“The jury’s verdict settles the question of federal criminal liability. The jury’s sole duty is to decide whether the evidence proves a defendant guilty of the charged crime beyond any reasonable doubt, and a substantial proportion of corruption trials result in acquittals. Prosecutors should never complain about the outcome of a fair trial.”
Those are the words of U.S. Attorney Rod Rosenstein, whose office spearheaded the case against former Shoppers Food & Pharmacy executives Bill White and Kevin Small and Maryland State Senator Ulysses Currie. That six week trial, which charged the three men with bribery and conspiracy, ended with a full acquittal on all charges for all defendants. The men were all tried together.
And while Rosenstein’s words indicate that the federal government fought the good and fair fight and accepts the outcome, the truth of the matter is that there wasn’t a felony case to be made against all three individuals and, especially for White and Small, men with impeccable reputations, there shouldn’t have been any legal action to begin with.
I wish I could be as objective in my analysis about White and Small’s former employer, Supervalu. For several years now, we have blatantly criticized the leadership of the Eden Prairie, MN based retailer/wholesaler. That criticism has always been centered on performance and leadership issues, particularly its current CEO Craig Herkert.
This time, the topic isn’t financial performance – it’s the company’s spineless reaction to the government’s agenda, followed by the performance of some former Supervalu executives.
When the government’s investigation began in 2008, Supervalu provided legal counsel for White, Small and several other Shoppers/Supervalu executives. It seemed clear that White, who was president of the regional chain from 1998 until his retirement in 2006 and Small, who served as VP-real estate and construction, felt they did nothing wrong by hiring and compensating Currie for his part-time consulting role on behalf of Shoppers. Currie’s duties included a wide range of services among them attending store openings and helping the retailer with more challenging issues such as helping get a traffic light installed at a new store and transferring a liquor license from one Prince George’s County store to another.
Even during the investigation, numerous documents illustrated that White and Small’s actions were supported by corporate Supervalu (and Currie was paid from Supervalu’s corporate offices not by the Shoppers office, which was then located in Lanham, MD). As far as the relationship between Currie and Shoppers/Supervalu, there was nothing hidden or mysterious about it.
However, the FBI and subsequently the U.S. Attorney felt that Currie, in particular, had committed an egregious crime. In September 2010, the Feds issued an indictment charging all three men with a host of alleged acts, the most serious of which were conspiracy and bribery, both felonious offenses punishable by large fines and/or prison time.
Immediately, White and Small cried foul and vehemently vowed to fight the charges. However, Supervalu, which had been supportive from the outset of the investigation, quickly pleaded guilty to the charges and, in a pre-arranged settlement, agreed to pay a $2.5 million fine. It should be noted that at the time of the indictment, Jeff Noddle, SVU’s former CEO who had supported the company’s position as well as White’s and Small’s, had retired, and his successor, the aforementioned Craig Herkert, elected to reach a plea agreement with the Feds. But let’s not blame Herkert for having a vendetta to throw White and Small under the bus. A more likely scenario is that, facing government pressure, the Supervalu legal team felt a settlement was the quickest and most painless way to put this issue behind them. But if you believe that Jeff Noddle did all he could to help his former top performing associate (Bill White) once the indictment was issued, think again.
Supervalu’s settlement made the situation much more difficult for White and Small. Not only were they about to square off against the federal government – a stressful and expensive situation in itself – they now had to reconcile the fact that their former employer had turned tails against them.
Even before the trial began in late September in Baltimore, it was clear that Supervalu was going to stonewall the efforts of White and Small to gather evidence that could help their cases.
Supervalu would not allow any of its current associates to be interviewed before the trial. And in a pre-trial hearing held in late July, Shoppers/Supervalu attorney William C. Brennan Jr., protested when attorneys for Currie, White and Small asked that more documents about the case that Supervalu held, be released, noting that such a “fishing expedition” would cost the company thousands of dollars.
Judge Bennett said access to the documents was a matter of fundamental fairness to Currie and the two former Shoppers executives.
“The defendants are entitled to look through documents and decide what is needed for their defense,” Bennett told Brennan. “Your client (Shoppers/Supervalu) might have to spend a lot of money.”
It’s one thing to cooperate with the government (as per the plea agreement); attempting to block evidence that could be helpful to two individuals who worked the tails off and made the company millions of dollars is quite another!
Then there’s Jeff Noddle, the man who began Supervalu’s backsliding path with his expensive and ill-advised acquisition of five major Albertsons divisions in 2006. Reportedly, when White asked Noddle to testify on his behalf (White’s corporate evaluations were always excellent and under his watch, Shoppers contributed nearly $300 million in profits to SVU over a seven year period during which Noddle was chief executive), Noddle begged off, allegedly citing potential conflicts as a shareholder (Noddle no longer has any direct affiliation with Supervalu). Noddle also reportedly told White that it might be in his best interests to settle the case as Supervalu did a year earlier. The last statement seems incredulous (and highly insensitive).
Here’s a man (White) who spent more than 40 years in the grocery business developing a sterling reputation from his superiors, associates and the vendors who knew him (he is a member of the Maryland Retail Hall of Fame and winner of the Pete Manos Retail Executive of the Year award), and whose financial performance was among the best in the whole company, being told by his former boss that a settlement ought to be considered. I’ll try to hold my tongue and just say that Noddle’s alleged response was disappointing at the very least.
When the trial finally began on September 28, the government never produced a “smoking gun” strong enough to convict Currie, White and Small. That the case was so circumstantial (and weak to begin with) only made proof of conspiracy and bribery even more vague than the original indictment stated.
“We didn’t see evidence that the actions that were unethical (by Currie) were done for some criminal purpose with criminal intent,” said juror Steven Cason, when interviewed by The Washington Post after the trial.
During the trial, it should be noted how important the testimony of current and former Shoppers associates was in illustrating the outstanding reputations that White and Small earned during their tenure at Shoppers. People like Julie McWilliams, Rhonda Furmanski, Payton Tucker, Rick Rodgers and Tom Mowery all contributed to an honest and positive portrayal of White and Small’s image. Former Supervalu corporate senior VP-real estate John Domino was also very forthright in his testimony in assessing the actions of White and Small.
On the corporate side only John Hooley, White’s former boss, who as president of Supervalu’s retail companies (pre-Albertsons), was one of the beneficiaries of the stellar performance of Shoppers during White’s seven year tenure as president, seemed less than voluntarily praiseworthy. After reading Hooley’s court transcript, I’d have to say that, for a man who as recently as 2007 supervised more than $7 billion in retail sales, his recall struck me as more than a bit fuzzy. Maybe he suffered from performance anxiety on the stand and his memory was better when the Feds first interrogated him.
Despite his seeming recalcitrance, Hooley actually helped the defense by noting (when questioned by the defense) that White’s reputation within corporate Supervalu was excellent, his performance both in earnings contributions and market share gains was strong and he was well regarded by Shoppers’ associates. It was a brilliant moment by the defense, which essentially maneuvered Hooley into praising White, something I don’t believe he was ready to volunteer on his own.
So, instead of sticking to their original “guns” of believing that it did nothing illegally in engaging the services of Senator Ulysses Currie, Supervalu/Shoppers caved and now is $2.5 million to the poorer (I know it’s chump change, but it’s the principle) with a Scarlet Letter on their record to illustrate their guilt.
And, now, in addition to being the worst performing publicly-traded supermarket organization in the industry, let me add one more dubious distinction to Supervalu’s credit. They are gutless, too. And while Supervalu’s decision to accept the Feds’ plea deal might be not a decision that Craig Herkert made on his own, the record shows the guilty plea is on his watch. His record of maintaining the “reverse Midas touch” remains intact.
For White and Small, victory is surely sweet, but the stress of the past three years has taken its toll. For 1,000 days they lived every day under the pressure that they might end up in prison or have their life savings evaporate. Now that this whole almost surrealistic process is over, I hope they can regain a small measure of peace and happiness. Both certainly deserve it.