The U.S. Attorney for the Eastern District of Virginia announced the guilty plea of Thomas Perry for giving illegal gratuities to federal and contract workers to receive government contracts for transportation services. What is interesting about cases like this is how modest the gratuities usually are, as compared to the loss that will be felt by the employees and payors from a criminal conviction. According to the government’s press release (here): "The items of value consisted of, among other things, lunches and dinners at various restaurants in the Hampton Roads area, an open tab at a delicatessen in Portsmouth, Virginia, airline tickets, concert tickets, NASCAR race tickets, hotel room charges, sports memorabilia, and a jacuzzi." I know how popular NASCAR is, but would you trade your career for a pair of tickets? (ph)
Category: Corruption
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Philadelphia City Councilman Rick Mariano has been the target of a federal grand jury investigation into possible corruption, and an indictment is widely considered likely in the near future. Yesterday, Mariano was spotted at the base of the William Penn statute atop City Hall, and the immediate reaction was to call the police and fire department because of a possible suicide attempt. A Philadelphia Inquirer story (here) notes that after begin escorted down by Mayor James Street, authorities speculated that Mariano just wanted some space to think and was not considering suicide — a more likely explanation unless there were another heartbreaking Eagles loss. Mariano is being investigated for, among other things, having his credit-card bills paid in exchange for support for projects. (ph)
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The U.S. Attorney for the District of Maryland announced the indictment of former state Senator Thomas Bromwell, his wife Patricia, and the CEO of a corporation, David Stoffregen, for using his office to conduct a RICO enterprise involving mail/wire fraud and extortion related to the award of state contracts to Stoffregen’s company. Outside of the organized crime and drug areas, the main use of RICO these days seems to involve political corruption cases (e.g. Atlanta’s former mayor Bill Campbell and former Illinois Governor George Ryan). According to the press release (here) issued by the USAO:
The indictment alleges that during the late 1990s and early 2000s, Stoffregen provided various benefits to Senator Bromwell in exchange for Bromwell’s agreement to use his influence and official position as a state senator to assist Stoffregen and his company, Poole and Kent. Alleged benefits that Bromwell received include construction work valued at more than $85,000 on a new house built in Baltimore County in 2000 to 2001 that was provided by Stoffregen for free or at a reduced cost; and more than $192,000 in payments provided to Mary Patricia Bromwell from January 2001 to May 30, 2003 for a no-show job at Namco Services Corporation.
The indictment further alleges that Senator Bromwell, who was chair of the Senate Finance Committee, used his influence to help Poole and Kent win a multi-million dollar bid to perform the mechanical subcontract on the University of Maryland Medical System’s (UMMS) Weinberg Building in downtown Baltimore. Bromwell also allegedly intervened in various business disputes on Poole and Kent’s behalf, including contract disputes with UMMS and the State of Maryland regarding the Juvenile Justice Center construction project.
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The New York Times reports here that "the first black Democratic Party leader in Brooklyn," who was an assemblyman for 23 years, was convicted in a New York State Supreme Court of violating campaign laws of New York State and "falsifying business records" of campaign contributions.
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It is truly hard to imagine that anyone could steal 2 million dollars from a school district. One would think that someone might notice. One would also think that the school district would have some oversight mechanism in place to avoid this from happening. Or maybe they did.
The NYTimes reports here that the "former Roslyn schools superintendent" pleaded guilty for stealing money for over six years. According to Newsday here, the former superintendent pleaded to grand larceny in an agreement that will require him to pay back the money and also spend from 4 to 12 years in prison. Part of the plea appears to include cooperation in an ongoing investigation. Perhaps the cooperation will unravel how this could possibly have lasted so long and allowed for so much money to be misused. Prosecutors normally start at the bottom and work their way up in an investigation.
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The trial of former Illinois Governor George Ryan and lobbyist Larry Warner is scheduled to begin Monday, Sept. 19, in U.S. District Court in Chicago, with the selection of the jury. Ryan is charged with RICO conspiracy, mail fraud, tax evasion, and lying to the FBI; his campaign committee and former chief of staff have already been convicted on RICO charges. Ryan was caught up in a wide-ranging investigation of corruption in the Illinois Secretary of State’s office involving payments for driver’s licenses that occurred during his two terms in that office. Ryan served only one term as governor, and was indicted within a year of leaving office in 2003. Among his final acts as governor was commuting the sentences of all prisoners on death row in Illinois due to flaws in the system that had resulted in a number of wrongful convictions. An AP story (here) discusses the charges against Ryan. (ph)
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It must the the time of year when prosecutions related to political officials come to fruition. An AP story (here) discusses the guilty plea of Joseph Cari, who served as Finance Chair of the Democratic National Committee, for demanding that an investment company hire a sham consultant for $850,000 if it wanted to manage funds on behalf of the Illinois Teachers Retirement System. Cari was indicted on August 3 along with Stuart Levine, a trustee of the System, and Steven Loren. Both Cari and Levine are attorneys. Just this week we have seen the indictment of a Massachusetts Republican party official (earlier post here) and the reindictment of individuals in connection with a political action committee founded by House Majority Leader Tom DeLay (earlier post here). (ph)
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The final report of the Independing Inquiry Committee Into the United Nations Oil-for-Food Programme has been released, and it is a catalogue of how a well-intentioned relief effort spun out of control through a lack of oversight and the inability of the UN, particularly the Security Council, to maintain any sort of responsible discipline over the operation. The Report (available here) points out that among the lessons to be learned from the effort was leaving far too much initiative for the program’s design and implementation with the Iraqi regime — which is a bit like leaving the punishment to the offender that led, to no one’s great surprise, to systematic abuses. The Committee also emphasized the "grievous absence of effective auditing and management controls" for the program. Among the lessons of Enron et al. is that corruption and a lack of internal controls is a recipe for disaster. (ph)
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If it’s Saturday, then it is time for a dose of corruption cases. Here are two from New Jersey, a reliable source of such prosecutions:
- Paul Zambrano, the former Mayor of West Long Branch, NJ, entered a guilty plea to accepting a bribe. According to the U.S. Attorney’s Office press release (here): "At his plea hearing, Zambrano admitted that, during his tenure as mayor in West Long Branch, from September 2003 to November 17, 2004, he accepted cash payments totaling $15,000 dollars from a confidential FBI informant and an undercover FBI agent, to reward him for helping obtain public contracts in West Long Branch and other places. Zambrano stated that he accepted the payments believing that the cooperating informant was an individual involved in the contracting and demolition business and that the undercover agent was one of his employees. Zambrano also admitted that he accepted the cash payments knowing the payments were intended to reward him for helping the cooperating informant and the undercover agent to obtain public contracts in West Long Branch and in other municipalities where Zambrano introduced the cooperating informant and the undercover agent to public officials.
- Harry Parkin, the former chief of staff to the Mercer Country Executive and a former member of the Delaware River Joint Toll Bridge Commission, received a 90-month prison term after a jury convicted him of violating the mail fraud statute (right of honest services). According to the USAO press release (here): "In reaching the guilty verdicts, the jury found that Parkin schemed to deprive the public of his honest services in several ways: by concealing a $150,000 loan that he made for the benefit of Central Jersey Waste and Recycling (CJWR), a Hamilton company that collected recyclables from Mercer County residents; by working to steer demolition contracts in order to protect and advance his secret financial interests; and by attempting to obtain an ownership interest in CJWR through extortion. According to testimony, in September 2000, Parkin, then chief of staff to the Mercer County Executive, discussed with Alex Abdalla and James Lambert his desire to obtain a secret one-third ownership interest in CJWR, which was in the first year of a five-year, $14.5 million contract in Mercer County. Parkin sought to partner with Abdalla, the owner of CJWR, and Lambert, the former executive director of the Mercer County Improvement Authority, in his efforts to acquire his secret ownership interest in CJWR."
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An AP story (here) talks about "A Summer of Scandal for U.S. Politicians," including the current cases involving Gov. Bob Taft’s misdemeanor guilty plea, Rep. Tom DeLay’s ethics problems in Congress, and Gov. Arnold Schwarzenegger’s questionable financial dealings. Throw in investigations of two Congressmen, William Jefferson of Louisiana and Randy "Duke" Cunningham of California, and it sure seems like the summer of corruption. But is it really different this time of year? Since this blog started last Nov. 1, Connecticut Governor John Rowland entered a guilty plea and began serving a one year federal prison term for accepting gifts in exchange for favors, former Phildelphia Treasurer Corey Kemp was convicted on conspiracy and mail fraud charges and sentenced to ten years, and two members of the San Diego City Council were convicted in the appropriately sleazy "Strippergate" prosecution. Upcoming corruption prosecutions involve the former Mayor of Atlanta and Governor of Illinois, both on RICO charges arising from their alleged misuse of office for personal gain. There are ongoing corruption investigations in Cleveland and Dallas, to name just two. The AP story asserts that there has been a "clear uptick" in the number of politicians under investigation, although I think that may be debatable. There is a cycle in corruption investigations, which can take months (or years) to develop, but we rarely see a year go by without at least a couple significant corruption cases being brought, mostly by federal prosecutors. Prosecutors certainly are more aggressive in targeting elected officials, particularly in the use of RICO charges, but then, isn’t it good that being an elected representative is not a license to steal? (ph)
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