Rep. Dollittle's Aides to Testify in Front of a Federal Jury

Two of Republican Rep. John Doolittle's top aides have been subpoenaed to testify before a federal grand jury investigating ties between Doolittle, his wife and jailed lobbyist Jack Abramoff.^[1] The grand jury subpoenas from the U.S. District Court for the District of Columbia were issued to Chief of Staff Ron Rogers and Deputy Chief of Staff Dan Blankenburg.^[2] They were announced on the House floor Tuesday, Sept. 4, after the aides informed the House speaker about the subpoenas.^[3]

Blankenburg and Rogers wrote in identical letters to House Speaker Nancy Pelosi that they would consult with House counsel before deciding how to respond.^[4] But Rep. Doolittle said in a statement that his aides would testify before the grand jury this week ''with hopes of putting the matter to an end….I think everyone can agree that this issue needs closure…..Three years seems like more than adequate time to determine the facts. I look forward to the truth finally being established and hope that we may have a resolution soon,'' said Doolittle.^[5]

Federal agents have also been in contact with several former Doolittle aides. Bill Portanova, attorney for former Doolittle chief of staff David Lopez, said Tuesday that Lopez had not received a recent subpoena for testimony but that he was continuing to dig for documents in response to earlier document subpoenas.^[6]

FBI agents raided Doolittle's Oakton, Va., home in April looking for information about his wife Julie's fundraising business, which had previously done work for Jack Abramoff.^[7] Doolittle has denied any wrongdoing, yet after the raid on his home he stepped down from the powerful House Appropriations Committee.^[8]

Doolittle has numerous ties to Abramoff, including accepting campaign contributions from the lobbyist and intervening on behalf of Abramoff's Indian tribe clients.^[9] Abramoff's lobbying firm also paid Julie Doolittle's Sierra Dominion Financial Solutions Inc. a near-monthly $5,000 retainer from September 2002 to February 2004, mostly to work on a fundraiser that was canceled after the invasion of Iraq in March 2003.^[10]

Doolittle asserts that investigators are trying to determine whether his wife Julie did real work in exchange for the payments from Abramoff - which she did, according to Doolittle; furthermore he has claimed that the raid on his home was an attempt to intimidate him after he refused to plead guilty to a crime he didn't commit.^[11]

Doolittle is the only sitting member of Congress known to be under active investigation in the Abramoff case, which has netted a dozen convictions from Bush administration and congressional aides as well as a guilty plea from now imprisoned former Rep. Bob Ney of Ohio.^[12]

As has been previously discussed in this blog, at length, Jack Abramoff has officially pleaded guilty to three felony charges in Washington, DC.^[13] The three charges—conspiracy, honest services mail fraud, and tax evasion—are related to his lobbying activities in Washington on behalf of Native American tribes.^[14]

Federal Criminal Defense Attorney Douglas McNabb has previously written about the federal crimes of mail fraud, found here, and tax evasion, found here, in this blog. Postings about Jack Abramoff can be found here.

---

^[1] Erica Werner, Doolittle Aides Subpoenaed in Probe, Associated Press Newswire, September 4, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id., This is required under U.S. House rules.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] Id.
^[12] Id.
^[13] William Branigin, et al., Abramoff Pleads Guilty to 3 Felony Charges, Washington Post, Jan. 3, 2006, available at http://www.washingtonpost.com/wp-dyn/content/article/2006/01/03/AR2006010300474.html?sub=AR (last visited September 11, 2007)
^[14] Id.

Federal Prison Employee Facing Bribery Charge-Arkansas

We have previously written about public corruption cases where individuals bribe government officials often with very large amounts of money or gifts. For example, two cases that received a lot of media attention, the case of U.S. Representative Randy Cunningham which can be found, here, and the case of lobbyist Jack Abramoff involved large scale bribery schemes of high government officials.

However, even a fairly low-level government employee can be prosecuted under 18 U.S.C. § 201, bribery of public officials and witnesses, for very small amounts of money or favors. Kenneth Ray Norman, an employee of the Federal Correctional Institution at Forrest City, Arkansas has been accused of providing a prohibited substance to prisoners for money.^[1] Mr. Norman allegedly provided tobacco to prisoners and accepted money for it.^[2]

The federal statute covering bribery sets an incredibly low threshold. Mr. Norman is being prosecuted under 18 U.S.C. 201 (b)(2)(C)which states: a public official or person selected to be a public official, directly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity, in return for being induced to do or omit to do any act in violation of the official duty of such official or person.[3]

In short, if any public official accepts anything of value that induces the individual to do or omit any act in violation of his official duties, the federal government can prosecute that person.^[4]

The term “public official” means Member of Congress, Delegate, or Resident Commissioner, either before or after such official has qualified, or an officer or employee or person acting for or on behalf of the United States, or any department, agency or branch of Government thereof, including the District of Columbia, in any official function.^[5]

Here, since Mr. Norman works for the federal prison system, he qualifies as a public official. Since it is a violation for him to provide anything to a prisoner, by accepting the money for tobacco, he can be prosecuted under the statute.

The punishment under this section of the statute is up to two years in prison and a fine or both. ^[6]

---

[1] FCI-FC Employee Facing Federal Charge, Times Herald of Forrest City, Arkansas, January 24, 2007.
[2] Id.
[3] 18 U.S.C. § 201(b)(2)(c).
[4] Id.
[5] 18 U.S.C. § 201(a)(1).
[6] 18 U.S.C. § 201(c)(3).

Obstruction—David Safavian

The first guilty verdict in Abramoff-related charges has been secured by the federal government, and the question now turns to who is next. Former White House chief procurement officer, David Safavian, was found guilty “on four of five felony counts of lying and obstruction.”^[1]

The trial lasted eight days, and it focused on Mr. Safavians’s assistance to lobbyist Jack Abramoff “regarding government-owned real estate and a weeklong golfing excursion the lobbyist organized to the famed St. Andrews golf course in Scotland.”^[2]

The question of “Who’s Next?” is on people’s minds because other participants on the golf trips “were Rep. Bob Ney, a high-ranking Republican, two Ney aides, and Christian Coalition founder Ralph Reed.”^[3] Furthermore, “to government prosecutors, his conviction proves that Jack Abramoff has the goods on many people and can deliver. In addition to [Mr. Safavian’s] conviction, the government has turned four other Abramoff associates as they close in on their investigation.”^[4] The star witness at Mr. Safavian’s trial was Neil Volz, “who worked for Congressman Ney before he joined [Mr.] Abramoff.”^[5]

Mr. Safavian, however, was not convicted on any corruption or bribery charges. Instead, he was convicted on three counts of false statements, and 2 counts of obstructing justice. One of the obstruction charges was dropped when Judge Paul Friedman determined that there was no evidence to support that charge.^[6]

Sentencing for Mr. Safavian will occur in the next few months, and it will likely be quite bitter. According to CBS, Mr. Safavian “was actually offered a deal without jail time, but turned it down.”^[7] That is just one of the many downsides to the United States Sentencing Guidelines, which overwhelmingly reward pleading guilty. By refusing to plead guilty, Mr. Safavian now cannot benefit from downward departures for acceptance of responsibility,^[8] or for super acceptance of responsibility based on keeping the government for having to prepare for trial.^[9]

---

[1] Pete Yost, Safavian Found Guilty on Charges Relating to Disgraced Lobbyist Abramoff, AP, (via the Olympian) Jun. 21, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Closing Statement Made in Lobbyist Probe Suit, AP (via MSNBC.com), Jun. 12, 2006.
[7] Deirdre Hester, Safavian Who?, CBS, Jun. 21, 2006.
[8] See U.S. Sentencing Guidelines § 3E1.1(a).
[9] Id. at § 3E1.1(b)

Mortgage Fraud—Florida

Two individuals in Florida “have admitted bilking mortgage lenders in a $67 million loan scheme to finance hotels in West Palm Beach, South Florida and Orlando.”^[1] Terry Singh Mughar, and Jason Madow “each face one count of conspiracy to commit wire fraud.”^[2] They were charged in a criminal information, waiving a grand-jury indictment earlier this month.^[3]

Mssrs. Mughar and Madow both negotiated plea agreements which outlined the scheme, for which they face up to five years in prison and a fine of up to $250,000.^[4] According to prosecutors, Mr. Mughar “inflated the price and value of hotels through fraudulent appraisals based on false hotel income and occupancy rates.”^[5] That false data was used, “along with fake promissory notes, false income-tax statements, sham franchise agreements and official-looking bank checks, to secure loans.”^[6]

The loans were used to pay off co-conspirators and to purchase more properties, which were then inflated in value and sold.^[7]

The Plea Agreement was done under Federal Rule of Criminal Procedure [hereinafter FRCrP] 11(c).^[8] In so doing, “the United States will recommend to the Court that the Court determine the defendant’s applicable guidelines range and defendant’s guidelines sentence, with any applicable departures, pursuant to the United States Sentencing Guidelines.”^[9] The US Attorney’s Office will likewise not charge the defendant for any other criminal offenses related to the conduct giving rise to the plea agreement.^[10] In addition to whatever prison sentence and fine are assessed, full restitution will be made to JP Morgan Chase and Old Standard Life Insurance Company.^[11]

At sentencing, “the United States will recommend to the Court that the defendant receive a two-level downward adjustment for acceptance of responsibility.”^[12] Furthermore, he could be eligible for an additional one-level downward adjustment for allowing the government to avoid preparing for trial.^[13] There will also be a recommendation made for a downward adjustment of no more than two levels regarding the defendant’s role in the offense,^[14] and a recommendation made for the low end of the sentencing range.^[15]

In pleading guilty, substantial cooperation is expected and will be tendered, and if the cooperation is completed before sentencing, a downward departure may be requested.^[16] The Department of Justice and Jack Abramoff are both requesting a continuance for his sentencing so that he can continue to provide information to investigation into the public corruption scandal surrounding Mr. Abramoff.^[17]

Unlike the guilty plea for Richard Causey, which we discussed at the end of December, the guilty plea in this case was done under FRCrP 11(c)(1)(B), which means that the defendant “has no right to withdraw the plea if the court does not follow the recommendation or request.”

---

[1] Pedro Ruz Gutierrez, 2 Admit Fraud in Mortgage Plot, Orlando Sentinel, Feb. 21, 2006.
[2] Id.
[3] See Waiver of Indictment, United States v. Mughar, 6:06-cr-00022 (M.D. Fla. 2006) (available through ECF).
[4] Gutierrez supra note 1.
[5] Id.
[6] Id.
[7] Id.
[8] Plea Agreement, Mughar, supra note 3.
[9] Id. at 2.
[10] Id. at 3.
[11] Id.
[12] Id. (citing U.S. Sentencing Guidelines Manual [hereinafter USSG] § 3E1.1(a)).
[13] Id. (citing USSG § 3E1.1(b)).
[14] Id. at 4 (citing USSG § 3B1.2).
[15] Id.
[16] Id. at 5 (citing USSG § 5K1.1).
[17] See Curt Anderson, Delay Sought in Abramoff’s Fla. Sentencing, Associated Press (via Yahoo!), Feb. 21, 2006.

Plea Agreement Cooperation Tactics—Randy “Duke” Cunningham

Our speculation the other day that super-lobbyist Jack Abramoff may have been wearing a wire may not be all that speculative. In a “Web Exclusive,” Time Magazine is reporting that sources have told it that former Representative Randy “Duke” Cunningham “wore a wire to help investigators gather evidence against others just before copping his own plea.”^[1]

At this time, the identity of those with whom Mr. Cunningham met while wearing the wire remains unclear, which has led to “furious—and nervous—speculation” by Congresspeople.^[2] Furthermore, neither the FBI nor one of Mr. Cunningham’s lawyers will confirm the report.^[3]

---

[1] Timothy J. Burger, Disgraced Congressman ‘Wore a Wire’, Time, Jan. 6, 2006.
[2] Id.
[3] Id.

Public Corruption—Jack Abramoff Guilty Plea

Updating our earlier post, Jack Abramoff has officially pleaded guilty to three felony charges in Washington, DC.^[1] The three charges—conspiracy, honest services mail fraud, and tax evasion—are related to his lobbying activities in Washington on behalf of Native American tribes.^[2] He is also being prosecuted in Miami, Florida in connection with the purchase of a fleet of casino cruise ships.^[3] Mr. Abramoff is expected to plead guilty to two charges in that case tomorrow.^[4]

It seems that Mr. Abramoff has been cooperating with prosecutors for 18 months without a plea agreement in place, and that he contacted them “to admit his wrongdoing and to seek forgiveness from those he has wronged. He intends to continue to work with the Justice Department and others to fully resolve all matters of interest, to provide restitution to anyone he has harmed, and to seek absolution from all.”^[5]

This minor tidbit is potentially huge. It is fair to speculate whether Mr. Abramoff has been wearing a wire or recording telephone conversations as part of his cooperation during the past 18 months. Under 18 U.S.C. § 2511, it is a crime to intentionally intercept wire, oral, or electronic communication. However, it is not unlawful “for a person acting under color of law to intercept a wire, oral, or electronic communication, where such person is a party to the communication or one of the parties to the communication has given prior consent to such interception.”^[6] Such a scenario recalls the sting operation recently conducted in West Virginia, which we discussed here, where the FBI inserted a fake candidate into that State’s election campaign in order to find corruption.

According to the AP, prosecutors in the DC case “will recommend a sentence of 9 ½ to 11 years, providing he cooperates with federal prosecutors in a wide-ranging corruption investigation believed to be focusing on as many as 20 members of Congress and aides.”^[7] According to the Washington Post, “his eventual sentence from the case in Washington will run concurrently with whatever sentence he receives in the Miami case.”^[8] This is known as a “global” settlement.

According to the US Attorney’s Manual, “[n]o district or division shall make any agreement, including any agreement not to prosecute, which purports to bind any other district(s) or division without the express written approval of the [US] Attorney(s) in each affected district and/or the Assistant Attorney General of the Criminal Division.”^[9] In making such a request, the requesting district or division must make known to each affected district or division three things:

1. The specific crimes allegedly committed in the affected district as disclosed by the defendant; no agreement should be made for crimes not disclosed by the defendant;
2. The identification of the victims of the crimes committed by the defendant; and
3. The proposed agreement to be made with the defendant and the applicable Sentencing Guideline range.^[10]

---

[1] William Branigin, et al., Abramoff Pleads Guilty to 3 Felony Charges, Wash. Post, Jan. 3, 2006.
[2] Id.
[3] Id.
[4] Mark Sherman et al., Abramoff Pleads Guilty, Will Cooperate, Associated Press (via Yahoo!), Jan. 3, 2006.
[5] Id.
[6] 18 U.S.C. § 2511(c).
[7] Sherman, supra note 4.
[8] Branigan, supra note 1.
[9] US Attorney’s Manual, Multi-District (Global) Agreement Requests, 9-27.641, Aug. 2002.
[10] Id.

Public Corruption—Jack Abramoff Guilty Plea?

A story that we discussed on December 21 seems to be coming to fruition. On that day we mentioned that Jack Abramoff was coming close to pleading guilty and cooperating with the government in its investigation of “wide-ranging political corruption.” Today, the Houston Chronicle,^[1] and Bloomberg^[2] are both reporting that Mr. Abramoff may plead guilty this week. CNN, as of 9.41 EST, is merely reporting that “Lobbyist Jack Abramoff, a close associate of former House Majority Leader Tom DeLay, [is] to plead guilty to corruption, [and] other charges,” treating it as breaking news.^[3]

Surely there will be more details shortly.

UPDATE: There are indeed more details. The New York Times is reporting that Mr. Abramoff is pleading guilty to 3 felony charges and that he has reached a "global" settlement that covers both the charges he is facing in Washington, DC, and in Miami, Florida.^[4] The AP is also reporting that an agreement has been reached, but it says that Mr. Abramoff will plead guilty to only 2 counts.^[5] When the facts of the deal become more stabilized, we will provide some insight into "global" settlements in a later post.

---

[1] Michael Hedges, Abramoff Plea Bargain Announcement Expected, Houston Chronicle, Jan. 2, 2006.
[2] Abramoff May Plead Guilty This Week, Snaring Lawmakers in Probe, Bloomberg, Jan. 3, 2006.
[3] Homepage, CNN.com, Jan. 3, 2006, last updated 9.41 AM EST.
[4] Anne E. Kornblutt, G.O.P. Lobbyist to Plead Guilty in Deal with Prosecutors, NY Times, Jan. 3, 2006.
[5] Curt Anderson, Abramoff to Plead Guilty, Attorney Says, AP (via Yahoo! News), Jan. 3, 2006.

Public Corruption—Potential Guilty Plea

Superstar lobbyist Jack Abramoff, who is scheduled to face trial on January 9, is reportedly in plea negotiations “in which he would plead guilty and cooperate in the wide-ranging political corruption investigation focused on his dealings with members of Congress and executive branch officials.”^[1] According to “people familiar with the talks” Mr. Abramoff “would provide testimony about numerous members of Congress and their staffs if he and the Justice Department reach an agreement.”^[2]

Last week, Mr. Abramoff’s co-defendant, Adam Kidan, agreed to plead guilty to conspiracy and wire fraud, and to testify against his former business partner.^[3] He joins another business partner, Michael Scanlon, who pleaded guilty to conspiring to bribe public officials a few weeks ago. When Mr. Scanlon pleaded guilty, he announced that he and Mr. Abramoff had provided travel, golf outings, meals, entertainment, campaign contributions and jobs for Congressional officials, in exchange “for ‘a series of official acts and influence.’”^[4]

The rash of guilty pleas falls in line with what we discussed yesterday. According to the Washington Post, “Justice Department investigators are looking at a half-dozen lawmakers, as well as Capitol Hill aides, former Abramoff associates and executive branch officials.”^[5] Clearly, the focus of the investigation is larger than simply Mr. Abramoff’s bribery, and the federal government is pressing on him extremely hard, and likely Mssrs. Kidan and Scanlon as well, to provide useful information about those who accepted bribes.

One such lawmaker is Ohio Representative Robert W. Ney, against whom Mssrs. Scanlon and Kidan have agreed to testify, and to whom prosecutors have told a possible bribery federal indictment is being prepared.^[6]

The current investigation into American public corruption comes at a somewhat awkward and ironic moment. The UN Convention Against Corruption just came into effect, and the Senate is now debating whether to ratify it.^[7]

---

[1] Susan Schmidt, Abramoff Reportedly Negotiating a Deal in Which He Would Plead Guilty, Testify, Wash. Post, Dec. 21, 2005.
[2] Id.
[3] Id.
[4] Jim Drinkard, Former DeLay Aide Pleads Guilty in Conspiracy Case, USA Today, Nov. 22, 2005.
[5] Schmidt, supra note 1.
[6] Id.
[7] See UN Convention Against Corruption, Oct. 31, 2003, S. Treaty Doc. No. 106-9.

Public Corruption—Michael Scanlon Guilty Plea

Influential lobbyist and former aide to Representative Tom DeLay, Michael Scanlon has pleaded guilty to conspiring to bribe public officials.^[1] It has now come to light that Mr. Scanlon has been cooperating with authorities since July.^[2] In his guilty plea, Mr. Scanlon admitted to conspiring to offer bribes to public officials and to defraud tribal clients of his public relations firm.^[3] He also agreed to make $19.7 million in restitution to the tribes he defrauded; the tribes had requested his lobbying assistance for making in-roads concerning their gambling operations.^[4]

In a prepared statement, Mr. Scanlon announced that he and Jack Abramoff, Mr. Scanlon’s business partner, had provided travel, golf outings, meals, entertainment, campaign contributions and jobs for Congressional officials, in exchange “for ‘a series of official acts and influence.’”^[5] At this point, it is unclear just how many members of Congress will be caught up in the scandal.^[6]

Conspiracy
Under 18 U.S.C. § 371, it is a crime for a person to conspire with at least one other person to commit an offense against the United States, and then make an overt act in furtherance of that offense. The punishment for a violation of section 371 is a fine, imprisonment for up to 5 years, or both.

Public Corruption
Under 18 U.S.C. § 201(b)(1), it is a crime for a person to corruptly give, offer, or promise anything of value to any public official with the intent to influence an official act, to influence a public official to commit or collude in the making of a fraud, or to induce any official to violate his duty as an official. The punishment for a violation of section 201(b)(1) is a fine not exceeding three times the value of the thing given, imprisonment for up to 15 years, or both.

---

[1] Jim Drinkard, Former DeLay Aide Pleads Guilty in Conspiracy Case, USA Today, Nov. 22, 2005, available here.
[2] Pete Yost, Former DeLay Aide Has Been Cooperating in Bribery Probe Since July, Austin American Statesman, Nov. 22, 2005, available here.
[3] Drinkard, supra note 1.
[4] Id.
[5] Id.
[6] Id.