A DRUG BUST TURNED BIG-TIME

His 2004 arrest led contractor Terry Jacobs to hook two S. Jersey
officials in an ongoing bribery probe.

A drug bust that drew little attention when it went down more than
two years ago has turned out to be a key element in a far-reaching
South Jersey political-corruption probe that broke into the open last
week with guilty pleas by politicians from Atlantic City and Camden.

While officials in both cities wait for the other shoe to drop - more
charges are expected - investigators remained tight-lipped about the
bribery-extortion probe and the Jan. 30, 2004, arrest of Atlantic
County contractor Terry Jacobs for having five kilograms of cocaine.

"There's not much we can say. It's still an ongoing investigation," a
spokesman for the U.S. Attorney's Office in Camden said.

What is clear from documents filed during the plea hearings Wednesday
in U.S. District Court in Camden is that the FBI used the drug case
against Jacobs to get him to cooperate in the corruption investigation.

Before that bust, records indicate, Jacobs was a target of the
corruption probe, unknowingly working with an FBI agent posing as a
Wall Street financier.

The financier, with access to lots of cash, was backing Jacobs in
corrupt cash-for-contract deals in Atlantic City and Camden,
according to an outline of the investigation in the filed documents.
It was FBI money, those documents indicate, that Jacobs used to bribe
Craig Callaway, who was Atlantic City Council president, and Ali
Sloan El, who was a Camden City councilman. At least two payments
were made in 2003.

But it was after his 2004 arrest that Jacobs got the proverbial offer
he couldn't refuse from the FBI. Facing a possible life sentence, he
readily agreed to cooperate in the corruption investigation and began
taping meetings with Callaway, Sloan El and others, according to two
law enforcement sources familiar with the probe.

Jacobs, 42, pleaded guilty Wednesday to possessing five kilograms of
cocaine. He faces a minimum 10-year prison sentence, but his
cooperation could result in less time.

Sloan El and Callaway pleaded guilty to extortion charges related to
accepting a bribe.

The drug case against Jacobs grew out of an investigation by the New
Jersey State Police and the FBI that apparently was unrelated to the
corruption probe.

Jacobs was arrested in a construction trailer in Monroe Township with
Herman "Sonny" Winters, according to police records. Winters is the
husband of Loretta Winters, a former councilwoman in that Gloucester
County community. The trailer was behind their home on Jones Kane
Road in a well-maintained neighborhood.

Herman Winters, like Jacobs, is in the construction business.

Loretta Winters is the politically appointed manager of the Motor
Vehicle Commission office in nearby Washington Township. Reached by
phone Friday, she said that on the advice of their lawyer, neither
she nor her husband would comment about the case.

Authorities seized the cocaine in the trailer during the 8 a.m. raid.

An alleged drug buyer also was arrested that day after showing up at
the trailer, according to investigators. During a search, police
found a gun and what one law enforcement source called a "large
amount" of cash in his car.

At the time, Jacobs was a relatively unknown construction company
owner from Pleasantville trying to establish himself as a qualified
minority contractor in government circles.

More important, although he was not aware of it, he had already been
caught in the FBI's corruption sting.

In October 2003, Jacobs arranged for Sloan El to meet with his Wall
Street financier in an Atlantic City hotel room during the New Jersey
State League of Municipalities convention. Sloan El admitted
Wednesday that he had accepted $13,000 in cash during the meeting.

In all, Sloan El acknowledged having received $36,000, including
$20,000 in four payments after Jacobs started cooperating.

Callaway admitted receiving $10,000 in December 2003, $3,000 early in
January 2004, and $23,000 in four payments after Jacobs' arrest.

In his guilty plea, Jacobs said he had made payments to Callaway,
Sloan El and others.

The others are believed to include Atlantic City elected officials
and businessmen and politicos in Atlantic and Camden Counties,
according to those familiar with the investigation.

Federal authorities have audio and videotape of some meetings,
according to individuals familiar with the probe.

Callaway and Sloan El also are cooperating with authorities. Lawyers
for both said their clients would not comment further about the case.

Like Jacobs, they remain free after posting bail. All three are
scheduled to be sentenced in December.

Jacobs' lawyer, public defender Christopher O'Malley, scurried away
from reporters in the federal courthouse after issuing a series of
terse "no comments" Wednesday.

O'Malley would not even provide the name of Jacobs' Atlantic City
construction company, saying he did not know it. Jacobs has operated
out of Jacobs Construction Services Inc. on Virginia Avenue in
Atlantic City since moving his base from Pleasantville this year.

On Friday the office, a block from the Boardwalk casino strip, was
locked, and the phone number listed for the company was no longer in service.