Morgan sheriff’s subpoena of FBI rejected; lawyer says IRS probing food money

The FBI argued that turning information over to Franklin would interfere with an ongoing criminal investigation. That has Franklin’s lawyer puzzled, he said, because he thought the only ongoing investigation was by the IRS into whether she should have paid taxes on state-issued inmate food money she loaned to a used car and title loan company.

“We know there is the question regarding taxes, with whether or not (inmate food money) was income,” said attorney William Gray. “The money came out of the food account and went to Priceville Partners. Ana never had it basically, and it went back to the food account. … I think the question of the taxes is the only thing remaining.”

The thumb drive would not appear to be relevant to an IRS investigation, however, which leaves Gray less certain.

Both blogger Glenda Lockhart’s lawyer, Brandy Lee of Birmingham, and Gray said the judge indicated at Wednesday’s hearing she would quash Franklin’s subpoena and rule in favor of the FBI. The judge’s announcement, which had not been memorialized in a written order late Wednesday, came after the Federal Bureau of Investigation submitted an affidavit explaining why it had refused to comply.

“The thumb drive and the other requested information is part of an ongoing criminal investigation currently being conducted by the FBI,” wrote Johnnie Sharp Jr., special agent in charge at the FBI’s Birmingham division. “I have concluded that disclosure of this information would impair the government’s investigative efforts. Even allowing access to this information would interfere with law enforcement proceedings and potentially compromise an ongoing criminal investigation.”

The issue arose in a lawsuit filed in 2016 against Franklin, deputies Blake Robinson and Robert Wilson, and information technology head Justin Powell, by Lockhart, whose blog has for years been critical of Franklin. Lockhart alleged Franklin and the other defendants illegally installed keylogger software on Lockhart’s computers to obtain passwords, and used information retrieved from the computers to obtain court approval for a search of Lockhart’s business. According to Lockhart, Franklin’s goal was to retaliate against the blog and to shut it down.

Franklin and the other defendants in October filed a counterclaim against Lockhart alleging her blog was libelous and invaded their privacy.

Gray said he is frustrated the FBI will not turn over the thumb drive.

“We know there is evidence that would vindicate the sheriff, the deputies and others. They didn’t get anything illegal off of Glenda Lockhart’s computer,” Gray said.

According to Lockhart, Franklin paid Lockhart’s grandson to install the keylogger. Daniel Lockhart, the grandson, in April testified he received the keylogger software on a thumb drive supplied to him by Powell. He said he installed the software and later gave the thumb drive to an FBI agent in Huntsville.

Powell testified in April he met Daniel Lockhart at the Falkville Volunteer Fire Department.

“At that meeting I gave Daniel Lockhart a keylogger that he had requested,” Powell said. “I showed him how to install it … .”

In the same hearing, Franklin denied knowing about the keylogger software and questioned whether it had ever been installed.

Gray said a forensic analysis of Glenda Lockhart’s computers indicates the keylogger software was never installed.

“If there were anything that was supposedly obtained from the thumb drive, where is it?” Gray said Wednesday. “It’s in the FBI office. It ain’t in the Morgan County Sheriff’s Office. It’s never been in the possession of the Morgan County Sheriff’s Office.”

In an amended answer filed last week, Powell admitted to providing the keylogger software to Daniel Lockhart, but denied it was on a thumb drive.

Gray said Franklin’s ongoing dealings with the IRS focus on an issue that has been a point of controversy in Morgan County and throughout the state for years: whether leftover inmate food money can be retained by a sheriff as personal income.

Franklin in 2015 loaned $150,000 to Priceville Partners LLC. The company went bankrupt in March 2016, and she filed a claim in the bankruptcy case. Her filing led to the discovery — initially publicized on Lockhart’s blog — that the money had come from an inmate food account.

Franklin has said she was encouraged to make the loan by Steven Ziaja of Falkville, who was then an Alabama Law Enforcement Agency Agent. After a federal court ordered Franklin to return the $150,000 to the food account, Ziaja provided the money.

Ziaja has since been terminated from ALEA and pleaded guilty in October to numerous misdemeanor counts of using a confidential law enforcement database to benefit his business interest in Priceville Partners. He was initially charged with felonies. In the plea agreement dropping the charges to misdemeanors, he agreed “to cooperate with the state as part of any ongoing criminal investigation into this and related matters, including making (himself) available for any questioning and providing any necessary documentation or testimony before any grand jury."

Franklin’s lawyer said he will now focus on obtaining depositions and other discovery from Lockhart. He’s not sure, however, whether he will allow his client to give sworn testimony.

Franklin has previously raised the Fifth Amendment right against self-incrimination because of the active criminal investigations, frustrating Lockhart’s efforts to proceed with a case that’s more than two years old.

“Until we got the filing by the FBI’s lawyer, we thought there were no other investigations (except by the IRS),” Gray said. “It may be presumptuous on my part, but I really don’t think there is any open investigation on either the deputies or the sheriff.”

He said he has no explanation for why the FBI would object to turning over the thumb drive if the only open investigation involved income taxes, and the possibility of another investigation leaves him hesitant to allow Franklin to submit to a deposition.

Franklin leaves office in January at the expiration of her second term. She will be replaced by Sheriff-elect Ron Puckett.