The National Attorneys General Training & Research Institute

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

Corruption News July 2016

The following is a compendium of news reports over the last month that may be of interest to prosecutors fighting corruption, particularly in the offices of attorneys general. Neither the National Association of Attorneys General nor the National Attorneys General Training & Research Institute expresses a view as to the accuracy of news accounts, nor as to the position expounded by the authors of the hyperlinked articles. The Op-Ed section, in particular, is included to provoke thought about the scope and scale of corruption.

Cases: Investigations, Prosecutions, and Appeals

Former Sen. Phil Griego to Face Trial on Nine Corruption Charges: Prosecutors in New Mexico Attorney General Hector Balderas’s office successfully completed a four-day preliminary hearing in early July, resulting in a state district judge binding a former state senator Phil Griego over for trial on nine felony counts. The charges—which include bribery, perjury, and violating his oath of public office—were filed in connection with a real estate deal in which Griego concealed a financial interest while pushing for a resolution to sell a state-owned property. When the deal went through, Griego was paid a $50,000 broker’s fee—a fact he allegedly did not disclose to other lawmakers.

N.Y. Supreme Court Judge Pleads Guilty to Bribery: New York State Supreme Court Judge John A. Michalek pled guilty to bribery and offering a false instrument for filing in state court on June 28, 2016. As part of the plea agreement, the judge agreed to cooperate with Attorney General Eric Schneiderman’s investigation into his relationship with a Buffalo-area political consultant and to resign from the bench. That consultant, G. Steven Pigeon, was arrested on charges of bribery, among other things, a day after the judge entered his guilty plea.

Alabama Sheriff Faces Impeachment in Corruption Probe: Alabama Attorney General Luther Strange’s Office began impeachment proceedings against Sheriff Tyrone Clark Sr., who is accused of, among other things, giving essentially free rein to an inmate facing drug trafficking charges. Clark allegedly allowed the inmate to leave jail, return with contraband, have access to guns, engage in human trafficking, and have sex with a woman in an unsecured visiting room. The Alabama Supreme Court—likely minus its chief justice, who is facing removal from office himself—will decide whether Clark should be removed from office.

Ex-Dallas County DA Chief Investigator Admits Taking Bribe to Drop Case: The former chief investigator for the Dallas (TX) County District Attorney’s Office has pled guilty to being bribed to persuade an assistant district attorney to drop criminal charges against a defendant. Anthony L. Robinson, who worked in the district attorney’s office for 20 years, admitted he accepted $200,000 from a defendant in March 2013 and then—less than two months later—persuaded the prosecutor to dismiss the pending criminal charges against that defendant. The assistant district attorney who allegedly agreed to dismiss the charges, Heath Harris, has announced his candidacy for Dallas County District Attorney.

Anthony Mangone's Corruption Sentence Tossed Out Over Bad Guidelines: As a result of an appeal in which the Government conceded that the sentencing guideline calculation was erroneous, a disbarred Westchester (NY) attorney who was sentenced to 18 months in federal prison will be resentenced by the same judge who told him his conduct made her “physically ill” and accused prosecutors and defense counsel of entering into plea deal to “try to control” the judge’s sentencing decision. The Second Circuit concluded that, while some of Southern District of New York District Judge Colleen McMahon’s comments were “intemperate” and “rhetorically emphatic,” defendant Anthony Magone hadn’t shouldered the burden of proving that he should be sentenced by a different judge.

Rep. Chaka Fattah Guilty on All Counts in Corruption Trial: After a month-long federal racketeering trial, U.S. Representative Chaka Fattah has been convicted of all 22 counts. Fattah routed federal grant money and nonprofit funds through consultants to repay an illegal $1 million campaign loan. Fattah is in the waning months of his eleventh term in office, during which time he served on the House Appropriations Committee.

Anticorruption Legislation: Discussed, Pending, and Passed

NY's Legislative Session: What Was Done, What Wasn't: Several ethics-related bills were passed in the waning days of the New York state legislative session. One requires more disclosure by lobbyists and requires political consultants to register with the state Joint Commission on Public Ethics. A second (S6326 and A00377), which will have to be passed again next year and sent to the voters, would amend the state constitution to strip lawmakers and other “public officers” on pensions if they are “convicted of a felony involving breach of public trust.” The bills have received some criticism as doing “little to address the underlying issues that have allowed scandal to flourish in Albany.”

Mexican President Vetoes Part of Anticorruption Legislation: Mexican President Enrique Peña Nieto has vetoed part of an anticorruption bill passed by Congress, citing concerns about invading the privacy of unelected government contractors and those who receive government funds. Nieto has proposed modifications to the article that requires such people to report their assets and other information and to 15 other related articles. Other aspects of the legislation that are supported by the president and by the private sector include the creation of a new anticorruption prosecutor—who would be independent of the government—and special courts to hear corruption cases.

New SEC Anti-Corruption Rules Make It Harder For Oil Companies To Bribe Foreign Countries: The Securities and Exchange Commission has issued new transparency rules that require oil, gas, and mining companies listed on the U.S. stock exchange to disclose every payment they make to both U.S. and foreign governments. Annual reports listing how much companies pay in, inter alia, taxes, royalties, fees, and production entitlements will be required beginning in 2018.

Op-Eds

This issue’s op-ed section is devoted to the Supreme Court’s decision in United States v. Robert McDonnell, an opinion by a unanimous court that interpreted the phrase “official act” in 18 U.S.C. § 201 in reversing the conviction of the former governor (and former attorney general) of Virginia. Notably, a “federalism paragraph” at page 24 of the slip opinion suggests that the Court’s decision is limited to the federal statute being construed—or perhaps the prosecution of state officials by federal prosecutors. As a result, McDonnell seems unlikely to limit state prosecutors’ ability to bring cases against corrupt state and local officials. Nevertheless, the case has garnered a great deal of attention, as these curated op-eds reflect, and is a decision that corruption prosecutors should read.

McDonnell Case Reveals the Supreme Court’s Squishy Corruption Standard: The Washington Post editorial board criticizes the McDonnell decision as “a narrow and exceptionally permissive interpretation of what constitutes actual corruption” that will “give comfort to other ethics-scorning politicians . . . .”

A Narrow Ruling on Public Corruption: The New York Times points out that the Supreme Court chose to remand Robert McDonnell’s case rather than reversing it and argues that the “decision should be narrowly construed and need not stop prosecutors from building strong cases against politicians who are abusing their office for personal gain.”

Supreme Court Underscores Clear Danger of Vague Laws: The San Diego Union-Tribune argues that the McDonnell Court made the right call in reversing a conviction under an “imprecise, open-ended” bribery statute.

Our View: High Court Ruling Means Tougher Ethics Laws Needed: The Auburn (NY) Citizen contends that the McDonnell decision means that states—and the federal government—should pass laws clarifying ethics requirements and imposing tough restrictions on “pay-to-play activities.”

International Issues

DOJ Gives Taiwan Bribe Money Paid to Former President's Family: The U.S. Department of Justice returned approximately $1.5 million in real estate proceeds to Taiwan. The money came from the sale of forfeited properties in New York and Virginia, which were purchased with bribe money that had been paid to the family of former Taiwan president Chen Shui-Bian. Chen, who was in office from 2000 to 2008, was convicted of bribery and sentenced to 19 years in prison in 2009.

UK Fraud is Up, Police Budgets are Down. Criminals Cheer: The 2016 UK Annual Fraud Indicator reports that fraud costs Great Britain $282 billion (or 193 billion pounds) per year. This is four times the loss amount estimated in 2013. With austerity cuts to policing, including cut-backs in many of the fraud squads, the relatively low risk of being arrested will, the author argues, give criminals an incentive to continue defrauding their victims: “Fraudsters . . . will continue to prey on victims until such time as there is a realistic possibility of their being apprehended and sentenced to a term of imprisonment that reflects the severity of the crime.”

Nigerian Anti-Corruption Singer Kidnapped: A singer who released a song mocking politicians who don’t keep their promises was kidnapped in Nigeria. After several days, Nigerian singer Ado Halliru Daukaka was eventually released, blindfolded, in a forest and later found unconscious and emaciated. Daukaka reported that the kidnappers told him that they would kill him, and “repeatedly asked why I was criticising politicians and warned me to stop or lose my life.”

China Seeks Western Help to Nab Fleeing Corruption Suspects: The Chinese government is requesting to extradite suspects charged with corruption who have fled overseas. But many Western countries—including the United States—have been reluctant to sign extradition treaties, due to concerns about human rights abuses.

Is Global Enforcement Parity the New Norm?: Sophisticated modern-day criminals often have an international reach. Crime-fighters around the world are increasingly relying on their foreign counterparts for evidence secured by Mutual Legal Assistance Treaties; to seek guidance on drafting and implementing anticorruption laws; and even to consult on the appropriate penalties to seek when defendants are convicted.

Media: Investigative Journalism About Corruption

Bid To Buy For-Profit College By Former Obama Insiders Raises Questions: Politico published a lengthy investigative report detailing an attempt by three former officials working for the investment firm of Marty Nesbitt and former Deputy Education Secretary Tom Miller to purchase the University of Phoenix, a for-profit college that is under investigation by the FTC and three state attorneys general. Miller was “part of the effort to more tightly regulate for-profit colleges at the very agency now charged with approving the ownership change,” and represented the Government at multiple meeting with the University of Phoenix before he entered the private sector. A former official in the George W. Bush administration described these efforts to buy the University of Phoenix as troubling: “They regulate it. They drive the price down. . . . They are buying it for pennies on the dollar.” Forbes argues this situation “underscores how regulation can serve purposes other than the public interest.”

The Trusted Grown-Ups Who Steal Millions from Youth Sports: The New York Times reports on embezzlement and other corruption cases arising from youth sports leagues with annual budgets in the hundreds of thousands of dollars. According to the article, there have been hundreds of arrests and convictions in 43 states in the last five years for thefts by treasurers and board members.


Amie Ely is the Editor of Corruption Newsletter and may be reached at 202-326-6041. The Corruption 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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