Macon Man Not Guilty in Tobacco Quota Trial

Printed September 1, 2004.
Source: Tennessean
September 1, 2004
Section: Local
Edition: 1ST
Page: 1B

FBI informant pressured him, county trustee says

By ROB JOHNSON, Staff Writer

A Macon County farmer was found not guilty yesterday of federal charges that he sold someone else’s tobacco as his own, a quota-eluding practice that is banned under U.S. agricultural price-support programs.

Although Donnie Morgan was captured on undercover tapes making the 2002 deal, he argued that he was pressured by an undercover informant – working under the direction of federal agents – into doing something that he wouldn’t have done otherwise.

In addition to working in his small tobacco patch, Morgan also is the Macon County trustee. The 18-year political veteran is responsible for more than $37 million in county funds.

“The truth worked,” a jubilant Morgan said. “There were a lot of lies told about me, and I’m very happy about the way this turned out.”

The jury clearly struggled with the case. It began its deliberations midday Friday. U.S. District Judge Aleta Trauger sent them home for the weekend. Jurors returned Monday and again yesterday.

The judge read them a set of instructions yesterday designed to encourage them to take a fresh look at the case. Two hours later, the verdict emerged. The jurors filed out of the courthouse quickly and without comment.

Morgan also was cleared of the charge of retaliating against a government witness, an undercover informant named Garth Middaugh.

Middaugh captured the incriminating discussions and transactions in late 2002 on surreptitious recording devices supplied by federal agents. In one tape, the camera was mounted inside the driver’s-side door of Middaugh’s pickup truck. To his right, Morgan is seen counting out more than $2,600 in cash on top of the armrest.

Middaugh was the man who arranged the black-market tobacco deal and had been working under the direction of agents from the U.S. Department of Agriculture, the FBI and the IRS.

The two men confronted one another again at Lafayette’s downtown post office after Morgan’s 2003 arrest. They scuffled there in October 2003.

Middaugh immediately called his FBI handlers who told him to seek medical attention and a county arrest warrant after the run-in with Morgan. Morgan said it was Middaugh who attacked him.

The trial was filled with hints of a broader, ongoing government investigation into the tobacco black market.

“The evidence was there. The probable cause was there,” said U.S. Attorney Jim Vines after the verdict. “I can say that crimes like this don’t happen in a vacuum.”

He declined to elaborate on whether any further prosecutions would arise from the tobacco investigations referenced during the trial. “We take the cases as they come.”

The government guarantees tobacco farmers a minimum price for their crops. Yet farmers must stick to USDA quotas.

The black market shifts tobacco from those who have more tobacco than their quotas allow to those who don’t have enough. USDA regulations prohibit farmers from selling tobacco that wasn’t grown on their own land.

Middaugh said he was helping government agents when Morgan arrived one day in December 2002 at the E.J. Parker tobacco receiving station in Hartsville, where Middaugh worked unloading farmers’ trailers.

Morgan told Middaugh that he, like most everyone else, was having a hard time drying that year’s especially moist crop. It looked like he would fall short.

So after some follow-up discussions, Middaugh agreed to drive to Kentucky where there was a supply of black-market tobacco. After frisking him, federal agents trailed him across the border. Middaugh drove it back to Tennessee, mixed the 2,648 pounds in with a couple of hundred pounds of Morgan’s own tobacco and saw to that it was promptly sold at the warehouse to Philip Morris.

Morgan cashed that check and counted out $2,648 for Middaugh, his dollar-a-pound price for arranging the transaction. That payout was the one captured on videotape.

Defense attorneys Peter Strianse and Kim Hodde argued that just as it requires careful cultivation to grow a crop of tobacco, it takes plenty of preparation to “pressure and panic” a man into agreeing to a deal he wouldn’t have done otherwise.

Assistant U.S. Attorneys T.J. Haycox and Darryl Stewart countered that Morgan was a more-than-willing participant.

Rob Johnson can be reached at 664-2162 or at