A Supreme Court decision that threw out the fraud convictions of two political aides to former New Jersey Gov. Chris Christie is rippling through other white-collar cases, possibly buttressing appeals by other defendants who say federal prosecutors have become too aggressive in using antifraud laws to go after dishonest conduct.
In the New Jersey scandal known as Bridgegate, the high court ruled last year that a political-retribution scheme that involved crippling a town with traffic jams didn’t constitute federal fraud. The decision already has prompted the reversal of most charges in a high-profile insider-trading case, and could hurt prosecutors’ efforts to preserve convictions in a case that exposed ethical failures at one of the Big Four accounting firms.
At issue in both cases is when underhanded conduct may be considered criminal fraud. The Supreme Court affirmed in the New Jersey case that federal fraud charges apply only when a scheme seeks to obtain money or property by deceptive means.
In the insider-trading case, Manhattan federal prosecutors said on April 2 that because of the New Jersey case, most of the charges should be wiped out. They recommended to the U.S. Court of Appeals for the Second Circuit that the entire case against Christopher Worrall, one of the defendants, be dismissed. Mr. Worrall, a former technical adviser at the Centers for Medicare and Medicaid Services, was accused of sharing secrets about government-funding levels with a consultant working for a hedge fund.
In the same case, prosecutors also agreed to toss out insider-trading and theft charges against two hedge-fund traders and David Blaszczak, the political-intelligence consultant whom they allege passed on the information from Mr. Worrall.
Ciara Torres-Spelliscy has posted this draft on SSRN (forthcoming, American University Law Review). Here is the abstract:
This piece discusses how the case Kelly v. United States, which was pending before the Supreme Court when this piece was written, was likely to expand two different developments in the Roberts Court’s jurisprudence: (1) expanding the constitutional protections for lying under the First Amendment and (2) narrowing the definition of corruption. This Piece describes how lower courts ruled in the Kelly case as well as arguments deployed by Kelly’s lawyers at the Supreme Court to try to exonerate their client Bridget Anne Kelly for her role in the Bridgegate scandal.
Epilogue: As this piece was being printed, the Supreme Court decided Kelly v. United States, 590 U. S. ____ , No. 18-1059 (U.S. May. 7, 2020). As predicted by the piece, the Supreme Court in Kelly expanded the Skilling case and narrowed what counts as corruption concluding “not every corrupt act by state or local officials is a federal crime.”
A former judge of elections and Democratic committeeperson from South Philadelphia has pleaded guilty to accepting $2,500 in bribes to inflate the vote totals for three Democratic candidates for Common Pleas Court judge in 2015 and also accepted money to add votes for other candidates, U.S. Attorney William M. McSwain announced Thursday.
Domenick J. DeMuro, 73, pleaded guilty to conspiracy to deprive Philadelphia voters of their civil rights by fraudulently stuffing the ballot boxes for the judicial candidates and for other candidates seeking office in the 2014 and 2016 primary elections. And he admitted violating the Travel Act, which forbids the use of a cell phone to promote illegal activity, McSwain’s office said.
Josh Blackman and Seth Barrett Tillman for Lawfare.
A top Democratic official said the witnesses — William B. Taylor Jr., the top diplomat in Ukraine, and George P. Kent, a senior State Department official — would lay out a timeline of serious misconduct by Mr. Trump and describe how the president sought to “bribe, extort, condition or coerce” the leader of another country. The official spoke on condition of anonymity without authorization to publicly describe internal strategy, but the language echoed the definition in the Constitution of behavior that warrants impeachment and removal from office.
Representative Adam B. Schiff, the California Democrat who is chairman of the House Intelligence Committee, promised that the two witnesses, who still serve in Mr. Trump’s administration, will reveal the president’s actions to be “a corrupt undertaking that is evident from his own words.”
In a taste of the epic partisan battle to come, Republicans readied their arguments that the president did nothing wrong — and certainly nothing impeachable — and raged against a process they have denounced from the beginning as unfair and illegitimate.
“We want to make sure the truth gets out,” said Representative Kevin McCarthy of California, the minority leader. “There is no reason for the president to be in this impeachment.”
House investigators have spent seven weeks methodically assembling evidence through closed-door interviews that Mr. Trump used security aid as leverage to force President Volodymyr Zelensky of Ukraine to publicly announce investigations into former Vice President Joseph R. Biden Jr. and debunked claims that Democrats conspired with Ukraine to interfere in the 2016 election.
A federal appeals court in Philadelphia on Thursday overturned U.S. Rep. Chaka Fattah’s bribery convictions in a decision that offered a small measure of vindication for the former Democratic congressman — but may not dramatically affect the decade-long sentence he received for other corruption-related crimes.
The ruling by a three-judge panel of the U.S. Court of Appeals for the Third Circuit held that jurors in Fattah’s case had not been properly instructed on the legal definition of “political graft” – one narrowed by a U.S. Supreme Court opinion issued just days after they convicted the congressman in 2016.
Still, wrote Chief Judge D. Brooks Smith: “There is more than sufficient – and distinct – evidence to support Fattah’s conviction on all of the other counts,” including allegations that he stole federal grant funds, charitable donations, and campaign cash to pay off his personal and political debts.
A Long Island judge on Thursday declared a mistrial in the case of Edward Mangano, the former Nassau County executive accused of public-corruption crimes, after the jury failed to reach a unanimous verdict.
Federal prosecutors said they would retry the case, which had offered a window into what they had called the county’s pay-to-play culture.
A top former FBI official accused President Donald Trump of acting out of spite against federal law enforcement after the president suggested Thursday he might commute former Illinois Gov. Rod Blagojevich’s 14-year prison term.
Robert Grant, a longtime colleague and friend of special counsel Robert Mueller who headed the FBI’s Chicago office at the time of the Blagojevich investigation, told POLITICO in an interview that Trump is working to upend the FBI’s work as personal revenge for the special counsel probe he’s facing.
“It’s so disheartening to think that the president of the United States would overturn the evidence heard by a judge and jury, all out of an animus toward Bob Mueller, James Comey and [former U.S. Attorney] Pat Fitzgerald,” said Grant, who is now retired from the FBI. “Blagojevich got caught by wiretaps and microphones and he was engaging in a practice that we believed he was taking part in for quite awhile … I don’t think anybody who listened to those tapes would think anything but it was an incredibly corrupt governor who was dealing with corrupt associates.”
The scheme, as outlined by federal prosecutors, was audacious. Top officials in Nassau County used political clout to help a restaurateur obtain county contracts and millions of dollars in loans. In return, the restaurateur was said to have showered the officials with kickbacks and bribes.
Among other things, prosecutors said, the restaurateur provided the Oyster Bay town supervisor, John Venditto, with free meals and limousine rides. He was said to have provided the Nassau County executive at the time, Edward Mangano, with a massage chair and an expensive watch. The county executive’s wife, Linda Mangano, received close to half a million dollars for what a prosecutor called a “$100,000-a-year phony baloney no-show job.”
Sheldon Silver, the former powerful Democratic speaker of the New York State Assembly, was found guilty of federal corruption charges on Friday, less than a year after his first conviction on the same charges was thrown out….
Mr. Silver’s retrial was widely watched as a test of the government’s ability to prosecute official corruption under the narrower definition. But from the outset, prosecutors this time seemed to hold an upper hand: The original verdict was only thrown out because the judge’s jury instructions were too broad, as defined by the Supreme Court decision.
The retrial in Federal District Court in Manhattan seemed to move at double speed: Instead of stretching over one month, as the first trial had, the second trial was completed in two weeks, as prosecutors quickly made their case that Mr. Silver, 74, had obtained the illicit payments. In return, prosecutors said, Mr. Silver took a series of official actions that benefited a cancer researcher at Columbia University and two real estate developers in New York.
Rod Blagojevich’s lawyers want the Supreme Court to tackle that question when the justices hold their weekly conference Friday. The court could reveal as soon as next week whether it will take the case.Blagojevich’s former colleagues in Congress are paying close attention.In a friend-of-the-court brief, current and former public officials weighed in, including Illinois Democratic Reps. Jan Schakowsky, Danny Davis, Bill Foster, Louis Gutiérrez, Mike Quigley and Bobby Rush, as well as Robert Barr a Republican former U.S. attorney and U.S. House member from Georgia.The brief said a “bright-line standard” differentiating between bribery and campaign fundraising was needed “to prevent selective enforcement in the campaign contribution context, because it is the rule, rather than the exception, that a candidate’s financial supporters make contributions with the belief that the candidate, if elected, will adopt positions that further the supporters’ interests.”