Nate Gray, a former Cleveland businessman and confidant of former Cleveland mayor Mike White, received a 15-year prison sentence for his conviction on corruption and tax charges. The case arose from a broad corruption investigation involving officials in Cleveland, East Cleveland, Houston, and New Orleas. A press release issued by the U.S. Attorney’s Office for the Northern District of Ohio (here) notes that officials from East Cleveland, Cleveland, and Houston have been convicted or entered guilty pleas to charges. (ph)
Category: Corruption
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The New York Times reports (here) that Philip Bloom has been charged with conspiracy, wire fraud, interstate transportation of stolen property, and conspiracy to launder money related to payments made to two coconspirators and their wives to obtain reconstruction contracts in Iraq. Bloom controls three companies that have $3.5 million in contracts awarded by the Coalition Provisional Authority, and is accused of making payments of up to $200,000 to the two unidentified coconspirators and others in the C.P.A. The article quotes the criminal complaint filed in the U.S. District Court for the District of Columbia as involving contracts related to "the renovation of the Karbala Public Library; demolition work related to, and construction of, the Al Hillah Police Academy; the upgrading of security of the Al Hillah Police Academy, and the construction of the Regional Tribal Democracy Center." (ph)
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Just to show that Philadelphia does not have a corner on the municipal corruption market — only NFL trauma-dramas — Detroit City Councilman Alonzo Bates was indicted on charges related to ghost employees and tax evasion. According to a federal indictment, Bates had four ghost employees on his city council office payroll who did no work on behalf of the city, including the mother of his son, his girlfiend’s daughter, and a gardener who did work at his home and a rental property Bates owns. The government also accused Bates of not paying income taxes on almost $400,000 that he earned while a member of the council. Bates was defeated in a reelection bid and will be leaving office shortly. He is the second Detroit City Council member indicted on corruption charges in the past two years, although the other council member died before trial. A Detroit News story (here) discusses the indictment. (ph)
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The St Pete Times here has again reported on the events at SOCom. This time the indictment has charges of wire fraud, bribery and conspiracy to defraud the United States and the indicted is a former Army colonel. The St Pete Times notes that "SOCom, which oversees the nation’s elite commandos, has been at the forefront of the war on terror."
This is frightening. The men and women at the "forefront of the war on terror" have trouble following the law? Obviously, the accused is innocent until proven guilty, but one has to wonder about what is happening at SOCom. The latest indictment is of an individual with a background (West Point) that one would think would not lend itself to being caught up in this type of criminality. Irrespective of the individual’s guilt or innocence, one has to wonder if the problem here is the organization, and the culture that has been created for these individuals to work within. For the sake of the men and women serving our country, the St Pete Times needs to continue coverage as they are providing necessary transparency to this situation. It is important that those on the frontlines receive the best equipment and best resources.
(esp)
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Ohio Representative Bob Ney has been subpoenaed to provide documents to a grand jury in Washington, D.C., investigating lobbyist Jack Abramoff, who has already been indicted in Florida on fraud charges. Abramoff has been the subject of an investigation by the Senate Indian Affairs Committee for his work on behalf of tribes on gambling issues, and his tribal clients paid for a golfing trip to Scotland for then House Majority Leader Tom DeLay and Rep. Ney in 2002 that may be involved in the grand jury investigation. Rep. Ney has pledged to cooperate fully in the investigation, although the issue will come to a head if prosecutors seek his testimony. Unlike a document subpoena, which can only be resisted on narrow Fifth Amendment grounds, testimony presents a much greater risk of incrimination that can trigger a Fifth Amendment privilege claim. Any inquiry into Rep. Ney’s conduct on behalf of Abramoff will have to steer clear of the Speech or Debate Clause, a very delicate issue when a Congressman’s actions that relate to the legislative process are the subject of an investigation. A story from The Hill (here) discusses the subpoena to Rep. Ney. (ph)
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On Tuesday, Philadelphia voters will consider the following ballot initiative:
Shall the Philadelphia Home Rule Charter be amended to require Council approval of certain City leases, contracts and concessions, to empower Council to address public confidence in the integrity of the City’s contracting process by requiring certain disclosures and by providing whether persons who have made certain campaign contributions are ineligible for such contracts and for City financial assistance, and to empower Council to regulate the process by which non-competitively bid (no-bid) contracts are awarded?
The city has garnered more than its fair share of publicity recently regarding municipal corruption, including the conviction of its former treasurer (Corey Kemp) and charges against a city council member (Rick Mariano) whose indictment broke a fourteen-year drought in which no council member had been charged with a crime. Critics of the city government point to the fact that there appears to be a culture of "pay-to-play" in which those who want contracts are expected to contribute. A local watchdog group called the Committee of Seventy, which was formed over 100 years ago to fight corruption, is pushing for adoption of the Charter amendment. Of course, requiring the City Council to approve leases, contracts and concessions will not necessarily end the atmosphere of corruption if it only moves the link between contracts and contributions to a different forum. An AP story (here) discusses the proposed amendment. (ph)
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It should not come as a surprise that Richard Scrushy entered a not guilty plea to corruption charges contained in an indictment filed in the Middle District of Alabama. Invoking God and country, Scrushy proclaimed that he was "absolutely not guilty," noting that he grew up reciting the Pledge of Allegiance and singing "God Bless America," but ""I am broken right now at what our government is doing." Scrushy also stated that the government offered him immunity if he would testify against former Alabama Governor Don Siegelman, but that he had nothing to offer. A Birmingham News story (here) discusses the not guilty plea. (ph)
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Sometimes you see a case in which you wonder whether people can sink much lower. A principal at an elementary school in Clinton Township, Michigan, entered a guilty plea to embezzling over $400,000 from the school’s child care program and parent-teacher organization over a seven-year period. A press release issued by the U.S. Attorney’s Office for the Eastern District of Michigan (here) notes that under the guilty plea the principal will have to serve a sentence of 27 to 33 months and forfeit properties worth approximately $400,000. A principal stealing from students causes far more damage than just the monetary costs in the betrayal of trust. (ph)
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The government unsealed an indictment of former HealthSouth CEO Richard Scrushy for allegedly paying $500,000 in bribes to a campaign committee for former Alabama Governor Don Siegelman in exchange for an appointment to a state board involved in approving, among other things, construction of hospitals. The indictment, returned in May but sealed because of the pending jury deliberations in the securities fraud prosecution of Scrushy, also names two former aids to Siegelman. Scrushy was found not guilty on all the charges in that case, and a New York Times story (here) quotes one of Scrushy’s attorneys, Donald Watkins, as stating, "Apparently the spanking we gave them in Birmingham was not sufficient." Any guesses on how Scrushy will plead at his arraignment?
Like Scrushy, Siegelman has also been prosecuted by the U.S. Attorney’s Office on different corruption charges that were dismissed. To make things even more complicated, Siegelman is running for the Democratic nomination for Governor for the 2006 election, and if he won, there is at least a chance he could face former Alabama Supreme Court Chief Justice Roy Moore, who is seeking the Republican nomination. Moore was ousted from the court for refusing to remove the Ten Commandments from the state courthouse. If this one gets to trial, it will certainly be interesting. (ph)
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Philadelphia City Councilman Rick Mariano, who made a brief sojourn to the top of City Hall last week to contemplate his circumstances, was indicted along with five others on corruption, conspiracy, and tax charges by the U.S. Attorney’s Office for the Eastern District of Pennsylvania that alleges he accepted $30,000 in bribes to assist in the award of city contracts and tax breaks (indictment here). A Philadelphia Inquirer story (here) notes that the indictment of Mariano breaks a 14-year drought in prosecutions of City Council members, with the last one being charged with a crime in 1991. That’s not nearly as long as the White Sox went between World Series victories, but maybe for Philly that’s a long time between having elected representatives hauled into court. (ph)
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