Tuesday, November 29, 2005

Not Quite What Was Wished For

The Atlanta Jrl Constitution reports here of a plea to bank fraud and identity theft by an individual who used a scheme to take money from a reputable foundation that assisted children. The foundation detected the fraud and reported it to authorities. (see post here)  But the big question is "why"?  What makes someone take funds from an organization that gives to children who are in need?

(esp)

November 29, 2005 in Fraud | Permalink | Comments (0) | TrackBack (0)

Monday, November 28, 2005

Another Reporter to Testify in the Plame Investigation

An AP story (here) reports that a second Time reporter, Viveca Novak, will testify before the grand jury regarding her conversations with Robert Luskin, Karl Rove's attorney during the investigation.  It is unclear whether Novak's testimony relates at all to the recent revelation by Bob Woodward that a senior administration official leaked information about Valerie Plame's status as a covert CIA agent in June 2003.  It may be that Special Counsel Patrick Fitzgerald is focusing on Rove's knowledge of the disclosure of Plame's identity, and perhaps even whether Luskin tried to dissuade Novak from revealing information about contacts with Rove. 

If the latter is the case, then Luskin may be a focus of a potential obstruction of justice case along with (or perhaps in lieu of) Rove.  To prosecute an attorney for obstruction, however, the government would have to overcome the protection afforded to attorneys in 18 U.S.C. § 1515(c), which states: "This chapter does not prohibit or punish the providing of lawful, bona fide, legal representation services in connection with or anticipation of an official proceeding."  If the Administration was hoping Fitzgerald's investigation would wind down after the Libby indictment, the Special Counsel may instead be like the Energizer Bunny -- and just as annoying as the commercials. (ph)

November 28, 2005 in Plame Investigation | Permalink | Comments (0) | TrackBack (0)

Prosecuting Campaign Contributions as Bribes

The recent conspiracy charge involving Michael Scanlon focuses on the interactions of Jack Abramoff ("Lobbyist A") and Representative Bob Ney ("Representative #1") that involve a number of campaign contributions and gifts in exchange for legislative acts, including placing an item in the Congressional Record.  Recent media reports assert that other Congressional officials, including Senator Conrad Burns, Rep. James Doolittle, and Rep. Tom DeLay, are the focus of the investigation in which large amounts of campaign contributions flowed from the Indian tribes represented by Abramoff and Scanlon to the campaign committees of various elected officials.  Money is, of course, the "mother's milk of American politics" according to an old adage, and while much campaign finance reform focuses on the corrupt influence of money, to this point criminal prosecutions of elected federal officeholders for payments received by their campaign committee's have been few.

One substantial hurdle to prosecuting an elected official for accepting campaign contributions related to legislative action is that those contributions are essentially designed to achieve that very purpose.  In McCormick v. United States, 500 U.S. 257 (1991), a Hobbs Act prosecution for extortion "under color of official right" that is essentially bribery, the Supreme Court stated the following:

Serving constituents and supporting legislation that will benefit the district and individuals and groups therein is the everyday business of a legislator. It is also true that campaigns must be run and financed. Money is constantly being solicited on behalf of candidates, who run on platforms and who claim support on the basis of their views and what they intend to do or have done. Whatever ethical considerations and appearances may indicate, to hold that legislators commit the federal crime of extortion when they act for the benefit of constituents or support legislation furthering the interests of some of their constituents, shortly before or after campaign contributions are solicited and received from those beneficiaries, is an unrealistic assessment of what Congress could have meant by making it a crime to obtain property from another, with his consent, "under color of official right." To hold otherwise would open to prosecution not only conduct that has long been thought to be well within the law but also conduct that in a very real sense is unavoidable so long as election campaigns are financed by private contributions or expenditures, as they have been from the beginning of the Nation. It would require statutory language more explicit than the Hobbs Act contains to justify a contrary conclusion.

This is not to say that it is impossible for an elected official to commit extortion in the course of financing an election campaign. Political contributions are of course vulnerable if induced by the use of force, violence, or fear. The receipt of such contributions is also vulnerable under the Act as having been taken under color of official right, but only if the payments are made in return for an explicit promise or undertaking by the official to perform or not to perform an official act. In such situations the official asserts that his official conduct will be controlled by the terms of the promise or undertaking. This is the receipt of money by an elected official under color of official right within the meaning of the Hobbs Act.

Members of Congress are subject to prosecution under 18 U.S.C. Sec. 201, which prohibits both bribery and unlawful gratuities.  For bribes, the government must establish a quid pro quo arrangement, the very issue in McCormick that the Court stated required proof that the quid pro quo was "explicit."  While a later decision in Evans v. United States, 504 U.S. 255 (1992), softened McCormick's holding a bit, for campaign contribution cases the government would have to meet a higher threshold than merely showing that the contributor hoped (or even expected) the elected official to take a position favorable to the contributor, and that the representative knew of the reason for the contribution.

Another problem prosecutors would face in pursuing charges against Congressmen -- but not their legislative staff -- is the Speech or Debate Clause, which provides that "for any Speech or Debate in either House, they shall not be questioned in any other Place." (Art. I, Sec. 6)  In United States v. Helstoski, 442 U.S. 477 (1979), the Supreme Court stated, "The Court's holdings in United States v. Johnson and United States v. Brewster leave no doubt that evidence of a legislative act of a Member may not be introduced by the Government in a prosecution under § 201."  In rejecting the government's argument that it should be permitted to introduce evidence of legislative acts to establish the Congressman's motive in taking money, the Court held:

We therefore agree with the Court of Appeals that references to past legislative acts of a Member cannot be admitted without undermining the values protected by the Clause. We implied as much in Brewster when we explained: "To make a prima facie case under [the] indictment, the Government need not show any act of [Brewster] subsequent to the corrupt promise for payment, for it is taking the bribe, not performance of the illicit compact, that is a criminal act." A similar inference is appropriate from Johnson where we held that the Clause was violated by questions about motive addressed to others than Johnson himself. That holding would have been unnecessary if the Clause did not afford protection beyond legislative acts themselves.

The Court did hold in United States v. Brewster, 408 U.S. 501 (1972), that promises to perform a legislative act in the future could be introduced to show the illicit agreement because the actual performance of the act is irrelevant to proof of the bribe.  In other words, the fact that a legislator engaged in an act in Congress covered by the Speech or Debate Clause would be excluded, but the agreement to do so would be admissible.

For any prosecution of Rep. Ney, which is a definite possibility from reading the criminal information of Scanlon, the government will face greater evidentiary hurdles than it does in other public corruption cases against state and local elected officials, who are not protected by the Speech or Debate Clause (including state constitutional provisions). See United States v. Gillock, 445 U.S. 360 (1980).

If prosecutors decide to pursue charges against members of Congress, the standard for proving a bribe will be high if the payments are identified as campaign contributions.  Moreover, any case involving legislative action likely will implicate the Speech or Debate Clause, an issue of considerable sensitivity on separation of powers grounds that will likely generate pre-trial appeals, slowing the prosecution even more than usual. (ph)

November 28, 2005 in Corruption | Permalink | Comments (0) | TrackBack (2)

Charles Walker Set For Sentencing Today

Charles Walker, a former Senate Majority leader in Georgia, and someone who the Atlanta Jrl Constitution (see here) calls "once the most powerful African-American politician in Georgia", is set for sentencing today after being convicted on 127 counts.  (see post here). Over a 100 of the counts were for mail fraud.

Like Richard Scrushy's trial, this case took place in the south,  But not only was the verdict different, but also the speed of the trial. (see here).  That "other southern jury," as I referred to Walker's case throughout the Scrushy trial, met not only on Memorial Day weekend, but also on Memorial Day.  Sounds like an interesting issue for appeal - - but first the sentence.

(esp)

Addendum - For details on the court appearance of today - see the Augusta Chronicle here.  A key issue in sentencing is the amount of money taken.  Since this is a fraud conviction, the amount can factor into the sentence given. - see Atlanta Jrl. Constitution here.

November 28, 2005 in Prosecutions | Permalink | Comments (0) | TrackBack (1)

Sunday, November 27, 2005

Ohio - Politics As Usual?

The Ohio Republicans seem to be having their issues lately.  As reported here by the Washington Post - - it has been everything from the bizarre investments of rare coins to Tom Noe's indictment for allegedly violating campaign laws. (see prior posts here and here).  And we haven't even gotten to a discussion of Ney or Taft.  Because of the influential role played by Ohio in the last election, one has to agree with the Washington Post that these recent happenings may play a factor in politics. 

What role does politics play for prosecutors?  The answer is that is should play no role.  As noted in the ABA Standards for Criminal Justice, Rule 3-3.9:

"(d) In making the decision to prosecute, the prosecutor should give no weight to the personal or political advantages or disadvantages which might be involved or to a desire to enhance his or her record of convictions."

(esp)

November 27, 2005 in Prosecutions | Permalink | Comments (1) | TrackBack (0)

White Collar Sentencing

A recent article on white collar sentencing in the Chicago Tribune here does an excellent job in pointing out that white collar sentences have risen as a result of the sentencing guidelines.

The article is titled, "Disparity Grows in Penalties for Execs."  Immediately under this title, however, is this subtitle, "Changes in sentencing rules spark variations in prison terms for white-collar criminals."  The article also states, "[t]he upshot: longer sentences than in the past, to be sure, but also a rise in disparities from judge to judge or jurisdiction to jurisdiction."

I agree with the statements of Professor Doug Berman, Attorney James Felman, and Professor John Coffee in this article.  And the article notes some important points regarding white collar sentencing - including the fact that white collar offenders are receiving exorbitant sentences these days. But - - -

1.  How is white collar crime being defined in this article?  Is it being defined the way the government statistics are defining it - a definition that omits all the corruption cases (despite the local USAs including corruption in their definition of white collar crime).  See post here - "Is DOJ 'Cooking the Books' in its Reporting of White Collar Crime?" This is an important question to ask whenever anyone is making any claim about white collar crime - How did they define it!

2. Is there really more of a sentencing disparity now?    The sentencing disparity is greater because of the "deals" the government provides to people - something that has existed since the enactment of the guidelines.  In the pre-Booker phase this was through 5K1.1 motions, and to a large extent that still exists.  Sentences people receive are not always based on their criminal culpability, but rather on whether they cooperate with the government.

3.  Sentencing disparity is also in large part a function of what the government charges the defendant with - that is, the crimes charged and the amount of loss claimed.  The mere adding of a money laundering count to a standard mail fraud charge significantly raises a sentence.  Yes, these days the government might include money laundering in a white collar case. So the sentencing disparity may be nothing more than a judge neutralizes the government charging process.

4. Is it so easy to say that there is now more disparity in sentencing?  Just because a person in one courtroom receives one sentence does not mean that a person in another courtroom receives a different sentence for the same crime.  The problem here is that one is often comparing apples and oranges.  No two cases are exactly the same.  In determining culpability it is important to recognize this, and that is exactly why judges need some discretion to modify the guidelines to suit the specific facts.  The fact remains that even after Booker they all start with the advice of the guidelines.

5. Just because there may be more departures in white collar cases (something I am not fully convinced of yet - and I define white collar crime to include corruption cases), does not mean that judicial sentencing is missing the mark.  Perhaps it is a signal to the legislature that someone needs to re-evaluate the draconian sentences being given in some of these cases.   

So if there is anyone out there who intended to take this Tribune article and say - - you see, we need more mandatory minimums, or we need a guidelines system that is mandatory because the advisory nature of the guidelines produces disparity in white collar cases -- these conclusions are not so easy and miss the real questions noted above. Everyone agrees that white collar sentences have gone up under the guidelines.  Not everyone, however, agrees that this is warranted.

(esp)

November 27, 2005 in Sentencing | Permalink | Comments (0) | TrackBack (0)

Building in Massachusetts

The construction industry has always had its fair share of complaints.  The Boston Globe here talks of an alleged immigrant labor scheme that is under investigation by the AG in Massachusetts. This extensive article, including a diagram, sheds light on how individuals might be paid off the books.  With this extensive press one has to wonder if the feds will become interested (if they aren't already) in checking out what is happening in Massachusetts.

(esp)

November 27, 2005 in Investigations | Permalink | Comments (0) | TrackBack (0)