Keeping Up With The Manhattan Contrarian: Sheldon Silver Conviction Reversed

Those of you living outside New York may not be familiar with the name Sheldon Silver.  Until January 2015, Silver, a Democrat, was the Speaker of the New York Assembly -- effectively the second most powerful politician in New York State after the Governor.  That's when our then-U.S. Attorney Preet Bharara launched his crusade to "clean up" New York State politics by issuing back-to-back charges against Silver and also against Silver's Republican counterpart as Majority Leader of the State Senate, Dean Skelos.  The charges against Silver came down in January 2015.  In November of that year he was convicted, and in May 2016 he got a 12 year sentence.  However, he has remained free on bail pending his appeal.

Yesterday the Second Circuit Court of Appeals reversed the conviction.  Here is a copy of the decision.  

Of course, if you have been a reader of the Manhattan Contrarian, you will not have been at all surprised by the reversal.  On the occasion of the criminal complaint against Silver in January 2015, I took the opportunity to get the document and go through it carefully, leading to a long post on January 25, 2015 titled "Is Sheldon Silver A Criminal?"    The theme of the post was that just being a thoroughly and deeply corrupt pol -- and Silver certainly was that -- does not make you a federal criminal.  Becoming a federal criminal requires violating an applicable federal criminal statute, and in a way not protected by the Constitution.  This is a concept that U.S. Attorney Bharara could never seem to grasp.  (Nor can a single person in the mainstream media seem to grasp the same concept with regard to President Trump.  Really, is it that complicated?)  

From my January 2015 post:

The fact that Silver is completely corrupt does not mean that Bharara has charged him with anything that does or should constitute a crime.   Here's a copy of the prosecutors' Complaint setting out the charges against Silver.  My main take is that there is almost nothing there.

That post gives the tortured history of the federal criminal law in the context of political corruption.  Silver was prosecuted -- as had become the norm in political and corporate corruption cases -- under a statute making it a crime to cause the public to suffer "depriv[ation] . . . of the intangible right of honest services."  (18 U.S.C. Sec. 1346)  What the hell does that mean?  Nobody could figure it out, least of all the Supreme Court.  In a 2010 decision reversing the conviction of Jeffrey Skilling (of Enron fame), the Supremes avoided declaring the statute void for vagueness by limiting its applicability to situations where the prosecutors could prove "bribery" or "kickbacks."  The "bribery" piece then refers you over to the federal statute defining that term (18 U.S.C. Sec. 201(a)(3)), which for a politician requires that he commit some "official act" in return for the bribe.

The main allegation against Silver was that a doctor referred him (in his capacity as a lawyer) some lucrative asbestos injury cases, and in return Silver had directed $500,000 of state funds to the doctor's research program at Columbia University.  But there were a number of weaknesses in the theory.  From the post:

  • There is no mention in the complaint that Silver or anyone on his behalf ever told Doctor-1 that he could get state money for his research if he referred cases to [Silver's law firm].  Rather, the Complaint states that Doctor-1 first asked Silver if [the law firm] would support his research, and Silver said it would not, and in the face of that Doctor-1 referred cases without any other promise (page 26).  The state money came several years later.
  • There is no mention of what portion, if any, of the $500,000 went to Doctor-1 himself.
  • After the state funding ended in about 2008, Doctor-1 continued to refer cases to [the law firm] through Silver

Faced with an iffy case, the prosecutors worked strenuously to obtain the squishiest possible jury charge on the question of what it means to do an "official act" in return for a bribe.  The trial court adopted the prosecution's proposed jury charge, over Silver's objection, as follows (from the Second Circuit opinion):

To satisfy this element [that Silver received bribes or kickbacks as part of a scheme to defraud], the Government must prove that there was a quid pro quo. Quid pro quo is Latin, and it means “this for that” or “these for those.” The Government must prove that a bribe or kickback was sought or received by Mr. Silver, directly or indirectly, in exchange for the promise or performance of official action. Official action includes any action taken or to be taken under color of official authority. 

And the prosecutor in his closing argument emphasized the point from the instruction that any act "taken under the color of official authority" could be the basis for a conviction.  Big mistake.  In June 2016 -- after Silver's conviction and at a time when his appeal was just getting started --  the Supreme Court reversed the conviction of former Virginia Governor Bob McDonnell under the same statute.  In McDonnell the Supremes restricted the definition of "official act" in the bribery statute to only include "a decision or action on a ‘question, matter, cause, suit, proceeding or controversy’” involving “a formal exercise of governmental power."  That's not consistent with the instruction given to the jury in Silver's case.  Thus the reversal.

Silver is by no means out of the woods.  The prosecutors are saying that they will re-try him.  You can evaluate for yourself whether his conduct as described above will meet the new legal test.  In my view, a jury could come out either way.

Even more interesting now is the question of whether the conviction of Dean Skelos will stand.  Skelos was Bharara's other big take-down of a major New York State pol.  Or maybe the prosecution of Skelos was the real point all along.  While Silver was the Democratic leader of the state Assembly, and with a huge legislative majority, Skelos was the Republican leader of the state Senate, with a razor-thin majority.  The Republican-controlled New York Senate stands as the only obstacle to the imposition in New York of every bad progressive idea that you can think of.  Thus, while the Silver prosecution involved no potential for altering New York's political balance, the Skelos prosecution very much did.  There was huge reason for the Democrats in New York -- including Bharara, a former staffer for U.S. Senate Minority Leader Chuck Schumer -- to want to take out Skelos.  Bharara indicted Skelos just a few months after Silver (May 2015), and the Skelos conviction was just a month after Silver's, in December 2015.  Skelos's appeal is still pending, and could be decided any day now.  

At least on the major charges in his indictment, Skelos has a far better case for reversal than did Silver.  Here is my summary of the charges against Skelos from a post on May 20, 2015:

[R]ead the charges against Skelos and you will find them remarkably thin.  This is all about Skelos allegedly trying to help his son Adam get some paying work.  There is no allegation of any money improperly going to Skelos himself.  The total amount of money alleged to have improperly changed hands seems relatively trivial -- $218,000 if I am counting correctly, and over a period of four years.  Of the $218,000, almost all, $198,000, is from a consulting contract that Adam got with an unnamed and uncharged environmental technology company.  Supposedly the company gave Adam the consulting gig because the dad got the company a $12 million contract with Nassau County.  But wait a minute -- Skelos didn't have any position with Nassau County.  The contract was subject to approval by the County Legislature, and got that.  These legislators may well all be friends of Skelos (his State Senate seat is in Nassau County), but it can't possibly be that he controlled this decision in any real sense.  That's rather a large gap in this thing.    

So how exactly could Skelos have done an "official act" on behalf of Nassau County, under the new McDonnell definition of the term, when he had no position or authority with Nassau County of any kind?  By comparison with Silver, Skelos stands a real chance of ultimate vindication.

It's getting more and more embarrassing for Bharara, as one after another of his high-profile convictions gets reversed.  (Don't forget that three of his six insider trading convictions after trial got reversed on appeal.)