Kevin Ring Suffers Devastating Legal Setbacks

Channing Turner of Main Justice is the first to report on a hearing today in U.S. v. Kevin Ring:

A judge denied a motion to dismiss the heart of the government’s corruption case against former Abramoff-associate Kevin Ring Thursday, clearing the way for prosecutors to proceed to a second trial.

In a motion filed last month, Ring had argued new restrictions imposed on prosecutors’ use of the honest services fraud statute made their case untenable. But U.S. District Judge Ellen Segal Huvelle of the District of Columbia disagreed with a whole-sale dismissal.

In our opinion, the reports from today's proceeding suggest that Judge Huvelle had a whole-sale disagreement with Mr. Ring's legal defense. Here are a couple of things we gleaned from today's hearing:

Quid pro Quo Agreement

[Judge Huvelle] rejected the defense’s argument that prosecutors must prove direct quid-pro-quo exchanges — the new criteria for honest services fraud. Instead, she allowed prosecutors to present evidence that could “infer” a quid-pro-quo exchange.

The prosecution and defense presented two different theories on the government's requirement to show a quid pro quo exchange. The defense insisted that in order to show a quid pro quo arrangement that the government was required to show an explicit agreement to exchange things of value (TOVs) for official actions. The defense claims that Mr. Ring and the public officials he lobbied never made such an explicit agreement. The government says that its evidence shows that such an agreement in fact did exist. In more than one plea agreement signed by public officials (John Albaugh, Ann Copland), the public officials admit performing official acts for TOVs. To our knowledge, no public official has stated that an explicit agreement existed, though.

When Judge Huvelle says that a jury may "infer" a quid pro quo exchange, she seems to be saying that a jury could infer that an implicit quid pro quo agreement existed and that this implicit agreement is sufficient to support an Honest Services Fraud (HSF) conviction. The jury may even conclude that an explicit quid pro quo agreement existed even though no one will admit to it. Either way, Judge Huvelle's ruling means that the government doesn't have to provide documents or solicit testimony that Mr. Ring explicitly tied TOVs to official acts.

Material Misrepresentation

[Judge Huvelle] pointed to the [Supreme] court’s silence on material [mis]representation — or intent to deceive the public — which she said could be expanded to include Ring’s alleged actions.

Fraud cases, including HSF, require an element of material misrepresentation or intentional concealment. In other words, in order to support a fraud conviction, the government must show that the defendant lied by commission (material misrepresentation) or omission (intentional concealment).

The defense has argued that Mr. Ring never committed an act of material misrepresentation. Mr. Ring, they argue, performed his lobbying activities out in the open and did not deceive anyone. Therefore, the government can't show the element of material misrepresentation and can't prove a violation of HSF.

The government counters that it will show material misrepresentation. Specifically, the government says it will show that Mr. Ring's bribery scheme involved "public officials who made material misrepresentations, concealed or omitted material facts, made false statements, or committed fraudulent pretenses as part of the scheme to defraud."

See what's going on here? The government's position is that there had to be a material misrepresentation in the bribery scheme, not that Mr. Ring personally made the material misrepresentation.

Unfortunately, today's reporting doesn't make it clear where Judge Huvelle sees a potential material misrepresentation. We're guessing that Judge Huvelle accepted the government's position in its entirety. It seems to us that the public officials made the material misrepresentation (or intentional concealment) when they did not disclose that the reason they were performing official acts was due to the fact that they were receiving things of value from Mr. Ring. If this is accurate, virtually all bribery schemes satisfy the material misrepresentation element; we can't imagine the situation where a public official openly acknowledges that his performance of an official act was largely influenced by bribes. We shall see.

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While we maintain that Judge Huvelle's decisions were devastating to Mr. Ring, we don't mean to imply that they weren't close calls. We believe they were. These are complicated legal matters -- Judge Huvelle even said as much. Both of today's decisions must have been difficult to make. As Judge Huvelle said in court today, "This case is filled with challenges ... We have excellent lawyers who don’t agree on anything."

Meanwhile, more definitional challenges remain. Mr. Turner reports that "prosecutors must prove Ring and the public officials he interacted with violated their “lawful duty” to the public — a term Huvelle and both counsels struggled to define." We won't even venture a guess as to how "lawful duty" will eventually be defined. The judge and attorneys in this case are far smarter than the author of this blog. We'll let them have first shot at solving that problem.