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Thursday, December 18, 2014

New judge in Siegelman case decides to protect his corrupt colleagues by denying request for release


Don Siegelman
Today's ruling that former Alabama Governor Don Siegelman will not be released pending a January hearing on his latest appeal is a sign that the federal judiciary in the South--and perhaps across the country--is in full damage control. It's also a sign that Clay Land is not an honest or courageous judge, even though he does a better job of his predecessor, Mark Fuller, in trying to act like one.

Land's primary grounds for denying Siegelman's request for release was that the U.S. Eleventh Circuit Court of Appeals had already ruled on matters related to Leura Canary's recusal in the appeal of Siegelman codefendant Richard Scrushy. Siegelman argued that Canary, former U.S. attorney under George W. Bush, did not honor her recusal--and presented ample evidence that Canary remained involved with the case long after she had supposedly stepped aside. Land admitted that Siegelman had raised ""significant issues that deserve serious consideration." (See order at the end of this post.)

But then the judge, from the Middle District of Georgia, dropped back to punt. In essence, he said, "The trial court and appellate court have already ruled on this issue, and it would make the judiciary look bad if I corrected them now. Please understand that I'm not saying the previous rulings are correct; there's a good chance they are not. In fact, this case is riddled with incorrect rulings, including the fact that prosecutors brought it well outside the five-year statute of limitations. Heck, convicted child rapist and former Penn State football coach Jerry Sandusky got more favorable treatment in court than did Mr. Siegelman and Mr. Scrushy. But I don't have the courage to stand up and say my fellow judges got it wrong. Unfortunately, our courts are not about dispensing justice; they are about protecting the judiciary and legal elites."

That's what we mean by damage control. The federal judiciary in the South has taken a much-deserved pounding in the past 12 months or so. First came revelations that Eleventh Circuit judge Bill Pryor, whose duty station is in Birmingham, has ties to 1980s and '90s gay pornography via nude photographs that appeared at a Web site called badpuppy.com. Then came reports that Fuller, the original trial judge on the Siegelman case, had been arrested for beating his wife in an Atlanta hotel room. That was followed by thunderous calls for Fuller's resignation, plus a vow from U.S. Rep. Terri Sewell (D-Alabama) that she will initiate impeachment proceedings when Congress gathers again in January.

Just yesterday, we had a report here at Legal Schnauzer that Pryor--because of his gay-porn secrets--is vulnerable to blackmail by conservative interests led by GOP guru Karl Rove, who once was Pryor's campaign manager in a run for Alabama attorney general. Our report stated that Pryor has become a "gatekeeper" or "fixer," ensuring that cases of particular importance turn out in a favorable way for the Rove faction.

Pryor's reputation as a fixer apparently extends to state-court matters because, as we reported earlier this week, prominent Alabama Republican Rob Riley sought out the judge for possible intervention in a Lee County grand-jury investigation that threatens the Riley Political Machine.

In that kind of environment, where flagrant corruption has become the norm, is it any wonder that Don Siegelman's request for release was denied? When will the public demand a federal investigation that likely would send numerous bad actors--including judges, lawyers, and politicians--to federal prisons? When will the public turn to the kind of protests we've recently seen in Ferguson, Missouri, and New York City over apparent police misconduct?

U.S. law enforcement apparently is infested with rogue officers, but our guess is that the judiciary (state and federal) is even worse. Clay Land's ruling today just adds to a mountain of evidence that a major shakeup is in order.


Rollins grandchildren win favorable ruling from appellate court in battle over family trust funds


Glen Rollins (right) and other members
of the Rollins family in court.
(From dailyreportonline.com)
Four adult grandchildren of the late co-founder of Rollins Inc. last week received a favorable ruling from the Georgia Court of Appeals in a long-running battle over trust funds in one of the South's most wealthy families.

A trial court had dismissed the grandchildren's claims, but the appellate court found the case presented factual issues that should go to a jury, according to an article by Alyson Palmer at dailyreportonline.

The grandchildren are suing their father, Gary W. Rollins, and their uncle, R. Randall Rollins, who head Orkin Pest Control and its parent company, Atlanta-based Rollins Inc. Gary and Randall Rollins are the sons of the late O. Wayne Rollins, founder of Rollins Inc. O. Wayne Rollins started the family's business empire with his brother, the late John W. Rollins Sr.

The John Rollins side of the family is based mostly in Delaware and the Carolinas, and it includes Ted Rollins, who recently was removed as CEO of Campus Crest Communities. Ted Rollins has been the subject of numerous posts here at Legal Schnauzer, mainly because of his central role in a grossly unlawful divorce case in Shelby County, Alabama, from his second wife, Birmingham resident Sherry Carroll Rollins. Also, Ted Rollins has student-housing developments at four Alabama campuses (South Alabama, Troy, Jacksonville State, and Auburn), even though he has a criminal conviction for assault from the brutal beating of his stepson.

The Georgia court case does not involve Ted Rollins, but the controversy involves millions of dollars and recently attracted the attention of Forbes magazine, with reporter Clare O'Connor producing a major investigative report.

At the heart of the case are trust funds that O. Wayne Rollins established for his grandchildren, with the recipients having limited access to them. That strategy seems to run in the Rollins family. As we reported in a previous post, Sarah Rollins of Birmingham (the daughter of Ted and Sherry Rollins) has a trust fund established by John W. Rollins, and she has reached the age where, by law, she is entitled to information about the fund. Sherry Rollins states that nothing about the fund has been disclosed to her daughter, while Sherry, Sarah, and her sister Emma have relied on food stamps off and on for several years.

What's the gist of the ongoing court case in Georgia? Here is how Alyson Palmer explains it:

The siblings complain that their father and uncle have established unfair distribution systems at odds with the terms of the trusts created for their benefit by their grandfather. . .

In their lawsuit, filed in 2010, the plaintiffs contend that, after their grandfather died in 1991, their father and uncle breached their duties when they made various changes to the structure, leadership, holdings and distribution methods used within the various family entities held within the trusts. They point to a "conduct-based distribution system" imposed by their father and uncle after their grandfather's death that made distributions from entities held in the trusts based on factors such as the plaintiffs' attendance at entity shareholder meetings and engagement in "serious pursuits." They also complain that their father and uncle unilaterally amended the agreement for a family partnership held within the S-trusts, the Rollins Investment Fund (RIF), to concentrate power in themselves and permit non-pro-rata distributions to themselves at their own discretion. . . .

The plaintiffs claim the changes amounted to breaches of trust and breaches of fiduciary duty. They say their father threatened to cut off distributions to them entirely if they sued and that he and their uncle had Glen Rollins fired from his position at the family company, where he had worked for his entire career.

The establishment of trust funds comes with significant tax advantages and can involve huge sums of money. How much is at stake in the Rollins case. Alyson Palmer provides an idea:

Giving some hint as to how much money is at stake, Wednesday's decision said the plaintiffs, in support of their allegations of inequitable distributions, say that Gary and Randall received a total of $46.7 million from RIF between 1993 and 2011, while the four plaintiffs received a total of $53.5 million from RIF during the same time.

Wednesday, December 17, 2014

Judge Bill Pryor's ties to gay pornography helped turn him into a "gatekeeper" for conservative interests


Bill Pryor at badpuppy.com
You might think that Bill Pryor's ties to 1980s and '90s gay pornography would hurt his chances of becoming a federal judge. But Pryor's gay-porn background actually helped him receive a lifetime appointment on the federal bench, according to our sources--plus a report from a veteran investigative journalist.

Legal Schnauzer received considerable national attention when we reported in fall 2013 that nude photographs of Pryor had appeared at the Web site badpuppy.com. But Wayne Madsen, who writes from his base in Washington, D.C., apparently was first to break the news in 2009. 

While the story has an undeniable titillation quality to it, Madsen points out its serious implications for our democracy. That's because the unsavory activities in Pryor's background make him vulnerable to a not-so-subtle form of blackmail while serving on the U.S. Eleventh Circuit Court of Appeals in Atlanta.

In fact, our sources say conservative forces pushed George W. Bush to make the appointment not because of any legal expertise on Pryor's part, but because his secrets make him controllable. Madsen calls Pryor a "gatekeeper" for Republican interests. Others have called him a "fixer," that he protects Karl Rove's agenda on the bench. Rove once served as Pryor's campaign manager in a race for Alabama attorney general.

Either way, Pryor appears to be a judge of dubious integrity. And that might be why prominent Alabama Republican Rob Riley reportedly has asked Pryor to intervene in an Alabama criminal probe that threatens to ensnare a number of individuals loyal to former Governor Bob Riley, Rob's father.

Will Pryor actually try to pull strings behind the curtain in order to thwart a grand-jury investigation in Lee County, Alabama? It might be too early to tell. But if that's what Rob Riley is hoping for, he probably turned to the right federal judge. This is from Wayne Madsen's June 2009 report:


June 15, 2009 -- Is there a closet door closed at the 11th Circuit Court of Appeals in Atlanta?

William H. ("Bill") Pryor, Jr., the former Attorney General of Alabama who was involved in the political prosecution by the Bush administration of Alabama Democratic Governor Don Siegelman and who squeaked by U.S. Senate confirmation after being nominated by George W. Bush to the 11th U.S. Circuit Court of Appeals, appears to have a little something in his "closet." Pryor was confirmed by the Senate in 2005 in a 53-45 vote, his nomination being secured by a bi-partisan agreement between Senator John McCain and thirteen "Gang of 14" senators to force an "up or down" vote on three stalled Bush federal court nominees. Pryor was 43 when he was sworn in as a federal judge.

According to WMR sources in Alabama, Pryor, who now acts as a gatekeeper on the 11th Circuit for the Bush interests in Florida, Alabama, and other states in the jurisdiction, advertised himself during his younger days on a gay website called "Bad Puppy." There are also rumors from informed sources that naked photographs are held by some top Republicans and conservatives as an insurance policy that Pryor rules the correct way on issues on the 11th Circuit bench.

How many cases have received unlawful interference from Bill Pryor? Could they include the high-profile case of former Alabama Governor Don Siegelman?

We don't have answers to those questions at the moment, but it's important to note this key point from Madsen--it's Republicans, not Democrats, who have tended to use this information against Pryor--to help ensure that some parties receive favorable treatment, while others are cheated.

The GOP angle is in keeping with our experience. The copies of the Pryor photos we received came from individuals with Republican political leanings.

Tuesday, December 16, 2014

Rob Riley appears to be in desperation mode as Lee County probe threatens the family political machine


Rob Riley
Members of Alabama's Riley Political Machine appear to be on the verge of panic as a state criminal investigation comes closer to focusing on their unsavory activities.

Birmingham attorney Rob Riley, son of former Governor Bob Riley, reportedly reached out to current Governor Robert Bentley and a sitting federal judge in an effort to derail the ongoing Lee County grand-jury investigation. Our research indicates the federal judge in question is Bill Pryor, who sits on the Eleventh Circuit Court of Appeals but perhaps is best known for nude photographs that tie him to 1980s and '90s gay pornography, via the Web site badpuppy.com.

Sonny Reagan was forced to resign as deputy attorney general for leaking information about the grand jury, which so far has focused mostly on House Speaker Mike Hubbard (R-Auburn). But Bill Britt of Alabama Political Reporter (APR) writes that Team Riley still is trying to force the Lee County inquiry off balance, partly by attacking Prosecutor Matt Hart.

In an article released yesterday, titled "Is Conspiracy At Play To Thwart Justice in Hubbard Case?" Britt reports that Rob Riley and others are taking extraordinary steps to undermine the investigation. At the heart of the scheme is a game of legal musical chairs, with Rob Riley and Bill Baxley representing multiple clients in an apparent effort to use attorney-client privilege as a way to get inside information. Writes Britt:

The public face of Hubbard’s legal team has been J. Mark White, but the attorney of record is, and has been, Rob Riley. This was confirmed by Riley’s office. It is believed that Riley is the one who suggested that White represent Hubbard and that Baxley defend Moore.

Strange’s memo makes it clear that Reagan's representation by attorney’s allied with Moore and Hubbard, created an “irreconcilable conflict of interests,” that compromised his, “duties of loyalty and confidentiality to the State,” and undermined grand jury's investigation for “his own personal interest.”

Strange describes a situation where a sitting Deputy Attorney General is sharing confidential information with attorneys, who, under the guise of attorney/client privilege are free to use this information to protect and defend their clients in a manner the law never imagined.

Here, a cast of characters all linked to former Gov. Bob Riley through relationships, both familial and financial, are talking to Reagan and each other through their attorneys.

Such a scheme, Britt reports, dances dangerously close to criminal territory:

Bill Pryor at badpuppy.com
It has been revealed that not only did Reagan conspire to reveal confidential information to those under indictment or investigation, but that he also participated in an attempt to have white collar crimes chief Matt Hart removed from the case by means of a bogus personnel complaint. It is widely believed, by those inside and outside the Attorney General’s office, that Reagan drafted the complaint against Hart with the help of those who had been actively engaged in advising Hubbard. As with other actions possibly taken by Reagan and the attorneys such a collusion would not fall under attorney/client privilege or the ethics code of the State. And certainly privilege does not extend to lawyers aiding clients in furtherance of a criminal activity.



How desperate is Rob Riley? The answer appears to be "very," Reports Britt:

It had been known for months that Reagan worked in concert with others inside the Attorney General’s office to lay the foundation for a bogus complaint against Hart. It is not known at this time if Riley or Baxley had any influence in the plot to remove Hart, but it is not outside the realm of possibilities given Strange’s statement. It has been said by a number or political operatives that Rob Riley allegedly reached out to Gov. Bentley as well as a sitting federal judge in an attempt to thwart the Hubbard investigation.
It is believed that the Attorney General’s Chief Deputy Kevin Turner was instrumental in Reagan’s scheme to oust Hart and that he is still causing friction within the office designed to slow the investigation.

The federal judge in question almost certainly is Pryor. He sits on the Eleventh Circuit, which is based in Atlanta, but his "duty station" is at the Hugo Black Federal Courthouse in downtown Birmingham.

We strongly suspect that Rob Riley and Pryor have collaborated on dubious activities before, including my unlawful arrest in October 2013.. At least one investigative journalist has reported that Pryor essentially serves as a "fixer" for conservative interests represented by former Bush White House strategist Karl Rove. The journalist reports that Pryor's ties to gay porn are well known among Republican factions, and they use that knowledge to essentially blackmail him into making sure key cases turn out in their favor.

Would a sitting federal judge actually interfere with a state criminal probe? When you are talking about Bill Pryor, the answer probably is yes--and it's likely that Rob Riley knows that.

Monday, December 15, 2014

Today's Siegelman hearing is over in Montgomery, and Judge Land will issue a written order later this week

Today's hearing in Montgomery for former Alabama Governor Don Siegelman is over, and U.S. District Judge Clay Land is expected to release a written order regarding possible release later this week.

Siegelman is expected to stay in the Montgomery County Jail until the decision is reached.

If Siegelman is released, he would be free pending the outcome of a U.S. Eleventh Circuit hearing on his appeal, set for January 13.


Sonny Reagan's forced resignation in AG's office raises the specter of criminal charges and disbarment


Sonny Reagan (right), with Bob Riley
The forced resignation of Sonny Reagan answers one question: How would Alabama Attorney General Luther Strange react to charges that one of his most high-profile deputies had leaked information about the ongoing Lee County grand-jury investigation?

Many more questions remain unanswered, and the episode hints that the state's ruling conservative elites often have their priorities out of whack when it comes to matters of loyalty and law. In an internal memo announcing the departure to AG employees, Strange essentially said Reagan was playing for one football team while tipping off the other team about plays to come. Reagan turned himself into a mole, a plant, a backstabber, and his actions raise this question: Is it possible for a lawyer to go any lower than this guy has gone?

Let's ponder just a few questions raised by Reagan's ouster:

* In his memo, Strange says Reagan "shared counsel" with two of the investigation's primary targets--House Speaker Mike Hubbard and State Rep. Barry Moore. What exactly does Strange mean by the term "shared counsel"? It appears he means that Reagan actually provided legal assistance to two individuals who were the subject of his own office's investigation. Again, how low can this guy go?

* Strange says Reagan "forged relationships with persons, outside the Office of Attorney General, who had an interest in undermining the Lee County Special Grand Jury's investigation." Who were these people, what was the nature of any communications Reagan had with them, and did they actually undermine the investigation?

* Were these individuals part of what has come to be known as "the Riley machine," headed by former Governor Bob Riley and his lawyer children, Rob Riley and Minda Riley Campbell. Reagan once served as a legal advisor to Bob Riley, so he clearly is in the Riley inner circle--as are Hubbard and Moore. Does the rule of law matter to those in the Riley orbit? Are their loyalties strictly to the Riley agenda, as opposed to Alabama taxpayers who pay their salaries?

* Will Reagan become the target of a criminal investigation? What about those with whom he communicated? Acting Attorney General Van Davis hinted that criminality was involved when he announced that Reagan had been placed on administrative leave in September, using verbs such as to "impede" and "obstruct" in describing the alleged conduct.
.
* What charges might be brought against Reagan and his cohorts? A state charge of obstructing governmental operations certainly is a possibility. If the misconduct invokes federal jurisdiction, that could lead to charges such as obstruction of justice, conspiracy, racketeering, and more.

* Where is the Alabama State Bar on all of this? How could Reagan possibly keep his bar card after committing acts of such brazen dishonesty?

* Reagan's lawyers in his appearance before the grand jury were Rob Riley and Bill Baxley. Did they know about Reagan's misdeeds? Did they participate in them? If so, what kind of professional and criminal sanctions might await them? Could they be disbarred or indicted, along with Reagan.

* Reagan has been the point man in the crusade against non-Indian gaming that started in 2008 under Bob Riley and has continued under Strange. Reagan has been the chief courtroom antagonist for several electronic-bingo casinos around the state that have been subjected to raids and seizure of equipment that appears to be legal under various constitutional amendments, but has been deemed illegal gambling machines by Riley, Strange, and Reagan. In fact, a judge is due to rule any day in a forfeiture proceeding involving the VictoryLand casino in Macon County. Given Reagan's dishonesty toward his colleagues in the AG's office, how has he treated adversaries in the courtroom setting? Have VictoryLand and other electronic-bingo facilities received fair shakes in their battles with a proven cheater named Sonny Reagan? If not, should their equipment be returned, and their facilities reopened?

* We know that Reagan unlawfully was trying to help Mike Hubbard and Barry Moore. But what about other members of Team Riley, including Big Bob himself? Insiders have speculated that prosecutors have the ammunition/information needed to "dismantle" the Riley Machine. Will the "Unmasking of Sonny Reagan" be a pivotal step in that process?

Sunday, December 14, 2014

Tomorrow's hearing in Montgomery should be short and sweet, ending with Don Siegelman's release


Don Siegelman
If former Alabama governor Don Siegelman finally has an honest and competent judge on his case, tomorrow's hearing in Montgomery should not last long.

Clay Land, from the Middle District of Georgia, has been named to replace original trial judge Mark Fuller, in the wake of Fuller's wife-beating scandal.

The point of tomorrow's hearing, set for 10:30 a.m. at the Federal Courthouse in Montgomery, is to determine if Siegelman should be released from prison, pending the U.S. Eleventh Circuit's consideration of his appeal on January 13.

If Land has reviewed the file--and it's one of the most controversial white-collar criminal prosecutions of the past 50 years--he should say something like this:

"Gov. Siegelman, the record shows that you and your codefendant, Richard Scrushy, have been through a nightmare--one that never should happen on American soil. You have served years in federal custody for crimes you did not commit. In fact, you were convicted of "crimes" that do not exist under the law. That's because the trial court gave incorrect jury instructions that do not match any language to be found in the relevant statutory or case law.

"The record is filled with evidence of juror misconduct, prosecutorial misconduct (including coaching and threatening of a key witness, plus failure to turn over potentially exculpatory evidence), and dubious rulings from the bench--by a judge we now know has serious problems with alcohol and prescription painkillers.

"On top of that, we see indications there was insufficient evidence to convict, in part because a check Mr. Scrushy allegedly handed to you, in which the government contends was a corrupt deal, had not been written at the time witness Nick Bailey said the transaction took place. Mr. Bailey testified that you left the meeting with a check, but evidence shows that could not have happened. What else did Mr. Bailey get wrong?

"My No. 1 concern, however, is that, by law, you and Mr. Scrushy never should have gone to trial. The government wrote an indictment that was so vague the defendants hardly knew what they were defending themselves against. When you asked for a bill of particulars from the government, seeking specifics about the charges, the trial judge inexplicably denied the request. Even Jerry Sandusky, the convicted child rapist and former Penn State football coach, was granted such a request at his trial.

"It wasn't until deep into your trial, that it became evident the alleged unlawful conduct took place in summer 1999, and the indictment was issued on May 17, 2005. Almost six full years had elapsed, meaning the charges were brought well after the five-year statute of limitations had expired. Your counsel properly sought a judgment of acquittal on statute-of-limitations grounds, but the trial court denied it.

Judge Clay Land
"My duty here today is not to consider issues related to your appeal. But I will say that it's hard to comprehend how the Eleventh Circuit has denied your appeals to this point, given what the record clearly shows. If Congress decides to conduct a far-reaching investigation of the federal judiciary in the wake of this case . . . well, we deserve it. I see every reason why citizens would question the honesty and competence of our courts because of the gross mishandling of this high-profile case.

"What will happen with your appeal, which is due to be heard in January? I don't know what will happen, but I know what should happen. As I've stated already, you could not lawfully stand trial because the government did not act within the five-year statute of limitations. That means that granting you a new trial would be inappropriate.

"The only correct and lawful finding is to find you and Mr. Scrushy not guilty of all charges.

"As for my decision here today, that is an easy one: You are due to be released immediately from federal custody, pending the Eleventh Circuit's hearing of your appeal.

"My best wishes to you, your family, your friends, and supporters. I hope someday you will find reason to once again have confidence in a justice system that has so badly betrayed you in this matter.

"Court is adjourned, and Mr. Siegelman, you are free to go."

Friday, December 12, 2014

Why did a federal prosecutor contact Rob Riley during the investigation of former Governor Don Siegelman?


Rob Riley
A federal prosecutor communicated with prominent Alabama Republican Rob Riley during the investigation of former Democratic Governor Don Siegelman, according to a report released yesterday.

Riley was serving as campaign manager for his father, Bob Riley, who was Siegelman's chief political opponent at the time. The revelation seems to support claims that Siegelman supporters have been making for years--that unlawful political motivations played a pivotal role in the prosecution.

Adam Zagorin wrote the article, titled "Justice Department Downplays Evidence of Politics in Probe of Governor," for Project On Government Oversight (POGO). The information about Rob Riley is included in a letter, dated June 3, 2010, from Assistant Attorney General Ronald Weich to U.S. Representative John Conyers (D-Mich.), who was then chair of the House Committee on the Judiciary. (See full letter at the end of this post.)

A Justice Department internal affairs unit, the Office of Professional Responsibility (OPR), was critical of several government attorneys involved in the Siegelman case, but concluded that the evidence "did not establish that political motivation played a role" in the case.

Why would a prosecutor contact the campaign manager for Siegelman's primary political opponent--if, in fact, politics were not involved? Why would Rob Riley's correspondent refer to himself as a "conservative prosecutor"?

Here is Zagorin on the communications between a member of the prosecution team and Rob Riley:

In 2002, during the Justice Department’s investigation of Siegelman’s administration, a federal prosecutor emailed the son and campaign manager of Siegelman’s principal Republican opponent updating him on the confidential probe, according to a Justice Department document obtained by the Project On Government Oversight and reported here for the first time.

In the email, the prosecutor said he had been “thwarted” after starting an investigation “into the Siegelman administration.” He added that it was “frustrating for me and a small group of like minded conservative prosecutors” to “fight the tide in order to do the job we are sworn to do.”

Many questions remain unanswered, Zagorin reports, in part because the Department of Justice (DOJ) apparently tried to hide information from Conyers and others. Many of those unanswered questions involve Rob Riley. Writes Zagorin:

In listing the people OPR interviewed, the Justice Department letter summarizing the probe does not name Rob Riley, the son of and campaign manager for Siegelman’s political rival Bob Riley and the recipient of the “like minded conservatives” email. As a result, it is unclear whether OPR contacted him.

The DOJ letter also offers no indication of why the prosecutor emailed Riley in the first place, and on whose instructions, if anyone’s. Nor does it say whether Riley replied or took any subsequent action. It does not explain how the “small group of like minded conservative prosecutors” fit into the picture, or why the prosecutor injected his own political leanings and those of his colleagues into the matter.

The unanswered questions also include who may have “thwarted” the conservative prosecutors and why, and what penalty the prosecutor faced, if any, for sending the email.

“I do not recall receiving the email in 2002, but I had nothing to do with the U.S. Attorney’s Office pursuing charges against Don Siegelman,” Rob Riley told POGO, noting that the contact would have occurred more than a decade ago. “I also do not recall being contacted by OPR one way or the other.”

The Conyers letter criticizes former Alabama U.S. attorneys Leura Canary and Alice Martin, who both oversaw prosecutions against Siegelman. The DOJ concluded, however, that no substantive discipline was merited:

The letter summarizing OPR’s investigation into prosecutors’ handling of the Siegelman matter shows that the internal watchdog singled out four prosecutors for at least some criticism, but nonetheless concluded that “political motivation” played no role in the case.

One of those singled out was Leura G. Canary, an experienced DOJ career lawyer who served as U.S. Attorney for Alabama’s Middle District, where Siegelman was tried and convicted.

A few months before Bob Riley defeated the incumbent Siegelman in the 2002 election, Canary formally recused herself from the Siegelman investigation. She did so following accusations, widely disseminated by the Siegelman camp, that she had a variety of political conflicts of interest. For example, citing public records, a lawyer for Siegelman protested that one of Siegelman’s political opponents had paid fees to Canary’s husband, a prominent Republican consultant.

In a letter explaining Canary’s recusal, Deputy Assistant Attorney General David Margolis wrote that DOJ had found no conflict, but that out of “an abundance of caution,” Canary would withdraw from the case anyway. She issued a similar statement.

Don Siegelman
 DOJ’s letter to Conyers also highlights the recusal issue. It cites an example where Siegelman was sending out campaign literature claiming that his prosecution was political, a copy of which apparently reached Canary. Despite her recusal, she then forwarded the campaign literature to Siegelman’s prosecutors, suggesting it could provide “a basis for a gag order” to prevent the ex-governor or his lawyers from raising allegations of undue political influence at trial. The letter says Canary should not have done this.

Soon after she contacted the prosecution team, it did in fact seek such a gag order, though a judge refused to grant one.

OPR minimized this example of Canary’s continued involvement in the case. It found that “Canary did not commit professional misconduct or exercise poor judgment in connection with her recusal from the Siegelman case.”


As for Martin, OPR found she exercised poor judgment in a minor administrative matter:

At another point, the DOJ letter refers to a separate attempt in 2004 by the Northern District of Alabama to prosecute Siegelman for corruption. A federal judge with nearly 30 years tenure threw that matter out of court, later calling it “completely without legal merit” and “the most unfounded criminal case over which I presided in my entire judicial career.” Citing the 2004 case, the judge wrote a letter to Attorney General Eric Holder calling for an investigation of prosecutorial misconduct in Siegelman’s subsequent 2006 conviction.

OPR had a different view. It concluded that, while the evidence in the 2004 case was “weak, the decision to prosecute. . .did not violate the Principles of Federal Prosecution.”

According to the DOJ letter, OPR had a procedural complaint. It found that the U.S. Attorney who brought the case, Alice Martin, “exercised poor judgment by failing to comply with Department guidelines” requiring her to “provide timely notice” of Siegelman’s indictment to DOJ headquarters.

Reached by POGO, Martin said, “We exercised great judgment in bringing the case, after a grand jury indicted Siegelman.”

Were politics at work in the Siegelman case? POGO shows that the DOJ considered Lanny Young to be an unreliable witness regarding incriminating evidence against Republicans Jeff Sessions and Bill Pryor. But the department used Young extensively in the case against Siegelman. Writes Zagorin:

The letter also says that “evidence did not support” an allegation that appeared in TIME magazine in 2007. That story, written by the author of this article, cited FBI documents showing the prosecution relied on a witness who gave incriminating evidence against Siegelman and two prominent Republican politicians in Alabama. Investigators and prosecutors allegedly ignored the evidence against the two Republicans.

The letter says OPR concluded that investigators and prosecutors did not pursue those matters because of “concerns” about the witness’s “credibility” as well as a “lack of resources.” The letter also reports that a lawyer in DOJ’s Public Integrity Section later re-interviewed the witness and determined that his allegations “lacked merit” and were probably “time barred” from prosecution. The letter says nothing about why, given those weaknesses, prosecutors chose to have the witness testify for four days at Siegelman’s trial, where the witness’s allegation figured in about half of the 32 corruption counts brought against the ex-governor. . . .

As long as the Department of Justice keeps the report about its internal investigation under wraps, it will be impossible for anyone to independently assess the Department’s investigation into itself or the soundness of its conclusions.

Perhaps most shocking of all, however, is the revelation that prosecutors were in touch with Rob Riley during what was supposed to be a confidential investigation. A full account of the communications are needed to know for sure, but information in the POGO report hints at possible criminal behavior, especially obstruction of justice.



Thursday, December 11, 2014

Do UAB fans have Birmingham attorney Doug Jones to "thank" for the demolition of Blazer football program?


Doug Jones
UAB supporters might have Birmingham lawyer Doug Jones to "thank" for the demise last week of the Blazer football program. Multiple news outlets, both traditional and Web-based, are reporting that University of Alabama board president Paul Bryant Jr. likely is responsible for the decision to kill Blazer football.

Our research indicates Bryant probably never would have become a UA trustee if Jones had not taken steps to protect him from a likely federal indictment in the late 1990s.

Jones, a University of Alabama graduate who reportedly has done legal work for Bryant, now is a principal in the downtown Birmingham law firm Jones Hawley. Before that, Jones was with Haskell Slaughter, but that firm dissolved earlier this year. In the late 1990s, Jones served as U.S. attorney for the Northern District of Alabama during the Clinton administration.

For Paul Bryant Jr., it apparently proved to be a good time to have a buddy in a high place.

Prosecutors and forensic accountants from Alabama went to Pennsylvania and helped obtain guilty verdicts on 135 counts of racketeering, wire fraud, and money laundering against a Philadelphia lawyer/entrepreneur named Allen W. Stewart, who wound up with a 15-year federal prison sentence.

Why were Alabamians on the prosecution team? Because the fraud had roots with one of Bryant's companies, Alabama Reassurance. And our sources say that prosecutors were promised that, if they obtained convictions in Philadelphia, they could come back to Alabama and zero in on Bryant's firm. Here is how we reported it in an earlier post:

Bryant and his company, Alabama Reassurance, came through the episode virtually unscathed. Sources tell Legal Schnauzer that a full-bore investigation of Alabama Re was to commence once the Stewart conviction was secured. In fact, Caryl Privett--then U.S. attorney for the Northern District of Alabama and now a Jefferson County Circuit judge--reportedly had promised investigators that they could go after Alabama Re once the Stewart trial was over.

By then, however, Privett was out of office, and someone in the U.S. Department of Justice called off the Alabama Re investigation. One can only wonder if Bryant's company has forsaken the fraudulent business practices that were revealed in the Stewart trial. One can also wonder who cut Bryant and his company a break--and why.

Jones told us in a telephone interview that he recused himself from the Stewart case because of an attorney-client conflict. That former client apparently was Bryant.

By the time, the Stewart case had ended with across-the-board convictions, Jones had replaced Privett as U.S. attorney for the Northern District of Alabama--and suddenly, the promise to go after Bryant's company was rescinded, and the investigation called off. Our sources say Doug Jones, as head of the Northern District, almost had to be the one to call the dogs off Alabama Re.

If Jones recused himself from the Stewart case, wasn't he also required to stay out of the Alabama Re investigation?

I've asked Jones directly, in two separate phone interviews, if he called off the Alabama Re investigation. He refused to answer the questions both times, responding mainly with insults and what might be called "elitist Southern condescension."

Here is an excerpt from the first time I tried to get the truth out of Jones:

Jones: I'm trying to make sure you understand that I have read your stuff, I have seen your conspiracy theories, and I am not going to answer any of your questions because I don't trust what you will write, period.

LS: I'm taking it down word for word. . . . I'm asking you, who called off the investigation of Paul Bryant?

Jones: I am not going to respond to any of your questions . .

LS: You were a public official then, Doug . . .

Jones: I am not going to respond to any of your questions. . . . I've seen the garbage you write and the way you spin and the way you slant. It's the most disingenuous stuff I've ever seen. . . . It just doesn't matter to me. You're a nothing to me."

You can hear the full conversation at the first video below. The second video includes a similar exchange, with me asking Jones directly about cancellation of the Bryant investigation--and Jones ducking and dodging and responding with insults.

I will allow UAB supporters to make up their own minds about Doug Jones' role in keeping federal investigators away from his buddy, Paul Bryant Jr. Since Jones won't answer questions from me, maybe he will answer questions from Blazer fans. His contact info at Jones Hawley is (205) 490-2290 and djones@joneshawley.com.

Would Bryant ever have been able to become a university trustee if he had been indicted on federal fraud, racketeering, and money laundering charges? It seems doubtful. And given that one jury already had reached guilty verdicts on related charges, it seems likely that Bryant would have had a hard time avoiding a prison term. He probably would have had pressing concerns to keep him from targeting UAB football.

In the videos below, Doug Jones vocabulary seems to include little more than insults directed at me, which is odd, given that I've repeatedly stood up for one of his former clients, Don Siegelman. But my impression is that Jones pretty much loses his cool because he can't handle being asked tough questions about a sensitive subject, Paul Bryant Jr.:





Wednesday, December 10, 2014

Paul Bryant Jr.'s fraud-tainted insurance company was started to help hide dog-track profits from the IRS


Paul Bryant Jr.
(Photo by Glenn Baeske/The
Huntsville Times/Landov--for
Bloomberg Markets)
Did Paul Bryant Jr. start Alabama Reassurance to help provide death benefits to policyholders who had lost loved ones? Not exactly.

An investigative article at Bloomberg Markets, from its January 2014 edition, shows that Alabama Re was designed mostly to hide taxable profits from Bryant's dog-track operations. (The Web version of the story is at the link above; the print version can be viewed at the end of this post.)

Did Alabama Re conduct business in an honorable fashion? Not exactly.

Bloomberg Markets showed that the company had reached an agreement to help underwrite policies for a firm owned by a Philadelphia entrepreneur named Allen W. Stewart. The document limited Alabama Re's liability at a certain figure and stated that there were no other agreements between the parties. But on or about the same day, records show, the two reached a side agreement that reduced Alabama Re's liability even more. A federal jury would later find this constituted fraud, and it was cited in nine counts that helped send Stewart to prison for 15 years.

Can Paul Bryant Jr. and his fellow members of the University of Alabama Board of Trustees be believed when they say they had nothing to do with last week's decision to kill the UAB football program--that it was campus president Ray Watts who pulled the trigger all on his own? We don't know what words would accurately describe all members of the UA Board--we hope a few of them might actually be "trustworthy"--but the Bloomberg Markets article leaves the distinct impression that "greedy," "cheap," and "dishonest" could apply to Bryant.

With that in mind, it seems safe to say that Bryant played a significant role in killing UAB football. And we aren't the only ones who apparently think so. Kyle Whitmire, a columnist for al.com, said Watts "looks like a stooge from his absentee masters in Tuscaloosa." That almost certainly was a reference to Bryant.

Should the public expect Bryant to conduct his trustee affairs in an honorable fashion when he clearly has not done that in the business world? We suggest the answer is no.

How dishonest can Bryant be? Bloomberg Markets shows that Alabama Reassurance was an insurance company pretty much in name only. Its primary purpose was to serve as a tax dodge. Here is what  reporters Anthony Effinger and John Helyar wrote about a Mississippi Department of Insurance examination of Alabama Re in the 1990s:

“They were propping up broke companies for a fee,” says Tom Gober, who was examiner-in-charge at the Mississippi Insurance Department in the early 1990s. “Companies knew they could call on Alabama Re because Alabama Re had to offset dog track profits.”

Bryant’s enterprises are all units of a holding company called Greene Group Inc., which Gober says allows the firm to consolidate its tax liabilities and offset profits from other enterprises with insurance write-offs.

Alabama Re intentionally worked with troubled insurers in a way that deceived the public--and the markets:

The company made a business out of propping up troubled insurers with reinsurance that appeared to reduce liability, says W.O. Myrick, a retired Alabama state insurance examiner. The contracts carried little, if any, risk to Alabama Re, he says. One client, Inter-American Insurance Co. of Illinois, went into liquidation in 1991, according to Cook County court documents.

“Historically, Alabama Re has entered into contracts to assume liabilities from problem insurers to help them appear to be in better financial condition than they actually are,” Myrick says in a telephone interview.

That's how Alabama Re came to be involved with Allen W. Stewart's Fidelity General Life Insurance Co.--and that's what helped lead to a multi-state federal investigation that involved prosecutors and forensic-accounting experts from Alabama:

The owner of one imperiled insurer, Philadelphia lawyer Allen W. Stewart, was convicted by a Philadelphia jury in 1997 on 135 counts of racketeering, wire fraud and money laundering and sentenced to 15 years in prison.

Nine of those counts concerned a reinsurance agreement with Alabama Re. In 1991, Stewart’s Fidelity General Life Insurance Co., facing insolvency, paid Alabama Re $412,500 to take on $15 million of its liabilities, according to the indictment. Regulators in California and Arizona rejected the agreement, saying it didn’t really shift the liability. Fidelity and Alabama Re then signed a new agreement in March 1993, which included a clause saying there were no other “understandings” between the parties.

Yet on or around that same day, a side agreement was signed with Fidelity’s parent company, Summit National Life Insurance Co., the indictment says, limiting Alabama Re’s possible losses to $481,250, guaranteeing that Alabama Re would suffer little or no loss.

Translation: Alabama Re wanted to take Fidelity's money, but it didn't want to take on much of its liabilities. Alabama Re sidestepped the purpose of the entire agreement, leaving numerous beneficiaries with life-insurance policies that were pretty much worthless.

Also, the public should remember these words from the Stewart case--racketeering, wire fraud, and money laundering. Paul Bryant Jr.'s company was deeply connected to all of that; the public record shows that's how Paul Bryant Jr. does business.

And the public is supposed to believe he was not involved in the decision to kill UAB football?