The National Attorneys General Training & Research Institute
CEPI Newsletter September 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, 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.
In late September, CEPI is hosting an Anti-Money Laundering Summit for subject matter experts from attorneys general offices, the federal government, and non-governmental organizations by invitation only. The Summit will focus on an anti-money laundering manual that NAAG anticipates publishing in 2018, and trends in money laundering and anti-money laundering enforcement in an effort to ensure NAGTRI provides cutting-edge training to our prosecutors.
Cases: Investigations, Prosecutions, and Appeals
Pennsylvania’s Attorney General Is Convicted on All Counts: Now-former Pennsylvania Attorney General Kathleen Kane was convicted of perjury, obstruction of justice, and criminal conspiracy after a trial that revealed she leaked grand jury information in a political corruption case in an effort to discredit that case’s prosecutor, and then lied about her role in the leak.
Attorney General Investigating Gallatin County Commissioner for Ethics Violation: The office of Montana Attorney General Tim Fox is investigating a Gallatin County Commissioner to explore whether his relationship with a developer violated Montana laws that banned him from accepting gifts “of substantial value” that would improperly influence a reasonable person “to depart from the faithful and impartial discharge of the person’s public duties.”
City Insider Given 10 Years in Prison for Red Light Cameras Scandal: John Bills, second in command at Chicago’s Transportation Department, was convicted earlier this year in a federal court of 20 counts including bribery. During Bills’ trial, prosecutors outlined a scheme to steer tens of millions of dollars in contracts for red light cameras to an Arizona company, Redflex Traffic Systems Inc., and proved that Bills accepted over half a million dollars in cash bribes, as well as gifts, hotel stays, an Arizona condominium, and trips. Bills used both his co-workers at City Hall and a friend he met at Alcoholics Anonymous throughout his scheme. The Chicago Tribune claimed partial credit for the case, noting that it exposed the scheme through a four-year investigation.
Ex-DPS Principal Says He was Pressured to Steal: Two former Detroit Public Schools principals have been sentenced to federal prison after pleading guilty in connection with a scheme that resulted in a loss of $2.7 million from their school district. Former principal Ronnie Sims claimed he accepted nearly $60,000 of dollars in kickbacks due to, essentially, “peer pressure.” He was sentenced to 15 months in prison. Former principal Nina Graves-Hicks was sentenced to 12 months for stealing over $27,000. She argued she used the money for students, but prosecutors obtained records showing that she made purchases at Perfumania and a 4-star Texas resort, undercutting those claims.
McDonnell and Its Potential Progeny
Prosecutors Will Drop Case Against Former Va. Governor Robert McDonnell: The Department of Justice has decided not to retry the former Governor of Virginia on corruption charges. The decision is a “blow to” the Eastern District of Virginia U.S. Attorney’s Office, whichrecommended a retrial of Robert McDonnell, according to “people familiar with the case,” and is expected to also result in the dismissal of charges against Maureen McDonnell. While the criminal case against the McDonnells is over, it is important to note that it led to legislative reform: it inspired the 2015 passage of state ethics laws in Virginia limited gifts from lobbyists and others to $100 per year.
Virginia Corruption Case May Resonate in California: A lawyer in private practice opines about whether McDonnell’s definition of “official act” will impact decisions interpreting California Penal Code § 68, which he views as the “equivalent” to the federal Hobbs Act (18 U.S.C. § 1951). He argues that McDonnell’s “ironic byproduct” is that “political effectiveness becomes related to criminal culpability,” because a politician who delivers the requested result after a bribe will have committed an “official act” under the Supreme Court’s definition.
Former State Delegate Convicted of Corruption Cites McDonnell Ruling in Asking for New Appeal: Former Virginia State Delegate Phillip Hamilton, convicted of federal corruption charges in 2011, has asked the Fourth Circuit Court of Appeals to allow him to file a second appeal based on McDonnell. Hamilton, who is serving a nine-and-a-half year sentence, was convicted of soliciting a job at Old Dominion University that he helped create while he was a member of the Virginia General Assembly.
Anticorruption Legislation: Discussed, Pending, and Passed
Mexico Supreme Court Overturns State Anticorruption Laws: Mexico’s Supreme Court has overturned state anticorruption laws in Chihuahua and Veracruz that would have permitted ex-governors to choose the prosecutors who investigated corruption allegations against them. Mexico’s Attorney General sued to stop the implementation of the laws, which were believed to be passed in an effort to curtail corruption reform and protect corrupt politicians.
Gov. Cuomo Takes ‘Aggressive Action’ To Combat Corruption: New York Gov. Andrew Cuomo has signed into law Program Bill #39 that he says will reduce the impact of Citizens United, a 2010 Supreme Court decision regarding campaign contributions, in New York state. The new law has been criticized by several public interest groups for requiring non-profits to identify donors who give $2,500 or more to them
Judge Orders Special Prosecutor to Caution District Attorney: In New Mexico, a state court judge has instructed a special prosecutor appointed to try two former Albuquerque police officers who shot and killed a homeless camp to send a letter to the district attorney cautioning her about speaking with the media about the case. Defense attorneys had alleged that the district attorney made comments to the media that prejudiced the defendants and argued that the charges should be dismissed.
SC Ethics Watchdogs to Hear Case Against State Treasurer: South Carolina State Treasurer Curtis Loftis is the subject of ethics complaints about his decision to recommend a friend, Michael Montgomery, be appointed to represent the state in a lawsuit that netted his friend $2 million. One issue that the Ethics Commission will consider is whether Loftis should have told the South Carolina Attorney General about his relationship with Montgomery when he request the AG’s permission to hire Montgomery.
Corruption in Albany: Will Anything Really Change?: In the Gotham Gazette, Dr. Bruce Dearstyne considers, through a historical lens, whether new laws—including the one recently signed by Gov. Cuomo—will halt corruption in the New York state legislature. He also notes the importance of “vigorous prosecutions of corruption, such as that carried out by U.S. Attorney Preet Bharara”—keynote speaker at the NAGTRI Anticorruption Academy last month—in reducing the scourge of corruption.
Will State's High Court Go Wobbly on Corruption?: The Florida Supreme Court will soon hear the case of a business owner who gave substantial gifts to employees of governments with which his company did business and was convicted in 2013 of unlawful compensation and conspiracy. In an editorial in the Sun Sentinel, the author argues that McDonnell should not prevent the court from affirming the businessman’s conviction.
Editorial: Gutting Alabama's Ethics Laws: The Montgomery Advertiser lauds Alabama Attorney General Luther Strange’s opposition of an attempt by Alabama House Ethics Committee Chairman Mike Ball to appoint a commission to review Alabama’s ethics laws. The editorial notes that Ball’s request follows the conviction of Ball’s “close ally,” former Speaker of the House Mike Hubbard, on twelve felony corruption charges brought by AG Strange’s office.
Resource Alert: StAR Corruption Cases Search Center: The Stolen Asset Recovery Initiative, or StAR, a partnership between the World Bank Group and the United Nations Office on Drugs and Crime, collects and organizes information about completed and ongoing asset recovery cases with an international dimension. The database is available at http://star.worldbank.org/corruption-cases/assetrecovery/.
After Dilma, Will Brazil Keep Up Its Massive Corruption Case?: Brazilian president Dilma Rousseff has been impeached by a Senate vote on charges that she mishandled Brazil’s budget and misrepresented the state of Brazil’s economy. Some fear that Operation Car Wash, the lengthy investigation into bribery allegations tied to Petrobras and other major oil and construction companies, may be imperiled under acting president Michel Temer.
Maldives Newspaper Raided After Corruption Claims Against President: In the Maldives, authorities have raided offices of the Maldivian Independent, a newspaper that participated in an Al Jazeera documentary that raised corruption allegations against the country’s president, Abdulla Yameen. The raid comes a month after the Maldives made “defamation” a criminal offense carrying penalties of up to six months in jail, and several years after the former president was ousted in what his supporters characterized as a coup.
Media: Investigative Journalism About Corruption
3 UA Trustees Have Links to 3 Firms Tied to Stadium Project: Three University of Arkansas system Trustees have ties to businesses that stand to earn nearly $200,000 from a $160 million project to add stadium seats to the University’s Razorback stadium. Two of the trustees are associated with two underwriter companies for the project, and a third is a lawyer at a law firm that has been recommended as legal counsel for the project.
$76 Where There Should Be $600,000: Missing City College Donation Prompts Inquiry: The New York Times profiles an investigation by the City College of New York into a bank account that should have held over half a million dollars from a large donation to the college. The Times notes that investigations into the management of that account and into the payment of apparently personal expenses of CUNY’s president follow the resignation of two chancellors in the University of California system due to “an outcry over their handling of expenses.”
The Whistleblower: How a State Police Officer Stood Firm in the Face of Corruption: The Mercer (NJ) Space profiles Jim Challender, who, as a state police detective in the 1970s, helped build a corruption case against the governor of New Jersey.
California District Attorney Creates Unit to Combat Plague of Perjury: The District Attorney of Lake County, California, has announced the formation of a new perjury investigation’s unit. Don Anderson appointed one of his 14 prosecutors to investigate lies in both criminal investigations and cases—including one that resulted in an innocent man being incarcerated for 18 years—and civil matters that some say are “rife with false claims as husbands and wives fight over children and alimony.”
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.