NJ Court Weighs Arrest of Star DOJ Anti-Corruption Witness

By Andrew Kreig

A New Jersey judge interrupted a corruption trial June 28 in Newark to hold a bond hearing for the Justice Department’s now-disgraced former star witness, Solomon Dwek, who was recently arrested in Maryland on stolen car charges. More important than the bond conditions, U.S. District Judge José Linares is separately considering whether to permit former Secaucus Mayor Thomas Elwell to call Dwek as defense witness. The judge told Elwell June 27 that he must have substantive questions for Dwek, and not simply call him to discredit him and the government.

Update: The judge revoked Dwek's bond, according to a report by Stephanie Akin of the Bergen Record, which she amplified as follows:

Linares said house arrest could not protect the general public from Dwek, who had shown through his theft of a rental car and subsequent lies to investigators that he would not comply with the agreements he made during his bail hearings and when he agreed to cooperate with the government.  “There is no condition for accommodations that would show that this defendant would not continue in some way shape or form to be a danger to the community and a risk of flight,” Linares said. “He has proven to be a consummate defrauder and an exceedingly cunning liar.” Dwek, who repeatedly puckered his lips in a fish-like expression and examined his fingernails throughout the hearing, simply took off his suit jacket and left the courtroom with the U.S. Marshal. Linares also said he would take Dwek’s arrest and subsequent behaviour into account when he sentences Dwek for charges that he attempt to pass $50 million in bad checks at PNC bank. He said Dwek’s failure to abide by the conditions of his bail and his cooperation agreement with the government—both of which stipulated that he could not be convicted of another crime—would make it “less likely” that Dwek’s hopes of a lighter sentence or even probation for that conviction would come to pass.

Chris Christie

The Justice Department initially listed Dwek as a witness to describe why Dwek’s $10,000 payment to Elwell was a bribe and not a campaign contribution from Dwek, who was working with the government to pretend to be a developer interested in supporting candidates who would help him. But the DOJ has since indicated it will not be calling Dwek, who admitted to a $50 million bank fraud and running a brothel. Those crimes encouraged him to work out a leniency deal with Republican U.S. Attorney Chris Christie, left, and his successors. They used Dwek as an undercover operative earning a five-figure monthly stipend paid from a fund created for his victims. Using taxpayer funds for bribes, Dwek then helped prosecutors create a 46-defendant “Big Rig III” corruption case announced in July 2009. Nearly all the political defendants were Democrats, including Elwell. The massive favorable publicity generated by the corruption indictments helped propel Chris Christie to a fall victory in the governor’s race on a reform platform.

The Justice Integrity Project has published many columns documenting irregularities in the Christie-initiated Dwek relationship. Samples are below. The round-up of recent developments includes other cases we have followed or new material by legal commentators that involve official misconduct. The regional news stories are arranged by state:

Index

TankerAlabama: Boeing projects $300 million overrun on tanker contract; Crooked Politicians, Businessmen, & Bankers Pilfer Town Causing Massive Layoffs and Tax Hikes; and The Road from Clarence Thomas to Harlan Crow Runs Close to Home. Our comment: We previously reported that an important behind-the-scenes factor in the federal frame-up of former Alabama Gov. Don Siegelman on corruption charges was the long-running bidding war between Boeing  and EADS over a $35 billion Air Force contract to build the next generation of mid-air refueling tankers. Many of Siegelman’s key Republican opponents fought unsuccessfully for the European-controlled EADS to win. By the same token, the new  cost-over-run projections by Boeing are worth scrutinizing now that it has won the bidding war. The Democrat Siegelman remains free on bond pending resentencing by a Republican judge who is the controlling shareholder of a closely held contractor that refuels Air Force planes and trains Air Force pilots under Bush contracts totaling $300 million from 2006 to 2009.  The relevance of the other clips in this section and below is more self-explanatory.

Connecticut: Federal Judge Rules For Government In Corruption Case Against Defendant

Illinois: Jury Convicts Ex-Ill. Gov. Blagojevich at Retrial; and Former media mogul Conrad Black sent back to prison for 13 months

Maryland: Inspector General’s Report Backs NSA Whistleblower’s Allegations of Waste

John EdwardsMassachusetts: Curbing Corruption with a Catch-All

North Carolina: Federal Prosecutors, John Edwards, and God’s Law


News Excerpts

New Jersey:

Bergen Record, Dwek arrested; Witnesses switched, Stephanie Akin, June 20, 2011. Former Secaucus Mayor Dennis Elwell is waiting for opening arguments to begin on the first day of his federal corruption trial, but the big question on everyone’s mind is how will the recent arrest of key witness Solomon Dwek figure into the government’s case. Elwell’s attorneys learned just Friday that Dwek was charged on May 31 with stealing a rental car in Baltimore, MD. During the same phone call, prosecutors informed Elwell’s defense team that they were pulling Dwek from his marquee spot as the first witness to take the stand, putting former Elwell co-defendant Ron Manzo in his place.  Opening statements will be postponed while Elwell’s attorneys, Thomas Cammarata and Jeffrey Carrigan, argue a pre-trial motion they submitted in light of the switch: a request to gain access to presentencing reports from a 2004 charge against Manzo for insider trading in Manhattan.The switch could also indicate that federal prosecutors are trying to put less weight on Dwek’s testimony in light of his recent arrest.

Associated Press / NJ.com, Dwek charged in Maryland, misses opening of former Secaucus Mayor Elwell's corruption trial, June 20, 2011. Solomon Dwek, the star undercover witness at the center of several cases in the wide-ranging corruption probe has been charged with failure to return a rental car and was not in court today to testify in the trial of former Secaucus Mayor Dennis Elwell. Elwell is charged with accepting $10,000 through Ronald Manzo and Dwek, who was posing as a developer.

Archive: Connecticut Watchdog, Court Slaps Feds Again For Christie-Era NJ Prosecutions, Andrew Kreig, Feb. 24, 2011. In a major setback for the U.S. Justice Department, a federal appeals court last week dismissed federal bribery and conspiracy charges against two New Jersey Democrats targeted in a trap set by New Jersey Gov. Chris Christie. More generally, the ongoing court battles over the prosecutions that Christie, below left, launched as his state’s U.S. Attorney could hurt his image as a rising national political star within Republican ranks and as a cost-cutting corruption-fighter. Beyond that, the Justice Department’s policies are national in scope and raise intriguing issues about how government can best fight corruption without wasting taxpayer money and violating civil rights.

Alabama:

Mobile Register /AL.com, Boeing projects $300 million overrun on tanker contract, George Talbot, June 24, 2011.  Boeing Co. is projected to exceed its cost ceiling by as much as $300 million on the initial contract to develop and build U.S. Air Force aerial refueling tankers, Bloomberg News reported today. Air Force officials this month briefed congressional defense committees and Pentagon officials on the projected 6 percent increase on what’s now a $4.9 billion engineering, manufacturing and development contract that includes four tanker aircraft. The contract calls for 14 more tankers to be delivered by September 30, 2017. Boeing in February beat out the European Aeronautic, Defence and Space Co., ending an almost 10-year process for deciding who would build the new tankers. EADS, which had proposed to build its tankers at a $600 million assembly plant in Mobile, did not protest the decision. EADS North America Chairman Ralph D. Crosby in March said “what determined the outcome here was price,” calling Boeing’s bid “an extremely low-ball offer.”

John McCainArchive: Justice Integrity Project, Inside Story on DoD's $35 Billion Boeing Air Force Tanker Deal, Andrew Kreig, Feb. 25, 2011. The Department of Defense Thursday announced its choice of Boeing for a $35 billion contract to build the Air Force’s next generation of mid-air refueling tankers. Boeing’s selection, subject to any challenge by the losing bidder EADS, could end a decade-long, scandal-ridden process that became one of the controversial and important in modern U.S. procurement history. The Justice Integrity Project has tracked the proceeding closely for a year and a half after learning from reliable sources details about industrial espionage and skullduggery in the contract battle. This went far beyond even the scandals showcased in Senate oversight hearings led by Sen. John McCain (R-AZ), right. Those scandals sent a Boeing executive and former Air Force procurement officer to prison on bribery charges and led to DoD revocation in 2005 of the initial award to Boeing.

Archive: Birmingham News, Editorial: Until and unless the U.S. Supreme Court rules differently, Siegelman and Scrushy remain guilty as charged of bribery, Editorial board, May 17, 2011. For those who believe in justice, last week's appeals court ruling regarding charges against former Gov. Don Siegelman and HealthSouth CEO Richard Scrushy had to be satisfying.

Archive: Justice Integrity Project, Judges Who Refuse to Recuse Taint Our Justice System, Andrew Kreig, May 16, 2011. Three recent state, federal and Supreme Court controversies show how the public is nearly powerless to obtain due process when conflicted judges refuse to recuse themselves. The latest example is Texas judge Tracy A. Gilbert, right, in a child custody case examined below.Bob Riley

WFSA-TV, Gov. Riley's attorney files notice of unavailability, John Shryock, June 27, 2011.  Former Alabama Governor Bob Riley's attorney Monday filed paperwork stating Riley, right, would be temporarily unavailable as a witness should he be called to testify in the ongoing federal gambling corruption trial. The notice comes one day after Riley crashed his motorcycle in Fairbanks, Alaska while enjoying a cross-country motorcycle trip.

MSNBC-TV, Crooked Politicians, Businessmen, & Bankers Pilfer Town Causing Massive Layoffs and Tax Hikes. Cenk Uygur, June 14, 2011. Transcript posted June 20 by Accountants CPA Hartford, CT.)  We’ve all heard the stories of Wall Street Greed but wait till you hear about how it affected one community in Alabama. We’re talking about Jefferson County, Alabama. Back in 1995 the local government planned to put a new sewer system in. The price tag was supposed to be $250 million.  But then the bankers came in. They paid off local politicians and businessmen to let them sell the County fancy synthetic swaps and other financial weapons of mass destruction. The eventual absurd price tag of the project became $3 billion. Twenty local officials and so-called consultants were convicted of corruption in Federal court.  Now how many bankers got convicted? You guessed it: none. They paid a comically low fine of $25 million and restitution of $50 million, a fraction of what they made off the deal, and they were free to go. And what happened to Jefferson County in the meanwhile? Well, they’re still saddled with the debt. So today 1,000 workers are being forced to take leave without pay. Sheriff Mike Hale said that his deputies will not be responding to traffic accidents because of budget problems  And where the hell is our Justice Department? I thought they were supposed to be on top of things like this.

Clqarence ThomasLegal Schnauzer, The Road from Clarence Thomas to Harlan Crow Runs Close to Home, Roger Shuler, June 27, 2011.  Mounting evidence indicates Justice Clarence Thomas is so ethically compromised that he should be removed from the U.S. Supreme Court. The latest evidence comes from a New York Times piece about Thomas' ties to a Texas real-estate baron named Harlan Crow.  We have discovered that the Thomas/Crow story, in a roundabout way, links to one of our storylines here at Legal Schnauzer. In fact, our story is about judicial chicanery in Alabama, the kind that favors the wealthy over regular citizens. That theme should sound familiar if you have been following the trail of Clarence Thomas' numerous ethical lapses. And it raises this question: How far will some wealthy Americans go to buy justice?

Archive: Justice Integrity Project, Judges Who Refuse to Recuse Taint Our Justice System, Andrew Kreig, May 16, 2011.  Three recent state, federal and Supreme Court controversies show how the public is nearly powerless to obtain due process when conflicted judges refuse to recuse themselves. The latest example is Texas judge Tracy A. Gilbert, right, in a child custody case examined below.

Connecticut:

Justice Integrity Project, Federal Judge Rules For Government In Corruption Case Against Defendant, Andrew Kreig, June 28, 2011. A New Haven federal judge June 24 blocked a defendant’s inquiry into his 2002 obstruction of justice conviction and ordered him to prepare for resentencing. Senior U.S. District Judge Ellen Bree Burns rejected further efforts by defendant Charles Spadoni, now free on appeal bond, to inquire about his conviction for deleting materials from his computer as federal authorities began a bribery investigation of former Connecticut State Treasurer Paul Silvester.  Silvester and Spadoni’s boss at Triumph Capital Inc. each served prison terms for Silvester’s requests for favors as the Republican treasurer was leaving office in 2000.  Spadoni's lawyers swore that Silvester and his sister have told them that prosecutors made promises regarding the case not disclosed to Spadoni pre-trial, as required.

Defense attorneys sought from Burns permission for a court proceeding to obtain the statements under oath, and to cross-examine prosecution and defense attorneys who submitted affidavits denying irregularities. Former Interim U.S. Attorney Nora Dannehy, one of Connecticut’s most prominent federal prosecutors of recent years and now deputy state attorney general under a Democrat, submitted one of the affidavits. Burns relied on it and similar ones to reject Spadoni’s request and his alternative appeal for the case to be dropped because of overall irregularities.  Burns, a Democrat born in 1923, supervised his trial and ruled afterward that no prosecution irregularities occurred. The Second Circuit federal appeals court in New York disagreed with Burns in a ruling in 2008 that dismissed seven of the eight convictions against Spadoni because prosecutors illegally withheld evidence from the defense.

Illinois:

Associated Press / Newsmax, Jury Convicts Ex-Ill. Gov. Blagojevich at Retrial, June 27, 2011. Rod Blagojevich, who rode his talkative everyman image to two terms as Illinois governor before scandal made him a national punch line, was convicted Monday of a wide range of corruption charges, including the incendiary allegation that he tried to sell or trade President Barack Obama's Senate seat. The verdict was a bitter defeat for Blagojevich, who had spent 2 1/2 years professing his innocence on reality TV shows and later on the witness stand. His defense team had insisted that hours of FBI wiretap recordings were just the ramblings of a politician who liked to think out loud. He faces up to 300 years in prison, although sentencing guidelines are sure to reduce his time behind bars.

Chicago Tribune / Boston Herald, Former media mogul Conrad Black sent back to prison for 13 months, Ameet Sachdev,  June 25, 2011.  Prison has not eased Conrad Black’s contempt for the federal government’s prosecution of him, and the former media mogul will have 13 more months to seethe behind bars. Black, the onetime jet-setting chief executive of a vast newspaper empire, appeared in a Chicago courtroom Friday to see if he would return to prison. He had exhausted his legal appeals, including a trip to the U.S. Supreme Court, in fighting his 2007 conviction for defrauding shareholders of Chicago-based Hollinger International Inc., former owner of the Chicago Sun-Times.

Maryland:

Thomas DrakeProject on Government Oversight (POGO), Inspector General’s Report Backs NSA Whistleblower’s Allegations of Waste, June 22, 2011. Many of National Security Agency (NSA) whistleblower Thomas Drake’s allegations of waste and an ineffective intelligence program at the NSA were backed up in a Department of Defense Inspector General’s report, which the Project On Government Oversight received today. The report is dated December 15, 2004, and has not been previously been made public in any form until today.

Archive: Justice Integrity Project, June NSA Trial Looms As Obama DOJ Crusades Against Critics,  Andrew Kreig, May 20, 2011. The Obama administration’s shocking crackdown on government whistleblowers became more prominent this week with the New Yorker Magazine’s publication of a hard-hitting article about the plight and June trial of former National Security Agency officer Thomas Drake, above right.

Massachusetts:

Boston Phoenix, Curbing Corruption with a Catch All, Harvey Silverglate (below at left), June 23, 2011. The recent conviction of former Massachusetts Speaker of the House Sal DiMasi has been celebrated by press and public alike. Although his actions were dishonest, I argue that they were not (but should have been) illegal. This case is yet another example of dangerous over-reaching by the Department of Justice,  using vague statues to “get their man” after he’s been targeted. The problem is that they can actually get any man, or woman, they target, and therein lies the danger to liberty and Due Process.

North Carolina:

ForHarvey Silverglatebes, Federal Prosecutors, John Edwards, and God’s Law, Harvey Silverglate, June 27, 2011.  Federal prosecutors have indicted former Senator and presidential hopeful John Edwards for violating God’s law. Such indictments, regardless of how despicably the defendant acted, pose disturbing civil liberties threats likely to go unnoticed as Edwards is led to the humiliating, and arguably deserved, conclusion of his ill-starred climb to the pinnacle of power. But given the vagueness of the charges, citizens from all walks of life should shudder at the precedent this case could set.