and Dalaly face a maximum of 10 years in prison and a fine of $250,000; Pierce and Brown face a maximum of five years in prison and a fine of $250,000. Johnson also agreed to forfeit the $110,000 in bribes as part of his plea deal. The U.S. Attorney’s Office agreed not to oppose his request for a reduction in offense level, which would impact his sentence.