The National Attorneys General Training & Research Institute

The National Attorneys General Training & Research Institute The National Attorneys General Training & Research Institute

CEPI Newsletter January 2018

This monthly compendium of news reports about corruption and ethics issues is brought to you by the Center for Ethics and Public Integrity (CEPI). Neither the National Association of Attorneys General nor the National Attorneys General Training & Research Institute express a view as to the accuracy of news accounts or affirm any position taken by the authors of the hyperlinked articles.

Cases

Former Pleasant Grove Police Officer Surrenders to Forgery and Perjury Charges: Former Pleasant Grove, Alabama Police Officer Lawrence Harrell Jr. has been charged by the Alabama Attorney General’s Office with second-degree forgery of traffic citations and perjury.

Woman Pleads Guilty to Stealing Over $75,000 from Arizona School District: Sarah Diaz, the daughter of the former business manager for the Topock Elementary School District, has pled guilty to stealing more than $75,000 from that school district. Diaz was charged by the Arizona Attorney General’s Office and will be sentenced in February.

Six Former NDOT Employees Accused in Tire Theft Ring: The Nevada Attorney General’s Office has filed charges against six former Nevada Department of Transportation employees, who are accused of being part of a seven-member tire theft ring. The scheme involved the use of a state credit card to buy tires and the submission of false work or labor hours to justify the purchase of the tires. The men are charged in a 21-count indictment with theft, fraud, embezzlement, burglary, and possession of stolen property.

Abelove Goes from Prosecutor to Defendant: In a case brought by the New York Attorney General’s Office, Rensselaer County District Attorney Joel E. Abelove has been charged with perjury and official misconduct in connection with his handling of a fatal 2016 police-involved shooting. Edson Thevnin was shot and killed by Sgt. Randall French during a traffic stop. Despite an executive order that made it clear that the attorney general’s office had authority to investigate the shooting, Abelove presented the case to the grand jury, permitted French to testify without securing a waiver of immunity, and withheld material evidence from the grand jury that might have supported indicting French. Abelove’s actions were, according to the attorney general’s office, an effort to protect French from any future prosecution for the shooting. Abelove testified before a separate grand jury in connection with the attorney general’s office’s probe and is charged with lying to the grand jurors about his conduct.

FBI, U.S. Department of Health and Human Services to investigate Oklahoma Health Department: The Federal Bureau of Investigation and the U.S. Department of Health and Human Services will partner with the Oklahoma Attorney General’s Office to investigate the Oklahoma State Department of Health (OSDH). OSDH is alleged to have mismanaged federal funds and recently sought a $30 million bail-out from the state legislature.

Katherine Kealoha Coerced Man to Lie to Grand Jury, Charges Say: Deputy City Prosecutor Katherine Kealoha—who, with her husband, Honolulu Police Chief Louis Kealoha, was indicted by a federal grand jury in October 2017—is alleged to have coerced a potential witness against her to lie in the grand jury. Katherine and Louis are currently charged with “framing” her uncle in an effort to discredit him in a family financial dispute. The potential witness, Ransen Taito, pled guilty to perjuring himself before the grand jury at Katherine’s request and agreed to cooperate with the government in an investigation into Katherine’s actions before she became a prosecutor. Katherine is alleged to have stolen $150,000 from a trust that was under her control when she was in private practice, half of which belonged to Taito.

A Former State Senator Allegedly Took 700 Pounds of Dunkin' Donuts Coffee as a Bribe: Federal authorities have charged former Massachusetts State Senator Brian Joyce with taking more than $1 million in bribes, which ranged from a Jeep, to kickbacks from an energy company, to 704 pounds of Dunkin’ Donuts coffee. Jones is charged in a 102-page indictment with crimes including racketeering, extortion, wire fraud, and money laundering.

Four Former Beaumont City Leaders Plead Guilty to Public Corruption Charges: Four former city of Beaumont, California, leaders have pled guilty to public corruption charges brought by the Riverside County District Attorney’s Office. The city’s former manager, director of economic develop, director of planning, and finance director admitted to their roles in a $40 million scheme that included stealing money designated for transportation projects and giving out interest-free private loans to other city employees. The four pled guilty to felonies and have been ordered to pay over $11 million in restitution. Several have been sentenced to only one year of house arrest, and, according to prosecutors, it is unlikely any defendants will receive prison time under current California state sentencing laws.

McDonnell

Ex-Lackawanna Commissioner’s Latest Appeal Rejected; Will Stay Behind Bars: Former Lackawanna, Pennsylvania County Commissioner Richard Cordaro has failed in his attempt to vacate his convictions for extortion, bribery, and racketeering. Cordaro, who was tried before the Supreme Court decided McDonnell v. United States, argued that his convictions should be reversed because the jury was not instructed on the proper definition of “official act.” A federal district court judge found that Cordaro did not demonstrate that it was more likely than not that no reasonable juror would have convicted him if the jury had been properly instructed.

Ethics

May Judges Search the Internet for Facts? ABA Ethics Opinion Sees Problems: The American Bar Association has published Formal Opinion 478, which provides guidance to judges about the use of online research. While judges are ethically permitted to conduct legal research online, they cannot generally use the internet to find “adjudicative facts” about the parties, that is, “who did what, where, when, how, and with what motive or intent.”

Breaking the Law Clerks’ Code of Silence: The Sexual Misconduct Claims Against Judge Kozinski: In the wake of allegations that now-former Ninth Circuit Judge Alex Kozinski preyed on his law clerks and other women over whom he occupied a position of power, ethics experts are examining the confidentiality requirements for federal law clerks. One of Kozinski’s former clerks outlined his mistreatment of her and her difficulty in obtaining ethics advice about whether she could speak about Kozinski’s actions. Thanks in large part to that former clerk’s blog post, the federal clerk handbook was amended and Chief Justice John Roberts has called for an evaluation of how the judicial branch handles allegations of sexual harassment.

Attention Corporate Defense Lawyers: Work Product is Up for Grabs If You Blab to Feds: A federal court in Florida has ruled that the law firm Morgan Lewis & Bockius waived its work-product privilege by providing oral summaries of witness interviews to the Securities & Exchanges Commission when it cooperated with the SEC in an effort to reduce its corporate client’s penalties. After two individuals associated with that corporate client were sued by the SEC, those individuals sought access to notes maintained by Morgan Lewis. Finding that Morgan Lewis waived its work-product privilege by providing summaries of those notes to the SEC, a magistrate judge ordered the firm to provide the documents to him to be reviewed in camera.

Tools

Answers to Frequently Asked Bank Secrecy Act (BSA) Questions: The Financial Crimes Enforcement Center (FinCEN) has published answers to over 20 frequently asked questions about the Bank Secrecy Act. While FinCEN’s guide is designed with banks in mind, it is also useful for prosecutors and law enforcement officers who investigate money laundering and other white-collar crimes.

Lessons from the “Isolated Capital” Effect for the Fight Against Public Corruption: The Global Anticorruption Blog published a piece highlighting the “serious corruption problem” in the New York state legislature and making a connection between corruption and the fact that Albany is isolated from New York’s population center, New York City. Building on analyses by two academics, the writer suggests that factors linked to densely populated cities—like a robust media presence, access to information about government expenditures, and high voter turn-out—can help prevent and root out corruption.

The El Paso Intelligence Center has released a paper addressing law enforcement challenges posed by merchant-based money laundering. For a copy of the document, prosecutors and law enforcement officials can request access to the EPIC website.

Investigative Journalism

An Alabama Sheriff, a Mystery Check and a Blogger Who Cried Foul: The New York Times examines allegations that Morgan County, Alabama, Sheriff Ana Franklin secretly installed spyware on a blogger’s computer after the blogger reported on Franklin’s alleged mismanagement of jail funds. The blogger reported that $150,000 that was earmarked to feed inmates at the jail had, instead, at the sheriff’s direction, been invested in a now-bankrupt used-car dealership run by a convicted fraudster.

International

Massive ‘Car Wash’ Corruption Probe in Brazil Faces Setbacks: The Brazil Supreme Court has voted to stop an Operation Car Wash-related investigation into four members of that country’s congress. As federal lawmakers can only be tried in that court, this ruling prevents prosecutors from pursuing cases against the lawmakers while they are in office. While this ruling is a setback, the larger investigation continues, as Brazil’s Federal Police have nearly doubled the number of agents assigned to investigate potentially corrupt politicians.

The Promise and Perils of Cleaning House: Lessons from Italy: Harvard Law Professor Matthew Stephenson, drawing from the rise of Silvio Berlusconi after the exposure of a major corruption network in Italy, writes “a well-intentioned and widely-celebrated corruption cleanup could contribute to the rise of a populist—and deeply corrupt—demagogue.” Stephenson posits that a “power vacuum” created after a corruption sweep and/or deepening cynicism about politicians when corruption is exposed might provide fertile ground for the rise of a Berlusconi-esque leader.

Are Mexicans Imagining Their Corruption Problem?: Mexican President Enrique Peña Nieto and others have discounted polls showing that Mexican citizens perceive corruption to be higher than ever. The president and his officials have suggested that social networks are to blame for a (presumably incorrect) perception that corruption has increased. Relatedly, lawmakers in that country are considering legislation that would make it illegal for citizens to publish corruption allegations online that might damage a target’s credibility—even if those allegations are true.

U.S. Sanctions Four More Venezuela Officials: Four Venezuelan officials have been sanctioned by the United States for corruption-related offenses. The officials, all part of President Nicolás Maduro’s government, are accused of political repression and public corruption and alleged to have committed misdeeds ranging from the mismanagement of a program that could have provided food to Venezuela’s impoverished people to the empowerment of armed gangs.


Amie Ely is the Director of the Center for Ethics & Public Integrity and the Editor of the CEPI Newsletter and may be reached at 202-326-6041. The CEPI Newsletter is a publication of the National Association of Attorneys General. Any use and/or copies of this newsletter in whole or part must include the customary bibliographic citation. NAAG retains copyright and all other intellectual property rights in the material presented in this publication. For content submissions or to contact the editor directly, please e-mail aely@naag.org.

Faculty Spotlight

NAGTRI's faculty are top-rated experts in their field. Read about them.

Course Schedule

NAGTRI offers high-quality, responsive and innovative trainings.

Research & Newsletters

NAGTRI produces comprehensive research and newsletters on topical legal issues.