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

CEPI Newsletter March 2019

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

After Refusing to Step Aside for Months, Embattled City Prosecutor Takes Leave Amid Federal Probe: Honolulu City Prosecutor Keith Kaneshiro, who has been the target of a federal investigation for months, has put himself on leave with pay. The Hawaii Attorney General’s Office previously filed a petition in the state’s supreme court that sought to suspend him because his status as a target of “subjected every case being handled by the Honolulu Department of Prosecuting Attorney to potential ethical and legal challenges.” That petition was withdrawn when Kaneshiro stepped down.

Lakewood Special Needs School Director Guilty of Money Laundering: After a month-long trial, Rabbi Osher Eisemann, the founder and director of the New Jersey School for Children with Hidden Intelligence, has been convicted of money laundering and misconduct by a corporate official. Prosecutors from the New Jersey Attorney General’s Office proved that Eisemann misappropriated $200,000 from the school, in an effort to make it appear that he used personal funds to repay debts he owed the school, and used a fundraising foundation to misappropriate $779,000 in operating funds from the school.

Cuyahoga County Prosecutor Passes Growing Corruption Probe to Ohio Attorney General: Cuyahoga County Prosecutor Michael O’Malley recused himself and requested that the Ohio Attorney General’s Office take over an investigation into potential county corruption. As the county’s attorney, O’Malley represents certain county officials and the county itself in a civil lawsuit over conditions in the county jail; the corruption probe also looks into potential criminal activity in the jail. O’Malley expects that two prosecutors on his staff will continue working on the criminal investigation with the state attorney general’s office.

Top Catholic Cardinal Admits Church Destroyed Documents on Clergy Sexual Abuse: During a summit at the Vatican to address combating clergy sexual abuse, German Cardinal Reinhard Marx admitted that in Germany, documents that could have contained proof of sexual abuse had never been drawn up or were destroyed. This admission is consistent with some of the findings by the Pennsylvania Attorney General’s Office in its 2018 grand jury report.

Federal

Felony Bribery Conviction Knocks Portage Mayor Out of Office: Now-former Portage, Indiana Mayor James Snyder was convicted of bribery and a tax obstruction charge after federal prosecutors proved he accepted a bribe in connection with a bid for garbage trucks and then created sham company to hide money from the IRS.

Prosecutors in Chicago to Drop Charges Against Former U.S. Rep. Aaron Schock if He Pays Back IRS, Campaign: Former U.S. House of Representatives member Aaron Schock, who resigned in 2015 during an investigation into, among other things, his lavish spending to remodel his Washington office in a “Downton Abbey” style, has entered into a deferred prosecution with federal prosecutors in Chicago. This is the latest turn in a case that has had its share of issues, which ranged the removal of the original judge and the U.S. Attorney’s Office for the Central District of Illinois, to a cert petition asking the Supreme Court to take up the defense’s Speech or Debate clause argument. The deferred prosecution requires Schock to pay back taxes to the IRS, reimburse his congressional campaign $68,000, and not commit any new crimes for six months. Schock’s campaign has pled guilty to a misdemeanor for failing to properly report expenses.

Norman Seabrook Was Once a Union Power Broker in New York. Now He Is Going to Prison: Norman Seabrook, who once led to 20,000-member union that represented corrections officials in New York, has been sentenced to nearly five years in federal prison. Prosecutors proved at trial that Seabrook steered $20 million in union money into a risky hedge fund in exchange for a kickback worth more than $100,000. Seabrook’s two trials—the first of which ended in a hung jury—drew widespread attention in large part because they included testimony about corruption in the New York City Police Department and touched on fundraising efforts by New York City Mayor Bill de Blasio.

Ethics

Bullying From the Bench: A Wave of High-Profile Bad Behavior has Put Scrutiny on Judges: The American Bar Association has assembled a compendium of judges behaving badly—ranging from one who engaged in a fistfight with a public defender to another who chastised an attorney for citing Supreme Court precedent.

Lawyer's “Succubustic” Claim Should Be Reported as Gender Bias to State Bar, Court Concludes: In California, lawyer Benjamin Pavone has been reported to the state bar for calling a judge who ruled against his client “succubustic.” In an opinion that defines “succubus” (for anyone who might need a refresher), the court “make[s] the point that gender bias by an attorney appearing before us will not be tolerated, period.”

Lawyer Suspended for Lying About Case Filings, Creating Fake Brief to Back Up His Account: A New York appeals court has suspended a real estate lawyer for three months because he lied to a partner about filing appeals briefs and used a rather elaborate scheme to corroborate his lies. Dennis McCoobery drafted a fake brief and constructed a fake chain of emails in an effort to further deceive a partner in his firm about whether he had properly filed a brief.

Houston Federal Judge Bars Female Prosecutor From Trial, Sparking Standoff With U.S. Attorney’s Office: In Texas, U.S. District Judge Lynn N. Hughes banished a female federal prosecutor from his courtroom in an apparent desire to retaliate against her because he was unhappy about the outcome of an earlier case in which she had been involved. In that earlier case, he dismissed an indictment when he concluded she had violated discovery rules, and complained that “It was a lot simpler when you guys wore dark suits, white shirts and navy ties… We didn’t let girls do it in the old days.” In its order reversing him in that case, the Fifth Circuit concluded his remarks were “demeaning, inappropriate and beneath the dignity of a federal judge,” and ordered that the case be reassigned to a new judge. In the current case, after the female prosecutor simply gave her name to the court reporter, Hughes excused her from the courtroom—and gave no reason for his decision. After the Fifth Circuit denied a mandamus request by the government, the defendant was convicted in a trial before Hughes in which the female prosecutor was not permitted to participate.

Federal Prosecutors Broke Law in Jeffrey Epstein Case, Judge Rules: A federal judge in Florida has ruled that the Southern District of Florida U.S. Attorney’s Office violated a statute requiring victim notification in a criminal case against Jeffrey Epstein, who was the beneficiary of a non-prosecution agreement in a case involving over 30 underage victims. For divergent takes on the ongoing investigation into the prosecutors’ actions in this case, see two thoughtful pieces by the former First Assistant U.S. Attorney of that office and a former New York federal prosecutor.

One Way To Deal With Cops Who Lie? Blacklist Them, Some DAs Say: Some recently-elected district attorneys who ran on “criminal justice reform” platforms are maintaining lists of police officers they deem untrustworthy. These prosecutors include the district attorneys in St. Louis, Philadelphia, Houston, and Seattle.

Potpourri

Why the U.S. Supreme Court’s New Ruling on Excessive Fines is a Big Deal: In Timbs v. Indiana, the Supreme Court has ruled that the Eighth Amendment’s prohibition on excessive fines also applies to state governments. In its decision, the Court concluded that the seizure of a $42,000 Land Rover that had been used to transport relatively small amounts of drugs violated the constitutional rights of the defendant, who had purchased it with “clean” money and faced a maximum fine of $10,000 on his drug charges. (Stay tuned to this newsletter for updates; next month, we hope to announce a free webinar that will discuss Timbs and provide some guidance.)

Money to Launder? Here’s How (Hint: Find a Bank): In a piece that focuses on Russian money laundering, Bloomberg fleshes out the theory of money laundering (placement, layering, and integration) and describes how some trade-based money laundering, “hawala,” and other schemes work.

International

Transparency International’s Corruption Perceptions Index 2018: Transparency International has released its 2018 Corruption Perceptions Index (“CPI”). The CPI cited the weak state of institutions in the Arab world as a source of corruption there. For a critique of the CPI, see two pieces at the Global Anticorruption Blog.

The SNC Affair is Now an Existential Threat to the Trudeau Government: In Canada, Prime Minister Justin Trudeau is facing ongoing criticism about allegations that he and his staff pressured the now-former attorney general to intervene in a criminal case involving SNC-Lavalin, which was being investigated on allegations akin to the Foreign Corruption Practices Act. In recent testimony before the legislative branch, former attorney general Jody Wilson-Raybould described how she was pressured to override her independent prosecutor’s decision to proceed with criminal charges against the Quebec firm rather than offer a deferred prosecution agreement.

Video: Baker Center Conference on Controlling Corruption in Latin America: A conference hosted by Rice University’s Baker Institute for Public Policy focused on controlling corruption in Latin America, and included panels that discussed anticorruption prosecutions across Latin America and corruption control in Mexico. Prof. Matthew Stephenson has helpfully summarized these panels, videos of which are available online.

Swedish Court’s Stunning Acquittal of ex-Telia Executives for Bribery: A court in Sweden has acquitted three former executives of the telecom giant Telia of bribing the daughter of the then-Uzbekistan president for the right to operate in the country her father controlled. The executives were accused of paying over $300 million; one commentator disputed the court’s factual findings and legal analysis, pointing to facts that the company conceded in cases in the United States as evidence that the Swedish court did not reach the correct result.


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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