The National Attorneys General Training & Research Institute
CEPI Newsletter December 2016
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: Investigations, Prosecutions, and Appeals
Green Bay Mayor Jim Schmitt Sentenced to $4,000 Fine, 40 Hours of Community Service: Green Bay (WI) Mayor Jim Schmitt was sentenced on December 5, 2016, for campaign finance violations and false statements intended to hide those violations. Schmitt pled guilty to three misdemeanor charges in a pre-indictment plea agreement, and the special prosecutor agreed to seek no term of incarceration. The mayor is continuing in office and says that the charges have not impacted his performance of mayor.
Judge: Text Messages Not Relevant in Case Against Public Defender's Investigator: Lawyers representing a former New Orleans Public Defender’s Office investigator have been denied access to online messages between two New Orleans District Attorney’s Office prosecutors and an attorney for the sheriff’s office. The defense attorneys claim the messages would have revealed that the case against the former investigator is a “vendetta.” The former investigator is facing charges in connection with a scheme to pose as a member of the district attorney’s office to secure police logs in connection with the defense of a man who was convicted of rape and kidnapping in 2014.
McDonnell and Its Potential Progeny
Big Win Comes Better Late than Never for Ex-State Rep. Mike Veon; Impact on Other Governmental Corruption Cases Is Unclear: Former state representative Mike Veon has been granted a new trial by the Pennsylvania Supreme Court, which issued a decision framing his conviction as a “criminalization of politics.” The court ruled that the trial judge erred when he instructed jurors that Veon did not have to gain financially to violate conflict-of-interest laws. Instead, the Pennsylvania Supreme Court ruled, prosecutors must prove that a politician benefited financially to convict him under the state conflict-of-interest statute, as intangible political benefits are not sufficient. (While their reliance on McDonnell was limited, the justices cited it for the proposition that statutes criminalizing corrupt behavior should be interpreted narrowly.) Veon, who was paroled from state prison in 2015, remains convicted of other corruption charges, including those involving his misuse of taxpayer money using a nonprofit organization. Newly-elected Pennsylvania Attorney General Josh Shapiro will have to decide whether to retry Veon on the conflict-of-interest charges, an outcome supported by the prosecutor who led the trial team.
Walter Reed, Former North Shore Prosecutor, Denied a New Trial: A federal district judge has denied requests for a new trial made by North Shore (LA) District Attorney Walter Reed and his son, Steven Reed. The Reeds are accused of using Walter’s campaign fund as a “slush fund,” spending more than $100,000 on personal expenses and failing to report that money as the taxable income that it was. Defense attorneys argued that federal prosecutors criminalized what should have been merely a state ethics matters and claimed that McDonnell required reversal of the convictions. The district judge rejected that argument, concluding that McDonnell’s definition of “official act” was “not at issue in this case.”
Preet Bharara: McDonnell Ruling No Grounds to Toss Silver Conviction: Prosecutors in New York have argued that the Second Circuit should affirm the conviction of disgraced New York State Assembly Speaker Sheldon Silver. Defense counsel argue that the jury was given an improperly broad definition of “official act,” under McDonnell, and ask for the conviction to the reversed. The Government contends that the judge’s instructions adequately stated the law and that any error in instructing the jury was harmless.
Robert Morgenthau on His Years as District Attorney: ‘I Don’t Look Back’: The New York Times profiles former Manhattan District Attorney and Southern District of New York U.S. Attorney Robert Morgenthau. One quote from a former prosecutor who worked under him stands out: “The buzzwords that occur to me are ethics and professionalism. . . . On ethics, from Day 1 you understood that there were lines, and you didn’t cross them.” (Interestingly, the article reveals that Morgenthau may have set the precedent for staying on as an SDNY U.S. Attorney after a regime change—something that Morgenthau did under Richard Nixon and current USA Preet Bharara will do under the Trump administration.)
Kern Prosecutor Faces Potential One-Year Suspension for Falsifying Confession: Kern County (CA) assistant district attorney Robert Alan Murray, who inserted a damning (and false) admission into a defendant’s confession in a sex offense case, is facing suspension of his law license. The State Bar Court Review Department has recommended increasing a 30-day suspension recommended by a lower tribunal to a full year, and to placing him on probation for two additional years and requiring that he complete the State Bar’s Ethics School. In the case involving the falsified confession, the judge dismissed the charges after the defense attorney reported what Murray—who characterized his acts as “a joke”—had done. In recommending a longer suspension, the State Bar Court Review Department noted that Murray prevented the victim from getting her day in court and put the public at risk. Notably, the defendant acquitted as a result of Murray’s acts is serving a prison sentence due to a sex crime conviction involving a new victim.
Brooklyn Prosecutor Accused of Using Illegal Wiretap to Spy on Love Interest: Brooklyn Assistant District Attorney Tara Lenich has been charged with using illegal wiretaps to spy on a police detective and one of her colleagues at the district attorney’s office. In what has been described as a “love triangle gone wrong,” Lenich forged the names of multiple judges to keep the scheme running for about a year, and—as part of an effort to cover her tracks—claimed to other prosecutors that she was involved in a secret International Affairs Bureau investigation with the New York City Police Department.
As a Distracted Brazil Mourns, Lawmakers Gut a Corruption Bill: While Brazil mourned the victims of a tragic plane crash that killed 71 people, including most of the Chapecoence soccer team, its legislature met in a marathon session to pass laws that could significantly erode the authority of prosecutors and judges who are investigating corruption politicians. Bills under consideration would, among other things, create “crimes of responsibility” against prosecutors and judges, such as disrespecting lawyers for defendants in a courtroom.
US Courts’ Evaluation of Foreign Judicial Corruption: Different Stages, Different Standards: In a post on the Global Anticorruption Blog, a Harvard Law School student from Ecuador writes about the 20-plus year of litigation between Chevron and Ecuadorian plaintiffs who sued Chevron about the environmental effects of oil exploration and drilling. The case was originally brought in the United States, then moved to Ecuador (at Chevron’s request) on forum non conveniens grounds. After the plaintiffs won in Ecuador and sought to enforce a multi-billion dollar judgment in the United States, Chevron then successfully argued that the Ecuadorian judgment had been procured through corruption, including bribery and perjury, that was orchestrated by the plaintiffs’ attorneys. In affirming the federal district court’s conclusion that the plaintiff’s lead attorney, Steve Donziger, had created a RICO enterprise and owed Chevron damages, the Second Circuit observed “Even innocent clients may not benefit from the fraud of their attorney.”
Ukraine appoints 23-year-old to lead anti-corruption office: A young woman has been named to lead Ukraine’s anticorruption office. Anna Kalynchuk, 23, recently graduated from law school and seems to be best known for her active social media presence (including an Instagram account that opines “All you need is law ;)” ).
Media: Investigative Journalism About Corruption
Panama Papers: Europol Links 3,500 Names to Suspected Criminals: The European Union’s law enforcement agency, Europol, has found that 3,500 individuals and companies listed in the “Panama Papers” are also found in law enforcement databases listing individuals and companies associated with money laundering, organized crime, terrorism, and drug trafficking. Meanwhile, some of the reporters who worked on the Panama Papers investigation are in hiding due to threats. As one example, Ecuador president Rafael Correa has used his Twitter account to name several journalists who worked on the investigation, leading his supporters to harass the journalists and disseminate photographs of them and their children.
Tulum, Mexico: How an Eco-Chic Retreat Became a Den of Corruption: A Newsweek article describes how citizens have been forced from their homes on a strip of beach sometimes referred to as “the Williamsburg of Mexico,” given its popularity with tourists who hail from the eponymous Brooklyn headquarters of hipsterdom. Murders of a local journalist (in 2009) and lawyer (in 2012) who were publicizing and fighting the corruption and evictions remain unsolved.
Tools and Tips
Financial Action Task Force Report Recognizes U.S. AML CFT Leadership, Action Needed on Beneficial Ownership: The Financial Action Task Force (“FATF”)—an international, standard-setting body for anti-money laundering (“AML”) and counter terrorist financing regimes—has published its Mutual Evaluation Report of the United States. The 266-page Report is largely laudatory of U.S. AML efforts, but concludes that it appears that—despite 36 states with laws that criminalize money laundering—“States do not prioritise” money laundering enforcement and that money laundering statistics “are not readily available at the State level.” FATF “encouraged” U.S. authorities “to collect information on a more regular and comprehensive basis concerning State-level ML investigations and prosecutions.” FATF also recommended that the U.S. increase transparency requirements for beneficial owners of companies.
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 firstname.lastname@example.org.