Oklahoma Criminal Defense Blog

Rod Blagojevich, former governor of Illinois, has had his two jury trials in federal court for bribery and corruption.  Now federal prosecutors are mopping up with some of the others caught in the investigation of Blagojevich.  Now it’s William Cellini’s turn.

Cellini is a power broker in Illinois state government.  His investment company, Capri,  made $220 million doing business with the state Teacher’s Retirement System.  And that connection is what allegedly brought him into a scheme to extort a campaign contribution to the Blagojevich campaign coffers.  The Blagojevich team knew how important it was for Cellini to maintain his dealings with Teacher’s Retirement System.

Cellini is being prosecuted for delivering a message to someone already given the message, Hollywood producer Thomas Rosenberg.  Rosenberg had an investment deal with the Teacher’s Retirement System until he got a visit from Antoin Rezko and Christopher Kelly.  Rezko and Kelly told Rosenberg his deal was dead unless made a $1.5 million contribution to Blagojevich.
Rosenberg then turned to an old friend whom he figured could enlighten and advise him.  He turned to Cellini.  But Cellini told him the only way to get his deal done was to make the contribution.  The government accuses Cellini of conspiracy in that extortion scheme, but the evidence so far described omits a critical link.  Granted Cellini had a motive to protect his connection with the Teacher’s Retirement, but Cellini did not deliver any bribe, threat, or (arguably) any message.  Rosenberg plainly said on cross examination by Cellin’s criminal defense lawyer that Cellini never asked for the contribution.  What Rosenberg said could have been simply a statement of fact, that Cellini believed, his opinion was that Rosenberg’s deal was finished unless he made the contribution.

But the government plugged that hole with the testimony of an inside witness.  Stuart Levine was charged and pled guilty to being part of this conspiracy.  He testified that Cellini agreed to approach Rosenberg, and that both Levine and Cellini were doing so to protect their influence with the Teacher’s Retirement System.  Certainly Levine’s testimony is suspect because he is cooperating with the government to lessen his sentences, so he has a motive to lie, fudge, create or enhance his testimony to make himself more valuable to the government.  As usual, critical facts in a trial hinge on the credibility of a witness.

A federal jury brought back verdicts in Alabama recently on an indictment charging 39 counts against 9 defendants with bribery.  After a two-year investigation by the F.B.I, two months of jury trial with evidence that included thousands of tape-recorded telephone conversations, and finally by a week of jury deliberations, the prosecution score was zero.

No one was convicted: All acquittals and mistrials.  The main target, Milton McGregor, was found not guilty on three counts and got a hung jury on 14 counts including one count of conspiracy.  (There is always a conspiracy count in federal court, at least when there has been an extensive investigation.)   McGregor is the multimillionaire owner of one of the largest casino complexes (including a greyhound racetrack) in the country name VictoryLand.   He was tried with two serving state senators, four former state senators, and four other people.

Two defendants, State Senator Quinton Ross and VictoryLand lobbyist Bob Geddie, were completely cleared by the jury’s verdict.   The jury could not reach a verdict on 33 other counts, so the government could seek a new trial for the seven remaining defendants, who include Senator Harri Anne Smith, former Senators Larry Means and Jim Preuitt, and McGregor.

All of this arose from some new gambling machines that were proposed for use in the casinos, called electronic bingo machines.  They looked like slot machines and were common for some time around the state.  However, the Governor Bob Riley declared them illegal, and several judges agreed with him, so legalizing them was proposed in the Alabama legislature. That is where the F.B.I. investigation took place.

As the casino-sponsored bill to legalize the machines was debated in the legislature, rumors floated of a federal investigation of money offered or paid for votes in favor of the new machines.   The F.B.I. made surprise visits to some of the legislators.  Indeed, when the 65-page indictment was unsealed last year, two of those originally charged pled guilty and testified at trial for the government as “cooperating witnesses.”  They and the recorded telephone conversations were the sum and substance of the government’s case.  Much discussion of money, contributions, promises, and deals were offered into evidence, but the criminal defense lawyers argued none of that constituted bribery.  The cooperating witnesses gave their opinions that bribery was implied or understood, but all of it fell short.  The jury obviously looked past all the theater of the government’s display, looked into all the mountains of evidence, and found it unpersuasive when held to the burden that is required in American courts: beyond a reasonable doubt.

The government’s case fell short of connecting McGregor to any discussion of money or votes.  And the government’s case was not helped by tape-recordings from one of its own witnesses, Senator Scott Beason.   One of the informant legislators, he referred on one of his tapes referring to customers of a gambling hall in a predominantly black counties as “aborigines.” Beason also recorded himself talking to Republican colleagues about how passage of the bill could hurt Republicans because the bill wouldn’t take effect unless approved by voters in the November election. He argued having the issue on the ballot would bring out more black voters, who traditionally favor Democratic candidates.

On a retrial, the government is sure to omit those tapes from the jury.  But jurors in that case will also know that legislators are constantly raising money, swapping favors, and trading deals on legislation on a daily basis, and the jury will still need evidence of bribery.

When the F.B.I. investigates something, it is with the prospect of presenting their evidence in federal court.  That is likely what the F.B.I. had in mind when a dozen agents showed up in April, 2010, at the Muscogee (Creek) Nation headquarters in Okmulgee, a federal prosecution.  The F.B.I. has for the last year been conducting an undercover investigation of the Muskogee Creek tribe tobacco activities.  F.B.I. investigations are notoriously thorough – and lengthy.

But the Muscogee Creek tribe wasted no time.  The following month, last May, the tribe filed charges in tribal court alleging at least some of the matters the federal authorities would want to prosecute in federal court.   The federal government, via the local United States Attorney in the Eastern District Attorney of Oklahoma, then obtained a preliminary injunction prohibiting the tribal court from proceeding with the prosecutions.  The tribe’s special prosecutor, Rod Wiemer, has appealed the issuance of that injunction to the United States Court of Appeals for the Tenth Circuit, and the tribal prosecutions are on hold until the Appeals Court rules on that.

Muscogee Creek Chief A.D. Ellis says he is the one who got it all started.  He says he has been telling everyone who will listen for the last three years to look into the activities of the tribe’s business arm, the Trade and Commerce Authority.  He claims Dana Johnson, former tribe tax commissioner, left him $3600 in an envelope given her by Randy Benham.  Ellis claims the F.B.I. now has 40 agents working undercover to investigate the tribe’s tobacco dealings.  Of course, the F.B.I. has no comment, referring all inquiries to the U.S. Attorney’s office, which neither confirms nor denies an investigation was in progress.

The tribe has charged three people with bribery (i.e., accepting bribes from tobacco wholesalers):

Dana Johnson, former Muscogee Creek Nation Tax Commissioner, is charged with 4 counts of bribery, to wit: accepting bribes from Randy Benham, former president of Briggs Wholesale Tobacco, and from Marvin Wesley of Seneca-Cayuga Tobacco Company;

Gene Antone Lee, former warehouse manager for the tribe’s Trade and Commerce Authority, is accused of 3 counts of bribery, including one from Benham;

Edward Warrington, also a former warehouse manager for the tribe’s Trade and Commerce Authority, is charged with one count of taking a $7600 bribe from Benham.

The tribe has also charged eleven people with embezzlement from the tribe’s Duck Creek
Community Center in Beggs.  A couple of these, Jeanetta Carr and Cecil Harry, are accused of embezzling over $100,000, and another five of them between $15,000 and $40,000.

The Randy Benham named above pled guilty last November in federal court in Mississippi to defrauding Mississippi, South Carolina, and and United States of $20 million in cigarette taxes and proceeds and money laundering.

The Oklahoma Tax Commission has a lawsuit pending that alleges the Creek Nation maintained a warehouse in Okmulgee to stock contraband cigarettes for distribution.  The Muscogee Creek Nation, 71,000 enrolled citizens strong, has no cigarette compact with the State of Oklahoma for five years.   Chief Ellis says in the past he thought handling Indian-made cigarettes was justified by the tribe’s sovereignty but now believes the tribe should enter into a compact.

Meanwhile, Doug Burnett, speaker of the the National Council of the Muscogee Creek Nation, he was not aware of any investigation by the federal government and the council is not investigating anything because there is no evidence to investigate.  While those statements may be technically correct, would not they cause anyone, criminal defense lawyer or anyone else, to wonder a little about what is going on?

Bernard Kerik was on top of the world.  He had served gloriously as police commissioner of New York City for Mayor Rudolph Giuliani.  Bernie was famous in his own right, often on television screens, sporting his trademark mustache and shaved head.  He was sent by President George Bush to reorganize the police force in Iraq.  Finally, he was nominated to head the Department of Homeland Security.   After that, things went downhill.

Kerik was indicted in federal court with corruption for allegedly accepting unreported gifts of construction work on his home.   Kerik failed to report as income more than $200,000 in rent paid on his behalf to use a luxury apartment where he lived with his family when he left his city post, paid for by Steve Witkoff, a commercial real estate developer. Also, a construction company with alleged mob ties paid for the $165,000 in renovations on Kerik’s home in Riverdale, the Bronx, apparently in hopes of obtaining a city license. In 2006, Kerik plead guilty in the Bronx to state misdemeanor charges stemming from those renovations.

In 2004, after nomination by Rudy Giuliani, President George W. Bush nominated Kerik to head the Department of Homeland Security.  Seven days later, Kerik withdrew his name from consideration.  Then fell the avalanche of questions about Kerik.

Had Kerik inappropriately lobbied New York City on behalf of Interstate Industrial, a construction company with alleged links to organized crime?  At first, Giuliani denied he knew about Kerik’s ties to Interstate Industrial when he appointed Kerik as police commissioner. Then in 2006, Guiliani acknowledged that city investigations commissioner, Edward Kuriansky, said Kuriansky has stated he told Giuliani in at least one briefing about Kerik’s problems, but Giuliani said he did not remember any such briefing.

Kuriansky’s diaries confirm that one of those briefings did take place.  Additionally, Kuriansky stated, based on his recollections and his diaries, he also briefed Dennison Young, Jr., one of Mayor Giuliani’s closest aides, about Kerik’s ties to the construction company only days before Mayor Giuliani appointed Kerik police commissioner.  Giuliani is well-known for the premium he places on loyalty and his own loyalty to others.  Giuliani Partners, his consulting firm did employ Kerik and continues to employ Alan Placa, a high school friend, in spite of allegations he molested young men years ago.

By the time Giuliani recommended Kerik for the Homeland Security job, his administration knew Kerik had acted on behalf of Interstate Industrial and knew about other criticisms of Kerik, including sending detectives to look for his lover’s cell phone and using police officers to research his autobiography.

In 2000, more than half the mayor’s cabinet opposed Bernie Kerik’s appointment to police commissioner.  They had concerns that included the fact that Kerik did not have a college degree, a police department requirement at the time for captains and above.

Giuliani met Kerik in 1990 at a fund raiser in New Jersey honoring a slain new York City police officer. Kerik was a decorated undercover detective with a ponytail and earrings, big biceps. Kerik cultivated political connections, such as the sheriff of Passaic County, N.J., who had made Kerik five years earlier the youngest jail chief in the county’s history.   When Giuliani ran for mayor in 1993, Kerik organized Giuliani’s security detail of off-duty officers to reserve the weekend shift for Kerik himself.

A year after Giuliani became mayor, he appointed Kerik first deputy correction commissioner to include supervision of Riker’s Island.   One year after that, Kerik was appointed  correction commissioner, where he showed up for spot inspections at 2:00 a.m.  When violence in the jails dropped, public praise climbed.  Now reported are some of his questionable activities then, such as his dating a woman who was a correction officer and his getting close to the department’s inspector general, whose responsibilities required him to avoid such closeness with other city personnel.  Later, one of his top deputies was convicted of taking $142,000 from a Correction Department that Kerik headed.  Another deputy was convicted of forcing staff members to do political campaign work and dispatching officers to renovate his home.

Lawrence Ray was a friend of Kerik and served as best man at Kerik’s wedding.  Ray even paid for much of the wedding, and Kerik in turn recommended Ray for a $100,000 job at Interstate Industrials, a New Jersey construction company with tens of million dollars in contracts with New York City.

Interstate Industrials hoped that Lawrence Ray could change relations with the City because, two years before, city investigators had found the company employed mob figures and denied the company an operating license. After hiring Ray, Interstate hired Kerik’s brother, and from then on, the then-correction commissioner began lobbying unofficially for Interstate. Kerik defended Interstate to the chief of enforcement for the city commission, a cousin of Giuliani who was reviewing Interstate’s license application.  Kerik telephoned an assistant commissioner at the Department of Investigation to say Interstate’s owners were clean of mob ties, so far as he knew.  He even had city detectives who were investigating Interstate meet Lawrence Ray in Kerik’s own city office, sending a strong signal to the detectives.  But the lobbying stopped in March, 2000, when Lawrence Ray and Edward Garafola, a mob soldier associated with Interstate, were indicted on a federal stock scheme not related to Interstate’s business.  New York City suspended Interstate’s $85 million in city contracts.

Three weeks later, Bernie Kerik interviewed for two hours with the Department of Investigation and talked about his relationship with Lawrence Ray, Interstate and its owners and his brother.  However, Kerik never mentioned that Interstate was paying for $165,000 worth of renovations on his new apartment in the Bronx.

That is when the police commissioner job came open.  Bernie Kerik was one of the candidates with his eight years experience as a police officer.  Edward Kuriansky, the city investigations commissioner, was assigned to oversee background investigations of Kerik and the other candidate, Joseph Dunne.    Kuriansky’s agency was supposed to be semi-independent, but Kerik had coopted it to some extent, appointing friends like Kuriansky to the commission and having them attend his morning meetings.  Kuriansky was a former prosecutor, and he knew Kerik had intervened on behalf of the company suspected of mob ties and that Kerik’s best friend and brother worked for that company.  Kuriansky, however, did not know Interstate was renovating Kerik’s apartment.

Giuliani selected Kurik as his police commissioner, and he served in that capacity for 16 months.  Crime fell, and Kerik enjoyed not only public approval during his tenure but celebrity.   Bernie Kerik adopted the persona of a steady figure after the World Trade Center attack on 911.  He continued to receive good press.  Three years later, after he had withdrawn his nomination as head of Homeland Security, it came to light that Kerik had used an apartment dedicated for weary rescue workers at ground zero for an extramarital affair with his book publisher, Judith Regan.

After Kerik’s three months in Iraq, he spoke at the Republican National Convention. But his candidacy to head Homeland Security lasted only a week.  He withdrew himself, saying he discovered his nanny was in the country illegally and he had not paid taxes on her.

Kerik couldn’t even stay out of trouble after he was indicted in federal court.  U.S. District Judge Stephen Robinson revoked Kerik’s bail when the judge found Bernie had, in apparent hopes of generating sympathy in his trial, leaked information the judge had ordered sealed.  Kerik ultimately pled guilty to eight counts in hopes of receiving a  two or three years sentence, as indicated by the Sentencing Guidelines and the expectations of the prosecutors.      Whoops. The judge gave him four years and said Kerik had violated the public trust immeasurably.   While waiting for his sentencing, Kerik complained that he had not heard from Rudy Giuliani.  Small wonder why.  The wonder is that he overlooked Kerik’s fleas so long.

William Jefferson, former Congressman from New Orleans, was sentenced to 13 years in federal prison for using his office to enrich himself and his family.  His sentence was less than the 27 years recommended by the U.S. Attorney.  He was convicted by a jury last August for bribery, racketeering and money laundering.  Some of his schemes involved business ventures in Africa.

Since Jefferson is 62 years old, his sentence could be a life sentence, since there is no parole in the federal prison system, although he could get 15 per cent of his sentence off for good behavior.

Jefferson was convicted after a six-week trial in Alexandria, Virginia. He was found guilty of 11 of 16 counts after he was indicted in June, 2007.  But his indictment followed highly publicized activity in the case.  Jefferson was videotaped by the FBI in July, 2005, receiving $100,000 of $100 bills in a briefcase in Arlington, Virginia.  Captured by a wire on one of the participants, Jefferson allegedly advised an informant to give Nigerian Vice President Atiku Abubakar $500,000 to make sure their business interests obtained contracts for their companies in Nigeria.

A few days later the FBI raided Jefferson’s home in Washington, D.C. and claimed to have found $90,000 of the cash in the freezer in $10,000 increments, wrapped in aluminum foil and stuffed inside frozen-food containers.”  The FBI claimed the serial numbers found on the bills in Jefferson’s home matched serial numbers of the money the FBI had given to their informant.

It was nine months later that the really big raid took place.  FBI agents executed a search warrant on Jefferson’s office in the House of Representatives, the Rayburn House Office Building.  Jefferson was a sitting Congressman at the time, and the FBI raid is believed to be the first time a raid was ever conducted on the office of member of Congress.

The separation of powers implications raised great concerns.  Members of Congress feared the precedent of law enforcement officers raiding legislators’ offices.   If legislators’ offices could be raided whenever agents of the executive branch claimed they were on the trail of criminal evidence, the legislative branch of government could be at the mercy of the executive branch.  These are the kinds of raids Russia’s Premier Putin has conducted to crush the formerly free press and private businessmen who challenged Putin.  These are the kinds of raids governments around the world have used as a pretext to force legislators to follow the command of the executive.

Congressional leaders immediately demanded the FBI return documents seized from the raid of Congressman Jefferson’s House office.  House Speaker Dennis Hastert and Minority Leader Nancy Pelosi spoke out together.  Reportedly Attorney General Alberto Gonzales and FBI Director Robert Mueller threatened to quit if the Justice Department had to return the documents.  Meanwhile, the House of Representatives was threatening to axe the Justice Department’s budget.  President Bush ultimately directed the Justice Department to seal all seized evidence for 45 days.

At the time, an ABC News poll in June, 2006 found 86% in the United States supported the FBI’s right to search congressional offices when they obtain a warrant.  This should be no surprise. The public’s support of law enforcement always outweighs support of Constitutional restraints.  At least the poll dealt with a search warrant.

As any criminal defense lawyer will tell you, members of the general public for the most part always will see the justification of unconstitutional actions in the results.  If the police acted without probable cause or a trumped up justification, the public does not often question the action.  There are significant exceptions, but for the most part, the safeguards of the Constitution are not appreciated by the general public when weighed against the value of “getting bad guys.”.

The public wants crimes solved, and the restraints on government placed by the Constitution are seen as speed bumps to be ignored only “a case at a time.”  The “case at a time,” of course, becomes the rule rather than the exception because in every case there is a “good reason” to go ahead with ignoring the restraints, to go ahead and get this guy because “this guy really needs getting” or “this crime really needs solving.”  The Constitution remains on the sidelines from little use until that member of the public or this person has an experience when they are surprised at how easy the rules have made it to convict someone innocent of a crime.

William Jefferson challenged the raid on his office to the District Court of the District of Columbia.  The Court held that the broad protections of the Speech or Debate Clause, which give absolute immunity from prosecution for legislative acts does not shield members of Congress from the execution of valid search warrants.  For those who fear executive overreach, it is noteworthy that search warrants would necessarily require approval from the judicial branch of government.  Oddly, Chief Hogan, who made this finding was the one who had approved the original search.

The decision of the District Court was appealed to a three-judge panel held that Department of Justice could not review Jefferson’s filed until Jefferson had seen what files had been taken from his office and which pertained to his legislative duties.

Thereafter the House of Representatives stripped Jefferson of his committee assignment in the House.  Jefferson was reelected in 2006, but after being indicted in 2007, he lost election in 2008, upset by a Republican in an overwhelmingly Democratic district.  Jefferson went to trial as an ex-Congressman.