Domestic Enforcement
Updates in US Domestic Bribery Enforcement
The slew of state and federal investigations into former President Trump’s alleged mishandling of classified documents, various attempts to overturn the 2020 election, and fraudulent business practices cemented domestic corruption enforcement in the headlines throughout 2022.[1] The prominence of these stories in the past year created an impression that enforcement against corrupt US actors was on the rise.
The reality, however, is that the Department of Justice’s (DOJ) prosecution of bribery and corruption cases in the US slowed in 2022, which continued the decline in public corruption prosecutions seen over the last several years. The drop in corruption prosecutions is notable given the Biden administration’s strong public affirmation in 2021 of its commitment to fight corruption as a core national security interest.[2]
Notwithstanding the decline in prosecutions, there were a number of noteworthy corruption convictions across the United States in 2022.
Recent Trends
Federal prosecutions for domestic bribery continued their downward trend in 2022. As of November 2022, DOJ was projected to bring approximately 25% fewer charges related to the corruption of federal, state, or local public officials in 2022 compared to 2021.[3]
The past year reflects what has been a steep and steady decline in federal prosecutions of corruption involving domestic public officials.[4] From 2002 to 2015, DOJ only had one year of fewer than 1,000 corruption prosecutions. The drop since then is staggering:
2016: 982 prosecutions
2017: 863 prosecutions
2018: 765 prosecutions
2019: 646 prosecutions
2020: 470 prosecutions
In the most recent years, the COVID-19 pandemic may have contributed to the decline. With some grand juries being suspended or limited, federal prosecutors were forced to focus their efforts on cases that needed to be prioritized—for instance, for statute of limitations or Speedy Trial Act reasons—or that required limited investigative work. As the country is transitioning out of the pandemic, more jury trials have returned, compelling DOJ to provide more resources to cases that have already been charged over those that are being investigated.
Bribery prosecutions may also have slowed in the last two years as DOJ prioritized tackling pandemic-related fraud through the COVID-19 Fraud Enforcement Task Force. Since May 2021, the task force has spearheaded the government’s efforts to uncover and prosecute attempts to defraud COVID-19-related federal programs such as the Payment Protection Program, Economic Injury Disaster Loan Program, unemployment insurance programs, and health care fraud enforcement.
Another potential factor in the reduction of prosecutions is the Supreme Court’s narrowing of what constitutes a corruption offense.[5] With the Supreme Court granting certiorari in two more cases involving honest services fraud,[6] federal prosecutors may be even more limited in their use of corruption statutes in the future.
Notable Convictions
Despite the downward trend in overall bribery and corruption prosecutions, last year saw a number of notable convictions for bribery schemes aimed at politicians, bureaucrats, and prominent businesspeople.
Notable cases in California, Illinois, and New York are discussed in more detail below.
1. California
Federal courts in California, particularly the Central District of California, regularly see some of the highest number of public corruption charges and convictions.[7] This was true in 2022 as well, as the Central District of California was once again a hotspot for high-profile bribery convictions.
In April, the former general manager of the Los Angeles Department of Water and Power (LADWP), David Wright, was sentenced to six years in prison after pleading guilty to helping a LADWP lawyer obtain a $30 million contract with the LADWP.[8] In exchange for securing the contract, Wright was promised future employment at the lawyer’s company and a $1 million salary. The case was an offshoot of the investigation by the US Attorney’s Office for the Central District of California (USAO-CDCA) into the LADWP’s sham class action settlement between ratepayers and the agency in which LADWP’s lawyer represented the class and the agency.[9]
In separate trials, juries found two real estate developers guilty of corruption offenses related to payments to Los Angeles City Councilmember José Huizar. In June 2022, a jury convicted David Lee of bribery, obstructing justice, and honest services wire fraud offenses for paying then Los Angeles City Councilmember José Huizar $500,000 cash for help resolving a labor organization’s appeal that halted his company’s development project. In November 2022, a jury convicted Chinese real estate developer Shen Zhen of honest service wire fraud, Travel Act violations, and bribery for providing Councilmember Huizar with cash, casino chips, luxury travel, prostitution services, and funds to settle a sexual harassment lawsuit. Zhen provided these benefits to obtain favorable treatment with respect to its development of a hotel in downtown Los Angeles. Councilmember Huizar, who has also been charged, has pleaded not guilty. His corruption trial is set for February 2023.
The City of Los Angeles responded to the various corruption investigations involving real estate developments and city councilmembers by introducing campaign contribution prohibitions for certain local elected offices.[10] That law took effect in 2022. The State of California has also enacted restrictions on campaign donations that can be made to local officials by those seeking licenses, permits, or other land entitlements.[11] That law takes effect in January 2023.
Not all the USAO-CDCA’s prosecutions were of local public officials. Former Nebraska US Congressman Jeff Fortenberry was sentenced to two years of probation for making false statements to federal agents who were investigating illegal contributions made to his re-election campaign at a 2016 fundraiser in Glendale, California.[12] In March 2022, a jury found Congressman Fortenberry guilty of lying to federal authorities about his knowledge of $30,000 in conduit campaign contributions from a Nigerian billionaire.
2. Illinois
Another traditional hotspot of federal public corruption convictions, the Northern District of Illinois, saw federal prosecutors crack down on several political bribery schemes in 2022.[13] In September, political consultant Roberto Caldero pled guilty to arranging various bribery schemes involving a City of Chicago alderman, a Chicago Public Schools employee, and Caldero’s clients who wanted to secure a janitorial contract at Chicago Public Schools.[14] The alderman, Danny Solis, has also been charged on a number of bribery counts but has been cooperating with investigators in the hopes of leniency.[15]
In April, the former mayor of Crestwood, Illinois, Louis Presta, was sentenced to one year in prison for accepting $5,000 from a red-light camera company executive in exchange for approving a higher percentage of red-light traffic violations.[16] Unbeknownst to Presta, the executive was working with the Federal Bureau of Investigation (FBI).[17]
3. New York
As might be expected from a major political hub, there were a number of headline-worthy bribery convictions in New York in 2022. In April, former Nassau County Executive, Edward Mangano, and his wife, Linda Mangano, were sentenced to 12 years and 15 months in prison, respectively, for their roles in a bribery and kickback scheme during Edward Mangano’s time in office.[18] The couple received over $450,000, five vacations, home improvements, and more from Long Island restaurateur Harendra Singh in exchange for Mr. Mangano performing public acts that benefited Singh’s businesses.
In May, the former CEO of a NYC homeless shelter, Victor Rivera, was sentenced to 27 months in prison for a bribery and kickback scheme with contractors that secured him hundreds of thousands of dollars meant for New York City’s unhoused population.[19]
Conclusion
Despite the high-profile prosecutions above and the various investigations into former President Trump, corruption prosecutions involving domestic public officials continued to decline in 2022. While the COVID-19 pandemic may offer some explanation of the decline, the downward trend can be traced back years. President Biden’s recent anti-corruption commitment has yet to cause the trend to reverse. If the upcoming Supreme Court honest services fraud decisions continue to chip away at the scope of federal corruption statutes, then prosecutors will have difficulty in more aggressively enforcing corruption laws.
Footnotes
[1] Peter Baker, The Story So Far: Where 6 Investigations Into Donald Trump Stand, NY Times (Sep. 21, 2022), https://www.nytimes.com/2022/09/19/us/politics/donald-trump-investigations.html. See generally Brandon Fox et al., The Role Government Filter Teams Play in Criminal Investigations, Corporate Counsel (Sep. 1, 2022), https://www.law.com/corpcounsel/2022/09/01/the-role-that-government-filter-teams-play-in-criminal-investigations/.
[2] Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest, The White House (Jun. 3, 2021), https://www.whitehouse.gov/briefing-room/presidential-actions/2021/06/03/memorandum-on-establishing-the-fight-against-corruption-as-a-core-united-states-national-security-interest/. See Brandon Fox et al., The Biden Administration’s Aggressive Policy Changes to Combat Corruption, Lawfare (Jan. 25, 2022), https://www.lawfareblog.com/biden-administrations-aggressive-policy-changes-combat-corruption.
[3] See Prosecutions for 2022: Lead Charge: 18 USC 201, TRAC Reports; Prosecutions for 2022: Lead Charge: 18 USC 666, Trac Reports; Prosecutions for 2022: Lead Charge 18 USC 1346, TRAC Reports.
[4] See Report to Congress on the Activities and Operations of the Public Integrity Section for 2021, DOJ, https://www.justice.gov/criminal-pin/file/1548051/download.
[5] See McDonnell v. United States, 579 U.S. 550 (2016); Black v. United States, 561 U.S. 465 (2010); Skilling v. United States, 561 U.S. 358 (2010).
[6] Percoco v. United States, 142 S. Ct. 2901 (2022); Ciminelli v. United States, 142 S. Ct. 2901 (2022).
[7] See Report to Congress on the Activities and Operations of the Public Integrity Section for 2021, supra note 4.
[8] See Former Head of LADWP Sentenced to Six Years in Federal Prison, DOJ (Apr. 25, 2022), https://www.justice.gov/usao-cdca/pr/former-head-ladwp-sentenced-six-years-federal-prison.
[9] See generally Ex-L.A. Special Counsel Agrees to Plead Guilty to Accepting Nearly $2.2 Million Kickback for Arranging Collusive Lawsuit Against LADWP, DOJ (Nov. 29, 2021), https://www.justice.gov/usao-cdca/pr/ex-la-special-counsel-agrees-plead-guilty-accepting-nearly-22-million-kickback.
[10] LA City Council Bans Political Contributions From Real Estate Developers, CBS Los Angeles (Dec. 4, 2019), https://www.cbsnews.com/losangeles/news/la-city-council-votes-bans-political-contributions-from-real-estate-developers/.
[11] Cal. Gov. Code § 84308 (amended October 2022).
[12] María Luisa Paúl, Ex-GOP congressman Jeff Fortenberry gets probation for lying to FBI, Washington Post (Jun. 29, 2022), https://www.washingtonpost.com/nation/2022/06/29/jeff-fortenberry-nebraska-sentence-probation/.
[13] See Report to Congress on the Activities and Operations of the Public Integrity Section for 2020, supra note 4.
[14] Consultant Pleads Guilty to Providing Bribes to Public Officials to Benefit Clients, DOJ (Sep. 2, 2022), https://www.justice.gov/usao-ndil/pr/consultant-pleads-guilty-providing-bribes-public-officials-benefit-clients.
[15] Craig Wall, Former Chicago Alderman Danny Solis' secret deal with feds revealed in new court documents, ABC 7 (Apr. 12, 2022), https://abc7chicago.com/chicago-alderman-danny-solis-deal-charged/11742396/.
[16] Former Crestwood Mayor Sentenced to a Year in Federal Prison for Participating in Bribery Scheme Involving Red-Light Camera Services, DOJ (Apr. 25, 2022), https://www.justice.gov/usao-ndil/pr/former-crestwood-mayor-sentenced-year-federal-prison-participating-bribery-scheme.
[17] Jason Meisner, Former Crestwood Mayor Louis Presta ordered released early from federal prison due to health concerns, Chicago Tribune (Sep. 29, 2022), https://www.chicagotribune.com/news/criminal-justice/ct-crestwood-mayor-louis-presta-released-from-prison-bribery-20220929-oo4s7b6g5jhsdnbn52rfgqdjgm-story.html.
[18] Former Nassau County Executive Edward Mangano and His Wife Linda Mangano Sentenced for Corruption and Related Charges, DOJ (Apr. 14, 2022), https://www.justice.gov/usao-edny/pr/former-nassau-county-executive-edward-mangano-and-his-wife-linda-mangano-sentenced.
[19] Former CEO Of NYC Non-Profit Sentenced To Prison For Honest Services Fraud, DOJ (May 23, 2022), https://www.justice.gov/usao-sdny/pr/former-ceo-nyc-non-profit-sentenced-prison-honest-services-fraud.