The United States Attorney's Office for the Northern District of California filed a dismissal last week of its remaining charges against former San Francisco Giants slugger and outfielder, Barry Bonds, as reported by the Associated Press. Bonds was convicted in April on one count of obstruction of justice. However, a mistrial was declared on the three counts of perjury against Bonds.
The dismissal has spared Bonds a second trial. However, the trial judge has upheld his obstruction conviction. Bonds' recommended sentencing range is 15 to 21 months' imprisonment, but the court may impose a lesser sentence at sentencing.
Former San Francisco Giants slugger and outfielder Barry Bonds was convicted last Wednesday on one count of obstruction of justice, after the U.S. District Court for the Northern District of California declared a mistrial on the three perjury counts against the former player.
The Associated Press has reported that U.S. Attorney for the Northern District of California Melinda Haag has informed the media that the Government may seek a second trial of Bonds as a result of the dismissed counts. The Court has scheduled a hearing on May 20 to determine whether or not the Government will seek a second trial.
The trial of former San Francisco Giants outfielder Barry Bonds on four counts of perjury and one count of obstruction of justice commenced yesterday in the U.S. District Court for the Northern District of California according to the San Francisco Chronicle. The charges against Bonds arise from his statements to a grand jury in 2003 in relating to an investigation into the Bay Area Laboratory Co-Operative (BALCO) in Burlingame, California, and steriods. Bonds told the grand jury that he never knowingly used banned drugs. The transcript of his December 4, 2003, testimony may be read in full here. Jury selection took place yesterday.
The jurors' names will be kept secret until the conclusion of the trial (however, the jury includes at least one Oakland Athletics fan). Opening statements are expected to take place today, followed by a hearing concerning Bonds' former weight trainer, Greg Anderson. Anderson pled guilty in the BALCO case and has served a year in prison for refusing to cooperate in the investigation of Bonds. The prosecution has subpoenaed him as a witness at trial, however Anderson has stated his intention not to testify against Bonds. The Court has stated that it will rule Anderson in contempt if he refuses to testify and hold him in prison for the duration of the trial.
Bonds, who played as a left fielder for the Pittsburgh Pirates from 1986 to 1993, and for the Giants from 1993 to 2007, holds Major League Baseball records for home runs in a single season, is an all-time leader in walks and intentional walks, and is also the recipient of 14 All-Star awards, 8 Golden Glove awards and 7 Most Valuable Player awards.
Since the prosecution of former Illinois Governor Milorad R. “Rod” Blagojevich has rested its case, we take the opportunity to recap the testimony and evidence in the first 23 days of the trial, drawing upon the excellent coverage of the Chicago Tribune’s “Blagojevich on Trial” Blog, and also WGN-TV Team 9's Trial Coverage. For the serious follower of the trial, the U.S. District Court for the Northern District of Georgia has also made available virtually all the pleadings, exhibits and recordings from the trial to the public, which may be perused here.
Thursday, June 3, 2010: The trial of Blagojevich and his brother and co-defendant, Robert Blagojevich, begins in the U.S. District Court for the Northern District of Illinois in Chicago, U.S. District Judge James Zagel presiding. Blagojevich’s attorney, Sheldon Sorosky confirms that the defense has subpoenaed numerous individuals, including U.S. Senator and Senate Majority Leader Harry Reid, U.S. Senator Dick Durbin, U.S. Representative Jesse Jackson, Jr., White House Chief of Staff Rahm Emanuel and Presidential advisor Valerie Jarrett. Judge Zagel denies petitions from the media to disclose the identities of jurors. Jury selection begins.
Friday, June 4, 2010: Jury selection continues. Blagojevich speaks to media and states that he has been falsely accused, and will be vindicated.
Monday, June 7, 2010: Jury selection continues.
Tuesday, June 8, 2010: A jury of 11 women and seven men—12 jurors and six alternates—is selected. The defense files motion alleging that Blagojevich’s First Amendment right to free speech was “criminalized.” Judge Zagel rules that no “twittering” is allowed in the courtroom. Assistant U.S. Attorney Carrie Hamilton give opening statement for prosecution. Hamilton argues that Blagojevich had more than $200,000 in debt and viewed the election of former U.S. Senator for Illinois Barack Obama as President of the United States as a financial opportunity. The prosecution alleges that Blagojevich sought to be appointed Secretary of the U.S. Department of Health and Human Services (HHS) and for millions of dollars in donations to a charitable organization which Blagojevich would control in exchange for appointing Valerie Jarrett to Obama’s vacant Senate seat. Hamilton argues that Blagojevich later sought $1 million from Jesse Jackson, Jr., in exchange for the appointment. Blagojevich viewed the vacancy as a “golden ticket.” The prosecution also argues that Blagojevich, convicted real estate developer Antoin “Tony” Rezko, Christopher Kelly and Blagojevich’s former Chief of Staff, Alonzo “Lon” Monk, conspired to extort kickbacks from companies seeking business from the state. Rezko allegedly made payments of $12,000 per month to Blagojevich’s wife, Patti Blagojevich. Blagojevich is also alleged to have extorted tens of thousands of dollars from Children’s Memorial Hospital in Chicago in exchange for obtaining reimbursements for the hospital, and to have attempted to extract campaign contributions from then-U.S. Representative Rahm Emanuel in exchange for a $2 million grant to a school in Emanuel’s district. Blagojevich attorney, Sam Adam, Jr., argues that Blagojevich didn’t receive a dime from the alleged scheme. Adam argues that Blagojevich was naïve in trusting others, including Rezko.
Wednesday, June 9, 2010: FBI agent Daniel Cain testifies regarding the investigations of Rezko and Blagojevich. Lon Monk, Blagojevich’s former campaign manager, who pled guilty to conspiring to solicit a bribe and is cooperating with the government, testifies to Blagojevich’s fundraising in the 2002 campaign. Monk testifies that Blagojevich, Rezko, Chris Kelly and Monk had a meeting in 2003 to discuss how to profit from action by the state. Rezko listed nine money-making ideas and the participants agreed to divide the profits equally. Kelly, who owned a roofing company, committed suicide in 2009, and the Court prohibited any mention of him to the jury. Monk testifies that he and Rezko also gave their opinions on who should receive senior positions in Blagojevich’s administration. He testifies that Blagojevich and Rezko obtained a $500,000 kickback from lobbyist Robert Kjellander in exchange for selecting Bear Stearns to sell a $10 billion pension bond deal in 2003. Monk testifies that Rezko tried to start an insurance company using his connections, the profits from which would be divided with Blagojevich and Monk.
Thursday, June 10, 2010: Lon Monk testifies regarding Blagojevich’s appointments of donors donating $25,000 or more to State boards and commissions. He states that Rezko allegedly “hired” Patti Blagojevich and paid her a $150,000 retainer, despite the fact that Ms. Blagojevich performed no work. Monk testifies that Blagojevich entered an agreement with Illinois State Senator and Senate President Emil Jones to not override Blagojevich’s veto of a bill which would have limited fundraising in campaigns for governor. The prosecution plays a recording of a telephone conversation between Blagojevich and Monk about getting $4 million in campaign fundraising, with Blagojevich yelling at Monk to contact prior donors to send $5,000 or whatever they can send. Prosecutors play recordings of telephone conversations, including a conversation in which Blagojevich and Monk discuss Jesse Jackson, Jr. Monk testifies that Blagojevich instructed him to attempt to obtain a $500,000 donation from Jerry Krozel, head of a road construction association, in exchange for announcing $5 billion in toll road funding, before a new ethics law banning such large donations took effect.
Photo from Cleveland.com
Monday, June 14, 2010: Monk testifies that he felt pressure to bring in campaign funds. He testifies that Blagojevich met with him in 2008 and said that he wanted to meet with race track owner John Johnston and obtain a $100,000 donation, allegedly in exchange for signing legislation which would save money for Illinois race tracks. The defense cross-examines Monk. Michael Ettinger, attorney for Robert Blagojevich, gets Monk to admit that Rod kept his brother out of the political end of things, including the meeting concerning Johnston. Sam Adam asked Monk whether it was a crime for a politician to accept a campaign contribution for state action if there was no quid pro quo, or something offered in exchange. Monk subsequently responded that it was not. Adam questioned Monk regarding whether Blagojevich had ever indicated that he would not sign the race track legislation if Johnston did not make a campaign contribution.
Tuesday, June 15, 2010: Blagojevich’s counsel continue their cross-examination of Monk. Monk admits that he occasionally lied to Blagojevich in order to stop Blagojevich from bothering him about fundraising. Monk repeatedly admits that he does not remember specifics of meetings with Blagojevich, Rezko and Kelly. The defense points out that Monk accepted several $10,000 cash gifts from Rezko allegedly in exchange for his involvement in the scheme, however Monk had signed a statement for the prosecution stating that the amounts were gifts with no quid pro quo attached. Monk admits that he lied to the FBI in an earlier interview. The defense tries to suggest that Blagojevich knew nothing about the cash or illegal acts involving Monk and Rezko. Monk admits that Blagojevich never told him he would withhold the funding for the toll roads if he did not receive a contribution. David Abel, a public finance quantitative technician, testifies regarding a meeting with Blagojevich, Kelly and staffers regarding the $10 billion pension bond issue. Abel admits on cross-examination that Bear Stearns was rated as highly qualified to do the deal. Vincent Mazzaro, a member of Bear Stearns’ municipal bond department, testifies that the manager of the department would have hired Robert Kjellander, who allegedly paid a $500,000 kickback to Rezko to ensure that Bear Stearns was selected as elite manager for the sale of the bonds. Kjellander would receive a “success fee,” in this case $809,000. Joseph Aramanda, a friend of Rezko’s, testifies that Kjellander loaned him hundreds of thousands of dollars at Rezko’s direction to support Papa John’s pizza franchises which Aramanda had purchased from Rezko. Aramanda testifies that Kjellander did not ask for any documentation for the loan. He testifies that Rezko contacted him following his receipt of the loan proceeds and asked him to pay various individuals and entities whom Rezko owed money to. Aramanda also testifies that Rezko told him he was involved in appointments for cabinet positions in Blagojevich’s administration, and offered Aramanda a position in the Illinois Department of Aging. Rezko also approached Aramanda about being a middleman between the Illinois Teachers Retirement System (TRS) and investment firms seeking to invest TRS monies. Aramanda testified that Rezko introduced him to Sheldon Perkin, another middle man, and that he and Perkin received $375,000 each from a $50 million investment deal between TRS and Glencoe Capital.
Wednesday, June 16, 2010: Joseph Aramanda testifies that Sheldon Perkin paid him $375,000, in three installments, on the TRS/Glencoe Capital, deal despite the fact that he did no work on the deal. Rezko asked Aramanda to divert $50,000 from the first installment to the sister of one of Rezko’s business associates. Aramanda testifies that Rezko told him that he could earn at least $1 million a year in finder’s fees for securing state pension monies for investment firms. Rezko told Aramanda that he would take a cut of the fees paid to Aramanda and would share them with Blagojevich, Lon Monk and Chris Kelly. Armanda stated that when Rezko told him about the arrangement, he became uncomfortable and withdrew from the agreement. Blagojevich attorney Michael Gillespie questions Aramanda about making a $10,000 contribution in 2004 to Barack Obama’s campaign for the U.S. Senate. The prosecution plays audio recordings of telephone conversations in which Blagojevich discusses the interest Illinois businessman Blair Hull, who donated $467,000 to Blagojevich’s 2002 campaign, in the vacant U.S. Senate seat. Blagojevich calls Hull “an idiot.” IRS agent Shari Schindler testifies that, in investigating Rezko, the government found monies going to Chris Kelly and River Realty, a company affiliated with Patti Blagojevich. Joseph Cari, a former national Democratic fundraiser, testifies that he had a conversation with Blagojevich in 2003 regarding Blagojevich running for president, in which Blagojevich told him he would approach businesses for contributions in exchange for awarding state business. The prosecution requests a gag order for Blagojevich and his counsel to prevent them from making public comments and influencing the jury. Judge Zagel states that he will take up the request later.
As reported in the Wall Street Journal and virtually everywhere else, Morgan Stanley has joined Goldman Sachs as the latest target of the federal government's criminal investigation of financial firms relating to the financial crisis which began in 2007, under the government's theory of criminality of failing to disclose to investors that the firms were "betting" on the failure of certain collateralized debt obligations, or CDOs. According to Federal prosecutors, Morgan Stanley designed CDOs, while at the same time Morgan Stanley's trading desk allegedly placed bets that their value would decrease. Similar to the government's investigation of Goldman Sachs, the investigation, headed by the U.S. Attorney's Office for the Southern District of New York, is focusing on whether Morgan Stanley made proper representations to investors about its role.
The investigation has focused in particular on two investments created in 2006, named after former U.S. Presidents James Buchanan and Andrew Jackson, known as the "Dead Presidents" deals by traders. Each deal issued approximately $200 million in bonds. Morgan Stanley did not market the deals to customers--the Jackson deal was underwritten and marketed by Citigroup and the Buchanan deal was underwritten and marketed by UBS AG. Citigroup has stated that it is cooperating with the government in the investigation.
However, as in the investigation of Goldman, prosecutors face an uphill climb against numerous obstacles and defenses. Morgan Stanley did make money on its "Dead Presidents" deals, however it lost $9 billion overall on mortgage-backed securities in 2007. Morgan Stanley has informed the media that it did not mislead investors, and that it has examined the "Dead Presidents" transactions and that it does not believe that the investigation has any substance. The allegations are based on documents which Morgan Stanley voluntarily provided to the U.S. Securities and Exchange Commission in response to a subpoena.
Both the Goldman and Morgan Stanley criminal investigations were the result of a civil fraud investigation of a dozen Wall Street firms begun by the SEC in 2009. Analysts have stated that all Wall Street investment banks have been receiving subpoenas about CDOs and CDO marketing. The SEC has been inquiring with firms regarding whether any of their clients were betting against CDOs.
Charging two or more distinct offenses in a single count is what the law refers to as duplicity. See generally 1 Wright, Federal Practice and Procedure, § 142 (2nd ed. 1982); 8 Moore’s Federal Practice, § 8.03 (2nd ed. 1984). The test for determining whether separate statements in a single false statement count constitutes a single offense turns on whether each alleged false statement in a given count is substantially the same as the others. United States v. Graham, 60 F.3d 463 (8th Cir. 1995); United States v. Bins, 331 F.2d 390, 393 (4th Cir. 1961)(“the test for determining whether several offenses are involved is whether identical evidence will support each of them, and if any dissimilar facts must be proved, there is more than one offense”). In a fascinating case against a sitting federal district court judge, the Ninth Circuit noted that the vice of a duplicitous indictment is that a conviction could be obtained without a unanimous verdict as to each of the false statements in a particular count. United States v. Aguilar, 756 F.2d 1418, 1420 (9th Cir 1985).
Multiplicity is the charging of a single offense in several separate counts. Id.
In Bonds the government charged a number of alleged false statements in a single count in the original indictment (available here). To illustrate the problem of multiplicity, we'll examine count one of the original indictment, which was later turned into 4 counts in the Superseding Indictment. In Count One, the government charged the following answers as a false statement (the alleged false statement is underlined):
Q. Let me be clear about this. Did he (Anderson) ever give you anything that you knew to be a steroid? Did he ever give a steroid?
A. I don't think Greg would do anything like that to me and jeopardize our friendship. I just don't think he would do that.
Q. Well, when you say you don't think he would do that, to your knowledge, I mean, did you ever take any steroid that he gave you?
A. Not that I know of.
Then, the government also charged in Count One, the following answers in the same false statement count (later set out as Count 2 of the Superseding Indictment (SSI)):
Q. So, I got to ask, Mr. Bonds. There's this number associated on a document with your name, and corresponding to Barry B. on the other document, and it does have these two listed anabolic steroids as testing positive in connection with it. Do you follow my question?
A. I follow where you're going, yeah.
Q. So, I guess I got to ask the question again, I mean, did you take steroids? And, specifically this test is in November 2000, were you taking steroids - -
A. No.
Q. - - or anything like that?
A. No, I wasn't at all. I've never seen these documents. I've never seen these papers.
Then, the government went on to charge in Count One, the following answers in the same false statement count (Count 3 of the SSI):
Q. So, starting in December 2001, on this page, again, there's a BB here, which obviously are consistent with your inititals, correct?
A. He could know other BBs.
Q. Correct. But BB would be your initials, is that correct?
A. That's correct. ***************************************************************
Q. Okay. Were you obtaining testosterones from Mr. Anderson during this period of time?
A. Not at all.
And, finally, in the same count, the government charged the following answers in the same false statement count (Count 4 of the SSI):
Q. In January 2001 were you taking either the flax seed oil or the cream?
A. No.
Q. And were you taking any other steroids?
A. No.
Following the defendant’s Motion to Dismiss and Reply (available here and here), the district court instructed the government to either elect which alleged false statements it would proceed under, or file a superseding indictment curing the defect.
The result of the superseding indictment (available here), each of the alleged false statements set forth above, has now become a separately charged count of the Superseding Indictment, so that the 4 paragraphs set forth above now comprise Counts One through Four of the Superseding Indictment. Similarly, Count Two of the original indictment was separated into 2 separate counts in the Superseding Indictment, Count Three of the original indictment was separated into 2 separate counts and Count Four of the original indictment is now Counts Nine through Fourteen of the Superseding Indictment. The last count of the original indictment (now Count Fifteen of the Superseding) still charges obstruction of justice. So, duplicity is where a single count joins two or more distinct and separate offenses into a single count and for Mr. Bonds, it resulted in a 15 Count Superseding Indictment.
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