FBI agents executed a search warrant at the office of member of the San Francisco Board of Supervisors on May 18 as part of a corruption investigation. According to reports in the San Francisco Chronicle (here and here), the government is looking into a $40,000 payment from a local businessman having city permit issues. Agents also searched two homes and a flowershop owned by the Supervisor. As is the norm in such situations, he has hired a former federal prosecutor — Steven F. Gruel — who said his client will cooperate in the probe "to clear up this apparent misunderstanding." Searching the office of a public official is uncommon, but concern that a subpoena might result in the destruction of documents is often the motivating factor in seeking a search warrant rather than the usual approach of issuing a grand jury subpoena. (ph)
Category: Corruption
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HR 1872, "Effective Corruption Prosecutions Act of 2007" is the house bill that mirrors Senate Bill S. 118. It provides that 18 U.S.C. s 666 would be allowed as a RICO predicate. It allows for an 8-year statute of limitations for a host of statutes that are routinely used in corruption cases, as well as outside this sphere. For example, if passed into law it would allow for an 8-year statute of limitation in a simple bribery case or in a mail fraud case that uses the honest services statute (see here). The proposed legislation also calls for additional funding to investigate and prosecute corruption.
Clearly the proposal to extend the statute of limitations will be the most controversial aspect of this proposed legislation. Some anticipated questions:
- Is it really necessary for investigations (if starting immediately after the commission of the crime) to last for 8 years in these specific type of cases?
- Many of the statutes included in this proposed legislation involve simple forms of criminal conduct, and is it really necessary to provide investigators more time to proceed with these cases?
- Are these cases really more complicated than tax cases, cases that have a statute of limitations below 8 years?
- Is it necessary to place undue stress on individuals being investigated by giving the government a longer statute of limitations before some resolution is reached on a case?
- Has corruption increased so drastically from the past that warrants this legislation?
(esp) (w/ a hat tip to Stephanie Martz)
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Former HealthSouth CEO Richard Scrushy is trying a new tactic in attacking his conviction on corruption charges related to a payment to former Alabama Governor Don Siegelman. According to a brief filed by his attorneys, available below, the federal criminal jurisdiction statute, 18 U.S.C. Sec. 3231, is unconstitutional because it was not properly passed by Congress in 1948. I won’t pretend to follow the argument completely, but the gist is that the bill ultimately passed by Congress had not been properly introduced in the House because that body had adjourned sine die the previous year without being reintroduced, and then the Senate passed a different version of the bill that was not enrolled until after another adjournment.
While I suspect there’s something amiss with this argument, it certainly wins points for creativity, but it may not have the effect Scrushy’s legal team asserts as a basis for overturning his conviction. Section 3231 replaced previous statutes that granted the United States District Courts exclusive jurisdiction over federal criminal prosecutions. It has been a cornerstone of federal constitutional law that there are no common law federal offenses, the venerable proposition was first announced in United States v. Hudson & Goodwin, 7 Cranch 32 (1812) — how often do you get to write that kind of citation. Since then, all federal prosecutions must be based on an identified statute and brought only in federal court unless the provision specifically allows for a state prosecution, something that many pre-Civil War laws authorized. Federal courts have long had jurisdiction over violations of federal statutes, so holding that the 1948 statute is unconstitutional because it was not properly passed would mean the prior statutes would still be valid and could not have been repealed or displaced by Section 3231. If that is the case, then the federal district court did have jurisdiction to try and convict Scrushy, albeit under a different provision of the federal criminal code. While certainly interesting, I suspect Scrushy’s argument won’t get much traction in the district court or the Eleventh Circuit.
Chief U.S. District Judge Mark Fuller finally set a sentencing date for Scrushy and Siegelman of June 26 (see AP story here), almost a year after the convictions. The judge still hasn’t decided issues related to the jury selection process, so there may be more to come on that front, and with almost two months until sentencing, look for a lot more fireworks in this case. (ph)
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FBI agents searched the Virginia home of California Congressman John Doolittle as part of the continuing probe of the Capitol Hill connections of former superlobbyist Jack Abramoff. Representative Doolittle’s wife, Julie, runs Sierra Dominion Financial Services, which was paid over $60,000 by Abramoff’s firm from 2002 to 2004 for event planning, and other Abramoff clients made substantial contributions to Representative Doolittle’s campaigns. Interestingly, the company was subpoenaed for its records earlier, so the search was likely triggered by additional information about records that were not furnished and, perhaps, a fear that they would disappear. Abramoff has been cooperating with the government’s continuing corruption investigation that has already netted guilty pleas from one Congressman and a number of House aides. Representative Doolittle stepped down from his position on the House Appropriations Committee, and has vowed to fight any federal charges if they are brought. Doolittle has been in Congress since 1991, although he won reelection in 2006 by only 49%-45%. A News10 (Sacramento) story (here) discusses the search, although Representative Doolittle’s blog (here) makes no mention of it or the investigation. (ph)
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Television programs occasionally show an appellate court freeing the wrongly-convicted defendant, and we lawyers laugh at the cheap theatrics, knowing that a court of appeals acts quite deliberately and never orders an acquittal during its session. Then again, reality mimics television every once in a while, as shown by the Seventh Circuit when the panel entered an order (here) acquitting Georgia Thompson of corruption charges at the conclusion of oral argument because the government’s evidence was insufficient to support the conviction. Thompson had begun serving her sentence, and the order required the government to arrange for her release by the end of the close of business on April 5, the date of the argument (a link to the oral argument is available here). Circuit Judge Diane Wood said that the government’s evidence was "very thin."
Thompson was convicted on Sec. 666 and honest services fraud charges for her role in awarding a $750,000 travel contract to a campaign contributor to Governor Jim Doyle. Thompson did not receive any direct pecuniary gain from the award, although the government did introduce evidence that she received a $.50 per hour raise that year. She was a career civil servant, and there was no evidence that she was aware that the recipient of the contract was a campaign contributor; the contribution was legal, and the government focused on Thompson’s knowledge of political connections to the Governor. An article in The [Madison]Capital Times (here) notes that Governor Doyle said he would rehire Thompson to her position in the Wisconsin state government. (ph)
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When former Deputy Interior Secretary Steven Griles entered a guilty plea to making a false statement to a Senate Committee, he admitted he lied when he testified that his relationship with former superlobbyist Jack Abramoff was nothing special. In fact, Griles’ then-girlfriend, Italia Federici, introduced Abramoff to him, giving Abramoff a special "in" with Griles. It turns out that another target of the investigation is Federici, who co-founded the Council of Republicans for Environmental Advocacy (CREA) in 1997 with Gail Norton, the former Interior Secretary appointed in 2001 who was Griles’ boss. A target letter sent to Federici by the Tax Division at the Department of Justice in January 2007, available below, states that "[t]he investigation is focused on the alleged illegal manner in which you operated [CREA]." Among the potential crimes being investigated are conspiracy, tax evasion, making false statement to a Senate Committee, and obstruction of an official proceeding.
Interestingly, one reason identified for sending the target letter is to afford Federici the opportunity to obtain court-appointed counsel, which she has done. The letter is addressed to her care of the Federal Defender’s Office in Washington, D.C., and a Legal Times story (here) notes that her attorney is from that office, due to financial problems. Abramoff and his clients made fairly significant donations to CREA, and his cooperation may be the basis for charges against Federici. (ph)
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New Jersey state Senator Wayne R. Bryant and the former dean of the School of Osteopathic Medicine (SOM) in New Jersey, R. Michael Gallagher, where charged in a twenty-count indictment with violations of Sec. 666 and the mail and wire fraud statutes for illicit arrangements to triple Bryant’s state pension through no-show jobs. According to a press release (here) issued by the U.S. Attorneys Office for the District of New Jersey, Gallagher is accused of obtaining the deanship through Bryant’s assistance, and alegedly rewarded him by helping to arrange a no-show job at the SOM. Bryant is also accused of holding other no-show jobs at the Gloucester County Board of Social Services and Rutgers-Camden law school. According to the press release:
Bryant allegedly used his power and influence as Senator and Chairman of the Senate Budget and Appropriations Committee to directly lobby state agencies, high-level officials (including the state Treasurer), legislators and their staffs and personally directed changes in the state budget to bring millions of dollars in extra funding to SOM. All the while, Bryant failed to reveal that he was simultaneously on the payroll at SOM, receiving a high salary of $40,841 in 2004. He also used various means to conceal his purported role there, according to the Indictment.
The case comes out of the investigation by an outside monitor of the operations of the University of Medicine and Dentistry of New Jersey (UMDNJ), which entered a deferred prosecution agreement in 2005 because of Medicare and Medicaid fraud. The indictment also accuses Gallagher of inflating profits at the University Headache Center — imagine the one-liners about that place — so that he could earn higher bonuses as its chairman. (ph)
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Former HealthSouth CEO Richard Scrushy’s little jaunt on a yacht from Palm Beach to Miami when, according to the government, he was supposed to be in Orlando with his family visiting Disney World, has gotten him in some hot water. Since his conviction on corruption charges, he has been on bail while awaiting sentencing and the resolution of motions for a new trial. The U.S. Probation Office has requested that Scrushy be remanded to home confinement for violating the restrictions imposed for his Florida trip, and the home confinement would entail the following:
The defendant shall participate in the Home Confinement Program to begin at a time and residence designated by the probation officer. During this time, the defendant will remain at his place of residence except for employment and other activities approved in advance by the probation officer. The defendant will maintain a telephone at his residence, without a modem, "call forwarding", "Caller ID", "call waiting", or portable cordless telephones. At the direction of the probation officer, the defendant shall wear an electronic monitoring device and follow electronic monitoring procedures specified by the probation officer. The electronic monitoring may include an active GPS device in order to monitor your compliance. The defendant shall pay the cost of electronic monitoring as directed by the probation officer.
Scrushy’s attorney’s claim that the conditions of the trip allowed him to travel to south Florida to visit family friends. A hearing has been set for April 9 to resolve the request for home confinement. A story on WSFA-TV12 in Montgomery (here) discusses the case and quotes from the Probation Office filing. (ph)
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Former superlobbyist Jack Abramoff spread himself around Washington D.C., and those contacts resulted in yet another official entering a guilty plea arising from their relationship. Former Deputy Interior Secretary J. Steven Griles entered a guilty plea to one count of obstruction of justice for lying to a Senate committee investigating Abramoff’s lobbying activities. Griles, the highest-ranking Administration official caught up in the Abramoff web, admitted that he did not tell the truth when he said his relationship with the lobbyist was not "unique" when in fact his girlfriend introduced them, giving Abramoff an in to Griles to lobby for clients. According to an AP story (here), at one time prosecutors threatened other charges against Griles, including honest services fraud and criminal conflict of interest. Under the plea agreement, Griles will receive a ten-month sentence, half of which will be served in prison.
Abramoff has been cooperating in the ongoing corruption investigation while serving his 5+ year prison term, but that time may be shortened soon. Federal prosecutors have filed a Rule 35 motion for a reduction of his sentence due to substantial assistance. It is not clear whether any more defendants will be charged, and it may be that the so-called "low hanging fruit" has been picked in the case. Whether anyone else on Capitol Hill or in the Administration will face charges remains to be seen, and Abramoff certainly carries some heavy baggage as a witness. An MSNBC story (here) discusses the sentence reduction motion. (ph)
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The post-trial phase of the prosecution of former HealthSouth CEO Richard Scrushy and former Alabama Governor Don Siegelman just keeps dragging on, and each month seemingly brings a new purported e-mail between two jurors that could show the deliberations were tainted by outside influences. The defendants’ new trial motion based on other e-mails was rejected, in part because the e-mails were never authenticated as involving the jurors. More e-mails appeared in December as part of a motion for reconsideration, and now another one (here) has shown up. Whether any of this will make a difference is still hard to tell, but the more time that elapses the more these e-mails seem to materialize. A story on WSFA TV-12 in Montgomery, Alabama, notes (here) that there may be an "email fairy" in the vicinity. (ph)
MattBray.net 