United States: Can Sheldon Silver Beat This?

While addressing a conference room full of New York State Assembly Democrats in the State Capitol less than a week after his arrest on corruption charges, former New York State Assembly Speaker Sheldon Silver reportedly told fellow lawmakers, "I'm going to beat this." Since that time, scores of articles have been written condemning Silver and the perceived corruption in New York state politics, yet none of the coverage has bothered to ask the obvious question: Can he?

The case against Silver must be reexamined in light of the federal grand jury's decision on February 19 to return a three-count indictment against Silver charging him with honest services mail fraud, honest services wire fraud, and Hobbs Act extortion under "color of official right." The indictment, like the original complaint, charges Silver with orchestrating two separate bribery schemes through which he allegedly received bribe payments concealed as "referral fees" from two law firms that facilitated Silver's corrupt arrangements.

As difficult as the case against Silver might seem at first blush, a closer review of the public information concerning the case suggests that Silver and his lawyers may have a shot at a successful defense—particularly in light of the fact that the government at this stage cannot present the testimony of a single witness who has pleaded guilty to participating in the alleged unlawful "schemes."

Understanding the Government's Burden Of Proof

For federal prosecutors looking to prosecute state and local bribery, honest services fraud and Hobbs Act extortion are the statutes of choice.

In the landmark 2010 case of Skilling v. United States, the Supreme Court limited the scope of the honest services fraud statute to corruption that amounts to bribery or kickbacks. The Hobbs Act "color of official right" extortion theory that is being used against Silver is, substantively, the equivalent of bribery. To prove this offense, the government must establish: (1) that Silver accepted money to which he was not entitled; and (2) that Silver knew at the time that the money was in exchange for some exercise of his official authority. No showing of a demand, shakedown, or inducement by Silver is necessary—Silver's abuse of his office would satisfy the necessary element of coercion.

The "Asbestos Scheme"

The essence of bribery is a quid pro quo, or a corrupt arrangement in which a public official receives something of value in exchange for his agreement to be influenced in the performance of his official position.

Here, in the "asbestos scheme," Silver is charged with using his official position as a New York state assemblyman, to benefit a prominent oncologist who has since been identified as the now-former Director of Columbia University's Mesothelioma Center Dr. Robert N. Taub. Silver is charged with directing a total of $500,000 in state funds to Dr. Taub's research lab, directing $25,000 in state funds to a nonprofit organization where one of Dr. Taub's family members served on the board, and helping Dr. Taub's son obtain employment at a nonprofit organization that received state funding from Silver. As part of the allegedly unlawful arrangement, Dr. Taub allegedly referred close to one hundred victims of asbestos exposure to Silver's law firm Weitz & Luxenberg, which, in turn, paid Silver $3.2 million for the referrals.

A key trial strategy for Silver's defense team will be to show that Silver merely intended to facilitate the research of a preeminent cancer doctor and to assist deserving members of the doctor's immediate family, and that at least in Silver's mind, the work that Silver's firm did on behalf of Dr. Taub's cancer patients was separate from anything he did in his official capacity as a New York state assemblyman. Based on information that has become public since Silver's arrest, this strategy may have traction with jurors.

An esteemed doctor who has been practicing medicine for almost five decades, Dr. Taub is regarded as one of the nation's leading experts on peritoneal mesothelioma, a rare cancer caused by asbestos exposure. For some jurors, it might seem like a no-brainer for Silver to send $500,000 in research funds to Dr. Taub's Columbia lab and for Silver to honor Dr. Taub, who, by all accounts, is a giant in his field.

Likewise, Silver's efforts to help Dr. Taub's family members do not appear particularly troubling. Based on public information, it appears that Silver directed $25,000 in state funds to Shalom Task Force, a Jewish nonprofit organization focused on promoting healthy marriages, of which Dr. Taub's wife sat on the board. As with the cancer research funds sent to Dr. Taub's lab, jurors are likely to consider the money that was sent to the Shalom Task Force to be money well spent.

Perhaps even less troubling is Silver's role in helping Dr. Taub's son land a job at OHEL Children's Home and Family Services, a Jewish organization dedicated to provided social services to families in need.

Moreover, Silver's defense team is likely to emphasize Silver's and Dr. Taub's strong personal bond as further justification for Silver's support of the Taub family. The defense team will argue that the personal and professional bond between these two developed as a result of seven decades of shared roots in the Lower East Side and both men's longstanding service to the Jewish community.

When viewed in this light, a key issue in the case will be the availability—or lack thereof—of an "insider" who can provide a first-hand account establishing that Silver used his official position to benefit Dr. Taub and his family, at least in part, because he was receiving, and wanted to continue to receive, patient referrals from Dr. Taub—patient referrals from which he expected to rake in millions after his firm's successful representation of these individuals.

One of the most noteworthy aspects of the case is the apparent absence of any cooperating witnesses who have pleaded guilty to participating in any of the offenses alleged against Silver. Based on the information that is public to date, the government appears to be relying exclusively on witnesses who have received non-prosecution agreements and immunity.

Silver's team will likely call upon witnesses from Weitz & Luxenberg to establish that no one at the firm suspected any wrongdoing or even knew much about Silver's relationship with Dr. Taub. Indeed, the government has already conceded in court documents that Silver did not share any details of his allegedly unlawful arrangement with members of the law firm.

Moreover, we can expect Weitz & Luxenberg attorneys to tell the jury that they understood that the referral-fee arrangement with Silver was completely above-board and that the firm successfully represented the individuals who were referred by Silver including negotiating substantial settlements of their asbestos claims. Indeed, the firm's managing partner has already gone on record to defend the firm's employment of Silver, likening Silver's position with the firm to a retired judge who is expected to bring prestige to the firm.

The biggest obstacle for Silver may be the testimony of Dr. Taub—a key government witness for whom Silver's lawyers have several lines of attack. Dr. Taub will testify under a non-prosecution and cooperation agreement with the government that provides that he will not be prosecuted for any of the conduct he testifies about. Such arrangements are normally reserved for witnesses with little or no criminal exposure.

Silver's defense team will likely point to the government's treatment of Dr. Taub as evidence that Dr. Taub is being "used" by the government and that the government is pursuing trumped up charges against Silver. It may be difficult for the jury to reconcile the idea that Dr. Taub's conduct did not warrant prosecution but Silver's conduct did—and an obvious compromise for the jury would be to let both men walk away from this affair which has forever impacted their personal and professional lives.

Silver's team will also seek to exploit an apparent inconsistency in the government's charging theories. Under the honest services theory, Dr. Taub is an active participant in the bribery and kickback arrangement with Silver; but under the extortion theory, Dr. Taub is a "victim" who felt that he had no choice but to bribe Silver so that he could obtain the research funds. A sophisticated New York jury may have a hard time placing Dr. Taub in either role, given Dr. Taub's esteemed position and reputation in the medical profession—and may have an even tougher time placing him in both roles as both bribe giver and "extorted" victim.

Most importantly, Silver's attorneys will make a strong case that the nature and timing of the transactions at issue favor Silver's position that no such quid-pro-quo arrangement existed. According to court documents, Dr. Taub sent Silver the first referral in November 2003—more than a year and a half before Silver directed the first research grant to Dr. Taub (July 2005). Furthermore, Dr. Taub continued to refer patients to Silver after 2010—that is, at least three years after Silver told Dr. Taub that the program under which Dr. Taub received the research grants had ended (sometime in 2007) and at least four years after Silver had directed the second and final research grant to Dr. Taub (November 2006).

Given this sequence of events, a jury might reasonably conclude that Silver did not believe that there was any connection between Dr. Taub's patient referrals and Silver's decision to award him research money. Indeed, the vast disparity between the purported benefit to Dr. Taub ($500,000 in research funds) and the purported benefit to Silver ($3.2 million in referral fees) would seem to support Silver's position that there was no connection.

Thus, the asbestos scheme is anything but a slam dunk. Much will depend on Dr. Taub's direct testimony about his allegedly unlawful dealings with Silver and information, if any, that might corroborate Dr. Taub's account. Even assuming that these pieces fall into place, the jury will decide if the disparate treatment of the two men is fair—and most importantly, whether Dr. Taub's testimony can be believed.

The "Real Estate Scheme"

The "real estate scheme" might be even more manageable for Silver's defense team.

In the real estate scheme, Silver is charged with using his authority over the real estate industry—including, among other things, his ability to influence real estate and tax abatement laws, rent control laws, and government subsidies—to benefit two real estate developers. As part of the unlawful arrangement, the two real estate developers allegedly agreed to retain the service of a particular real estate firm—which has since been identified as Goldberg & Iryami—a firm that specializes in real-estate tax reductions for properties in New York City. Goldberg & Iryami allegedly paid Silver $700,000 for the referrals. Jay Arthur Goldberg, Silver's former assembly counsel, is the lead partner at Goldberg & Iryami.

Since the details of Silver's official acts are unknown at this time, it is impossible to determine if there are any obvious temporal links between Silver's use of his official position and the referral fees that he collected.

Like the asbestos scheme, however, Silver's lawyers will be able to exploit the apparent absence of any credible witnesses who can confirm the existence of a quid-pro-quo arrangement between Silver and the real estate developers.

When viewed in this context, the indictment is a game changer for Silver. Up until the indictment, the fate of Silver's former assembly counsel Jay Arthur Goldberg was in question. By identifying Goldberg as an unnamed co-conspirator or "CC-1" in the original complaint, the government exerted pressure on Goldberg to cooperate in the investigation in the weeks leading up to the indictment. Normally, a person identified as an unnamed co-conspirator either pleads guilty and cooperates with the government or is added to a later indictment. Thus, the government's decision to drop the conspiracy count relating to the purported real estate scheme, including reference to Goldberg as CC-1, is remarkable.

This surprising turn of events suggests that Goldberg remained loyal to Silver and steadfast in their shared belief that they did nothing wrong. Going forward, the government may have a difficult time prosecuting the case if other witnesses follow Goldberg's example.

Presumably, this means that Goldberg may be available as a defense witness who can tell the jury that he did not believe he was facilitating an unlawful arrangement, that his firm performed valuable services for their real estate clients, and that the firm paid Silver for his role in helping the firm grow its practice—and based on their close personal bond that, like Dr. Taub, includes deep roots in the Lower East Side. Goldberg's successful law practice—which, according to press reports, includes hundreds of clients—could add validity to such testimony.

In addition, Silver's lawyers will be able to elicit testimony from the two real estate developers identified in the indictment who, according to court documents, will say that they did not learn that Silver was sharing the legal fees until very late in the game (that is, 2012 and 2014, respectively).

While we can expect the government to call the real estate lobbyist identified in court documents (who has entered into a non-prosecution agreement with the government that identifies him merely as a fact witness) to talk about Silver's late disclosure of the fee arrangement, it is unclear what, if anything, this person might be able to say about the existence of a quid-pro-quo arrangement. Moreover, any testimony by this individual that there was such an arrangement would presumably be contradicted by real estate developers who will say that they were outraged when they learned that Silver was splitting the fees.

Likewise, the government will likely call Goldberg's former law partner (who will provide testimony under an immunity order and has not pleaded guilty for his role in any of the charged offenses) to talk about concerns this person had about Silver's apparent failure to comply with his disclosure obligations and bar rules regarding disclosure of the fee arrangements. But again, it is unclear what, if anything, this person can say about any purported unlawful arrangement. Presumably, this person's testimony was not significant enough to implicate Goldberg in these offenses—and if this individual did not refrain from splitting profits with Goldberg and Silver, this could seriously undermine any testimony that something appeared to be amiss.

To be sure, the government likely has an arsenal of evidence against Silver, most of which is not public at this time—and the government may easily be able to meet these apparent challenges to the government's proof. But based on the information that is now publicly available, Silver's statement that he is going to "beat" this case is not outlandish. His lawyers are correct to advise him that this is a triable case. As we watch the case unfold, we should remind people that the phrase "innocent until proven guilty" is a fundamental principle of our criminal justice system.

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