Three Felonies A Day

How the Feds Target the Innocent

Harvey Silverglate

• Publisher: Encounter Books
• Year: 2011
• ISBN:
  9781594035487
• Topic: Law
• Subtopic: Criminal Law
• Index: Law

The average professional in this country wakes up in the morning, goes to work, comes home, eats dinner, and then goes to sleep, unaware that he or she has likely committed several federal crimes that day. Why? The answer lies in the very nature of modern federal criminal laws, which have exploded in number but also become impossibly broad and vague. In Three Felonies a Day, Harvey A. Silverglate reveals how federal criminal laws have become dangerously disconnected from the English common law tradition and how prosecutors can pin arguable federal crimes on any one of us, for even the most seemingly innocuous behavior. The volume of federal crimes in recent decades has increased well beyond the statute books and into the morass of the Code of Federal Regulations, handing federal prosecutors an additional trove of vague and exceedingly complex and technical prohibitions to stick on their hapless targets. The dangers spelled out in Three Felonies a Day do not apply solely to "white collar criminals,” state and local politicians, and professionals. No social class or profession is safe from this troubling form of social control by the executive branch, and nothing less than the integrity of our constitutional democracy hangs in the balance.

CHAPTER ONE

Reeling in the Great White, and Other Tales of Fishing for State and Local Pols

In column after column during the 1990s, Miami Herald columnist Carl Hiaasen obsessed over the “culture of corruption” besetting South Florida. One focus of his ire was Raul Martinez, the popular mayor of Hialeah, a heavily Cuban-American city just outside of Miami. Hiaasen was hardly a lone wolf howling in the wilderness: over the years Martinez would survive three corruption trials brought by the Florida U.S. attorney’s office. Yet even Hiaasen thought the feds should call it quits after the second trial, when jurors voted 11-1 for acquittal. “[N]ot because he’s innocent,” the crusading columnist assured his readers, but because “most Hialeah voters adore Raul,” having consistently returned him to office in spite of his legal travails. Still, all was not lost, in Hiaasen’s opinion. The unsuccessful trials against Martinez provided “valuable civics lessons, proving beyond any doubt that Hialeah is as relentlessly corrupt as everybody assumed.”¹

But was Raul Martinez “corrupt”? Or was he an ordinary local politician, even a pol of above-average skill and charisma, who fell prey to a fishing expedition by federal prosecutors hell-bent on using every legal tool in their arsenal to assert their authority over local political arrangements? The press, all too eager to parade its hard-boiled realism while mounting the pedestal of moral guardianship, rarely bothers to ask such questions about the motives of federal prosecutors and the real offenses of state and local political figures. And yet one day, the feds would come after the Fourth Estate too, armed with many of the same statutes and misplaced legal arguments it began applying in the 1980s to pols.

Martinez was and remains something of a rarity in South Florida: a Cuban-American Democrat who garners political support from a broad spectrum of the area’s enormously diverse electorate.² He came to Hialeah as a child, then married and had two children. After founding a Spanish-language weekly newspaper with his father, Martinez, like many successful professionals in that fast-growing part of the state, dabbled in real estate development. Elected to the Hialeah City Council in 1977, the ambitious Martinez quickly challenged the Democratic machine, which was run by then-mayor Dale Bennett. Martinez won the mayoral election, and his political career took off as he gained the trust and support of many segments of the community. He attracted a wide array of political supporters who felt that they wanted to hitch a ride on his star. It was widely thought that he was being groomed to run for the seat of legendary long-time Democratic Congressman Claude Pepper, with whom Martinez had developed a friendship. Such was Martinez’s popularity that in 1982 the Florida legislature established new district lines that placed Martinez’s residence in Representative Pepper’s district.

On the Republican side, leaders were grooming then-State Representative Ileana Ros-Lehtinen. She was the daughter of a Cuban immigrant, Enrique Ros, who was a leader of Miami’s large, predominantly Republican, and vociferously anti-Castro Cuban community. It would be an uphill climb for any Democrat to beat Ros-Lehtinen for Claude Pepper’s seat, but Martinez, an evident up-and-comer, seemed poised to do precisely that.

State and federal investigators had long looked into allegations of corruption among local political bodies in Hialeah. In early 1985, The Miami Herald published a series of articles claiming that members of the Hialeah Zoning Board and City Council were “selling” their votes to developers in exchange for receiving lots or shares in the projects. As bad as that sounds, it’s important to put these allegations in context. Florida laws governing local political office-holders are similar to those in most states. Local politicians are allowed, if not encouraged, to maintain private careers and businesses to support themselves and their families. Salaries paid to such political figures typically are modest, necessitating that anyone other than those with inherited or earned wealth maintain an income-generating occupation while in public office. In the 1980s, members of the Hialeah Zoning Board were unsalaried volunteers, while city councilors were paid a mere $2,600 per year, and the mayor’s salary hovered around $50,000. Since such officials are paid so little in their elected positions, it might well be seen as a perk of office that one is allowed to parlay one’s importance and prestige into increased business success. At the very least, state and local laws and political culture tolerate local officials’ engaging in private business dealings that almost certainly benefit from their holding municipal office, as long as they do not engage in official acts, such as voting on municipal bodies on matters that directly affect their own financial interests. In an area where real estate development was exploding and where local city councils and zoning boards maintained dockets crowded with petitions for enactment of or relief from laws, it was perhaps inevitable that Martinez’s civic life would fuse to some degree with his professional work.

What’s crucial to bear in mind here is that states and municipalities do prescribe limits to these relationships, and in fairly straightforward terms. Typically, state and municipal conflict-of-interest laws prohibit public officials from playing both ends of a project or business venture. Moving to more serious criminal infractions, bribery takes place when the businessman initiates the idea of a payment, and it is extortion when the public official demands payment to refrain from harming the citizen’s interests.

In 1989, a state investigation of Martinez had just closed, finding nothing in the way of bribery or extortion to pin on the mayor. Still, the federal investigation continued and, after the death of Representative Pepper, the feds ramped it up. “The timing raises further questions about the motivation of the prosecution,” wrote The Miami Herald. The United States Attorney at the time was Dexter Lehtinen, whose wife expressed interest in replacing Pepper when he had fallen ill.³ Sure enough, Martinez dropped out of the congressional race when the corruption investigation made its way into the press. And Ileana Ros-Lehtinen sought and won Pepper’s seat after his death.

Lehtinen did not want for doubters and critics. A “high-level administration source” was quoted in the Herald as saying that “of all the U.S. attorneys around the country, he was by far the one we scratched our heads about the most.”⁴ There were reports that the seriously wounded Vietnam War vet motivated his assistant prosecutors to win cases “by waving a plastic model of a Kalashnikov AK-47 assault rifle at a full staff meeting and handing out printed slogans: ‘No Guts, No Glory.’” Stories circulated about Lehtinen’s frequent volcanic tirades at staff meetings and elsewhere.⁵ Writer T. D. Allman described Lehtinen in Vanity Fair as a Captain Queeg-like character who, a former subordinate told the writer, “runs this office the way Noriega ran Panama, through terror, fear, and intimidation.”⁶

To quiet his critics while his wife ran for one of the state’s highest offices, Lehtinen claimed that he was stepping out of the Martinez investigation and prosecution, leaving the decisions to the rest of his staff. And decide they did: On April 3, 1990, Martinez was charged in a complex, 64-page indictment alleging, at its center, a “racketeering conspiracy” and the crime of extortion under the federal Hobbs Act.⁷

For the most part, the technique by which the alleged extortion was accomplished was that real estate developers cut Martinez in on deals by selling him parcels of property at below-market prices. A typical deal for which Martinez was indicted was the Marivi Gardens project. Silvio Cardoso, star government witness, was an unsuccessful candidate for City Council in 1977. In the next election, he won after allying himself with the then-mayor and political boss Dale Bennett, who had built up a formidable political machine. When Martinez challenged and beat the Bennett mayoral machine in 1981, Cardoso switched sides and moved into Martinez’s camp. Cardoso testified that his change of allegiance occurred because “I saw he [Martinez] was doing a good job for the city, and I worked with him. We worked on a lot of things together, the mutual respect for each other broadened where we have developed a friendship.”⁸

The following year, Cardoso began to take advantage of his relationship with the new mayor. He decided to purchase and develop a plot of land named “Marivi Gardens.” He needed a zoning variance to build more extensively on the property. Not surprisingly, Cardoso approached Martinez to see if he would be his partner. Cardoso explained that if he and the mayor became business partners, it would cement their friendship. He also believed that if the popular mayor were a partner in the project, it would attract buyers for the completed units. Martinez indicated his interest. Cardoso signed the purchase contract for the undeveloped property in January 1983.

Cardoso’s application for the zoning variance for Marivi Gardens needed a recommendation from the Zoning Board to the City Council. When the matter came up before the Council, Cardoso, a member, abstained because of his interest in the project. The variance was allowed. Cardoso followed through on his purchase of the property in December 1983. Earlier that year, Martinez told Cardoso that he wanted to purchase one of the lots, but Cardoso replied that he intended to give, not sell, the lot to his newfound friend and political ally.

Cardoso further testified that he and Martinez never discussed anything that Cardoso expected Martinez to do. And, it must be recalled, Cardoso by this time was an immunized cooperating witness for the government, under pressure to help the prosecution. Nonetheless, he never said that Martinez had ever threatened him in any way. Nor did Martinez threaten to veto Cardoso’s zoning applications, even though a veto was within his power.

Cardoso denied that Martinez’s official power to obstruct the project had any reason to do with his wanting to give the mayor the plot. Rather, his motive was more generalized: “I felt it would be to my benefit politically, and economically in the future.” Cardoso also noted that, if he cemented his business and personal relationship with Martinez, the mayor would refer real estate deals in Hialeah to Cardoso, because Martinez “did not have the time” to do them himself. “I would basically broker the deal.”

As a result, Cardoso transferred the gift lot to Martinez, who duly declared it as income on his 1984 tax return. Three years later, Martinez sold the lot for $45,000. As Cardoso had anticipated, when he ran for election to the City Council in 1983, Martinez not only contributed to his campaign and helped get others to do so, he also escorted the candidate around Hialeah’s campaign trail. Martinez even advised on the preparation of campaign literature. Cardoso was right: A business and friendship relationship with a popular and successful public official was not bad for business or political life.

Another government witness, Renan Delgado, testified similarly in connection with another real estate deal, Steve’s Estates. Delgado sold property to Martinez on favorable terms, explaining that Martinez provided useful advice and assistance in his business. Delgado elaborated:

Everybody wanted to be friends with the [mayor]—in the city where you work. He’s my friend, but you also want to be friends, you know, for a lot of reasons. If you’re in business in a city, in any city, you want to be friend [s] with your people that run the city.

Delgado’s last sentence summed up quite succinctly the reigning business ethos in most municipalities. He explained that while he would have wanted to receive more of the money on the deal and give Martinez a less favorable price for the lots the mayor purchased, his decision to accept less money was “voluntary.”

At this point in the story, it’s necessary to step back and take a look at the law the feds used to go after Martinez. The Hobbs Act was enacted in 1951 during a period of public outcry over organized crime, essentially to deter extortionate threats by both private thugs and public officials seeking payoffs. The situation of public officials is, of course, different from that of gangsters. The latter could threaten citizens with all manner and kinds of violence to extract payments or property. Corrupt public officials have a different tool to induce citizens to fork over money: the power inherent in political office by which officials can enrich or ruin private parties seeking government approval, assistance, or forbearance on a project.

Public sector extortion is in another way very different from extortion involving the neighborhood leg-breaker. In our political system, citizens who run for public office often have to raise significant sums of money to finance their campaigns. Campaign contributors sometimes donate out of a sense of civic virtue. Often their motive has something to do with official or unofficial legislative or executive support, or simply “greasing the wheels” for a project.

Under federal law, bribery of state officials (typically payments initiated by the citizen) is not a distinct federal crime, although it might be punishable under circumstances in which the citizen uses the mails or other tools of interstate commerce to carry out a violation of state law. Only extortion engaged in by the official violates the Hobbs Act.⁹ In theory, this law is meant to prevent and punish the disruption to interstate commerce, over which the constitution gives the federal government much control, when local officials impede economic and commercial activity by blocking projects unless paid off. A major purpose of such regulation of interstate commerce has been to remove untoward burdens on the free flow of commerce. A state cannot, for example, selectively impose a tax on products made in and exported from another state, as this would disadvantage and hence slow the flow of goods from one state to another. And so, in theory, it seems reasonable for the federal government to forbid state and local officials from superimposing a “corruption tax” on economic activity.

The trouble commenced because the Supreme Court interpreted the Hobbs Act in a way that eliminated any meaningful distinction between extortion and bribery. It regards payment to a state or local official as inherently a product of the official’s position and power. This becomes a serious problem for local officials who choose to continue their businesses and professions while holding public office, as we shall see in the Martinez case. Indeed, the prosecution of Raul Martinez by Dexter Lehtinen’s office demonstrates the ways in which the lack of clarity inherent in the Hobbs Act can be a prescription not so much for keeping interstate commerce free of debilitating corruption, but rather for imposing federal tyranny over local political systems and, not so incidentally, evening political scores and affecting electoral outcomes.

At bottom, the prosecution’s case at the trial was all over the place: The mayor had used, or taken advantage of, or merely benefited from his official position in order to coerce, or accept, financial tribute from those whom he had the power to hurt or to refrain from helping. A delicate dance was played out, the feds alleged, between a fawning, sycophantic, and generous citizen-businessman, and a powerful local pol who remained in private business during his term in elective office and did not wall himself off from projects requiring government approvals.

In their lunge at Martinez, the feds also employed a technique dubbed “ladder climbing,” once engaged in sparingly but now in greater, indeed routine, use. The idea is simple and operates much like it sounds: The feds put pressure on those in the lower reaches of the system, here, the citizen businessmen, in order to get them to testify against those above them on the ladder. Those who do not readily cooperate are threatened with prosecution, and they then face a choice between serving a long prison term or giving testimony deemed helpful to the prosecution of higher-ups. Some are actually prosecuted and become cooperative witnesses just before their trials, or after conviction and before sentence. Sometimes it takes an actual heavy sentence to coerce the witness.

The technique used to pressure witnesses in the Martinez case was a variation on this theme. Each of the developer “victims” of Martinez’s alleged abuse of his official powers was deemed not only a victim of Martinez’s extortion, but a co-conspirator in the criminal enterprise. And each was given immunity by Lehtinen’s office in exchange for testimony. Such immunity was necessary to get the cooperation and testimony of the “victim” of the extortionate activity of the mayor. Without it, the victim-witness could incriminate himself by testifying and admitting to his role in giving the mayor a cut of the projects in exchange for official favors—at the very least a possible state bribery offense. Sometimes witnesses seek immunity in exchange for their cooperation, but at other times immunity is imposed on them by a prosecutor who obtains an “immunity order” from a judge. The bottom line of an immunity order is that nothing the witness says in his or her testimony can be used by a prosecutor or court in a criminal case against the witness.

The defense’s case consisted largely of cross-examining the government’s witnesses to demonstrate that none of them was ever threatened by Martinez, nor was anyone offered zoning help in exchange for any financial advantage conferred on the mayor. Importantly, the defense pointed out to the jury that in Hialeah, as in most of Florida at the time, local political officials were expected to maintain outside employment and business interests. Indeed, part of Martinez’s defense was precisely that he was on the way up, and therefore local business people vied to associate themselves with him. The immunized witnesses who testified for the government were hardly alone in wanting to hitch themselves to the Martinez political star. As one Florida House of Representatives member testified in the defense case:

Mr. Martinez was so highly regarded in all parts of Dade County. He was one of the few Hispanics because he was...

Table of contents

• Praise
• Title Page
• Dedication
• Preface
• Foreword
• Introduction
• Three Felonies a Day
• CHAPTER ONE - Reeling in the Great White, and Other Tales of Fishing for State ...
• CHAPTER TWO - Giving Doctors Orders
• CHAPTER THREE - The Unhealthy Pursuit of Medical Device and Drug Companies
• CHAPTER FOUR - Following (or Harassing?) the Money
• CHAPTER FIVE - Accounting for the Perils Facing Business Support Services: The ...
• CHAPTER SIX - Lawyers: Government Offense Against the Best Defense
• CHAPTER SEVEN - Doing Their Duty (or Committing Espionage?) and Other Media ...
• CHAPTER EIGHT - National Security: Protecting the Nation from Merchants, ...
• CONCLUSION
• Acknowledgements
• ENDNOTES
• INDEX
• Copyright Page