The National Attorneys General Training & Research Institute

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

CEPI Newsletter May 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.

Corruption Cases

State

Former AL Dept. of Public Health Employee Faces Felony Indictments: Former Alabama Department of Public Health employee Yoskio Denise Givner has been charged by the Alabama Attorney General’s Office with theft, criminal possession of a forged instrument, and using her office for personal gain.

Date for Corruption Trial of State Sen. John Courson of Columbia Set: The state court public corruption trial of South Carolina State Senator John Courson is set to begin on June 4. Courson is charged with misconduct in office, criminal conspiracy, and converting campaign money to his personal use.

Florida Mayor Charged with Official Misconduct, Corruption: Boca Raton, Florida, Mayor Susan Haynie has been charged with official misconduct, perjury, and misuse of public office for failing to disclose $335,108 in outside income. Haynie allegedly omitted that she was being paid hundreds of thousands of dollars by a real estate mogul and then lied under oath to county ethics investigators.

Former UHP Trooper Sentenced for Starting 1,000-Acre Wildfire: Rex Richard Olsen, a former Utah Highway Patrol trooper, has been sentenced to one-to-fifteen years in prison for setting a 2017 wildfire that burned 1,000 acres. Olsen, who was charged by the Utah Attorney General’s Office, admitted that he intentionally started the fire to “feel the excitement of it,” and was previously convicted in federal court of starting a similar fire around the same time on Bureau of Land Management Land.

Paxton Announces Indictments of Three Jefferson County Sheriff’s Candidates for Accepting Illegal Donations: Three former Jefferson County, Texas, candidates for sheriff—including current Jefferson County Sheriff Zena Collins Stephens—have been indicted by the Texas Attorney General’s Office for fraud related to campaign contributions. Stephens, Ray Elliot Beck, and Joseph Sterling Stephenson have been charged with misdemeanors for accepting cash contributions over $100; Stephens was also charged with tampering with a government record, a felony.

2 Workers Plead Guilty in Scam to Reduce Utility Bills for Bribes: Two suspended New Brunswick, New Jersey, Water Department employees have pled guilty to a scheme to reduce the water and sewer bills for dozens of properties in exchange for $20,000 in bribes. Joseph DeBonis, a/k/a “Gordo,” and William Ortiz, a/k/a “Billi,” cost the city around $500,000. Residents, who were forced to pay higher utility rates, underwrote the cost of the crime. The men face recommended sentences of five years in prison, along with a requirement that they give up their government jobs and pensions. They will also be ineligible for future public jobs. The New Jersey Attorney General’s Office prosecuted the case.

Federal

Former New York Prosecutor is Convicted of Bribing Ex-Cop Over Gun-License Issues: A former Brooklyn Assistant District Attorney has been convicted in federal court of bribing a now-former New York City Police Department Sergeant to obtain gun licenses for the former ADA’s clients. John Chambers was convicted of, among other things, bribery and honest services fraud for bribing former NYPD sergeant David Villanueva with tickets, free meals, sports memorabilia, an expensive watch, and cash.

Ex-HSBC Exec's Banker Friends Must Unmask To Defend Him: A New York federal judge has required that members of the financial industry must reveal their names on the public record if they wish to argue for a lenient sentence for a convicted colleague. The case may provide precedent for prosecutors who have cases where defendants wish to provide letters of support under seal.

Former Texas Congressman Steve Stockman Found Guilty of 23 Felonies: Steve Stockman, who represented Texas in the U.S. House of Representatives, was found guilty of defrauding two donors and funneling their $1.25 million into personal and campaign expenses. In one example, Stockman assured the donors that their funds would be used to fund housing costs for interns; instead, the money went towards Stockman’s friend’s rehab treatment and to spy on a potential opponent, while the interns experienced a “horrific” working environment and had to fend for themselves to find housing. Stockman’s former secretary testified that Stockman opted to skip a mandatory ethics course on Capitol Hill, telling her that “he wasn’t planning to go because then they might hold him to the rules.”

Ethics

Attys Must Admit Some Errors To Current Clients, ABA Says: The ABA Standing Committee on Ethics and Professional Responsibility has released Formal Opinion 481, which instructs lawyers to tell current client about “material” errors the lawyers make. The opinion defines as material errors that are “reasonably likely to harm or prejudice a client” or likely to reasonably cause the lawyer to consider firing the attorney. The new obligations emanate from Model Rule of Professional Conduct 1.4. The opinion explicitly does not apply to errors that are discovered after the representation has been terminated, although it acknowledges that “[g]ood business and risk management reasons” may cause lawyers to choose to warm former clients of their errors “in time to avoid or mitigate any potential harm or prejudice to the former client.”

Fed Raids On Trump Atty A Privilege Screen 'Nightmare': In an analysis piece that may be of interest to any corruption prosecutors with lawyers as potential targets, Law360 describes the process that New York federal prosecutors are likely to use when they search through evidence obtained as a result of a recent search warrant executed on a high-profile lawyer. The defense motion and the government’s response provide additional details on the issue.

Lawyers for Eves, LePage Make Their Cases in Federal Court: Lawyers for Maine’s Governor, Paul LePage, and for that state’s former House Speaker, Mark Eves, had an en banc argument before the Third Circuit Court of Appeals about whether the governor was entitled to immunity in a lawsuit Eves brought against him. Eves alleged that LePage caused him to be fired from his position as president of a school after LePage threatened to withhold funding that would have gone to the school. LePage threatened to pull the funding after Eves—a member of the party opposite LePage’s, with whom LePage was typically at odds with during Eves’ tenure in the House—was hired by the school. The federal district court found that, regardless of LePage’s motive, the governor enjoys immunity for any funding decisions.

5th Circuit Blasts Lawyer Who Sent Thank-You Checks to Experts, Yet Told Jurors They Were Unpaid: The Fifth Circuit Court of Appeals has overturned a $151 million verdict against Johnson & Johnson after concluding that plaintiff’s counsel Mark Lanier engaged in a series of “deceptions” during the trial. In an opinion notable for its tone and willingness to identify and scold Lanier—while referring only obliquely to other lawyers on his team—the court criticized both Lanier’s suggestion to the jury that his experts were unpaid, unlike the defense experts, and decisions by the trial court to permit unduly inflammatory evidence about payments to the regime of Saddam Hussein and complaints of racism at Johnson & Johnson.

Arkansas Justices Appeal Decision Allowing Judge's Lawsuit: Judges on the Arkansas Supreme Court have asked the Eighth Circuit to lift a federal district judge’s decision permitting a lawsuit against them to proceed. On April 17, 2018, Pulaski, Arkansas, County Circuit Judge Wendell Griffen joined a public protest about the death penalty—including by laying on a cot in a manner that Griffen said was intended to portray Jesus—outside of the Arkansas governor’s mansion. That same day, Griffen blocked Arkansas from using a lethal injection drug, apparently concluding that the state misled a medical supply company to obtain it. The Arkansas Supreme Court later disqualified him from hearing the case. Griffen sued in federal court to be reinstated, and a district court judge dismissed his lawsuit against the state supreme court itself but allowed it to proceed against the individual judges.

How ‘Oral Downloads’ Created a Work-Product Protection Waiver: After two former General Cable executives were charged with accounting fraud, they sought to compel General Cable’s outside counsel (the law firm Morgan Lewis) to produce materials related to the firm’s internal investigation of the company, including investigation interview notes, SEC meeting notes, and an investigation report. A federal judge ruled that, because Morgan Lewis provided “oral downloads”—that is, verbal descriptions of the investigation interviews—to the SEC, Morgan Lewis waived any work product protection it may have had over those notes and was required to provide them to the former executives. This decision may be of particular relevance in cases involving parallel proceedings.

Panel Asks SJC to Suspend Judge Estes Over Sexual Affair: A judge who helped launch Pittsfield, Massachusetts’ drug court has admitted that he engaged in “serious misconduct” by having sex with a clinician for the drug court. Judge Thomas Estes, who was appointed to the bench after a long career as a public defender, has argued that he should not be removed from the bench despite claims by the clinician that Estes fired her after she tried to end their affair. A federal lawsuit by the clinician is pending against Estes and the drug clinic.

Raleigh Lawyer's 18-Year Battle Against Roy Cooper Gets Another Go in Court: In 2000, Raleigh, North Carolina, lawyer Gene Boyce sued former attorney general Roy Cooper for allegedly committing libel in a campaign ad that was ran when Boyce’s son, Dan, unsuccessfully ran against Cooper for attorney general. In 2014, a settlement resulted in an apology by Cooper and $75,000 in legal costs to Boyce. Two years later, Boyce filed a related lawsuit against the North Carolina Bar, arguing that it should have investigated a complaint he filed about Cooper that arose out of the same conduct underlying the 2000 lawsuit. One of Boyce’s arguments was that, because Cooper, as the state’s attorney general, represented the Bar, the Bar had a conflict of interest that compelled an investigation of the allegations against Cooper by someone not employed by the bar. The North Carolina Court of Appeals issued a decision finding that, among other things, the general court of justice—in addition to the state bar—had jurisdiction to “provide for any relief needed to address professional misconduct arising out of litigation before the courts.”

Should Ohio Pay Wrongfully Imprisoned Ex-Inmates if Prosecutors Withhold Evidence?: Ohio is considering bills (House Bill 411 and Senate Bill 248) that would allow wrongful imprisonment payouts in cases in which exculpatory evidence was withheld by the police or prosecutors—even if the defendant is factually guilty of the crime. The bills were under consideration last year, but were pulled at the last minute after the Ohio Attorney General and the Ohio Prosecuting Attorneys Association objected to it.

Judge Recuses Self, Scolds Law Student-Plaintiff: Florida federal district judge Federico Moreno recused himself in a civil case involving a law student who is suing a bank pro se. The student, Jonathan Mullane, allegedly visited the judge’s law clerk to request a copy of the record so he could file a writ of mandamus with the Eleventh Circuit, as he seemed to believe that the judge should have ruled on his motion for a default judgment. Mullane is also interning for the local U.S. Attorney’s Office, and there are allegations that he implied to the law clerk that he was there on behalf of federal prosecutors. Judge Moreno issued an order explaining some elementary principles of federal civil litigation, expressing “concern” about Mullane’s “lack of candor,” recusing himself due to the ex parte communication, and suggesting that—after he reviewed security footage—he may well refer Mullane to the Florida Bar, his law school, and to the U.S. Attorney “for any action they deem appropriate.”

Tools

CliffsNotes for Implementing an Income and Asset Disclosure System for Public Servants: The Global Anticorruption Blog provides a helpful “cheat sheet” for financial disclosure systems for public servants, which may be of interest to anyone considering legislation to require additional disclosures.

International

FinCEN Issues Advisory on the FATF-Identified Jurisdictions with AML/CFT Deficiencies: The Financial Crimes Enforcement Network (FinCEN) has issued an advisory to financial institutions regarding the Financial Action Task Force’s (FATF) updated list of jurisdictions with strategic anti-money laundering/counter-terrorist financing (AML/CFT) deficiencies. These changes may affect U.S. financial institutions’ obligations and risk-based approaches regarding relevant jurisdictions.

IMF to Probe Role of Advanced Economies in Feeding Corruption: The International Monetary Fund will assess the role that advanced nations play in bribery and other forms of corruption. The IMF will examine budget management, financial-sector oversight, central bank controls, market regulations, and the rule of law. It will also increase its monitoring of corruption in countries to which it lends, in the wake of corruption allegations over money it provided to Ukraine.

Facebook Fined $33 Million For Failing to Aid Brazil Graft Probe: A judge in Brazil has ordered Facebook to pay over $33.4 million for failing to cooperate with a corruption investigation. Despite being served with a search warrant, Facebook did not provide access to WhatsApp messages exchanged by targets of the investigation.

Here are the Features of Canada’s DPA Scheme: Canada is implementing a new Deferred Prosecution Agreement; a Canadian lawyer describes what those DPAs will look like.

French Supreme Court Finds No Double Jeopardy Based on Foreign Plea Agreement: France’s Supreme Court recently ruled against a defendant who argued that double jeopardy principles should prevent the prosecution of a company that entered into a plea agreement for related charges in another country.

South Africa's Zuma Proclaims Innocence After Court Appearance: Former South African President Jacob Zuma is facing corruption charges related to a $2.5 billion arms deal. Zuma, who proclaims his innocence, has been charged with 16 counts, including fraud, racketeering, and money laundering.

Sponsored Trips By Lawmakers Violate Anti-Graft Law: Anti-Corruption Chief: South Korea’s anticorruption commission has warned lawmakers that they will violate the Improper Solicitation and Graft Act if they go on trips funded by institutions and agencies under their oversight.


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.

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