Tuesday, January 18, 2011

Siegelman, Scrushy get another shot at 11th Circuit


Here's Press-Register cartoonist J.D. Crowe's take on the reaction by Scrushy and
 Siegelman to being found guilty. Both, and especially Scrushy, had used various arguments 
and public relations ploys to curry favor with the seven black jurors. As J.D.'s cartoon 
makes abundantly clear, it didn't work.

 On Wednesday, lawyers for Don Siegelman and Richard Scrushy will appear for the second time
before the 11th Circuit Court of Appeals. Tomorrow (Tuesday) I will give my prediction of
what I believe will happen -- not Wednesday, for certainly the 11th Circuit won't rule immediately 
after the oral arguments, but when it does rule. It's anybody's guess when appeals courts rule, but
based on the last time the parties appeared, two to four months seems reasonable.
       As you may know, the U.S. Supreme Court sent the Siegelman/Scrushy case back to the 11th Circuit, and asked the court to review its prior findings on the case in light of the Supreme Court's decision in the appeal of former Enron officer Jeff Skilling. At issue -- as will be discussed in tomorrow's blog -- is the applicability of the "honest services" statute to the Scrushy-Siegelman case.         
    As a preview for that, here are two portions form the same chapter in, "The Governor of Goat Hill." The first tells about the first oral argument, and the second, about the 11th Circuit's ruling. I've put some identifiers in parentheses. I will admit to being proud of my analysis, and when this is all over -- if it ever is -- would love to ask the 3 judges to read what I wrote and hear what they have to say.

        Here, from the book:

    On December 9, 2008, the Atlanta-based 11th Circuit Court of Appeals
entertained oral arguments on Siegelman and Scrushy’s appeals of their convictions.
            Most of the reporters who covered the trial attended, as did I, having driven up
from Mobile. Why, I’m not sure, considering the expense, but I wanted to see it.
Adam Nossiter (of the New York Times) was there, Horton (Scott Horton, of Harper's) not.
            Siegelman was accompanied by his wife and two children, as well as Kenneth
“Maze” Marshall, the wheelchair bound veteran who almost never missed a day
of trial. Scrushy wasn’t permitted to leave prison for the hearing, though his wife
Leslie attended. It appeared she’d let a plastic surgeon mess with her pretty face. She
looked tougher and meaner, as if her face was uncomfortable from the stretching.
            All sides retained ringers who specialize in appellate law. Washington D.C.,
attorney Sam Heldman argued for Siegelman, and Bruce Rogow, from Miami,
for Scrushy. Alex Romano, a Justice Department lawyer who also specialized in
appellate arguments, made the government’s case.
            The defendants had to be disappointed that neither of the two judges on the
panel that ordered Siegelman released pending his appeal was on the three-judge
panel picked to decide that appeal.
            Each of the three somber, robed men was over 60, and two well over it.
All were appointed by Republican presidents -- Chief Judge J.L. Edmondson by
Ronald Reagan, and, flanking him, Judge Gerald Bard Tjoflat and Senior Judge
James C. Hill, both Ford appointees.
            The defense teams split duty. Heldman was to use Siegelman’s time to argue
that the government failed to prove the existence of an explicit quid pro quo
between Siegelman and Scrushy regarding the lottery donation and the CON
board appointment. Rogow devoted Scrushy’s allotment to making the case for
a mistrial based on juror misconduct by way of the e-mails. I was surprised that
the defendants elected to spend half their allotted time on the juror e-mails, given
how hopeless I considered this argument (as, indeed, it proved to be.)
            The judges, as Siegelman himself noted after the hearing, had done their
homework. With one notable exception they displayed considerable familiarity
with the facts of the case and the arguments made in the briefings.
            Siegelman’s lawyer went first. He was only seconds into his no quid pro quo
presentation when Edmondson, the chief judge, delivered a directive that had to
send chills through all on the defense side of the courtroom.
            “I don’t think that’s going to be your best argument today,” said Edmondson,
a lean, toothy man, and as impassive as he was authoritative.
            It is said of oral arguments that the tenor and direction of the questions is
often a poor guide to what the court is really thinking. But Edmondson’s opening
directive was just too strong to spin as anything other than bad news for Siegelman
and Scrushy. Everyone seemed to immediately recognize that, at the very least, the
chief judge had made up his mind on the bribery counts and was putting those in
the government’s column. Edmondson told the D.C. lawyer that he would be better
off spending his time arguing the two “Tim Adams” charges against Siegelman.
            Those were the counts, also in Scrushy’s guilty column, regarding HealthSouth’s
hiring of and payments to CON board member Tim Adams. There had been, as
Edmondson keenly noticed, no strong evidence tying Siegelman to that scheme.
            The apparent good news that the chief judge seemed inclined to reverse those
two counts against Siegelman was far outweighed by the implication that he
seemed sold on the bribery counts.
            One of the more discomforting colloquies for the defendants arose from an
apparent error by Judge Hill.
            Despite Edmondson’s advice, Heldman didn’t concede the quid pro quo
argument. After all, it accounted for most of the counts against both defendants.
In making that case, he belittled the import of Bailey’s question to Siegelman
-- the pivotal quote in which Bailey asked Siegelman what Scrushy was going to
want “for that.”
            That, of course, was the $500,000 to the lottery foundation, with Siegelman’s
response, according to Bailey, being, “The CON board.”
            Hill corrected Heldman. The judge said Bailey’s testimony was more
ambiguous. He told Heldman that Bailey had actually testified to asking
Siegelman, “What’s he (Scrushy) going to want?”
            The judge offered that if Bailey had added “for that” at the end of his question
to Siegelman then it would have been far stronger evidence of a quid pro quo.
Hill’s correction seemed to perplex Heldman. The lawyer surely knew that he’d
presented Bailey’s testimony correctly. Bailey’s actual testimony was: “What in the
world is he going to want for that?”
            But what was Heldman to do? Correct Hill, and in front of all, risk making
the case of a quid pro quo against his client?
            I wondered – and suppose Heldman did too – if Hill wasn’t just messing
with him to draw him into acknowledging the power of the statement against his
client. Heldman elected not to correct Hill. He reluctantly accepted the gift horse,
dead on its feet though it was.
            Whether Hill was playing clever with Heldman or mistaken as to the wording of
Bailey’s question to Siegelman – and I think the latter – Heldman, his client and the
rest of those on the defense side had to recognize the implication of Hill’s question.
Someone – his fellow judges, his law clerk -- was going to correct him, and, in all
likelihood, remove for Hill the ambiguity of Bailey’s question. (Three months later,
when the 11th Circuit issued its opinion, Bailey’s testimony – including the ending
words, “for that” – was presented accurately and, for the defendants, damningly.)
            Of the three judges, one – Tjoflat – said little. His only comment I caught
did not portend well for the defendants, or in any event, Siegelman. Heldman
was trying to explain for one of the other judges why the October 2001 meeting
between Siegelman, Bailey and their two lawyers (when Siegelman wrote the
check to Bailey for the rest of the motorcycle) did not constitute a cover-up.
            Gruffly, almost under his breath, Tjoflat muttered words to the effect that he
wasn’t buying that tale.
            The hearing lasted about 45 minutes. Out in the hall I asked Helen
Hammonds, the “blogger lady” during the trial, what she thought. Helen tended
to see things from the defense side and had good relations with Art Leach. She
shook her head and smiled. It was, she said, a bad day for Siegelman and Scrushy.
If Helen thought that, then indeed it had been.
            In a line I suppose was intended to explain to readers why the New York Times
went to the trouble of covering the hearing, Nossiter wrote that the Siegelman case
“has become Exhibit A in the claims of Democrats that the Justice Department
under President Bush was politicized.”
            If those words were true, then Nossiter and the Times had unwittingly cleared
the Bush Justice Department of being “politicized.”......

And, soon after, in the same chapter:

            On March 6, 2009, the three 11th Circuit judges issued a unanimous opinion
that kept Scrushy in prison and likely ensured Siegelman’s return. The court upheld
all six counts against Scrushy. The judges killed off the two “Tim Adams” counts
against Siegelman, but upheld the verdicts on the five remaining charges.
            The 68-page opinion was in many ways a defense of the jury system’s capacity
to weigh circumstantial evidence when considering criminal cases, and, specifically,
those involving bribery and public corruption.
            In their appeals, Siegelman and Scrushy appeared to try to convince the court
that under prevailing law, circumstantial evidence wasn’t sufficient to bring much
less convict on cases alleging bribery and extortion by public officials. They based
that argument on their interpretation of a much-cited Supreme Court ruling on
a West Virginia public corruption case called McCormick.
            The defendants declared that, according to McCormick, “only express words
of promise overheard by third parties or by means of electronic surveillance” can
satisfy the evidentiary need for proving bribery.
            Lawyers for Siegelman and Scrushy pointed out that there was no such
recorded or first-person evidence presented to the jury. And they were right. There
wasn’t. They claimed that Bailey’s testimony was the only evidence of an explicit
quid pro quo connecting the $500,000 and Siegelman’s appointment of Scrushy to
the CON Board.
            They argued that no reasonable juror could have concluded the existence of a
criminal quid pro quo from the evidence at trial.
            In its ruling, the 11th Circuit presented the defendants position, followed by:
“We disagree.”
            Then, and not for the first or last time, the three judges launched into a
vigorous defense of the right and ability of juries to weigh circumstantial evidence
in such cases.
            The judges rejected the defendants’ interpretation of McCormick, writing that
the ruling on the West Virginia case “does not impose such a stringent standard”
of evidence in quid pro quo prosecutions.
            They cited a 1992 case called Evans, decided since McCormick. In that case,
U.S. Supreme Court Justice Anthony Kennedy wrote a concurring opinion
declaring that there was no requirement that prosecutors present evidence of “an
agreement memorialized in writing” or even fi rst person testimony by someone
who overheard a public official agreeing to an illegal quid pro quo pact.
           Kennedy wrote that if that were the standard, then corrupt public officials
and those bribing them could “escape criminal liability through ‘knowing winks
and nods.’”
          In upholding the lottery foundation counts, the judges didn’t limit their argument
to a defense of the jury system. Th ey also extolled the abundance and persuasiveness of
the circumstantial evidence presented by the government in proving the CON Board
scheme and, for Siegelman, the motorcycle/obstruction count.
        The court was swayed by, among other things, the evidence showing the lengths
to which both defendants went to conceal the two $250,000 contributions. On
Scrushy’s side, that entailed his threat to fi re the investment banking fi rm UBS if
it didn’t contribute $250,000 to the foundation; and the eventual solution for the
money to come from Integrated Health in Maryland.
       The judges recited (HealthSouth financial officer) Mike Martin’s testimony about a conversation with Scrushy in which the boss said that for HealthSouth to “have some influence or a spot on the
CON Board,” it had to help Siegelman raise money for the lottery campaign; and that
if the company did contribute it “would be assured a seat on the CON Board.”
       The judges presented numerous portions of trial testimony, including Martin’s
statement that HealthSouth was “making a contribution . . . in exchange for a spot
on the CON Board;” and Bill McGahan’s testimony about being told by Martin
and Scrushy that UBS had to donate to the Alabama foundation.
      On several key points the 11th Circuit turned to the testimony of Darren Cline,
the fundraising consultant hired by Siegelman to work on the lottery campaign. The
court recited Cline’s memorable line that, “if the governor wanted to get something
done, then (Bailey) went ahead – blindly went ahead and did it.”
       It singled out Cline’s testimony that Siegelman “called the shots” on the
lottery campaign; that Siegelman told Cline that Scrushy arranged the $250,000
check from Integrated Health; and that Siegelman said another $250,000 would
be coming later.
       In the court’s opinion, that and more buttressed Bailey’s story that Scrushy
agreed from the start to give $500,000, as opposed to $250,000 and, later, a
separate decision to give the other $250,000. In other words, the two checks were
parts of the same whole, and that wasn’t just Bailey talking.
       The judges emphasized the testimony showing how important it was for
HealthSouth to have a seat on the CON board. Some of that came from Loree Skelton,
who, as the court remarked, testifi ed that she was “responsible for HealthSouth
political donations” but was not told about the two $250,000 payments.
       Skelton, the judges remarked, didn’t learn about the $500,000 until 2002,
and only then through the media.
       The largely un-refuted evidence showing Siegelman’s efforts to conceal the
two $250,000 donations appeared to carry considerable weight with the court.
The judges laid out the foundation’s requirement to report its donations and
expenditures to the Alabama secretary of state and its failure to abide by that
requirement until more than two years later.
       They remarked that the foundation only fi led reports because, “Alabama
newspapers questioned” the failure of the foundation and the Democratic Party
to properly report their financial activities to the Alabama secretary of state office,
prompting involvement by the attorney general’s office.
       (Not to correct the 11th Circuit, but “newspapers” should have been singular!)
        The court made it abundantly clear that bribery charges can be brought in
cases involving campaign contributions, regardless of whether a public offi cial
enjoys a personal fi nancial benefi t. Nevertheless, the 11th Circuit reminded the
defendants that there was evidence of personal benefi t in this case. Th e $730,789
loan to the foundation that was used to repay the Alabama Democratic Party was
“personally and unconditionally guaranteed by Siegelman,” the court noted.
        "There was another personal guarantor, but each was individually liable.”
       The judges reminded the defendants that “the close relationship in time
between the fi rst check and Siegelman’s appointment of Scrushy was also some
evidence of quid pro quo.”
        And then: “In sum, the evidence was sufficient such that a reasonable juror could
have concluded that Siegelman and Scrushy explicitly agreed to a corrupt quid pro
quo, thereby proving the bribery, conspiracy and the two related mail fraud counts.”
      The 11th Circuit was unmoved by the “juror misconduct” element of the appeal.
The judges agreed with the government’s argument that Fuller went to considerable
lengths to investigate what were, after all, anonymously sent e-mails.
       Nor was it swayed by Siegelman’s defense on the obstruction count. That, the
court noted, amounted to little more than an attack on the credibility of Nick
Bailey and Lanny Young, and failed to explain away the multitude of checks and
other evidence upon which the charge was based.
       The judges meticulously laid out the documentary evidence – the $9,200
from Lanny to Nick to Siegelman by way of the check to (Siegelman' wife) Lori Allen – then offered
excerpts of testimony by Bailey and Young. One regarded the meeting at the office
of Siegelman lawyer Bobby Segall, where Bailey wrote Siegelman the $2,973.35
check as the purported balance on the sale of the motorcycle.
      Government: What was going on here?
      Bailey: We made a decision to fi nalize the agreement we made regarding the
motorcycle early on, and this was to fi nish that. We met at the Governor’s attorney’s
offi ce and with my attorney, and that’s when I fi nished paying the Governor in full
for the motorcycle to carry out the plan that we had entered into probably 12 to 18
months earlier.
      Government: And what was that plan?
      Bailey: To disguise the $9,200 from Lanny to the Governor.

      The judges then eviscerated Siegelman’s obstruction appeal. They wrote that
the jury was “entitled to infer from the sham check transaction in Bailey’s lawyer’s
presence that Siegelman intended to mislead the lawyer into believing that the
transaction was legitimate, that Bailey had, indeed, purchased the motorcycle
from him, and that the check was final payment.”
        “As the ‘unwitting third party,’ the lawyer would be in a position factually to
support the cover up since Siegelman clearly knew that there was a ‘possibility’
that the federal investigators would come asking.”
      Repeat: Sham check transaction. Those are the 11th Circuit’s words, not Bailey’s
or Young’s.
      The court declared that Siegelman’s argument against the obstruction charge
mirrored those he “made against his convictions on virtually all the other counts
– that the evidence in this case was not perfect, that it relied too heavily on
circumstances and required the jury to draw inferences from those circumstances
that might have been drawn diff erently by diff erent jurors.”
      And then, this refutation of the basis of much of Siegelman’s appeal:

     "Siegelman’s contention throughout his brief that ‘there was no evidence’ to support
a particular inference too often meant merely that there was no evidence other than
Bailey or Young’s testimony,” the court wrote. “While Siegelman may not approve that
the testimony of coconspirators was suffi cient to support the jury’s findings of fact, the
jury was free to disregard or disbelieve it.
   They believed it.

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