A brief announcement (here) from the U.S. Attorney’s Office for the Western District of Washington states that the office will conduct the investigation of controversial Spokane Mayor Jim West after the Eastern District USAO recused itself from the case. The investigation concerns possible violations of federal anti-corruption laws by West for offering city jobs and appointments to young men he met in on-line chat rooms. An article in the Spokane Spokesman-Review (here) discusses the investigation, including the appointment of one person to the city’s Human Rights Commission who had a relationship with West. (ph)
Category: Corruption
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U.S. District Judge Michael Baylson imposed sentences on two defendants, both of whom entered guilty pleas, in connection with the Philadelphia corruption trial on Friday. Former Philadelphia Treasurer Corey Kemp’s pastor, the Rev. Francis McCracken, admitted that he and Kemp diverted $50,000 from a bank loan to his church for repairs after it was struck by lightening, that he set up a shell corporation to take funds from a federal welfare program, and not paying taxes on over $500,000 of income. Judge Baylson sentenced Rev. McCracken, who is widely respected in the community for his work on behalf of the poor, to 30 months in prison. A Philadelphia Inquirer story (here) quotes Rev. McCracken stating at the sentencing hearing: "Your Honor, I can’t calculate how much I’ve given to others, in terms of food, in terms of recreational needs, how many allowances I’ve given to children, how much food, how much clothing. But please, Your Honor, rest assured that I put back into the church, back to the community and the church during the past 20 years, many times over what I took in this case." The other defendant, Rhonda Anderson, agreed to cooperate early on in the government’s investigation and received a term of two years probation.
The five defendants from the main corruption are awaiting sentencing, with Kemp and Janice Knight set for July 18, Detroit businessman La-Van Hawkins on Aug. 16, and former Commerce Bank executives Glenn K. Holck and Stephen M. Umbrell scheduled for Sept. 16. While Rev. McCracken’s conduct was largely unrelated to the corruption and perjury charges involving the five defendants, the substantial prison term imposed by Judge Baylson may well indicate that Kemp and the others will receive prison sentences, perhaps quite significant terms. As the central character in the misconduct, Kemp will receive probably receive the longest term, followed by Holck and Umbrell because of their conviction for conspiring with Kemp to commit honest services fraud. (ph)
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The former Monroe (FL) County Attorney, James Herrick, was added to a superseding indictment for alleged obstruction of justice, conspiracy to obstruct a federal grand jury, and two counts of witness tampering in connection with concealing an alleged $29,000 kickback paid to former Monroe County Commissioner and Mayor Jack London. The payment was related to approval of a development in the Florida Keys ("Margaritaville") called Halls Resort (it’s now a Hampton Inn). According to a press release issued by the U.S. Attorney’s Office for the Southern District of Florida (here):
[T]he payment to London was made by a consultant, identified as “R.H.,” who had been hired by a real estate developer, identified as “M.R.,” to assist “M.R.” with obtaining building permits from the BOCC for the Halls Resort project. According to the Superseding Indictment, London used the $29,000 payment to satisfy an outstanding lien against a residential property London owned in Cork, Ireland. Hendrick allegedly agreed to participate in this kick-back scheme, and used his position as County Attorney to place the Halls Resort project on the BOCC agenda.
In addition, the Superseding Indictment alleges that, beginning in July 2003, and continuing into March 2004, Hendrick acted as a conduit between John “Jack” London and “R.H.” and that he subsequently devised a false explanation to legitimize “R.H.’s” $29,000 payment to London. Hendrick did so knowing that the false information would be conveyed to a federal grand jury.
Houston, Cleveland, Hoboken, and now Margaritaville — this is certainly worse than stepping on a pop-top. Is no place safe from corruption these days, Jimmy? (ph)
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In our Nov. 17th post here, we spoke of the indictment of former Atlanta Mayor Bill Campbell of Atlanta, Georgia. In this prior post we also spoke of a defense motion to dismiss two racketeering counts because the prosecution was particularly slow in bringing this indictment. And now approximately six months later a hearing was held on this motion.
It seems the government took a long time in bringing this indictment, and a key witness for the defense is no longer alive. This is an interesting issue that can arise in white collar cases, cases that often take longer to investigate then cases involving street crimes.
And the issue the magistrate judge will need to decide here is whether this particular delay deprives the accused of the right to present his defense. Did this delay place former Mayor Bill Campbell at a disadvantage? No one wants to be indicted, but if its going to happen, it should be done in a timely fashion. For more details on this issue see Bill Rankin’s story here, in the Atlanta Jrl Const.
(esp)
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Maybe there’s something in the air these days with all the corruption cases flowing out of the U.S. Attorney’s Offices (e.g., Philadelphia, Hoboken NJ, Connecticut). The U.S. Attorney’s Office for the Southern District of Texas (Houston) announced the guilty plea of Monique McGilbra, a former Director of Building Services for the city of Houston, to charges that involve corruption not only in Houston, but also touching Inglewood, CA, and Cleveland. According to the press release (here):
McGilbra admitted to accepting bribes and gifts for favorable treatment on City of Houston contracts. Some of the bribes were paid to Garland Hardeman, a former Inglewood, California, City Councilman and businessman, who pleaded guilty to an unrelated public corruption bribery scheme in California. McGilbra introduced Hardeman to representatives of a Houston-based development company doing business with the City’s Building Services Department. The development company sought contracts with the City using Hardeman and McGilbra to influence the award of contracts, including the 911 Superstation project. McGilbra accepted and agreed to accept money from Hardeman for any contracts awarded by the City to the development company. McGilbra also admitted to accepting gifts from representatives of the development company including numerous meals in restaurants, the use of a condominium in Northern California for a ski vacation for her and her family, payment of expenses for a trip to San Antonio, tickets to professional football games, and a gift certificate from Neiman Marcus.
McGilbra also admitted to accepting gifts and benefits for favorable treatment on City of Houston contracts from an Atlanta-based contractor who obtained an energy-related subcontract to change-out the traffic signals in the City. McGilbra accepted gifts from the contractor and representatives of an energy company, including $6,000 in cash, sporting event tickets, a pair of earrings, a gift certificate to Luis Vuitton, trip related expenses to Miami and New Orleans, and tickets to the Lion King production.
McGilbra is also tied into a broad corruption case in the Northern District of Ohio:
McGilbra is one of nine defendants charged in Cleveland, Ohio, with corruption and racketeering violations last February. McGilbra pleaded guilty to federal charges of conspiracy and extortion under color of official right in Cleveland, Ohio, on May 6, 2005, and faces a maximum punishment of 20 years imprisonment and a $250,000 fine for those convictions. A sentencing date has not yet been set in that case. In addition to McGilbra, Brent Jividen, a Cleveland businessman, has pleaded guilty to racketeering conspiracy; and Ricardo Teamor, a Cleveland lawyer, has pled guilty to extortion conspiracy.
Oliver Spellman, the former Chief of Staff to the Mayor of Houston, pleaded guilty last December on separate Cleveland charges for accepting bribes from Nate Gray relating to a contract Gray was seeking with the City of Houston for a shuttle service at Houston Intercontinental (Bush) Airport. Spellman admitted that he introduced Cleveland businessman Brent Jividen to McGilbra regarding the selection of vendors to provide energy services to the City of Houston.
Also charged and pending trial in Cleveland, Ohio, on May 23, 2005, are Nate Gray, a Cleveland businessman, Gilbert Jackson, a New Orleans businessman, and Joseph Jones, a Cleveland City Councilman.
Did McGilbra and the others do any work in their spare time? (ph)
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Former Hoboken, NJ. Mayor Anthony Russo received a 30-month term of imprisonment for taking $317,000 in bribes from an accounting firm in exchange for directing city business to the firm. A press release issued by the U.S. Attorney’s Office (here) noted that, at his sentencing, "Russo equivocated and minimized his conduct." Initially dissatisfied with Russo’s acceptance of responsibility for his conduct, the district judge placed him under oath and required that he acknowledge the amount of the bribes he received, which he has been ordered to repay. (ph)
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An AP story (here) states that Illinois Governor Rod Blagojevich’s office and campaign fundraising committees have been subpoenaed for records by a state grand jury investigating corruption. The investigation concerns possible job appointments being given in exchange for campaign contributions, and the grand jury seeks a broad array of records on campaign contributions and hiring. In addition to Blagojevich’s office, his chief fundraiser and his father-in-law, a Chicago Alderman, have also been served with subpoenas. After graduating from law school in 1983, Blagojevich worked as an Assistant States Attorney in Cook County before launching his political career. Interestingly, his official biography (here) contains the following statement: "A former golden gloves boxer, Blagojevich is committed to fighting a system that accepts corruption, mediocrity and failure, and pledges to make everyday life better for average working families in Illinois."
Blagojevich succeeded George Ryan in 2002, who left office under a cloud and is currently under indictment on charges (including RICO) related to — don’t be shocked — corruption. Of course, gubernatorial corruption is not limited to Illinois, having forced out John Rowland in Connecticut, who is currently serving a one year sentence in a federal correctional institution, and tinged the administration of former New Jersey governor Jim McGreevey, with corruption charges against one of his chief fundraisers. (ph)
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Former Philadelphia City Treasurer Corey Kemp and four other defendants were convicted on the 19th day of deliberations. Kemp and two Commerce Bank executives, Stephen Umbrell and Glenn Holck, were convicted of conspiracy charges related to corruption in the payment and receipt of gifts in connection with the placement of city funds in banks. Kemp was also convicted on other tax and corruption counts. Two other defendants, Le-Van Hawkins and Janice Knight, were acquitted on the broad conspiracy charge but were convicted of perjury (Hawkins) and misuse of government property and making false statements (Knight). The jury deadlocked on other charges against the defendants. An article on Bloomberg.com (here) reviews the verdict.
The case was marked by an unusually contentious atmosphere in the courtroom, as discussed in an earlier post here, including calls for U.S. District Judge Michael Baylson to recuse himself because of alleged favoritism shown to the government. Judge Baylson is a former U.S. Attorney for the Eastern District of Pennsylvania. The grounds for an appeal of the convictions will be numerous, the two most important being alleged Brady violations by the government (earlier post here) and the removal of a juror for bias who had indicated she did not believe the government had proven its case (earlier post here). This case is far from over. (ph)
UPDATE (5/10): The Philadelphia Inquirer has an excellent scorecard of the verdicts on each count and each defendant here.
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Former Kansas City Municipal Court Judge Deborah Neal entered a guilty plea last Tuesday in which she admitted to soliciting $28,000 of loans from lawyers who appeared before her and a bonding company, and stated that she gave favorable treatment to the lawyers in some cases. Neal solicited the money because of an admitted gambling addiction. Now comes the fall-out for the lawyers, who will certainly be looking at disciplinary proceedings and possibly criminal investigations for lending a judge money while they had matters pending before her. In fact, an Assistant U.S. Attorney in Kansas City is quoted in a Kansas City Star article (here) stating that the loans may open up the attorneys to criminal charges. A range of federal corruption statutes can be used, most likely Section 666 and the right of honest services theory for mail/wire fraud (assuming there were telephone calls or mailings). As long as we’re on the topic of legal ethics, is it proper for a federal prosecutor to comment publicly about possible criminal charges? The Legal Ethics Forum blog (here) highlighted the lawyers’ potential exposure. (ph)
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The drumbeat of prosecutions arising from the Monmouth County, New Jersey, corruption probe continues with the arrest of developer Anthony Spalliero, who was charged with bribing former Marlboro Mayor Matthew Scannapieco and the former director of the Monmouth County Board of Freeholders. According to a press release (here) from the U.S. Attorney’s Office:
Spalliero offered and paid Scannapieco approximately $135,000 between 2001 and 2003 in conjunction with three development deals. Count One of the criminal complaint charges that between 2001 and 2002, Spalliero paid Scannapieco approximately $100,000 in exchange for Scannapieco’s assistance in obtaining re-zoning and land-use approvals for a proposed development of the site of the former Marlboro Airport and surrounding property. In December 2002, during a recorded conversation, a business associate of Spalliero allegedly offered to provide a member of the Marlboro Township Council with approximately $150,000 in campaign funds in exchange for that council member’s support of re-zoning and land-use proposals that Spalliero sought for the site of the Marlboro Airport and surrounding property.
The bribes to the freeholder director were allegedly paid on two occasions: First, in 2001 and 2002, Spalliero had a Monmouth County official deliver $5,000 in cash to the freeholder director at his home. Second, in 2002 and 2003, Spalliero and another developer paid the freeholder director $3,500 in cash, again by having the Monmouth County official deliver the money to the freeholder director at his home. The complaint alleges that the second payment was in exchange for the freeholder director’s assistance on a planning issue for a Marlboro development.
The criminal complaint (here) charges Spalliero with violations of 18 U.S.C. Sec. 666. With all the indictments of Monmouth County officials, the last one left standing may have to turn out the lights.(ph)
MattBray.net 