Florida: Crime and Corruption

Jailed official puts hope in high court ruling
The appeal of a convicted Palm Beach County commissioner highlights a recent U.S. Supreme Court decision overturning a powerful anti-corruption law.
BY JAY WEAVER

A convicted Palm Beach County commissioner hopes to have his criminal record erased, arguing his failure to disclose a financial interest in land deals no longer stands up as illegal since the U.S. Supreme Court struck down the federal law prosecutors used against him.

Anthony Masilotti's legal challenge is the first by a South Florida public official convicted of ``honest services fraud,'' following the high court's far-reaching decision in June. Two other convicted Palm Beach County commissioners might also benefit from the ruling.

No official taken down in Miami-Dade or the recent wave of Broward County corruption cases -- including former School Board member Beverly Gallagher, who pleaded guilty to bribery charges -- was convicted under the honest services law.

The Supreme Court deemed unconstitutional a central piece of the 1988 honest services law, which allowed federal prosecutors to make corruption cases based on a failure to disclose a conflict of interest, or self-dealing. They ruled that prosecutors must prove a bribe or kickback was paid in exchange for a favorable vote -- a much greater challenge in corruption prosecutions.

Numerous appeals like Masilotti's have been filed around the country, including that of former Enron chief executive officer Jeffrey Skilling, whose honest services conviction was the basis for the Supreme Court's ruling.

Masilotti, 54, pleaded guilty to an honest services conspiracy in 2007, served three years in prison and is now in a South Florida halfway house awaiting release in February. He says he committed no crime in light of the Supreme Court's ruling, and wants his conviction thrown out by a Fort Lauderdale federal judge.

The former longtime Palm Beach County commissioner also says the federal government should return 345 acres of land in Martin and Brevard counties valued at $9 million, and $200,000 in cash that were confiscated from him as part of his original conviction.

His Miami lawyers argue that prosecutors had to prove Masilotti accepted a bribe or kickback for a vote. But they maintain there was no language of that kind in the factual statement of evidence that he signed along with his guilty plea.

In court papers, the lawyers acknowledge that Masilotti was paid about $40,000 by a developer who covered his gambling debts at the Atlantis Hotel and Casino in Nassau, Bahamas.

The commissioner had played the role of a broker by putting the developer together with another land investor in a single-family-home project in neighboring Martin County. But his lawyers note that Masilotti voted against a traffic plan for the developer's project.

``No one is denying he received the money,'' said Miami attorney David Weinstein, a former federal prosecutor who is representing Masilotti with Don Bierman. ``But there's no evidence that this money was a bribe or a kickback for his role as a county commissioner.

``Absent that proof, there is no violation of the honest services fraud statute under the Supreme Court's decision.''

On Thursday, however, federal prosecutors countered that the gambling-debt payment was indeed a ``kickback.'' Prosecutors also asserted the former politician received other ``kickbacks'' from developers.

Masilotti is not the only South Florida official who might gain relief from the Supreme Court's ruling. Two of his former commission colleagues, Warren Newell and Mary McCarty, also pleaded guilty to honest services fraud conspiracies and served prison sentences.

The U.S. Attorney's Office in Miami, like others around the country, had relied on the honest services law for years. It allowed prosecutors to make public-corruption cases based on an official's hidden financial interest in a deal -- without having to prove an unlawful quid pro quo, such as a cash bribe.

This year, anticipation of the Supreme Court's decision gave prosecutors pause nationwide.

``It was a very valuable tool for prosecutors,'' said former U.S. Attorney Jeffrey Sloman, who stepped down from the Miami post in May.

``Without it, you're left with bribery and extortion statutes, which are more difficult to prove,'' he said. ``As a result, some corruption cases that the public is going to demand action on are going to slip through the cracks.''

Meanwhile, the Justice Department has urged Congress to recraft the law so it can pass constitutional muster.

``This undisclosed self-dealing or concealed conflict of interest is not bribery, but is just as violative of the public trust,'' Lanny A. Breuer, assistant attorney general for the criminal division, told the Senate Judiciary Committee last month.

He noted that one-time Washington super-loybbyist Jack Abramoff was convicted in 2006 of an honest services fraud conspiracy for his role in orchestrating the bribery of Capitol Hill lawmakers, congressional staffers and federal officials.

``The honest services fraud offense provided prosecutors with a tool that could be used to attack corrupt conduct in all its diverse and creative forms.''