MONTGOMERY, Ala., May 25, 2007 - Government attorneys have filed their sentencing memorandum in the corruption case of former Governor Don Siegelman and "The government asserts that Defendant Siegelman is deserving of and should receive a sentence of thirty years for the criminal conduct for which he was convicted... The United States asserts that thirty years imprisonment, a fine of $1,000,000, and an order of restitution of $5,239,495 is the most appropriate sentence in this case."
Note: Siegelman has until May 29, 2007 to present information concerning differences not settled in the sentencing objection conference.
Siegelman attorney Susan James says,"Based on the sentencing guidelines for the counts he was convicted on you could suggest between three and five years. But they took all that acquitted conduct and came up with astronomical numbers...The bigger they can make it look the more they hope to influence the judge. No way they can say it's even appropriate. That wasn't what the testimony was. The jury apparently didn't believe Lanny Young and Nick Bailey...The trial evidence made clear that both Young and Bailey had personally benefited substantially more from their greed and dishonesty than their sentences and/or restitution reflects. Governor Siegelman and his family on the other hand were scrutinized by the IRS for years and he was not prosecuted for any tax related matter. He does not owe a dime as a result of any of the Government's erroneous allegations of corruption."
"The guidelines are advisory...If they had to charge it and prove it, it would be different. We've been battling for weeks now. As of close of business Friday, we don't have the revised pre-sentence report which we want before we write a sentencing memorandum. They want 30 years; We want probation."
Previously attorney Vince Kilborn told WSFA.com, "The government wants to charge Governor Siegelman with all the crimes he got found innocent of. They contend that those crimes should be considered by Judge Fuller and the point is they're not crimes...All the testimony by Lanny Young about Goat Hill, the revenue rulings...They want to throw all that in as part of what he should be punished for and we say,'Y'all tried that once and failed and you shouldn't try it again.' It's just fundamentally unfair. Why should we have to come in and retry the case."
Kilborn said after the objections conference several weeks ago, "We certainly don't think there was criminality that justifies a heavy sentence like the government's trying to get. Particularly with 90 percent of this case he was found innocent of and we don't think that ought to be considered again. So we're vehemently fighting that."
Following are more excerpts from the government memorandum filed between 7:30 and 8 p.m. on Friday evening:
"The Probation Officer correctly observed that "[e]ach of [Defendant Siegelman's] counts of conviction represent essentially one composite harm" - namely, the harm to the citizens of Alabama from Defendant Siegelman's criminal activity while Lieutenant Governor and Governor, including, but not limited to, his acceptance of bribes from Defendant Scrushy, his planning and execution of a criminal conspiracy and honest services fraud scheme involving Defendant Scrushy and other members of the CON Board (e.g., Tim Adams), his planning and execution of a honest services fraud scheme involving Lanny Young, and his obstruction of justice during the investigation of these public corruption offenses."
"Defendant Siegelman's counts of conviction involve the same victim (e.g., the citizens of Alabama) and are connected by a common criminal objective - Defendant Siegelman's intent and desire to obtain power, money, and property for himself and others through the illegal use of his official position as Lieutenant Governor and Governor."
"Siegelman's obstruction of justice offense involved obstructing the investigation and prosecution of the public corruption offenses occurring while he was Lieutenant Governor and Governor...Defendant Siegelman's obstructive conduct which formed the basis of Count 17 was aimed at the entire investigation of public corruption offenses during his gubernatorial administration. Defendant Siegelman's obstructive conduct was designed to thwart the investigation into his criminal conduct, and, if successful, would have precluded the prosecution of not only himself, but also Bailey. The successful prosecution of Bailey led to his cooperation with the government, and thereafter to the successful prosecution and conviction of Defendants Siegelman and Scrushy."
"...The benefit received in return for the illegal payments is calculated as follows: Defendant Siegelman received $500,000 in benefit from Defendant Scrushy since Defendant Siegelman used that amount to pay off a debt for which he was personally liable. Tim Adams received at least $11,000 in benefit from Defendant Scrushy in the form of two bribes of $8,000, and $3,000, respectively. Integrated Health Services received $17,000 in benefit from UBS Warburg for issuing the $250,000 check that Defendant Scrushy used to bribe Defendant Siegelman since UBS Warburg forgave $267,000 of indebtedness owed to it by IHS. HealthSouth received approximately $3,109,054.62 in benefit from the construction and operation of the Phenix City hospital - a project that the CON Board approved in furtherance of the conspiracy and honest services fraud scheme executed by Defendants Siegelman and Scrushy for which they were convicted in Counts 5, and 6-9, respectively. Defendant Siegelman received at least $400,000 from Young in the form of cash, property (e.g., four-wheeler), campaign contributions in the form of cash and property (e.g., shirts, hats, signs), and airplane rides.8 Defendant Siegelman received $50,000 from Waste Management after he had the Department of Revenue change the assessment of fees for Chemical Waste Management at the waste disposal facility at Emelle, Alabama pursuant to the honest services fraud scheme he had with Young. Waste Management received at least $4,200,000 in benefit from the reduction of fees at the waste disposal facility at Emelle, Alabama pursuant to the honest services fraud scheme he had with Young. Waste Management received at least $4,200,000 in benefit from the reduction of fees at the waste disposal facility at Emelle, AL."
"Paul Hamrick received at least $50,000 from Young in the form of cash, property (e.g., NASCAR tickets, airplane tickets), and airplane rides.9 Bailey received at least $62,000 from Young in the form of cash and property. Young, d/b/a AWDS, received $3,000,000 from Waste Management for the Cherokee County Commission enlarging the service area and lowering the royalty fees at the Three Corners Landfill, which action was performed as part of the honest services fraud scheme between Defendant
Siegelman and Young. Young, d/b/a GH Construction, LL.C., received $411,495 from ADECA as part of the GH Project, which was part of the honest services fraud scheme between Defendant Siegelman and Young. Young received $35,000 from Bill Blount as part of the illegal agreement and honest services fraud scheme he had with Defendant Siegelman. Young received at least $50,000 in fees from consulting contracts he received through Austin Young Capital Resources because of the illegal agreement and honest services fraud scheme he had with Defendant Siegelman. In sum, a conservative account of the total benefit received from the payments is $11,895,549.62."
"Defendant Siegelman should be fined $1,000,000. As discussed supra, the total loss figure caused by his having run the government of the State of Alabama like a grocery store is much higher than $1,000,000. Nevertheless $1,000,000 is a fair and reasonable amount based on Defendant Siegelman's ability to pay. This sum will also have the effect of divesting him of approximately $1,000,000 that he received at or near the time of the settlement of the State of Alabama's interest in a national lawsuit against tobacco companies, while he was the Governor of Alabama, from a law firm with which he had formerly been associated."
"The law firm which paid this money to Defendant Siegelman received a share of the legal fees paid to lawyers who were allowed to represent the State of Alabama in the tobacco litigation. Defendant Siegelman, while not technically receiving any of the tobacco legal fees, received almost all of the fees (approximately $1,000,000) for the firm from a related case. The percentage of Defendant Siegelman's fee from that litigation was far in excess of that normally allocated to him by the firm and far in excess of the amount commonly shared with associates or for that matter partners. (Defendant Siegelman was not a partner in the firm.) Moreover, the fee constituted an unearned windfall obtained under questionable circumstances considering Defendant Siegelman's ability at the time to refuse to approve the tobacco settlement. Regardless, since Defendant Siegelman has the ability to pay with money closely connected to his actions while Governor, and since his wrongdoing while Governor resulted in a much greater loss to the State of Alabama, he should be fined the amount of $1,000,000. A fine in this amount will both best punish Defendant Siegelman and deter him and others from engaging in misconduct of this nature in the future."
"On information and belief, the United States avers that Defendant Siegelman has purchased annuities with this money which are reflected in the PSR. The United States has subpoenaed records for the sentencing hearing which will establish whether this money was used to purchase the annuities and will establish if this purchase was made in an effort to insulate these monies from being recovered as restitution or a fine in anticipation of same becoming an issue at sentencing."
"Defendant Siegelman ...was an organizer and/or leader of the criminal activity for which he was convicted in Counts 3, 5, and 6-9 (the "CON Board criminal activity"), and Count 17 (the "obstruction criminal activity") of the second superseding indictment.
The CON Board criminal activity involved five or more participants, including Defendant Siegelman, Defendant Scrushy, Nick Bailey, Mike Martin, Eric Hanson, and Tim Adams."
The evidence adduced at trial established that Defendant Siegelman exercised decision-making authority throughout the execution of this criminal activity (e.g., he made the decision to appoint Defendant Scrushy to the CON Board), that his leadership and participation was vital to the execution of the criminal activity, that he recruited others to participate in the criminal activity (e.g., Nick Bailey), that the $500,000 he received from the criminal activity was used to pay off a liability for which he was personally liable, that he and Defendant Scrushy were intimately involved in the planning and organizing of the criminal activity, that this criminal activity pervaded the highest levels of State government and involved many knowing and unwitting participants, and that Defendant Siegelman controlled and had authority over the actions of others (e.g., Bailey, Darrin Cline, Josh Hayes, Raymond Bell, Margie Sellers) involved with the criminal activity."
Defendant Siegelman should receive the four-level enhancement even though Defendant Scrushy is due to receive it as well, for more than one participant can be an organizer or leader of any given criminal activity..."
"... Though in agreement with the PSR, the government addresses the various bribes involved with Defendant Siegelman's criminal conduct because this issue arose during the objections conference. As the government stated during the objections conference, Defendant Siegelman's criminal conduct involved at a minimum (1) the $500,000 bribe paid to him by Defendant Scrushy as charged in Count 3, (2) the bribes Defendant Scrushy paid to CON Board member Tim Adams (e.g., $8,000 bribe paid in February 2002, and $3,000 bribe paid in July 2002) as part of the conspiracy and honest services fraud scheme charged in Count 5, and Counts 6-9, respectively, and (3) the bribes paid to Defendant Siegelman, Hamrick, and Bailey by Lanny Young, which were part of the honest services fraud scheme and public corruption offenses that Defendant Siegelman sought to cover up by his obstructive conduct for which he was convicted in Count 17. The bribes identified above involving the CON Board criminal activity are offense conduct specifically identified in the indictment. Defendant Scrushy's bribe payment to defendant Siegelman is specifically charged in Count 3, which states that "defendant DON EUGENE SIEGELMAN . . . corruptly solicited, demanded, accepted, and agreed to accept $500,000 from defendant RICHARD SCRUSHY, intending to be influenced and rewarded in connection with the appointment of defendant RICHARD SCRUSHY . . . to the CON Board." The jury found Defendant Siegelman guilty of Count 3."
Attorneys for Scrushy in a recent motion, which was denied by Judge Fuller say Scrushy "will argue at sentencing, there was no evidence presented at trial connecting him to either of the alleged bribes paid to Mr. Adams. Moreover, and in any event, any "benefit" that might have accrued to HealthSouth did not "result from" the payment of any monies or the provision of any thing of value to Tim Adams. "
"The $500,000 bribe in Count 3, together with further, different bribes, are all charged as integral parts of Count 5. Count 5 charges a mail fraud conspiracy to deprive the State of Alabama of the honest services of both Defendant Siegelman "as well as other members of the CON Board." Count 5 goes on to specifically state as one manner and means of the conspiracy the same bribe identified in Count 3 (i.e., that "RICHARD M. SCRUSHY would and did pay $500,000 to DON EUGENE SIEGELMAN ..."). Indictment at ¶ 55a. Count 5, however, goes on to specifically state as a separate manner and means of the conspiracy that "RICHARD M. SCRUSHY would and did offer things of value to another CON Board member..." Id. at ¶ 55e. ""
Moreover, the indictment specifically charged two payments to the "CON Board Member," separate and apart from the $500,000 paid to Defendant Siegelman. In particular, ¶ 56 charges as one overt act a "payment of $3,000" on August 2, 2002, for creating a CON Board quorum for action on a proposed hospital. Further, ¶ 56 charges a February 6, 2002, "payment of $8,000" concerning a certain PET scan application as another overt act. At trial, the testimony of Loree Skelton both identified Timothy Adams as the CON Board member receiving these two separate payments, and highlighted their separation from the $500,000 bribe to Defendant Siegelman, of which she had no knowledge. The jury found Defendant Siegelman guilty of Count 5 as they found him to be part of the charged conspiracy and liable for the criminal actions of his co-conspirators (e.g., Defendant Scrushy) which were reasonably foreseeable to him.
Further, all of the same bribes identified in the Count 5 conspiracy were also charged as substantive mail fraud in Counts 6 through 9. Specifically, Counts 6 through 9 charged the very same manner and means as Count 5, i.e., that "RICHARD M. SCRUSHY would and did pay $500,000 to DON EUGENE SIEGELMAN ...", id. at ¶ 59a, and that "RICHARD M. SCRUSHY would and did offer things of value to another CON Board member..." Id. at ¶ 59e. "
"Moreover, and more importantly, Counts 6 through 9 proceed to charge aspects of all the various bribes as separate mailings in furtherance of the scheme. Specifically, Counts Six and Seven charge mailings of CON Board appointment letters that furthered the $500,000 bribe of Defendant Siegelman by giving HealthSouth membership on and influence over the CON Board. Count 8, in contrast with Counts 6 and 7, charges a mailing in furtherance of the $3,000 bribe to Timothy Adams to facilitate a Certificate of Need for a HealthSouth hospital in Phenix City, Alabama. Count Nine, in further contrast with Counts 6 through 8, charges a mailing that furthered the $8,000 bribe in connection with the PET scanner application. The jury found Defendant Siegelman guilty of each of Counts 6 through 9, thereby specifically finding that each of the multiple bribes at issue did occur and that he was criminally liable for them.
Additionally, the bribes involved with the obstructive criminal conduct were particularly charged in Count 2 of the indictment as part of the substantive RICO offense and in Counts 10-14 as parts of the manner and means of the honest services fraud schemes involving Defendant Siegelman, Hamrick, Bailey, and Young. In particular, ¶ 30 delineates particular bribes that Young made to Defendant Siegelman, Hamrick, and Bailey as part of their "pay for play" agreement."
"Though the jury found Defendant Siegelman not guilty on the RICO Counts and Counts 10-14, the United States submits that the evidence at trial established by a preponderance of the evidence that Young paid these bribes..."
"...A sentence of 30 years is a reasonable sentence given that the jury convicted Defendant Siegelman for public corruption offenses that spanned at least a four year time frame while he was Governor, involved his abuse of a plethora of State government agencies and personnel, and caused a heightened distrust of State government. If ever a defendant was deserving of being held accountable to the maximum extent for his criminal wrongdoing, Defendant Siegelman is that defendant, especially given the complete lack of remorse and acceptance of responsibility he has shown for his crimes, his continued proclamation of innocence despite the jury's verdict and claims that the prosecution against him is politically motivated. The United States, therefore, respectfully urges this Court to punish Defendant Siegelman to the fullest extent permitted under the law."
We are likely to have a mini-trial at the time of sentencing. Issues which we will most likely hear about again include the differentiation between a campaign contribution and a bribe and the whole issue of there needing to be a quid pro quo. Another contention will most likely be other past and current CON board members and their political contributions prior to having been appointed to the board.
Former Governor Siegelman issued the following statement Saturday, "Following Congressman Artur Davis' questioning of Alberto Gonzalez in the House Judiciary Committee about the prosecutor's behavior in this very case, the prosecutors seek an enhanced sentence of up to 30 years . Is retaliation the reason?"
"Why do the prosecutors continue to protest my proving that this case was politically motivated from the start?"
"Is it a coincidence that after my recent request to travel to Washington, DC, the prosecutors once again complain about my allegations that this case was, in fact, politically motivated?"
"As will be proven before the Congressional Judiciary Committees, the Alabama Case was politically motivated and those who have cooperated with Karl Rove have been rewarded."