Monday, August 1, 2011
Thursday, July 28, 2011
Danielle Chiesi, the former beauty queen, hedge fund trader, and fount of inside information to Raj Rajaratnam, was sentenced last week to 30 months in prison. We had blogged about her earlier. (see here)
Ms. Chiesi, who had extracted information from lovers and passed it on to Rajaratnam, was described by United States Attorney Preet Bharara in interesting imagery as "the vital artery through which inside information flowed between captains of industry and billionaire hedge fund managers."
The 30-month sentence was three months greater than that imposed on her former lover and boss, Mark Kurland, whom she blamed for involving her in criminality. Ms. Chiesi had specifically asked for a sentence equal to or lesser than Mr. Kurland’s. The government sought a sentence within the advisory guideline range of 37 to 46 months.
Retaining her sense of style to the end, Ms.Chiesi wore an atypical outfit for a defendant about to be sentenced, a sleeveless pink dress and matching pumps. And, after the sentence, alluding to her early morning arrest, she told the FBI agents at the prosecution table that the next time they knocked on her door they should do it in the afternoon. I suspect that she’ll be up early for the next 30 months.
Wednesday, July 20, 2011
In the Northern District of California, the court in United States v. Au Optronics Corporation, et. al (AUO) was faced with the question of whether Apprendi applied to criminal fines that the government was seeking under the alternative fine statute, 18 U.S.C. s 3571(d). The company and nine individuals were charged with price-fixing in violation of the Sherman Act. A Superceding Indictment claimed that the government would seek a criminal fine against the corporate defendants (not the individuals) under the alternative fine statute, which would mean that "the government could seek a fine in this case of up to $1 billion against AUO." The government sought bifurcation into separate guilt and penalty phases and also sought an "order that the evidence presented in the penalty phase need not be presented to a jury." In essence they were arguing that Apprendi did not apply here.
The court saw it differently then the government. Initially two circuits had found that Apprendi applied and even a declaration of the antitrust division had said it was applicable with fines. Then came the case of Oregon v. Ice, where the Court held "that a judge could impose consecutive sentences without any jury findings beyond those of guilt." Following this decision, the First Circuit found that criminal fines were exempt from Apprendi.
The government argued here that the First Circuit decision should be followed because "under historical practices fines fell within the sole discretion of the trial judge."
The problem for the government, however, is that they were relying on dicta from the Ice case. Thus, the court in AUO held that Apprendi's mandate applied here. Hon. Illston states, "[t]he magnitude and primacy of such punishment puts it in a separate class from an ordinary criminal fine imposed against a defendant who faces incarceration." (the government was seeking a fine that could amount to $1 billion, which is "ten times more than the fine authorized by the Sherman Act")
The court also denied the government's request to bifurcate the trial into a guilt phase and penalty phase, stating that "the Court is disinclined to bifurcate without a more substantial showing that a separate penalty phase will save judicial resources."
Court's Order - Download July 18 2011 Order re bifurcation motion
There are two lessons for the government here - 1) there are consequences to overcharging, and 2) stop wasting money.
Tuesday, June 28, 2011
Benjamin Weiser, NYTimes, Judge Explains 150-Year Sentence for Madoff has a fascinating story of some of the surrounding conversations prior to the Madoff sentencing. But there is one aspect that continues to trouble me when sentences given are beyond the lifetime of the individual serving the sentence - that is, does this undervalue our sentencing process. Some may claim that it sends a more pronounced message when the sentence is of such a stinging length. And clearly a long sentence was warranted here. But what does it say about our sentencing process when individuals are given sentences that are not only beyond the lifetime of the defendant, but also beyond any person's lifetime. I have to wonder if it makes a mockery of the sentencing process.
Addendum - Doug Berman, Sentencing Law & Policy,Judge Denny Chin and Bernie Madoff talk about a sentence of 150 years
Friday, June 17, 2011
NACDL's 1st Annual West Coast White Collar Conference, “Turning The Tables On The Government” – “From Push to Shove: Defending Against Higher Sentences,” Friday, June 17, 2011
Guest Blogger: Darin Thompson, Assistant Federal Public Defender, Office of the Federal Public Defender (Cleveland,OH)
The seminar closed with a discussion of sentencing strategies. Moderated by Jeffery Robinson, the panel consisted of David Angeli, Ellen Brotman, U.S. District Court Judge Robert T. Dawson, Vito de la Cruz, and Jan Nielsen Little.
Mr. de la Cruz started the discussion by suggesting that because the guidelines still carry considerable weight, plea agreements should (where possible) be negotiated to impose a statutory cap on the possible penalty. With regard to the guidelines, Mr. de la Cruz discussed looking at the way in which the guideline was drafted. If the guideline was not based upon a Sentencing Commission study and empirical evidence, the case law is clear that the district court can reject the guideline based upon policy alone.
Ms. Brotman seconded those comments, and noted the excellent resources made available by federal defender offices to assist in analyzing whether the guideline at issue may be subject to challenge on this basis.
Judge Dawson noted the reason behind the guidelines was to establish some sense of fairness between sentences, but were intended to be recommendations only. Post-Booker, the “real work” at sentencing is with regard to variances.
Mr. Angeli suggested that the “deconstructing the guidelines” approach may be effective with regard to 2B1.1 guidelines, because those guidelines have not evolved due to careful Sentencing Commission study. Ms. Brotman followed up by noting that this kind of attack should be supported by empirical evidence in favor of the sentence that is being sought, rather than just relying on omissions by the Sentencing Commission. She additionally noted that the initial research upon which the guidelines were based was flawed, because it only included defendants who were sentenced to prison.
Mr. Angeli discussed Pepper v. U.S., a Supreme Court case which held that post-1st-sentencing, pre-re-sentencing rehabilitative efforts can be taken into consideration. He noted that the Court held that the sentencing guideline which did not make good policy sense could and should be disregarded. The holding in Pepper suggests that a number of other policy statements are now subject to challenge.
Ms. Little noted that the Sentencing Commission has compiled a huge variety of statistics, available on their website, which can be used to make arguments for lenience. For example, she noted that statistics supporting a relatively high frequency of variances with regard to similarly situated defendants can be cited to request a similar variance. Ms. Brotman suggested that the Sentencing Commission can remain relevant by making this information even more readily available.
Ms. Brotman discussed the application of the four purposes of sentencing listed in 18 U.S.C. 3553 apply to white collar cases. The negative use of the same factors by the government was discussed by Mr. Robinson and Ms. Little.
Ms. Brotman discussed the Ninth Circuit’s review of white collar sentences, and noted with concern that a number of the Judges have expressed that discretion in white collar cases should be reined in because Judges are more inclined to be sympathetic to white collar defendants because they are more likely to actually be similar to them with respect to their background.
The panel noted (with audience agreement) that Assistant United States Attorneys are almost uniformly asking for guideline sentences. Ms. Brotman noted that this rigid policy often eliminates them from the discussion regarding the appropriate sentence.
Wednesday, June 15, 2011
Danielle Chiesi, the Wall Street blond bombshell who gave new meaning to the term “insider trading” by extracting from sexual partners confidential information which she relayed to convicted inside traders Raj Rajaratnam and Mark Kurland, is reportedly seeking a downward variance from a Sentencing Guideline range of 37-46 months, in part because her wrongdoing resulted from her “toxic” sexual relationship with Mr. Kurland. Ms. Chiesi’s sentencing memorandum highlights a letter from her current boyfriend which contends that Mr. Kurland, her twenty-year lover, exploited her and turned her into his “virtual servant.” Ms. Chiesi seeks to be sentenced to no more than the 27-month term that had been imposed upon Mr. Kurland.
Ironically, one of Ms. Chiesi’s lovers/sources, former IBM executive Robert Moffatt, now serving a six-month sentence for providing confidential information to Ms. Chiesi, at sentencing blamed Ms. Chiesi for manipulating him.
It will be interesting to see whether this “blame the man” explanation strikes a responsive chord with sentencing Judge Richard J. Holwell. Historically, women have received more lenient sentences than men for similar conduct, and the “blame the man” defense frequently worked at sentencing. However, that record was largely compiled with a male-dominated judiciary where some might have condescendingly viewed women as the “weaker sex.” Given changing societal and judicial views (and non-discriminatory mandatory sentences and sentencing guidelines), I suspect that differential has diminished considerably.
Monday, May 23, 2011
It is good to see that President Obama is using his pardon powers, granting eight pardons this past week. (See Press Release here) Clearly more pardons would have been better as there are many suffering from the collateral consequences of a conviction that should not have happened. Likewise, there are many that have significantly reformed their lives and are deserving of a second chance. Some observations about these pardons:
- Four of the eight included a conspiracy count.
- Three of the eight had a drug related charge.
- The largest sentence that had been given in any of these offenses was five years.
- Four had a sentence of no prison time.
- The most recent sentencing from these cases was 2001.
- Seven of the eight cases were prior to 2000.
- Only two cases were from the same state, that being Indiana.
An important question to ask is whether any of these cases should have been criminal activity in the first place. Did we really need to send someone to prison for "the possession and sale of illegal American alligator hides" in violation of the Lacey Act? Would a civil fine have been sufficient?
Friday, May 6, 2011
20th Annual National Seminar on Federal Sentencing Guidelines - The Presentence Report and the Sentencing Process
A box lunch was provided with an allstar panel discussion and video. The topic was the presentence report and the sentencing process. Moderating this session was W. Carl Lietz, III (Kish & Lietz). The panelists were Hon. Donna Elm (Federal Public Defender - Middle District of Florida), Laurel Moore Lee (AUSA - Middle District of Florida), Tess Lopez (Sentencing Mitigation Specialist), Ray Owens (Assist. Chief Deputy US Probation - Middle District of Florida), and Adrienne Wisenberg (Barnes & Thornberg). Some comments:
- See probation early. (Tess Lopez)
- Remember that the prosecutor now has to deal with the Victims Right Act & statutory obligations. (Laurel Moore Lee)
- You need to prepare your client. Spend time with client on what things to avoid saying for getting an acceptance of responsibility. You may not want the client to speak to preserve appellate issues (Donna Elm)
- Prosecutors give information about the case to the probation officers (Laurel Moore Lee/Ray Owens)
- Go to the interview with your client and participate - give your version of the incident - be an advocate. Discuss in advance any objections you may have and correct inaccuracies in the report. (Adrienne Wisenberg)
Two highlights of the program:
- Adrienne Wisenberg talked about character letters and how it is important to have them providing specific instances that tell the story of the client.
- Donna Elm presented a sentencing video that was POWERFUL.
These highlights show the importance of getting a judge to understand exactly who is your client, why your client committed this act, and why this individual deserves a lesser punishment.
Thursday, May 5, 2011
20th Annual National Seminar on Federal Sentencing Guidelines - Sentencing Issues in Securities Cases
This was an extremely high-powered panel, with Hon. Frederic Block (E.D. N.Y.) serving as the moderator.
Giving background on securities fraud sentencing was Alexandra Walsh (Baker & Botts). She noted that the biggest driver is "loss" with as many as 30 points added, and with first offenders being eligible for extraordinary sentences. As long as "loss" has such a huge influence and as long as there are judges who will look at the circumstances - there will be disparity. She asked what will be the Commission's response - will they scale back these sentences? Judge Block noted how easy it is to get life for a securities fraud sentence.
Judge Block noted how Dura Pharmaceutical set the standard of "loss" in civil cases. Speaking about post- Dura, Hank Asbill (Jones Day) noted how the 5th Circuit looked at "loss" and how it was developed in civil cases. But the 9th Circuit in Berger took a different position as noted by Judge Block. They chose not to use the civil fraud standard. Hank Asbill showed a flaw here when he asked - how do you determine the harm to society? He noted how the court gave Berger himself a break. But other cases in the 9th Circuit may not be agreeing with Berger. As noted by Judge Block - "we are dealing with fuzzy stuff." Judge Block then mentioned the Dodd-Frank Act which seems to have language more like Berger, as opposed to Dura.
Michael Horowitz (Cadwalader Wickersham & Taft, LLP) was asked whether the Sentencing Commission has to scratch Dura. It sounded like the Commission will address this issue this coming summer. But where should the Commission go - on one hand there is a view to raise the guidelines (tough on crime), yet another view is to think beyond incarceration. Judge Block questioned whether the Commission was giving judges real guidance here.
The Department of Justice (DOJ) person on this panel was Daniel Braun, Assistant U.S. Attorney in the Southern District of NY (starting of course with the typical DOJ disclaimer that he was not speaking for the dept.). He noted that with increased discretion you get broader differences in sentences. He spoke to the letter of Jonathan Wroblewski, Dir. of Policy and Legislation, DOJ. He stated that this letter was not focused on individualized cases but rather on the broad differences in sentences. (There had been criticism that the letter singled out some specific cases)
Michael Horowitz noted how in the Adelson sentencing, the judge (Judge Rakoff) specifically asked the AUSA if life was an appropriate sentence. Which of course the AUSA could not answer. (Background on Adelson - see here)
Judge Jed Rakoff, speaking next, noted that the guidelines don't capture - what kind of human being do you have in front of you. He said that bad guys who make serious mistakes deserve to rot in prison, but he felt different about good guys who make serious mistakes.
Hank Asbill looked at what should a defense attorney do - he looked at issues of change of venue (are you leaving a more favorable judge?). He mentioned the Pepper case (see background here) as to whether the court could consider post-arrest variances. Things that were banned from the guidelines, now come back into the game. The panel ended on a somewhat humorous note - with the telling about an Israeli study that showed that favorable sentences were after the judge had eaten.
Bottom line - this was an incredible lineup of speakers, an incredible panel - hats off again to Kevin Napper (Carlton Fields) for putting this one together.
Opening remarks for the seminar were by Kevin Napper (Carlton Fields) & Ted Simon (speaking on behalf of NACDL)- Although I was not there, Ted Simon tried to discern the diversity of the audience. He asked - "how many believe in the concept that a federal sentence should be sufficient but not greater than necessary"- he received a response of a lot of hands. He next asked - "how many are dedicated to the concept that a federal sentence should be 'something, but not greater than as little as possible'" - he received laughter. He next asked - we can't ask the question of how many believe that a federal sentence is insufficient, even if greater than the statutory maximum.
He noted that the conference included a diverse, rich, talented, experienced, pool of participants. He called the seminar "unequivocally the leading federal sentencing seminar in the country." He said it was a seminar composed of the leading federal court probation specialists, jurists, prosecutors, and professional officers on all sides of the issues - "all the essential ingredients of the sentencing stew" and a program where everyone can learn and perform their respective roles better. And of course he gave a plug to join NACDL.
Hats off to Kevin Napper, Carlton Fields, for putting together an incredible lineup and conference.
Friday, April 1, 2011
This week's Sentencing Guidelines opinion from the Third Circuit in United States v. Negroni underscores the importance of forcing district courts to create an adequate record at sentencing hearings. Paul Negroni and James Hall IV pled guilty to mail and wire fraud, among other crimes. They were knowing participants in a massive fraud scheme. Hall's original Guidelines range was 87-108 months, reduced to 46-57 months after the district court struck Paragraph 45 of the PSR, which had provided the factual support for a 6-level "250 or more victims" enhancement. The judge then downwardly varied to a 15 month sentence. Negroni's Guidelines range was 70-87 months. The judge downardly varied to a probated sentence with 9 months home detention. The Third Circuit vacated both sentences, because of the procedural unreasonablemess of the downward variances, and remanded for resentencing, I have commented previously on the disturbing trend in federal circuit courts of reversing downward variances based on alleged procedural irregularities, thereby gutting Gall and Kimbrough. The Fourth Circuit is particularly notorious for this.
But district judges must step up to the plate and do their part. In Negroni, the sentencing court struck Paragraph 45 of Hall's PSR, but clearly failed to articulate on the record its reason for doing so. The district court also failed to adequately articulate the substantial downward variance it granted to Negroni. Instead, like so many sentencing judges, it rather rotely recited the Section 3553 factors without intelligently discussing most of them or specifically applying them to the facts of Negroni's case and personal history.
It is really not that hard for a district judge to make an adequate procedural record. Defense counsel must force the sentencing court to discuss each Section 3553 factor and apply it in some fashion to a defendant's unique circumstances. How does counsel do this? By literally providing, in writing and in advance, a paint-by-numbers guidebook for the court. I do not know if that was attempted in Negroni. Perhaps it was. It is not always psychologically easy, in the midst of a hearing, to convince a judge who is ruling in your favor to touch all the bases. But don't kid yourself--the circuit courts are waiting, and itching, to send these babies back. Better to educate the district court beforehand, through your sentencing memorandum, about the procedural requirements for a downward variance.
Here is the opinion. Hat tip to Greg Poe for sending this decision our way.
Tuesday, March 15, 2011
As noted here (KTUU.com, Weyhrauch Gets Fine, Probation in Corruption Case Plea) and also Becky Bohrer, Anchorage Daily News (AP),Weyrauch Gets Suspended Jail Sentence, $1,000 Fine , the Weyhrauch case is finally being resolved. But lets look at what is happening here -
Weyhrauch was initially charged with an individual named Kott, who is now awaiting a ruling on whether his case will be dismissed for discovery violations. Perhaps we have a preview of the reasoning of the Ninth Circuit Court of Appeals by the decision last week in the Kohring case that found that the government had failed to provide Brady material to the defense. (see here, here, and here).
Weyhrauch's case went to the Supreme Court as one of three cases being examined as part of the "honest services" doctrine that prosecutors stretched to a point that the Court decided to place new limits upon -- requiring a showing of "bribery and kickbacks." In its ruling in Skilling, the Court did not directly address the question raised in the Weyhrauch case as to whether you needed a violation of state law for a mail fraud charge that uses honest services. Rather the Court reframed the question with a new test of "bribery or kickbacks." (see also here)
Now Weyhrauch is back in court pleading to the charge noted in the articles above. In dismissing the federal case against him he filed a non-opposition to the motion to dismiss as follows:
"Weyhrauch non-opps the motion to dismiss for two reasons. First, this was a very weak case from the beginning and all the evidence the government ever really had was that Weyhrauch had participated in, aided, or abetted a lobbyist engaging as a lobbyist without being registered. See, attached Exhibit 1, Information and Plea Agreement. Now that Weyhrauch has pled to that crime in state court, there are no longer facts to support a federal indictment. Second, Weyhrauch believes there is evidence to support dismissal of the indictment because of "misconduct before the grand jury which returned the indictment against Weyhrauch." (reference to a letter filed under seal), which is filed under seal because it refers to grand jury testimony and other grand jury proceedings. If the standard is that dismissal is appropriate when the ends of justice are served, then this case qualifies by any measure."
The more important question is: Did the ends of justice warrant the federal government using the mail fraud statute to bring this alleged state case in the first place?
Monday, March 7, 2011
As predicted here in December, sort of, the U.S. Supreme Court partially reversed the Eighth Circuit last Wednesday in Pepper v. United States. (See Pepper). (This post will not concern itself with the "law of the case" part of Pepper, in which the Eighth Circuit was upheld.) The Eighth Circuit's deeply baffling and inhumane decision, flatly prohibiting sentencing courts from considering any evidence of a defendant's post-sentencing rehabilitation in cases remanded from the courts of appeals, not only resulted in the re-incarceration of a fully rehabilitated offender. It also blithely ignored a plethora of recent Supreme Court sentencing case law. The Supreme Court opinion (a majority opinion) by Justice Sotomayor is a ringing reaffirmation of the principle that sentencing courts can and must consider, in the words of Williams v. New York, "the fullest information possible concerning the defendant's life and characteristics."
The Court established in Booker, and reiterated in Gall and Kimbrough, that a sentencing court has broad discretion to consider nearly every aspect of a particular case (and a particular defendant) in fashioning an appropriate sentence. "It has been uniform and constant in the federal judicial tradition for the sentencing judge to consider every convicted person as an individual and every case as a unique study in the human failings that sometimes mitigate, sometimes magnify, the crime and the punishment to ensue.” Gall, 552 U.S. at 52 (citing Koon v. United States, 518 U.S. 81, 113 (1996)).
Justice Sotomayor cited the above language from Koon and Gall and made it a centerpiece of her opinion in Pepper. The Eighth Circuit's decision was so bad that even the government confessed error. The Court ruled that 18 U.S.C. Section 3742 (g)(2), which prohibits, in most instances, a sentencing court from sentencing outside the original Guidelines range upon remand, is unconstitutional. (But the Eighth Circuit had not relied on or cited this statute in its opinion below.) The Court clarified, once again, that sentencing courts are free to disagree with Guidelines policy statements.
Pepper will obviously benefit white collar offenders, as it re-affirms the broad power of sentencing courts under the Booker-Gall-Kimbrough regime and re-emphasizes their power and duty to consider evidence pertaining to each defendant's unique personal circumstances. One of the most important things about Justice Sotomayor's opinion is that it is a solid majority opinion (5 out of 8 justices) in favor of continuing the Booker-Gall-Kimbrough line.
Justice Sotomayor's opinion is remarkably restrained, given that the Eighth Circuit's sub silentio defiance of Booker-Gall-Kimbrough principles resulted in the 18 month re-incarceration of a fully rehabilitated offender who had painstakingly put his life back together.
It is difficult to read Justice Breyer's concurrence as anything other than a signal to the lower courts to continue to interpret the Booker-Gall-Kimbrough line in as cramped a manner as possible. How unfortunate if it causes other federal circuits to repeat the Eighth Circuit's tragic mistake.
Sunday, March 6, 2011
May 4-6 in Orlando, Florida, the Tampa Bay Chapter of the Federal Bar Association, The NACDL, and the Criminal Justice Section of the ABA, hold the Twentieth Annual National Seminar on the Federal Sentencing Guidelines. (see here) This is the premier yearly federal sentencing conference, providing the basics of federal sentencing for newcomers and the very latest updates and practice tips on what is happening, practically and theoretically, in federal sentencing courts throughout the country. In a post-Booker world, it is critically important to know how best to advocate within and outside of the sentencing guidelines. With increased judicial discretion at the district court level, the distinct work of judges, trial counsel, and probation officers becomes particularly important.
This year the conference offers panels with judges such as Hon. Fred Block, Paul Borman, Steven Merryday, Jed Rakoff, Charlene Honeywell, Robin Cauthron, Robert Hinkle, John Antoon, II, William K. Sessions, III, John Gleeson, Robert Pratt, and others. There are breakout sessions on sentencing in securities cases, drug offenses, pornography offenses, and fraud, just to name a few of the topics. The conference also has sentencing mitigation specialists speaking. Co-blogger Sol Wisenberg and I will both be there and look forward to seeing everyone for this highlight event.
Friday, February 25, 2011
Anthony J. Franze & R. Stanton Jones (Arnold & Porter LLP) have a wonderful article in Bloomberg Law Reports titled, With Friends Like These: The Troubling Implications of the Government's Recent Effort to Block Amicus Curiae Briefs in a Controversial White Collar Criminal Appeal.
Amici briefs serve an important function and courts often rely on amici to present matters that need to be addressed in a case. One would think the government - as "ministers of justice" - would want the court to hear and read everything. So a non-consent on the filing of amici briefs in a case when government conduct is being questioned is troubling. And if the amici briefs are nothing more than someone "seeking to 'inject interest group politics into this case'" - wouldn't the court be capable of recognizing this?
I have previously blogged about the Rubashkin case here.
Check out this story by Lisa Black in the Chicago Tribune titled - Ex Cons Offer Prison Primers for soon-to-be incarcerated execs
(esp)(w/ a hat tip to Professor Bob Batey)
Sunday, February 20, 2011
Alan Ellis, John R. Steer, and Mark H. Allenbaugh, have a fascinating article titled "At a Loss for Justice - Federal Sentencing for Economic Offenses." They note how "more than 300 federal criminal statutes are covered by" USSG § 2B1.1. The article contains wonderful tables that compare the amount of loss to the sentence given. The data in this article should prove helpful in making an argument in a sentencing hearing. The authors conclude the article by noting the need to revisit this fraud guideline.
The article has wonderful data that supports an argument I have long made - that we need to rethink giving Draconian sentences, in some cases in excess of twenty-five years, to non-violent first offenders who commit white collar crimes. See Ellen S. Podgor, The Challenge of White Collar Sentencing, 93 Jrl of Criminal Law & Criminology 731 (2007).
Monday, January 24, 2011
Families Against Mandatory Minimums (FAMM), a nonpartisan, non-profit organization working for sentencing reform has launched a new blog - SentenceSpeak. FAMM has been in existence since 1991 and has become the country’s premier reform organization advocating for the elimination of harsh mandatory minimum sentences. Their mission is to ensure that all offenders – including those convicted of white collar crimes – get fair and proportionate punishments.
Saturday, January 15, 2011
In commenting here Wednesday about former Travis County District Attorney Ronnie Earle's shameful money laundering prosecution of Tom DeLay, I noted that:
"The election code conspiracy charge [against DeLay] was almost immediately thrown out because there was no such crime in existence in Texas, as Earle should have known, and as the state’s highest criminal court later confirmed."
R. K. Weaver sent in a comment disagreeing with my analysis. According to Weaver:
"While it is true that there is no express 'conspiracy' provision in the Election Code, there is a general 'conspiracy' provision in the Penal Code which, on its face, and historically was considered to apply to all crimes in Texas. The Texas Court of Criminal Appeals, an elected body that is entirely occupied by Republicans, held for the first time in the history of Texas law, and contrary to abundant precedent, that this provision was limited to Penal Code crimes and was not applicable to the thousands of crimes that exist outside the Penal Code. That decision is generally considered by Texas lawyers to be absurd on its face and blatantly political. Unfortunately, it is also not terribly uncommon. There is a good reason that this court is referred to as 'the clowns on the Colorado.'" [emphasis added].
"When Earle indicted DeLay for conspiracy to violate the criminal provisions of the Election Code he was acting on established and well known Texas legal principals. DeLay's victory before the Court of Criminal Appeals was more about the political landscape in Texas than about the state of the law. I anticipate that when the current case gets before that court they will once again carve a 'DeLay exception 'to the law." [emphasis added].
Weaver is mistaken.
Title 4, Section 15.02 of the Texas Penal Code is the general criminal conspiracy statute. In 1977, long before Tom DeLay's rise to prominence, the Texas Court of Criminal Appeals, the highest court in Texas authorized to rule on criminal cases, held in Baker v. State, 547 S.W.2d 627 (Tex.Cr.App.1977), that Section 15.02 (the general conspiracy statute) could not be applied to a criminal offense defined by another law (that is, defined by a law located outside of the Penal Code) unless the other law explicitly referenced the Penal Code. The non-Penal Code offense at issue in Baker was the Texas Controlled Substances Act. Baker followed a similar holding in Moore v. State, 540 S.W.2d 140 (Tex.Cr.App. 1977), which had found Section 15.01 of the Penal Code, the general attempt statute, inapplicable to the Controlled Substances Act. Both rulings were based on a strict reading of Penal Code Section 1.03(b) which stated in part that “[t]he provisions of Titles 1, 2 and 3 of this code apply to offenses defined by other laws, unless the statute defining the offense provides otherwise.” Since the conspiracy and attempt statutes were contained in Title 4, they could not apply to the Controlled Substances Act, the Court of Criminal Appeals reasoned, unless the Controlled Substances Act provided otherwise. The Controlled Substances Act did not provide otherwise, and did not contain its own attempt or conspiracy provisions. (The Texas Legislature later amended the Controlled Substances Act and it now expressly references Title 4 Penal Code offenses.) Both Baker and Moore were written by Tom G. Davis, a widely respected mainstream jurist. Judge Davis was a Democrat, as were all of the judges on the Court of Criminal Appeals at the time. In reversing Baker’s conviction and ordering the prosecution dismissed, Davis ruled that “[t]he complaint and information in the instant case do not allege an offense against the laws of this state."
Baker was still the law in Texas in 2005, when Earle brought his indictment against DeLay, and had been the law for 28 years. The pertinent portions of the conspiracy statute (Section 15.02) and of Section 1.03(b) remained the same. Earle’s original indictment of Tom DeLay charged that DeLay conspired in October of 2002 to violate the Texas Election Code. The Election Code is not a part of the Penal Code. In 2002, the Election Code did not contain a conspiracy provision or reference or incorporate Section 15.02. In other words, under authority of Baker and Moore, one could not conspire to violate the Election Code. The Election Code was amended, effective September 1, 2003, to permit application of Title 4 offenses, including the Section 15.02 conspiracy statute. But the amended version could not be applied to DeLay’s alleged conduct without violating Ex Post Facto principles. Ergo, Earle’s original indictment of DeLay did not, in the words of Tom G. Davis, “allege an offense against the laws of this state.”
According to a story in the Washington Post, Earle did not learn that there might be a problem with the original charge until his assistants told him about it, shortly after the indictment was returned. How sad. The Penal Code went into effect in 1973. The Election Code was enacted in 1975. Earle was elected Travis County District Attorney in 1976. Baker was decided in 1977. DeLay was indicted in 2005. When Earle found out about his mistake, he did not drop the Election Code conspiracy charge, which would have been the right thing to do. He re-indicted DeLay, using a new grand jury under dubious circumstances, but kept the Election Code conspiracy charge in the indictment. The trial court properly threw it out. The Court of Criminal Appeals affirmed in a 5-4 opinion.
Wednesday, January 12, 2011
The Washington Post reports here on the three year prison sentence handed down Monday to former House Majority Leader Tom DeLay by Texas state judge Pat Priest. DeLay was found guilty last November by an Austin jury of money laundering and conspiracy to commit money laundering under Texas criminal statutes.
The prosecution of DeLay by Travis County District Attorney Ronnie Earle and his successor has been nothing less than a travesty of justice. This is really not about Tom Delay. You can love him or you can hate him. It is instead about our collective glee whenever a person of an opposing ideology gets indicted.
Earle originally indicted DeLay for conspiracy to commit money laundering and conspiracy to violate the state election code. The election code conspiracy charge was almost immediately thrown out because there was no such crime in existence in Texas, as Earle should have known, and as the state’s highest criminal court later confirmed. The money laundering charge, and the conspiracy charge on which it is bottomed, should have never been brought either. Here’s why.
Delay's alleged laundering activity was accomplished through the writing of checks. DeLay was accused and convicted of knowingly conducting, supervising, and facilitating a transaction involving the "proceeds" of criminal activity in violation of the state money laundering statute, Texas Penal Code Section 34.02. In 2002, the year of the alleged offense, Section 34.01 of the Penal Code provided that "‘Proceeds’ meant "funds acquired or derived directly or indirectly from, produced through, or realized through an act." Section 34.01 defined "funds" as follows.
(A) coin or paper money of the United States or any other country that is designated as legal tender and that circulates and is customarily used and accepted as a medium of exchange in the country of issue;
(B) United States silver certificates, United States Treasury notes, and Federal Reserve System notes; and
(C) official foreign bank notes that are customarily used and accepted as a medium of exchange in a foreign country and foreign bank drafts."
So, in 2002 the "proceeds" of criminal activity meant "funds" acquired, derived, produced or realized through an act. "Funds" in turn included: coin or paper money designated as legal tender, circulating, and used as a medium of exchange; United States silver certificates, United States Treasury notes, and Federal Reserve System notes; and, official foreign bank notes used and accepted as a medium of exchange in a foreign country, and foreign bank drafts. Most conspicuously, "funds" did not include checks. This was no accident. The final version of the 1993 money laundering statute was far narrower than the draft first introduced in the Texas House of Representatives. The initial draft prohibited the knowing facilitation of a transaction involving "property" that was the "proceeds" of criminal activity. Property was defined broadly to cover tangible or intangible personal property as well as "a document, including money, that represents or embodies anything of value."
I am aware of no reported cases under the original Texas money laundering statute, prior to DeLay’s indictment, in which the proceeds of criminal activity were identified as checks. In the vast majority of the cases, the laundered proceeds consisted of currency. There were no reported cases even discussing whether a check could constitute laundered funds. The reason for this is obvious. Virtually no prosecutor in Texas thought that checks were "funds" under the old money laundering statute.
In 2005, the Texas Legislature amended the money laundering statute and broadened the definition of "funds" to include "currency or its equivalent including an electronic fund, personal check, bank check, traveler’s check, money order, bearer negotiable instrument, bearer investment security, bearer security, or certificate of stock in a form that allows title to pass on delivery." The House Research Organization’s analysis of the amendment stated that it would "broaden the definition of ‘funds’ to include money other than cash." The analysis also notes, in the "Supporters Say" section, that "[u]nder current law, prosecutors may not prosecute offenders for money-laundering if the offender received a form of money other than cash, such as checks or money orders. This is inadequate as it prevents prosecution under this statute in an array of cases." The new bill "would fix this problem by covering money received in a variety of forms other than cash." It gets even worse. Members of Travis County District Attorney Ronnie Earle’s own staff helped in the drafting of the 2005 amendment!
Of course DeLay could not be prosecuted under the 2005 version of the statute, for conduct that allegedly occurred in 2002, without violating the Constitution’s ex post facto clause. But that sort of problem did not bother Earle. He simply used the 2002 version, even though nobody thought back then that "laundering" via checks constituted laundering under Section 34.02.
The case is now headed for the higher courts. Here’s hoping that one of them does the right thing.