Wednesday, May 16, 2012

Why was Forest City Ratner not touched in the Yonkers case? Law prof suggests prosecutorial discretion regarding a potential conspiracy charge that would've been tough to win

Some keeping watch on the recent Yonkers corruption trial, in which former Council Member Sandy Annabi and her political mentor, Zehy Jereis, were convicted, had to wonder why developer Forest City Ratner, the beneficiary of Annabi's vote flip to enable its huge Ridge Hill retail/residential project, went unscathed.

After all, while Annabi got nearly $200,000 from Jereis over eight years, and he got a far smaller sum from the two developers he worked with, Forest City's gain, in exchange for a no-show job it gave Jereis after the vote, was surely far greater.

Annabi's vote unlocked progress on a project on which Forest City had already spent some $70 million. Forest City's potential losses, from delay, from selling Ridge Hill to other investors, or from shrinking the project, could have been huge. And it only cost Forest City a commitment of $60,000 to Jereis, who ultimately was paid only for three months: $15,000.

So, why didn't prosecutors target the biggest beneficiary?

Bennett Gershman, a former state prosecutor who teaches at Pace Law School in Westchester and followed the case in the media, suggests it was a judgment call: while Forest City Ratner might have been vulnerable to a federal charge of conspiracy, the evidence was much weaker, and prosecutors apparently calculated that it was more important to convict corrupt public officials than see the case muddied by ancillary, weaker charges.

"The big gap is whether or not [Forest City] Ratner knew payments were being made to influence her vote," Gershman said. "And there’s no evidence. Why would they think, necessarily, that benefits were being lavished on this councilperson"--as opposed to simply that Jereis had her ear.

When I wrote about the "mystery of Ridge Hill" in March 2010, the big question, yet unanswered, is whether Forest City knew Jereis was paying Annabi. According to testimony by Forest City executives, they didn't know. (If that's not true, it could emerge if Annabi's appeal fails and she seeks some kind of reduction in her sentence.)

Unseemly, but they get away

"It looks like they [Forest City] got what they wanted: they may have been part of the conspiracy," Gershman mused. "Whether it’s beyond a reasonable doubt, probably not... They walk away, maybe smelling, not an aroma we would like. But they don’t care, they’re a multibillion-dollar corporation that looks to the bottom line, and the bottom line is getting this thing built."

(I'd add that the departure of the two main witnesses who worked for the company, government relations chief Bruce Bender and his deputy Scott Cantone, for a new consulting firm is either a complete coincidence of an example of "not an aroma we would like." One observer said it was "rebooting.")

Criminal law, Gershman noted, is not about morality, it's about pursuing winnable cases. "There are a lot of things about the criminal law that result in immoral conduct and decision-making," he observed. "Rats get rewarded to testify against lesser rats, sometimes. The big shots walk away."

Who's the big fish?

"If you’re the prosecutor, you want to get government officials who are corrupt," asserted Gershman, pointing to the U.S. Attorney's pursuit of other political figures in Westchester and Putnam counties, including former Senators Nick Spano and Vincent Leibell.

As for the charges against Annabi, he said, "that's the worst kind of corruption there is, selling your vote."

"I would say these developers, and the banks, they're able to insulate themselves," he said, pointing to wider concern in society about special favors. "They use lobbyists and they get government officials to support their projects. It's a very difficult job for prosecutors to pierce through those walls and show Forest City Ratner was part of the conspiracy."

(Thus, as New York Times columnist Michael Powell put it in January, describing the troubling but murky evidence regarding the company in this case as well as the charges against state Senator Carl Kruger, A Developer Between Legal Clouds.)

The possible case

The initial indictment, in 2010, discussed a bribery scheme, but when the indictment was revised, the main charge against the duo was modified to corrupt payments, a stream of payments from Jereis to Annabi over a number of years to keep her on a string.

Forest City, Gershman observed, was vulnerable to prosecution, as it had benefited from Annabi's vote and later rewarded Jereis.

"Could you stick them into a conspiracy, under the theory that they were part of the overall corrupt agreement?" he asked rhetorically. "Federal conspiracy law is so broad, that you probably could link them into this corrupt agreement. Co-conspirators don’t have to know everything everybody is doing. They just have to be a significant part of the plan, and the jury can infer that they acquiesced and encouraged all the other operators in the plan."

The evidence pointed to questionable conduct, though not necessarily illegal conduct. Jereis had asked Forest City for a job after arranging a meeting with Annabi, and the developer put him off, thinking it looked bad to hire him before her vote.

Had they promised Jereis a job before Annabi’s vote? "It was inconclusive," testified Bender, "but we certainly left the impression we were probably going to do it."

Had Jereis not produced Annabi's vote, would Forest City have hired him? "It's hard to say, but probably not," Cantone said.

The problems with the case

But rewarding Jereis was not likely a federal crime, Gershman said, because Forest City said it was unaware that Jereis had been rewarding Annabi financially. "If we had any inkling of any of the accusations or facts," Cantone testified, "we not only would not have been meeting with him, we certainly wouldn't have hired him."

"They could say, Jereis was there to lobby the City Council, to lobby his close acquaintance, and if he’s able to be successful, that’s terrific, and we’re now going to hire him," Gershman said. "I’m standing in the shoes of the U.S. Attorney, and thinking of the weaknesses in my case."

"Here's the key" he added. "You’ve got a pretty solid case against two people, if the jury buys it. Do you want to bring in more potential co-conspirators, and broaden the conspiracy? I see nothing that shows that Ratner and Bender/Cantone are directly, closely linked. Tthey’re on the periphery. Could the jury sweep them in? It’s possible. But the jury could see the government is reaching, and it could dilute the view of the jury."

"Does he want to risk losing the case because he’s trying for too much, or does he want to focus to what he really can succeed on, and leave the questionable, risky potential defendants on the outside?" Gershman asked. "This is a great example of prosecutorial discretion. Do I think they could have charged Ratner? Yes, but to the U.S. Attorney, it was too big a risk."

Forest City officials apparently didn't ask for and get immunity from federal prosecution. Why not? "When you’re looking for this kind of cooperation, giving immunity suggests that you’re looking at these people in a criminal way," Gershman said. "I don’t think they wanted to create that impression. That might have suggested to the jury the prosecutor was playing fast and loose."

Subtle questions

While Forest City chose not to hire Jereis before Annabi's vote, fearing it would not be "optically"good, in the words of former official Cantone, Gershman thinks it didn't make a difference to the case. "I think the fact that it happened afterwards is more incriminating," he said. "Either way, they’re still sitting there saying, We thought this guy could produce the goods. Their defense is still something that is plausible, at least to a jury."

What about the fact that Jereis was hired for a no-show job? "He’s being rewarded for prevailing on his cousin to vote for the development," Gershman said. "You’re piling up pieces of evidence that could be sufficient for a jury to conclude they’re part of a conspiracy. But you still have to show they were aware payments were being made to Annabi to change her vote."

There were other areas of weakness in the case, which surely will be part of the effort to get the verdict overturned. After all, key prosecution witness Anthony Mangone, an admitted liar, claimed he got a bribe on the second project, Longfellow, the day developers were out of the country. "Juries understand that witnesses can contradict themselves," Gershman allowed. "Does that mean they’re lying about everything? My experience is juries believe stool pigeons, most of the time."

Why didn't Annabi testify? Gershman said such a defendant would be vulnerable to be portrayed as a liar on the clearest charges, those regarding lies on her income tax return and mortgage applications. "Whatever it is, she’s vulnerable," he said.

Jereis had to testify to bring in the defense that his payments were motivated by infatruation, Gershman said, "and if jury buys it, they acquit." They didn't.

Possible state charges

When I wrote two years ago about the "mystery of Ridge Hill", a former prosecutor who spoke not for attribution suggested that Forest City might be vulnerable to state charges based on the no-show job, given that it's a misdemeanor to falsify business records and a felony to falsify business records with the intent to conceal a crime.

Based on testimony at the trial, there would have been evidence to sustain at least a charge, if not necessarily a conviction, for the misdemeanor, I'd say. (Given that there was no proof Forest City knew Jereis was paying Annabi, a felony charge would have been a stretch.)

After all, Jereis's first invoices were sent back by Forest City staffer John Swagerty as "junior varsity," but later re-sent and paid, after the secretary for Bender and Cantone requested it.  Prosecutors evinced no description of the quality and accuracy of the revised invoices.

But Cantone did say, when asked what value Jereis provided, "Besides providing access to Council Member Annabi, nothing at all." So that certainly suggested false invoices.

Gershman, however, was nonplused. "How many judges and lawmakers and on and on have people payrolls who aren’t doing all the stuff they’re supposed to do?" he asked rhetorically. "It happens so regularly, unfortunately," that's it's unlikely a county District Attorney would put the effort into prosecution.

Beyond that, he suggested, such a case could run into other problems: Jereis could say he was lousy at record-keeping, while Forest City could have said they were merely negligent--and negligence isn't a crime.

However, I'd suggest, Bender and Cantone, according to their testimony, sounded negligent. They sounded like they were doing a deal.

What next?

The jury was out for several days, because the case was not exactly a slam dunk.

"You don't have to find the defendants made any money," Assistant U.S. Attorney Perry Carbone said during the closing argument, aiming to rebut the common-sense conclusion that the money Jereis got from Forest City and the Longfellow developer--$35,000--was far less than he'd passed on to Annabi over seven years. "No one is claiming Mr. Jereis is a smart crook."

(Had Jereis been paid for a full year by Forest City, rather than for three months, he would have earned $60,000. To give money to Annabi, may have relied on his own not inconsiderable resources, or was expecting more along the way. Or, perhaps, he had other schemes afoot.)

I asked Gershman if he thought the defense attorneys' expected motion to set aside the verdict would work. He said no. "To me, the evidence was pretty strong," he said. "The direct evidence and reasonable inference was that Jereis gave benefits and she voted accordingly."

Given Jereis's defense that he spent all the money only because of his desire for Annabi, I suggested that it might have been both, that Jereis both pursued Annabi but also wanted influence.

"Mixed motives courses through all of the law," said Gershman, who said he thought that defense "kind of preposterous." "You also have corroborating evidence to discredit his testimony, and to prove it was corruption." He pointed to the spike in phone contacts on the day Jereis asked for a job, when he and Annabi had 81 phone contacts.

If their appeals fail, can Annabi and Jereis make a deal at sentencing? "It’s going to depend on what they have to offer," Gershman said. "Chances are, what they have is bupkes. If they were going to do it, they would’ve done it years ago."

No comments:

Post a Comment