The National Attorneys General Training & Research Institute
CEPI Newsletter March 2017
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
Essex Clerk Arrested for Stealing $94,000 in Taxpayer Money: The Illinois Attorney General’s Office has charged Traci Freytag with depositing nearly $100,000 of Essex township checks into her personal account. Freytag allegedly used the cash to, among other things, take trips to Florida.
Paterson Mayor Joey Torres, City Workers Hit With Corruption Charges: The mayor of Paterson, New Jersey, has been charged by the New Jersey Attorney General’s Office with official misconduct and tampering with public records. Based on press reports, Mayor Joey Torres is alleged to have required city workers to do private jobs for him that ranged from washing his scooter to doing construction at a relative’s beer business.
Former Los Angeles Sheriff Found Guilty of Obstructing Federal Investigation: Former Los Angeles County Sheriff Lee Baca was found guilty of obstruction of justice. The jury found that Baca obstructed an investigation into corruption and abuses in the county jails he oversaw. In this retrial, federal prosecutors streamlined the case drastically to focus the allegations against Baca, rather than emphasizing the problems at the jail he oversaw.
Ex-N.J. Official Avoids Prison in United Corruption Case: David Samson, the former chairman of the Port Authority of New York and New Jersey (and former New Jersey Attorney General) has been sentenced in federal court to one year of home confinement on corruption charges. Samson was charged after he forced United Airlines to reinstate what he called the “Chairman’s Flight,” a twice-weekly route from Newark to South Carolina. Samson is expected to serve his term in the South Carolina home that was his reason for the flights, and is also required to provide 3,600 hours of community service, pay a $100,000 fine, and serve four years of probation.
McDonnell and Its Potential Progeny
Walter Reed, Son Can Remain Free While They Appeal Corruption Convictions, Judge Rules: The former District Attorney for St. Tammany and Washington (Louisiana) parishes and his son were allowed to remain on bail pending appeal to the Fifth Circuit Court of Appeals after the federal district judge overseeing their case ruled that the defense raised substantial questions of law that might result in a reversal on appeal, including on McDonnell grounds. Walter Reed and his son were convicted of a variety of federal charges as a result of their personal use of campaign funds.
After Preet Bharara's Exit, Give Local DAs the Tools to Fight Corruption: A former federal prosecutor and current state legislator argues that the New York state legislature should give state prosecutors “the same legal weapons” that federal prosecutors enjoy so that they can prosecute “dirty politicians.” The writer argues this is particularly important given the McDonnell case and because there has been no indication that corruption cases will continue to be a priority for federal prosecutors.
Lawyers Clear Prosecutor in Noura Jackson Case: A Tennessee Shelby County Assistant District Attorney has been largely exonerated of misconduct charges related to his failure to timely provide witness notes during a murder trial. The disciplinary panel concluded that the failure to disclose was inadvertent.
Florida Gov. Takes Case from Anti-Death Penalty Prosecutor: Florida Governor Rick Scott has transferred a first-degree murder case against Markeith Loyd, who was charged with murdering his own pregnant girlfriend and Orlando Police Lt. Debra Clayton, away from Orange-Osceola State Attorney Aramis Ayala, who has refused to seek the death penalty. After Ayala refused Scott’s request to recuse herself, Scott issued an executive order that reassigned the case to another state attorney who is willing to seek the death penalty.
<href="#sthash.nojWAp7U.dpuf">Braxton Prosecutor Resigns Over Handling of Sex Abuse Case: Braxton County (West Virginia) Prosecuting Attorney Kelly Hamon McLaughlin hasagreed to give up her law license for three years and step down as prosecuting attorney after admitting she had, in essence, twice obstructed justice. After an 11-year old girl reported to law enforcement that McLaughlin’s father-in-law sexually assaulted her, McLaughlin claimed she’d assigned the investigation to another prosecutor’s office; instead, she’d told no other office about the allegations. In an apparently separate incident, McLaughlin’s deputy prosecuting attorney broke into the local sheriff’s office; McLaughlin allowed him to resign rather than face charges.
Attorney with Criminal Record to Serve as Special Prosecutor: In Pinal County, Arizona, a criminal defense attorney who was charged with multiple felonies in connection with an illegal campaign contribution scheme has been appointed as special prosecutor in two death-penalty-eligible homicide cases. Gary Husk pled guilty to a misdemeanor in connection with the scheme in 2014 and an attorney disciplinary panel found that his conduct reflected adversely on his “honesty, trustworthiness, or fitness as a lawyer.” Husk nonetheless will receive $160,000 of county funds to serve as a special prosecutor in two cases from which the elected county attorney recused himself due to ethical conflicts.
State Auditor Says Proposed Legislation in Oklahoma Would Invite Corruption: In Oklahoma, a proposed new law, House Bill 1247, that would allow county officials to select their own auditors, has provoked concern that auditors selected in that manner could be corrupted.
The U.S. Department of Justice has released an “Evaluation of Corporate Compliance Program” that describes the factors federal prosecutors typically consider when evaluating a corporate compliance program. One firm that represents companies that could be subject to such an evaluation describes it as “a welcome articulation of compliance program ‘ground rules’ for companies before the Fraud Section as the subject of a federal investigation or prosecution.”
FinCEN Renews Real Estate “Geographic Targeting Orders” to Identify High-End Cash Buyers in Six Major Metropolitan Areas: The Financial Crimes Enforcement Network (FinCEN) has announced the renewal of existing Geographic Targeting Orders that temporarily require U.S. title insurance companies to identify the natural persons behind shell companies used to pay “all cash” for high-end residential real estate in six major metropolitan areas. The areas are: (1) New York City; (2) Miami-Dade, Broward, and Palm Beach Counties in Florida; (3) Los Angeles County, California; (4) San Francisco, San Mateo, and Santa Clara Counties in California; (5) San Diego County, California; and (6) Bexar County, Texas.
Media: Investigative Journalism About Corruption
The International Center for Journalists has published “Follow the Money: A Digital Guide for Tracking Corruption,” a free 50-plus page guide to national and international databases that can be accessed to find information about companies involved in corruption and money laundering.
The Sum of its Parts: Coordinating Brazil’s Fight Against Corruption, 2003-2016: A publication by Innovations for Successful Societies summarizes what led to the 2016 charges in the biggest corruption case in Brazil’s history. Since that publication, the Brazilian prosecutor in charge of the Odebrecht/ Petrobras case has asked the Supreme Court to open 83 new cases into allegedly corrupt politicians.
German Authorities Raid U.S. Law Firm Leading Volkswagen’s Emissions Inquiry: The Munich office of Jones Day, a U.S.-based law firm that Volkswagen hired to conduct an internal investigation, was searched by German authorities. The authorization of the search highlights the differences between American and German views of attorney-client privilege and the work product doctrine.
South Korea’s President is Impeached: South Korean President Park Geun-hye has been removed from office by that country’s supreme court. The court concluded that Park extorted money from big firms and attempted to conceal her crimes. An election for her successor has been set for May 9, 2017. Every South Korean president since the 1980s—when the country became a democracy—has been ensnared by corruption scandals.
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.