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Monday, September 26, 2011

Could Bloomberg Be Prosecuted For Re-election Campaign Finance Fraud?

Could New York Mayor Mike Bloomberg face federal criminal charges over his campaign finance activities in his last mayoral campaign in 2009?

City Hall News is reporting, via Twitter (@cityhallnews) and later in its Tuesday online edition, that indicted Bloomberg campaign operative John Haggerty's defense lawyers claimed today in opening arguments in Haggerty's criminal trial that Bloomberg and certain campaign staff members received immunity from criminal prosecution from Manhattan District Attorney Cyrus Vance's office in exchange for testimony before a grand jury.

If true, this is a development that can seriously undermine Bloomberg's remaining time in office.  His credibility has already been severely shredded by the bovine desire for a third term, the CityTime scandal, the blizzard fiasco, Cathie Brown...and on and on. (For further reading, see this.)  

The federal criminal exposure could be significant.  There are plenty of federal laws on the books which can be used -- justly or unjustly -- as the predicate for a prosecution.  There is precedent for criminal charges, successful prosecutions and substantial jail time for elected officials caught in campaign finance-related crimes; see this article on the six-year federal prison sentence for former New Jersey Assemblyman / Perth Amboy, NJ mayor Joseph Vas.

There is nothing to indicate that Bloomberg -- or others -- were granted immunity from federal prosecution.  A wise lawyer (such as myself!) may have recommended seeking such protection, particularly if there is a parallel although undisclosed federal investigation ongoing, unless that guarantee of legal protection was not considered to be necessary.  This would indicate a possible back-channel assurance from the Obama / Eric Holder Justice Department that there would be no criminal prosecution, and I'm not saying this happened, this is only a theory.

Of course, such a theory would leave a highly-prominent (and very juicy career-making target) Bloomberg subject to official federal criminal prosecution if there were a regime change in Washington that was willing to press charges.

Another point:  The government cannot force anyone to testify, whether before a grand jury or a regular trial jury. This is true even if the government grants one immunity from prosecution.  One can still refuse, and go to jail for contempt (see: Barry Bonds' trainer/childhood friend Greg Anderson).

It is believed that ordinary people rarely testify in any grand jury investigation unless they are clear victims or, as is more common, they are vulnerable to being prosecuted and the state exploits that vulnerability to induce a person to testify in exchange for immunity from prosecution.  In other words, if you aren't a victim and the state wants you to testify, failing to testify as the state asks may result in the person being threatened with being charged with a crime. (At the very least, a non-cooperative person who refuses to testify as ordered can expect to be thoroughly investigated as the government searches for something to use against the non-compliant person, something that is prosecutable, so that it may have leverage.)

That means that Bloomberg's seeking out and accepting immunity is a strong indication -- if not a flat-out bonafide certainty -- that Bloomberg had very possible criminal liability in connection with the financing of his last campaign, and was given the choice of testifying or being prosecuted.  And as defense attorney Raymond Costello said in court Monday, while John Haggerty got charged, the others got a "get-out-of-jail-free card."
What if Bloomberg is totally innocent?  If Bloomberg did not have liability, or simply felt that either the chance of being prosecuted, or the factual or legal bases for such a prosecution were so weak as to warrant ignoring any threat, all Bloomberg would have had to do was to refuse to testify.

Instead, Bloomberg chose to testify.  Whether there was a prosecution hammer over his head, Bloomberg chose to testify.

The bottom line fact is this: Michael Bloomberg would not have testified without receiving assurances from the District Attorney that he would not be criminally charged in connection with facts or events surrounding the Haggerty case. 

You can judge for yourselves what this means.

Eric Dixon is a New York lawyer who helps people handle the stress of investigations, including criminal investigations and prosecutions, and handles complex investigations and legal analyses including those in the course of attempting to exonerate the wrongfully accused.

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