Leonardo Angiulo: A Good Day for FBI, A Bad Day for Politicians
Monday, March 31, 2014
These three cases involving local politicians raises some big questions about the health and sovereignty of our local, state and Federal Governments, believes Leonardo Angiulo.
The three cases involve local politicians in North Carolina, California, and Rhode Island. Each one made national news for a minute, but considering the significance of federal agents raiding statehouses and legislators allegedly trafficking firearms, a more involved review may be warranted. To be certain, none of the parties involved have been convicted so any accounts in the public realm at this point are mere accusations. That being said, they are some pretty heavy allegations.
Similar cases making headlines
Take State Senator Leland Lin Yee of California for example. According to a press release issued by the San Francisco FBI office on March 26, 2014 that gentleman is accused of conspiracy to traffic in firearms without a license and to illegally import firearms as well as involvement in a scheme to defraud citizens of honest services. According to the same FBI press release, some of the allegations in that case include Senator Yee offering to make phone calls and write a letter of support for an undercover officer's state contract bid in exchange for campaign donations.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTSimilarly, the case of Charlotte, North Carolina Mayor Patrick DeAngelo Cannon involves allegations of theft and bribery concerning programs receiving federal funds, honest services wire fraud, and extortion under color of official right. According to the March 26, 2014 press release of the FBI's Charlotte Division that city's mayor is accused of an American Hustle-ish set of circumstances. Namely, the mayor allegedly accepted cash and other things of value and, in return, used his official position to benefit a commercial developer to do business in Charlotte. The developer, however, turned out to be an undercover federal agent.
Interestingly, federal agents and state police also stormed the Rhode Island State House on Friday March 21, 2014 and, according to GoLocal reports, seized records after entering the office of the speaker of the state house of representatives. When asked, the Federal Prosecutors' limited explanation for their actions include the service of federal search warrants. As of the time of this writing, neither the United States Attorney's Office for Rhode Island nor the Boston office of the FBI had issued any press releases on the topic.
Honest services fraud
Honest services violations under Federal Law are specifically implicated in two of the three circumstances discussed above and the press release about Senator Yee cites two specific statutes in alleging “Scheme to Defraud Citizens of Honest Services.” The first is 18 USC §1343 and the language of that code section criminalizes the transmission of any interstate or foreign communication to execute a “scheme or artifice to defraud.” The second statute is 18 USC §1346 that defines “scheme or artifice to defraud” as any “scheme or artifice to deprive another of the intangible right of honest services.” One logical interpretation of these statutes is that using the powers of a public office to secure personal financial benefit, through actions like kickbacks or bribes, is criminalized by these laws.
The scope of this honest services fraud statute, along with other issues, was tested in 2010 by the U.S. Supreme Court case of Skilling v. United States. In that case, the “honest services” language had been used to prosecute Mr. Jeffrey Skilling for his involvement in the failure of the Enron Corporation. Specifically, as quoted on page 3 of that case, the indictment contended Mr. Skilling and his co-conspirators “enriched themselves . . . through salary, bonuses . . . other profits, and prestige” while making false public statements about the vitality of the corporation resulting in shareholders and members of the public from being denied honest services. To roughly break that down, they charged him with puffing up the value of corporate stock and pocketing the benefit.
When the Supreme Court reviewed the case, they declined to extend the statute to cover the described behavior. In doing so, the Supreme Court also gave an interesting explanation for how the statute came to be including an examination of mail fraud during the 1800's. In the end, the Court chose to focus the term “honest services” to mean at least those circumstances involving bribery and kickback schemes. Since Mr. Skilling was not alleged to have accepted or solicited side payments in exchange for making misrepresentations the court decided he did not commit honest services fraud. In short, it's not the lie or the fraud that is the problem. It's the making money on the side that does it.
Returning to the recent national events, the broad scope of action focused on elected officials within a short period of time raises some big picture questions about the health and sovereignty of our local, state and Federal Governments. I'll leave that for someone else to answer. For the purposes of this column, the limited question of what may have prompted federal action in North Carolina and California is answered with an evaluation of relevant statutes and precedent. What happened in Providence, on the other hand, is yet to be seen.
Leonardo Angiulo is an Attorney with the firm of Glickman, Sugarman, Kneeland & Gribouski in Worcester handling legal matters across the Commonwealth. He can be reached by email at [email protected].
Related Slideshow: Rhode Island’s History of Political Corruption
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