Friday, June 25, 2010

Can the Government Get a Conviction on Bruce Weyhrauch Now?


Ed. Note--The post below is by Mark Regan, and focuses on the state of the prosecution's case against former State Rep. Bruce Weyhrauch (R.-Juneau) in the wake of the U.S. Supreme Court's rulings yesterday on the honest services fraud statute. Mark Regan's posts will appear in Times font, while I will continue to post in Georgia font.--Cliff Groh

From Mark Regan--

What sort of case can the Government now make out against Bruce Weyhrauch?

Pete Kott got thousands of dollars in inflated payments to his flooring business. Vic Kohring got wads of cash. All Bruce Weyhrauch may have gotten was a promise that VECO would talk with him about some future legal work.

Now that the Supreme Court has said that Weyhrauch's failure to disclose that promise isn't enough by itself for the Government to convict him of honest services mail fraud, one big question is, can it convict him of something else?

The indictment in Bruce Weyhrauch's case charged him with four offenses: an extortion count (Count 3), a bribery count (Count 5), an honest services fraud count (Count 7), and a conspiracy to commit extortion, bribery, and honest services fraud count (Count 1). (The other counts in the indictment are against former State Rep. Pete Kott (R.-Eagle River), who was charged in the same indictment.) In the Skilling case, the Supreme Court has now invalidated honest services fraud charges that depend on a failure to disclose something. That leaves pending the extortion and bribery charges, along with whatever honest services fraud charge there might be that can be made to look like a bribe or kickback.

In the proceedings just before Weyhrauch's trial, the Government identified a state legislative ethics statute, AS 24.60.030(e)(3), that might provide a standard for an honest services fraud claim. It provides:

(e) A legislator may not directly, or by authorizing another to act on the legislator's behalf,
* * *
(3) unless required by the Uniform Rules of the Alaska State Legislature, take or withhold official action or exert official influence that could substantially benefit or harm the financial interest of another person with whom the legislator is negotiating for employment.

The Government's extortion and bribery theories are that Weyhrauch unlawfully attempted to obtain a promise of contract work from VECO in exchange for voting VECO's way on the legislation. An honest services fraud claim based on AS 24.60.030(e)(3) presumably would say that Weyhrauch voted VECO's way while he was negotiating for employment.

How solid would those charges be? It depends on what evidence the Government and Bruce Weyhrauch would have been able to present at trial. Trial didn't happen on schedule, and any statements witnesses might have made haven't become public. The Government's trial brief is also quite unhelpful in showing what evidence the Government might have tried to present to support these claims if the case had indeed gone to trial in 2007 -- but it's still possible to look at the indictment for some clues.

The indictment claims, citing a May 4, 2006 letter from Weyhrauch to Bill Allen, that Weyhrauch was trying to get legal business from VECO at the same time that he was voting VECO's way on oil tax legislation (paragraphs 36-41), and that during a conversation that same day in the infamous Room 604 of the Baranof Hotel, Bill Allen and Rick Smith discussed whether Weyhrauch's letter was connected to Weyhrauch's willingness to vote VECO's way on oil taxes (paragraph 38). Kott, Weyhrauch, Allen, and Smith then worked together on oil tax legislation, and on May 9, Allen said to Smith that if the PPT tax came out at 20%, they would have to give Weyhrauch some contract legal work. (Indictment, paragraph 49.)

On May 19 -- during a period in which the House was not in session while legislators heard a lengthy presentation at another location on the proposed gas pipeline contract -- Weyhrauch set up a meeting with VECO in Anchorage for May 24. Before the meeting, Allen and Smith agreed to "string him out" with legal work. A few days after the meeting, Weyhrauch wrote a note to VECO looking forward to working with Allen and VECO in the future. (Indictment, paragraphs 51-57.)

Later, during the early June special session, Weyhrauch again voted VECO's way, and in a conversation with Bill Allen Ben Stevens agreed with Allen that Weyhrauch had voted with VECO because Bill Allen had said that VECO would give Weyhrauch some contract work. (Indictment, paragraphs 60-62.)

But there is no allegation that VECO ever did give Bruce Weyhrauch any contract work, let alone give him the kind of money-for-no-work payoff that it gave Pete Kott and Vic Kohring. Also absent from any of this is any statement by Weyhrauch himself, even a hearsay statement, tying his vote to his desire to do work for VECO. Nor is there any suggestion that Bruce Weyhrauch might have said to Bill Allen, as Pete Kott said to Allen, that "I had to cheat, steal, beg, borrow, and lie" in order to face Allen, or that Bill Allen might have responded to Bruce Weyhrauch, as he responded to Pete Kott, "I own your ass." (Indictment, para. 45.) And the indictment does not quote any VECO document, or make any direct claim about any particular conversation between VECO officials and Weyhrauch, where a promise of future work might have been made in exchange for a commitment by the legislator to vote a particular way. In fact, one paragraph of the indictment says that at the May 24, 2006 meeting in Anchorage, Weyhrauch and VECO discussed jobs and discussed oil taxes -- but it is probably significant that this paragraph does not try to link the two topics beyond saying that they were both discussed at that meeting. (Indictment, paragraph 54.) If the conversation indicated a quid pro quo, you'd expect that particular paragraph to have said so.

So the quid pro quo that justifies extortion and bribery cases is hard to find among these facts. It might be easier to find support for a charge that Weyhrauch violated the Alaska legislative ethics statute, AS 24.60.030(e)(3), by negotiating for work with VECO at the same time he was taking official action to support VECO on oil taxes -- but would that be close enough to bribery or kickbacks to satisfy the Supreme Court's new standard for honest services fraud federal prosecutions?

The Government has the first crack at deciding what to do, and if it decides to proceed, the Ninth Circuit and Judge Sedwick will have to try to sort things out.

--Mark Regan

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