Albany's decade of corruption: public integrity enforcement after Skilling v. United States, New York's dormant honest services fraud statute, and remedial criminal law reform.

AuthorStengel, Andrew M.
PositionI. Introduction through III. Relevant Federal and State Public Corruption Laws, p. 1357-1383
  1. INTRODUCTION

    The old gripe about legislative dysfunction in Albany has given way to something new. (1) "It has become something of a cliche to bemoan" Albany's culture of corruption. (2) In the last decade, ten members of the New York State Legislature were indicted, convicted, or pleaded guilty to crimes involving corruption. (3) United States Attorneys brought most of the cases based on violations of honest services fraud. (4) The District Attorneys of Albany, New York, and Kings Counties were also active in prosecuting corruption over the period, as was the State Attorney General more recently. (5) More than three decades ago, Governor Mario M. Cuomo said of politicians, we "campaign in poetry" and "govern in prose." (6) By Cuomo's standards, Albany's contemporary prose reads as obscene.

    In 2010, the Supreme Court of the United States decided Skilling v. United States, (7) narrowing the scope of federal honest services fraud to include only kickbacks and bribes, thereby upending nearly twenty-five years of public corruption prosecutions. (8) Prior to the Skilling decision, the fraud statute was employed by federal prosecutors to pursue breaches of the general duty of the public trust, but where the acts fell short of bribery. (9) As a result of Skilling, a major weapon wielded by U.S. Attorneys against public corruption vanished. Fortunately, at least for New York, there is a state criminal statute similar to the honest services statute that does not likely suffer from the same infirmities as its federal counterpart: receiving reward for official misconduct in the second degree, Penal Law section 200.25. (10)

    Perhaps not coincidentally, the current regime of state ethics laws was the consequence of ethics lapses by the majority leader of the State Senate more than half a century ago. (11) In 1954, Governor Thomas E. Dewey, in his annual message to the legislature, spurred the reform that led to enactment of the Code of Ethics that is applicable to members of the state legislature today. (12) Unfortunately, some in Albany treat the Code as if it is written in foreign tongue.

    For far too long, section 200.25 has been overlooked as a viable public integrity tool. (13) Well-intentioned reforms creating the third investigatory and enforcement regime over state government in only five years are not nearly enough to dam the culture of corruption. (14) State ethics enforcement promises more inaction due to the procedures to commence a full investigation by the new enforcement body that oversees the executive and legislative branches. (15) If the tide of Albany corruption is to turn from flow to ebb, then section 200.25 should be vigorously enforced, and badly needed reforms of criminal public integrity statutes should be enacted.

    Part II of this article details the acts of the state legislators who pleaded guilty to, or were convicted of, corruption during the prior decade. Part III explores relevant public corruption laws, federal honest services fraud, the State Code of Ethics, and state corruption statutes. Part IV applies the New York's Penal Law section 200.25 to recent convictions and alleged facts uncovered in recent corruption cases. Finally, Part V proposes necessary remedial measures--reforms to criminal public corruption laws as a means to deter the ethically challenged.

  2. ALBANY'S DECADE OF CORRUPTION: 2001-2010

    The decade began with a number of prosecutions of members of state legislatures by district attorneys in Albany, Brooklyn, and Manhattan, and ended with several more prosecutions by the U.S. Attorney. (16) The Manhattan District Attorney secured guilty pleas for bribery from Assemblywoman Gloria Davis in 2003 (17) and Senator Guy Velella in 2004. (18) Davis pleaded guilty for bribe receiving in the second degree for accepting $24,000 as part of a scheme to arrange for a contractor to receive a lucrative construction contract from a not-for-profit that the Assemblywoman controlled. (19) Assemblyman Green pleaded guilty to submitting false travel expenses and petty larceny in 2004. (20) In 2007, the Brooklyn District Attorney won his third conviction of Clarence Norman, Jr., a former assemblyman and Kings County Democratic party chair, for extorting judicial candidates for party support. (21) The following year the Brooklyn District Attorney successfully prosecuted Assemblywoman Diana Gordon for third-degree bribe receiving, among other corruption charges, stemming for a scheme to assist developers in acquiring public land in exchange for building her a home. (22) Gordon was caught on a wire telling the developer, "One hand washes another hand." (23)

    Contrary to the poetry of T.S. Eliot, (24) the decade ended with a bang, rather than a whimper, with six federal prosecutions of legislators in a three-year period beginning in 2008. The U.S. Attorney for the Southern District of New York obtained guilty pleas from four legislators, and the U.S. Attorney for the Northern District, won a guilty verdict against former Senate Majority Leader Joseph Bruno. (25) Senator Pedro Espada, Jr. was indicted in the Eastern District in December 2010 and convicted on four theft counts nearly two years later. (26)

    In 2008, Assemblyman Brian McLaughlin pleaded guilty to racketeering, which included bribes, and defrauding taxpayers and unions. (27) He was sentenced to ten years in prison. (28) The next year, Senator Efrain Gonzalez Jr. pleaded guilty to fraud and conspiracy for using funds that he steered to a non-profit for personal expenses. (29) He was sentenced to seven years. (30) And Assemblyman Anthony Seminerio pleaded guilty to honest services fraud for promoting the interests of clients that paid him in excess of $1 million. (31) He was sentenced to six years. (32) In December 2010, Senator Vincent Leibell pleaded guilty to one count of failing to report $43,000 of consulting income on his federal income tax return and one count of obstruction of justice. (33) He was sentenced to twenty-one months. (34)

    The same month, Senator Pedro Espada, Jr. was indicted by the U.S. Attorney for the Eastern District on five counts of embezzlement and one count of conspiracy, related to more than $500,000 improperly taken from Bronx-based non-profit healthcare clinics that he founded. (35) The most notable corruption case of the decade was brought against the former Senate Majority Leader, who was indicted on eight count of honest services fraud. (36) In 2009, Bruno was convicted on two counts, acquitted on five, and no verdict was reached on one. (37) However, the conviction was reversed (38) in light of Skilling v. United States. (39) The U.S. Attorney will retry Bruno on a different, yet related, charge. (40)

    The new decade is off to no less an inauspicious start. Most recently, though likely not last, Senator Carl Kruger and Assemblyman William Boyland, Jr. were indicted in the Southern District for honest services fraud and money laundering related to $1.5 million in bribes exchanged for various political favors; the former pleaded guilty and was sentenced to seven years and the latter was acquitted after a jury trial but was indicted anew for bribery only weeks later. (41) Additional investigations of various members of the legislature roll on. (42)

  3. RELEVANT FEDERAL AND STATE PUBLIC CORRUPTION LAWS

    1. Federal Honest Services Fraud: McNally and Skilling

      Honest services fraud was enacted by Congress in reaction to the Supreme Court's 1987 decision in McNally v. United States. (43) In that case, the Court limited mail and wire fraud to include only tangible rights, i.e., money or property. (44) It excluded "the intangible right of the citizenry to good government" from the statute's purview. (45) The defendants in McNally, two Kentucky public officials and a figurehead of an insurance agency, were involved in a self-dealing kickback scheme involving ownership of the agency, an undisclosed conflict of interest. (46) The Court in McNally concluded that the mail and wire fraud statute only reached tangible rights. (47) The justices explained that the Court did so "[r]ather than construe the statute in a manner that leaves its outer boundaries ambiguous and involves the Federal Government in setting standards of disclosure and good government for local and state officials." (48) The Court declared: "If Congress desires to go further, it must speak more clearly than it has."...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT