The National Attorneys General Training & Research Institute
CEPI Newsletter October 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.
Indictment: Former GBI Agent Spent More than $60K on Illegal Purchases: A former high-ranking Georgia Bureau of Investigation Agent, Sandra Putnam, has been charged with misusing her state-issued credit card to make tens of thousands of dollars in personal purchases and then trying to cover up her crime by doctoring receipts. The Georgia Attorney General’s Office Special Prosecutions Division filed a racketeering indictment alleging Putnam committed 670 separate criminal acts.
Pointe Coupee Employee Facing Public Corruption Charges: The Louisiana Attorney General’s Office has charged a Pointe Coupee Parish account clerk with felony theft, malfeasance in office, and computer fraud after an investigation that revealed that Willie Woods used his position to steal more than $7,500 from the City of New Roads.
How 'Old School Corruption' Led to Mayor's Ousting in N.J.'S 3rd Largest City: Now-former Paterson, New Jersey, Mayor Jose “Joey” Torres has pled guilty to corruption charges brought by the New Jersey Attorney General’s Office. Torres, the three-time mayor of New Jersey’s third-largest city, pled guilty to second-degree conspiracy to commit official misconduct, agreed to forfeit his position and any future public office or employment and pay restitution, and was sentenced to five years in prison. Torres’s scheme—which was first publicized by local media after a local developer hired a private investigator to follow the mayor and his workers—involved requiring city workers to do work that benefited Torres and his family personally. Three department of public works supervisors who were involved in Torres’s scheme have also pled guilty to lesser charges.
Corruption Case Against Pa. Lawmaker Delayed for Years: Pennsylvania State Representative Vanessa Lowery, who was charged with bribery nearly three years ago, has yet to be tried. She’s remained a legislator while facing charges—which are supported by recordings that reveal she accepted thousands of dollars in apparent bribes—and has an upcoming hearing to which the now-incarcerated former Philadelphia District Attorney Seth Williams (who was himself convicted of abusing the powers of his office) has been subpoenaed as a defense witness. The investigation that resulted in charges that were brought by Williams’s office had been handled by the Pennsylvania Attorney General’s Office—until then-Attorney General Kathleen Kane took office and secretly shut down the investigation. Press about Kane’s decision to kill the case ultimately caused her to leak grand jury evidence in an effort to respond to the allegations—and resulted in her being convicted of corruption charges herself.
Rural South Dakota Community Struggles 2 Years After Crime: Two years after a corrupt businessman fatally shot his family before committing suicide—not long before it was discovered that he embezzled more than $1 million in federal grant money that was intended for schools—rural South Dakota communities victimized by the businessmen are gearing up for litigation about who pays if the U.S. Department of Education demands the refund of grant money connected to the businessman’s scheme. The South Dakota Attorney General’s Office investigated to determine that the businessman, Scott Westerhuis, and his wife spent the money on home improvement projects, among other things. Several other employees who participated in the fraud were charged by the attorney general’s office.
Federal Prosecutors Target the 'Dark Underbelly of College Basketball': Ten people, including four college basketball coaches and an Adidas executive, have been charged in Manhattan federal court with soliciting and accepting cash bribes to funnel high school players into college basketball programs. The case has led to the suspension of Rick Pitino, who was already penalized by the NCAA for an apparently unrelated scheme to provide strippers to basketball prospects. Famed commentator Dick Vitale commented on the allegations.
A Corruption Case Worth Repeating: Following its decision in U.S. v. Sheldon Silver, the Second Circuit Court of Appeals has reversed the conviction of former lawmaker Dean Skelos and his son on McDonnell grounds. The court found that the jury instructions incorrectly defined “official act,” and that the jury could have convicted Skelos for committing acts that the Supreme Court declared insufficient to constitute the “quo” of a quid pro quo bribery scheme. The case has been remanded for a new trial, as the court concluded that there was sufficient evidence for a properly instructed jury to convict Skelos of the charges.
Judge Rejects Move to Call Attorney General as Witness In Griego Case: The judge overseeing the criminal case against Phil Griego, a former New Mexico state senator, has denied Griego’s attempt to call New Mexico Attorney General Hector Balderas—whose office is prosecuting Griego—as a witness in his case. Griego is facing charges in connection with his concealment of the fact he stood to gain a $50,000 commission when he pushed through the sale of a state-owned building when he was a legislator. Griego’s attorneys alleged that, when Griego gave then-state auditor Balderas a campaign donation, he told Balderas about his role in the real estate deal that is the subject of his charges, and Balderas told Griego he had nothing to worry about. In an affidavit filed with the court, Balderas denied he ever discussed the building sale with Griego and characterized the conversation as “casual small talk.” In ruling against the defense motion, the judge noted that for a prosecutor to be compelled to testify, the defendant would have to show that vital evidence couldn’t be obtained anywhere else. Griego’s attorneys have also made motions arguing that McDonnell’s “official acts” requirement applies to New Mexico state law and that prosecutors have not alleged that Griego committed the required official acts.
Prosecutors: Menendez Was Doctor's 'Personal US Senator': In opening remarks to the federal corruption trial of Sen. Bob Menendez, prosecutors allege that Menendez “sold his office for a lifestyle he couldn’t afford.” The charges allege that the senator accepted luxury trips from a wealthy donor, who he then assisted in various ways at the expense of the citizens whom he represented. Perhaps adding to an already difficult and contentious case, the judge in the case has, according to media accounts, been somewhat short-tempered with the parties. The case has included sparring about the applicability of McDonnell to the charges.
The Colorado Attorney General has successfully argued for a change in that state’s Rules of Professional Conduct after the Supreme Court’s Office of Attorney Regulation Counsel’s handling of a grievance left prosecutors concerned that they could be subject to bar complaints if they oversaw undercover investigations. Now Colorado Rule of Professional Conduct 8.4(c) provides that lawyers are permitted to—despite the general prohibition against dishonesty, fraud, deceit, or misrepresentation—“advise, direct, or supervise others, including clients, law enforcement officers, or investigators, who participate in lawful investigative activities.”
Florida Supreme Court Rules Against Ayala on Scott's Reassigning of Death Penalty Cases: The Florida Supreme Court has ruled that Governor Rick Scott has the power to strip cases from State Attorney Aramis Ayala based upon Ayala’s declaration that she would refuse to ever seek the death penalty. The court concluded that Ayala’s “blanket policy” was “in effect, refusing to exercise discretion,” and rejected her argument that the case was “a power struggle over prosecutorial discretion.” Ayala has responded to the decision by dismissing her federal lawsuit against the Governor and announcing that she will consider, on a case-by-case basis, whether the seek capital punishment in future death-penalty-eligible cases.
Juan Martinez, Prosecutor In Jodi Arias Case, Cleared in State Bar Ethics Case: Deputy Maricopa County, Arizona, Attorney Juan Martinez—made famous during the televised murder trial of Jodi Arias and later criticized for writing about the Arias case—has been cleared of the fifth Arizona State Bar complaint filed against him. The complaint alleged that Martinez acted unethically during five capital murder trials—at least one of which resulted in an opinion by the Arizona Supreme Court finding that he had committed prosecutorial misconduct in a case that the U.S. Supreme Court later reversed.
Justice Matters: What is a Commonwealth’s Attorney?: Alexandria, Virginia, Commonwealth Attorney Bryan Porter explains his office’s powers in the first of what appears to be an ongoing column called Justice Matters. Porter notes that ethics rules will preclude him from writing about any ongoing case that he’s prosecuting—perhaps an overstatement, but arguably good practice nonetheless.
‘Catfishing’ Brings Trouble for Pa. Prosecutor and N.Y. Lawyer: A Pennsylvania disciplinary board will hear an ethics complaint against a district attorney who created a fake Facebook profile for subordinates to update and to use “to befriend defendants or witnesses if you want to snoop.” In New York, a Staten Island lawyer and political operative who created accounts that appeared to belong to a politician client’s nemesis is the subject of a criminal probe into what the Staten Island lawyer apparently considered merely a “#DirtyTrick.” In an ABA-sanctioned article, each of these incidents is described and analyzed. (Note: while prosecutors’ oversight of undercover operations has been approved by the ABA and federal courts, a prosecutor who engaged in similar, direct, online subterfuge to communicate with a defense witness was disciplined in Ohio—and contacting defendants who are represented by counsel will often run afoul of both Rule of Professional Conduct 4.2 and Massiah.)
SEC Probes Departure of PepsiCo’s Former Top Lawyer: Thanks to a reporter’s email address being included on what was intended to be a confidential communication among attorneys at high-profile New York City firms, the Wall Street Journal is reporting about an apparent probe by the Securities & Exchange Commission into the circumstances of the departure of Pepsi’s former General Counsel. Law.com also covers the accidental leak.
Resource Alert: IBA Local Legislation Library (It's free!): The FCPA Blog provides information about a resource maintained by the International Bar Association: a library of anticorruption legislation from around the world. This may be useful for anyone involved in drafting or proposing legislation—although for the United States, it contains only a subset of the federal laws that could apply in a corruption case.
FinCEN Release: Advisory on the FATF-Identified Jurisdictions with AML/CFT Deficiencies: The Financial Crimes Enforcement Network has released a list of jurisdictions that are deficient in anti-money laundering (AML) and combatting the financing of terrorism (CFT). This list may affect U.S. financial institutions’ obligations and approaches with respect to these jurisdictions, which include North Korea and Iran.
Disclosure of Beneficial Ownership: The Library of Congress has surveyed laws around the world that govern the registration of beneficial owners and disclosure of corporate data. This information is then compared and contrasted with S. 1454, which is under consideration in the U.S. Senate. The FACT Coalition and a number of other “good government” groups support S. 1454 and a similar bill, S. 1717, while National Association of Criminal Defense Attorneys opposes the transparency the bills would require.
ISO 37001 and the Federal Sentencing Guidelines Compared: The Global Anticorruption Blog discusses the International Standards Organization’s ISO 37001: Antibribery Management Systems—Requirements with Guidance for Use and compares it to the factors set forth in the U.S. Sentencing Guidelines to determine the adequacy of an organization’s compliance program.
Brazil's Ex-Leader Lula Appears in Court in Corruption Case: Former Brazilian President Luiz Inacio Lula da Silva has been questioned by that country’s top anticorruption judge about allegations he accepted bribes. The former president—best known by the nickname Lula—denied the accusations. Polls in Brazil suggested he is a front-runner for the 2018 presidential elections—which he will be allowed to compete in only if his criminal appeal in a separate bribery case, for which he faces nearly a 10-year sentence, succeeds.
Raul Mondesi, Former Yankees Outfielder, Sentenced to Eight Years in Prison for Corruption While Mayor of San Cristobal: Former New York Yankee Raul Mondesi has been sentenced to prison in his native Dominican Republic, where he was the mayor of the town of San Cristobal. Mondesi was sentenced to eight years in prison for embezzling the equivalent of $6.3 million U.S. dollars.
Quebec Corruption Unit Arrests 8 in Alleged Municipal Contract Scheme: Prosecutors in Quebec, Canada, have charged eight officials with a kickback scheme in which engineering firms would provide political donations and other favors in exchange for $160 million in city contracts. The charges, which were brought by an anticorruption unit in Quebec known as UPAC, include fraud and conspiracy to commit fraud, municipal corruption, and breach of trust. Arrestees include a former high-ranking city councilor, who is currently on trial for fraud and breach of trust in a separate criminal case.
Amnesty for Ben Ali-era Corruption in Tunisia Condemned: Activists in Tunisia have criticized a law that pardons officials that were involved in corruption while the country was a dictatorship. Activists argue that amnesty granted by the new “Administrative Reconciliation Law” is a setback for democracy. Government officials are permitted to offer amnesty to corrupt officials who did not derive any personal benefit from acts committed during the regime of Zein al-Abidine Ben Ali, which ended in 2011, and were obeying orders.
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.