Metropolitan News-Enterprise


Thursday, October 20, 2011


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Court Orders Hearing for Man Convicted of Bribing Congressman




A former defense contractor convicted of bribing a member of Congress is entitled to a hearing on whether immunity should have been granted to a potential defense witness who would have contradicted testimony presented by prosecutors, the Ninth U.S. Circuit Court of Appeals ruled yesterday.

The judge largely rejected contentions by Brent R. Wilkes, in particular his challenge to the use of a federal statute making it a crime to fraudulently deprive the citizenry of the “honest services” of a public official.

Wilkes was convicted on 13 counts stemming from payments of cash and other benefits to Randy Cunningham in exchange for the congressman’s assistance in procuring contracts. The former Republican representative from San Diego was sentenced to more than eight years in prison after pleading guilty to fraud charges, while Wilkes drew a 12-year sentence and was fined $500,000 and ordered to forfeit more than $636,000.

Cunningham is reportedly due to be released in 2013.

Wilkes spent 11 months in custody before being released on bail pending appeal, after the Ninth Circuit said he had raised a substantial question of law or fact that was likely to result in a favorable ruling.

Newspaper Expose

Also sentenced to prison as a result of the scandal were Kyle “Dusty” Foggo, a longtime friend of Wilkes who drew a 37-month sentence after admitting he steered a CIA contract to him, and Mitchell Wade, who once worked for Wilkes as a consultant. Wade later started his own contracting firm, and paid, by his admission, more than $1 million to Cunningham before the San Diego Union-Tribune ran a news story exposing the scheme.

Wade then began cooperating with prosecutors and eventually received a 30-month sentence.

Wilkes was indicted in 2007. The indictment charged that he and his company, Automated Document Conversion Systems—a maker of software which converted government documents from paper to electronic format—obtained millions of dollars in business by steering money and favors to the congressman.

It was also alleged, and immunized witnesses testified, that much of the work for which Wilkes was paid wasn’t done, or was done poorly, and that equipment that the government was charged for was not used to perform the contracted work.

Wilkes allegedly received more than $80 million in earmarks that Cunningham, then a member of the House Appropriations Committee, slipped into bills. One of the claims made by prosecutors was that Wilkes arranged prostitutes’ services for the congressman.

Convicted of 10 counts of honest services wire fraud and one count each of bribery, conspiracy, and money laundering, Wilkes contended on appeal that District Judge Larry Burns should have granted use immunity to Michael Williams. Wilkes claimed that Williams, an ADCS vice president, would have refuted the allegations of non-existent or substandard work.

Burns found that Williams’ proposed testimony would have been relevant and material, and favorable to the defense, but that the court could not grant immunity to a defense witness absent a showing that the government’s decision to deny the witness immunity amounted to prosecutorial misconduct, which the judge said was not shown.

Subsequent to Wilkes’ conviction, the Ninth Circuit decided United States v. Straub (2008) 538 F.3d 1147. The case held that the district court may, in order to prevent fundamental unfairness, be constitutionally required to grant use immunity to a defense witness upon a showing that the testimony will directly contradict that of an immunized prosecution witness.

Remand Required

Prosecutors argued that Straub does not compel reversal in Wilkes’ case because Williams’ testimony would not directly contradict the government’s immunized witnesses. But that argument is inconsistent with the district judge’s findings, Senior Judge Arthur Alarcon wrote yesterday for the panel.

Based on Straub, the jurist said, the case must be remanded to the district court for an evidentiary hearing to examine Williams’ proposed testimony and the specifics of the prosecution’s immunity agreements in detail.

The panel, however, rejected the remainder of Wilkes’ contentions, including the claim that a prosecutor committed misconduct in closing argument by telling jurors:

“If paying prostitutes to sleep with a congressman with whom you have business going on is not cheating us out of our rights to that congressman’s honest services, then our rights mean nothing. They’re worth nothing. But, you know, ladies and gentlemen, from the instructions, our rights do exist. They mean something. You will vindicate those rights here.”

The statement was a fair comment on the evidence and the instructions, Alarcon said.

The court also swept aside a challenge to the “honest services” convictions. Alarcon distinguished Skilling v. United States (2010) 130 S. Ct. 2896, a case arising out of the Enron scandal.

Skilling, Alarcon explained, limits the reach of the honest-services law to bribery and kickback schemes.

“The evidence against Wilkes of honest services fraud, however, was sufficient to convict because the government proved that Wilkes engaged in a scheme to defraud the United States and its citizens of their right to Cunningham’s honest services, and that this scheme involved both quid pro quo bribery and material misrepresentations,” the judge wrote.

The case is United States v. Wilkes, 08-50063.


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