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Survey of Past Criminal Prosecutions for Covert Payments to Benefit a Political Campaign

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Part of Just Security’s work on accountability and election law.

The indictment of former President Donald Trump for conduct involving the alleged concealment of hush money payments to benefit a presidential campaign raises the question whether his case is being treated like other cases. That question is fundamental to ensuring the equal application of the law and protecting free and fair elections. In this essay and accompanying table of cases (the “Table”), we analyze 17 analogous campaign finance and related prosecutions in the State of New York and nationally. Our research shows that third-party payments covertly made to benefit a candidate are routinely and successfully prosecuted as campaign finance violations in New York and elsewhere under a variety of state and federal statutes.

This essay is the fourth in a Just Security series about the Manhattan case and follows our piece demonstrating that New York prosecutors regularly bring and win prosecutions for felony violations of the state’s books and records statute on falsifying business records (New York Penal Code § 175.10), including for conduct far less serious than the allegations against Trump. In this essay we make the same point about surreptitious third-party payments benefiting a candidate or campaign: there is nothing novel about prosecuting them. Quite the opposite.

New York State itself offers a number of important, closely analogous campaign finance cases that resulted in convictions for conduct similar to Trump’s, including falsifying business records. We begin there.

Richard Brega

The Richard Brega case involved campaign finance violations which were prosecuted as a felony violation of New York’s books and records statute. In that regard, the Brega case is on all fours with DA Bragg’s case which reportedly also will seek to elevate the books and records violation to a felony on a campaign finance basis.

Brega ran Rockland County’s bus system and transported students on a multi-million dollar contract.

A Rockland County grand jury indictment in July 2017 accused Brega of, between April 2013 and August 2013, using 10 “straw donors,” including his family, friends, and employees of his company, Brega Transportation, to secretly funnel over $40,000 in (cash) campaign donations to the 2013 county executive campaign of legislator Ilan Schoenberger.

The indictment charged Brega with ten felony counts of falsifying business records, namely that “with the intent to defraud and commit another crime and to aid and conceal the commission thereof” Brega “caused” false entries regarding the donations to be entered in the business records of the New York State Board of Elections.

“The campaign contribution limit for an individual donating to Legislator Schoenberger in 2013 was $9,221. The straw donations were reported by ‘Friends of Ilan Schoenberger’ to the New York State Board of Elections as individual contributions of the ten straw donors,” the District Attorney’s Office stated. Brega was “accused of causing those records to be false, as the money that was funneled into the Schoenberger account was his own.”

In May 2018, Brega pleaded guilty to one count of first-degree falsifying business records, and admitted to using his “brother-in-law, Anielo Feola, as a go-between to conceal the origin of a $6,000 donation” to Schoenberger. In December 2018, Judge David Zuckerman sentenced him to a year’s imprisonment to run concurrent with his federal sentence of 4 years and 2 months in prison for a separate bribery conviction which was passed the day earlier.

Clarence Norman

Another earlier case that resembles the potential Trump prosecution is that of Clarence Norman. Among other similarities, Norman’s election law violations were treated as the predicate acts for a falsifying business records felony charge—a path that we expect DA Bragg to follow. Indeed, the Norman case may offer an even closer parallel than Brega.

Background

Clarence Norman was a member of the New York State Assembly from the 43rd Assembly District in Central Brooklyn for 23 years, and since 1990 the leader of the powerful Kings County Democratic Party in Brooklyn.

Norman’s criminal activity was extensive and complex, as too were the criminal investigations, prosecutions, and appeals that followed. Brooklyn District Attorney Charles J. Hynes charged six in a judicial bribery scandal in 2003, and accused local party leadership of facilitating a sham judicial selection process. This spurred a sprawling corruption investigation into Norman’s role in Brooklyn’s party machine politics. Within months, former judicial candidates alleged that Norman threatened to withdraw party support unless they hired consultants friendly with party leadership – reportedly a $100,000 proposition. As part of this investigation, prosecutors pored over Norman’s financial records, including his interactions with campaign funds and government reimbursements.

In early October 2003, DA Hynes presented evidence of Norman’s campaign spending practices and other matters to two Brooklyn grand juries. Both grand juries returned indictments, and at the time charges were reported as including: (1) failing to report a lobbyist’s political contribution, worth thousands of dollars, to the State Board of Elections; (2) grand larceny for depositing a $5,000 check for his campaign into his personal bank account; and (3) 76 counts of filing for reimbursement from taxpayer money for over $5,000 in travel expenses already paid for by the party.

It was alleged by prosecutors that in 2000 and 2002, Norman spoke with Ralph Bombardiere, the executive director of the New York State Association of Service Stations and Repair Shops (“the Association”), a political action committee, and “knowingly and willfully” solicited him to pay certain campaign expenses. People v. Norman, 2007 NY Slip Op 04667 [40 AD3d 1128] (May 29, 2007). “Pursuant to the agreements each year that the Association would do so, the executive director received invoices for purchases made for various campaign expenses, and he caused the Association to pay all but one of those invoices. Although those payments constituted in-kind contributions to” Norman’s campaigns, he did not inform the treasurer of the Committee to Re-Elect Assemblyman Clarence Norman, Jr. (“the Committee”), the political organization formed to receive contributions and make expenditures on behalf of Norman’s re-election campaigns, that the Association had made the payment. “Because she was unaware of the payments, the treasurer did not include them in the January 2001 Periodic Report (“the January 2001 Report”) or the January 2003 Periodic Report (“the January 2003 Report”) she was required to file with the New York State Board of Elections (“the Board of Elections”).” People v Norman, 2004 NY Slip Op 51851(U).

Contributions were reported to total $7,423.30 in 2000 and $5,400 in 2002. “There was no accusation that the money had gone into Mr. Norman’s pocket. Rather, it was used to pay expenses for the primary elections, like printing and shopping bags.” Prosecutors argued that Norman had tried to conceal the contributions, because he knew they exceeded the maximum of $3,100 then permitted by state law.

Charges 1: First Indictment

A ten-count indictment was returned in respect of Norman’s solicitation of contributions and falsification of business records, for which he stood trial. People v Norman, 2004 NY Slip Op 51851(U) (Dec. 15, 2004).

Counts related to expenses paid by the Association in 2000:

  • Count 1 – Offering a False Instrument for Filing in the 1st Degree, alleging that Norman presented the January 2001 Report to the Board of Elections, knowing the report contained “a false statement and false information” and with intent to defraud the Board.
  • Counts 3 & 4 – Falsifying Business Records in the 1st Degree, alleging that Norman prevented the making of a true entry and caused the omission of such an entry in the records of the Committee (count 3) and the Board of Elections (count 4).
  • Count 9 – A felony election law violation, alleging that Norman “knowingly and willfully” solicited a person to make expenditures in connection with his candidacy, “for the purpose of evading the contribution limitations” of Article 14 of the Election law, in violation of what was then Election Law §14-126(4), now Election Law §14-126(6).

Counts related to expenses paid by the Association in 2002:

  • Count 2 – Offering a False Instrument for Filing in the 1st Degree, alleging that Norman presented the January 2003 Report to the Board of Elections, knowing the report contained “a false statement and false information” and with intent to defraud the Board.
  • Counts 5 & 6 – Falsifying Business Records in the 1st Degree , alleging that he prevented the making of a true entry and caused the omission of such an entry in the records of the Committee (count 5) and the Board of Elections (count 6).
  • Count 7 – “received a contribution and failed to provide the treasurer of the Committee with ‘a detailed account’ of it within 14 days of its receipt, in violation of Election Law §14-122.
  • Count 8 – received a contribution from a single contributor that amounted to more than ninety-nine dollars and failed to file a statement of its receipt, in violation of Election Law §14-102.
  • Count 10 – A felony election law violation, alleging that Norman “‘knowingly and willfully’ solicited a person to make expenditures in connection with his candidacy, ‘for the purpose of evading the contribution limitations’ of Article 14 of the Election Law, in violation of Election Law §14-126(4),” now Election Law §14-126(6).

Counts 4, 6, 7 and 8 were eventually dismissed, with Norman standing trial for the remaining counts. People v Norman 2004 NY Slip Op 51851(U). In dismissing some counts, the court helpfully identified election law violations as the predicate crime to the felony count for falsifying business records:

“Since it is a crime indeed a felony for a person ‘acting on behalf of a candidate or political committee [to] knowingly and willfully … solicit any person to make [expenditures in connection with the nomination for election or election of any candidate] for the purpose of evading the contribution limitations of [article 14 of the Election Law],’ Election Law § 14-126(4), this evidence is also sufficient to establish that the defendant concealed these solicitations and contributions from the treasurer and thus prevented the making of a true entry, and caused the omission of a true entry in the records of both the Committee and the Board of Elections with ‘intent to defraud includ[ing] an intent to commit another crime or to aid or conceal the commission thereof.’” Penal Law § 175.10.” Id.

Charges 2: Second Indictment

The second indictment returned a seven-count indictment against Norman in respect of, in main, his stealing of the $5,000 check. People v Norman, 2004 NY Slip Op 51392(U) (Nov. 16, 2004).

“During the months of October and November of 2001, the treasurer of the Club wrote a number of checks, including three payable to the Committee. One, dated October 17, 2001, was for three thousand dollars, and included the notation ‘Election Expenses.’ Another, dated November 20, 2001, was for two thousand five hundred dollars, and had no notation indicating its purpose. The treasurer of the Committee deposited both of these checks in the Committee’s account at Carver Federal Savings Bank. The treasurer of the Club also wrote a third check payable to the Committee, dated October 30, 2001, for five thousand dollars, and wrote on the check the notation ‘contribution.’ On October 31, 2001, the defendant signed his name on the back of this check and deposited it in a personal account he maintained at another bank in Kings County. The defendant told neither the treasurer nor the secretary of the Committee about this check.” Id.

“In January, 2002, the treasurer of the Club filed a report with the Board of Elections, which listed the contributions the Club had received and the disbursements it had made during the period between July 16, 2001, and January 15, 2002. In that report, the treasurer included the five thousand dollar check, along with the other two checks, as contributions the Club had made to the Committee. On January 23, 2002, the treasurer of the Committee mailed to the Board of Elections the Committee’s January Report. In that report, the treasurer listed the contributions the Committee had received during the period between July, 2001, and January, 2002, including the two checks from the Club that she had deposited in the Committee’s account, but not the five thousand dollar check, of which she was unaware.” Id.

The counts on the indictment were as follows:

  • Count 1 – Grand Larceny in the 3rd Degree, and alleges that he stole more than three thousand dollars from the Committee.
  • Counts 2 and 3 – Falsifying Business Records in 1st Degree, and allege that, with intent to defraud, including the intent to aid and conceal the commission of a crime, the defendant prevented the making of a true entry, and caused the omission of a true entry in the records of the Committee (count 2) and of the Board of Elections (count 3).
  • Count 4 – Offering a False Instrument for Filing in the 1st Degree, and alleges that he presented the January Report to the Board of Elections, knowing the report contained “a false statement and false information” and with intent to defraud the Board.
  • Counts 5, 6 and 7 – criminal violations of the Election Law, see Election Law § 126(2), and allege, respectively, that he received a contribution and failed to provide the treasurer of the Committee with ‘a detailed account’ of it within 14 days of its receipt, in violation of Election Law §14-122 [count 5]; that he received a contribution from a single contributor that amounted to more than ninety-nine dollars and failed to file a statement of its receipt, in violation of Election Law §14-102 [count 6]; and that he received a contribution to a political committee and converted it to his personal use, in violation of Election Law §14-130 [count 7].

Counts 3, 5, 6, and 7 were eventually dismissed, and Norman stood trial on the remaining counts. People v Norman, 2004 NY Slip Op 51392(U) (Nov. 16, 2004).

Convictions

In respect of the first trial and indictment, in September 2005, Norman was convicted of two felony New York campaign finance laws for soliciting illegal contributions in his 2000 and 2002 primary campaigns for his seat in the New York State Assembly (counts 9 and 10), as well as one felony and one misdemeanor count of falsifying business records of those contributions and preventing the making of a true entry and causing the omission of an entry in the Committee’s records (counts 3 and 5).

The second trial and indictment led to a conviction in December 2005 for Norman’s taking of the $5,000 check, on counts of grand larceny in the third degree, falsifying business records in the first degree, and offering a false instrument for filing in the first degree. The conviction was affirmed in People v. Norman, 40 A.D.3d 1130, 837 N.Y.S.2d 277 (App. Div. 2007). In January 2006, he was sentenced to a prison term of 2 to 6 years for the convictions in both trials.

Other Examples and Table

Brega and Norman are just two examples of predicating a books and records felony on campaign finance violations. As we note in the Table, there are other New York prosecutions combining charges of falsifying business records in the first degree with New York Election Law violations, though only in relation to state, not federal, elections.

In the John Dote case, the defendant pleaded guilty to felony falsification of business records and to two violations of New York Election Law – unlawful use of campaign funds and failure to account to the party treasurer. He did so in connection with his stealing over $59,000 from his own campaign funds. The books and records charge accused him of filing false financial reports with the state Board of Elections “with the intent to conceal his ongoing larcenies.”

In the Richard Luthmann case, the defendant was accused of impersonating New York political figures on social media in an attempt to influence campaigns. He too pleaded guilty to felony falsifying business records as well as to misdemeanors under New York’s election law. The falsifying business records charges against Luthmann related to his creating false records on the social media sites, “with the intent to injure them.”

Of course, there are distinctions with the Trump case, including that the foregoing cases concerned state candidates whereas Trump was seeking federal office. But as we explained in the second essay in this series, Bragg has formidable arguments on preemption and other possible Trump defenses that enable the Manhattan DA to prosecute the former presidential candidate as others have been prosecuted in New York.

What’s more, there are many other cases – in New York and nationally – that address this type of conduct as a campaign finance violation. These cases, individually and collectively, contradict the assertion that there is anything novel about prosecuting covert benefits to a campaign as alleged in the Trump hush money scheme.

That is not to say that every case of this kind that has been prosecuted in New York or nationally has resulted in conviction. The vast majority have. But where they did not result in conviction, the charges generally still made it to the jury. We discussed one of those cases, that of John Edwards, at length in the second essay in this series, rebutting common misunderstandings of the matter. Another similar (non-hush money) example covered in the Table is the prosecution by then-Manhattan DA Cyrus Vance against Nora Anderson and Seth Rubenstein.

Finally, of course, there is also the federal case against Michael Cohen. As former U.S. Attorney for the Southern District of New York Preet Bharara succinctly put it on Meet the Press this Sunday:

“Michael Cohen, who was not only charged with this type of crime but this particular crime. And he thought it was a crime, pled guilty to it. His lawyer thought it was a crime, allowed him to plead guilty to it. The prosecutors in the Southern District of New York thought it was a crime. The judge accepted the guilty plea, thought it was a crime.”

What’s more, the “[Federal Election] Commission’s Office of the General Counsel (OGC) recommended finding reason to believe that Cohen and the Trump Organization made, and Trump and Donald J. Trump for President, Inc. (the Committee) accepted and failed to report, illegal contributions,” according to the Chair and another commissioner of the FEC. (In a split decision that fell along partisan lines, the full FEC voted against investigating charges that Trump and his Committee had violated campaign finance laws.)

In the Table below, we looked at a total of 15 additional cases beyond Brega and Norman, all of which concern covert benefit to a campaign, either by a third-party providing cash or in-kind support, or services, or through covertly funneling other contributions. The Table is not a comprehensive survey of all past cases, but provides strong insight into these types of cases.

The Table is available in the 46-page Scribd file below as well as a separate online PDF.

Survey of Criminal Prosecutions for Covert Payments to Benefit a Political Campaign on Scribd

Image – Thurgood Marshall United States Courthouse in New York City (Getty Images)

The post Survey of Past Criminal Prosecutions for Covert Payments to Benefit a Political Campaign appeared first on Just Security.

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