Cuccinelli relieved from case, McDonnell still in the crosshairs

In the case of former chef to the Executive mansion Todd Schneider, AG Cuccinelli's office (as predicted) has been let out of the case.

In response to discovery motions implicating Governor Bob McDonnell, AG Cuccinelli's office moved the court to allow the AG's office to be recused from the case.  Schneider's attorneys objected. 

At a hearing this afternoon, Judge Margaret Spencer of the Richmond City Circuit Court allowed AG Cuccinelli's office to withdraw from the case. 

Norfolk Commonwealth's attorney, Greg Underwood (D) will be handling the prosecution from now on.  Commonwealth's Attorney, Paul Ebert was not selected for reasons not apparent from any news source at this time.

The AP reports that the motion to dismiss has been delayed until May 14, 2013.  Given the fact the recusal motion has been granted, I strongly predict the motion to dismiss will be denied.

Governor McDonnell still faces the possibility of substantial disclosure of records regarding his family's use of assets at the Governor's mansion.  With AG Cuccinelli's office out of the picture, he is likely anxious to find out what will happen next.

Star Scientific and Cuccinelli, a fleeting excitement

Updated: Motion to recuse AG Cuccinelli's office granted, as predicted.

An Attorney General seeking a governorship, a well-heeled businessman paying a substantial amount toward the Governor's  daughter's wedding, a disgruntled former employee being prosecuted for embezzlement, and an off year election make for some juicy legal stories.

The only thing clear is that there will be more chaos before the waters settle down.

Todd Schneider - Executive Chef and current source of angst for Governor McDonnell

Todd Schneider, the former executive chef at the Governor's mansion in Richmond, is being prosecuted for alleged embezzlement of (it appears) food from the executive mansion.  As part of his defense he is seeking substantial information about the McDonnell's use of goods from the Executive mansion.  The implication is one of outright theft, but nothing beyond bare allegations from the accused has surfaced.  Still, the Washington Post broke the story this morning that the FBI have been investigating McDonnell due to alleged improper ties to Jonnie Williams the CEO of Star Scientific, Inc. 

Star Scientific, Inc. appears to be a former tobacco company that now produces dietary supplements.  It also appears that much of Star Scientific's resources were spent on lawsuits defending patents in the past decade.

What could this possibly have to do with AG Cuccinelli?

Attorney General Cuccinelli has his own ties to Jonnie Williams, having received gifts from Williams.  Cuccinelli also, up until recently, owned some stock in Star Scientific.  But what does this have to do with Schneider?

Schneider claims, that in 2012, Schneider was interviewed by the FBI, Virginia State Police, and the Virginia AG's office regarding information Schneider had regarding improper connections between Jonnie Williams and the McDonnell family.

The Attorney General's office then, one year later, initiated prosecution against Schneider for embezzlement.  It is not clear that there is any direct tie between the conversations in 2012, and the evidence gathered for the embezzlement charges. 

Schneider's counsel, seeing an opportunity to defend their client, are now seeking to force the Commonwealth to turn over substantial documentation that appears embarrassing to the McDonnell family. 

AG Cuccinelli, seeing what a mess this was becoming sought to be recused from the case due to a conflict of interest that likely existed prior to indicting Schneider.

But wait, I thought the Virginia Attorney General does not handle criminal prosecutions

Okay, I have made a big deal in the past over the limited criminal enforcement powers of the AG's office.  The AG in Virginia is essentially a civil attorney's office, although it handles criminal appeals.  So, in searching for the local Commonwealth's attorney who I felt should be prosecuting Schneider, I instead found this:

"Unless specifically requested by the Governor to do so, the Attorney General shall have no authority to institute or conduct criminal prosecutions in the circuit courts of the Commonwealth . . ."  Va. Code § 2.2-511.  Wow! That looks really bad, did Gov. McDonnell insist on prosecution?!?!?!?!?!  Did AG Cuccinelli prosecute without proper authority?!?!?!?!?!

No.

The statute goes on to state "except in cases involving . . . (v) the theft of state property . . ."  Us lawyers always have exceptions.  Va. Code § 2.2-511.

So the AG has the authority.  But that does not mean he had to utilize it.  Yes, the AG's office, to handle this cleanly, should have handed the prosecution off earlier.  We are where we are, so is the AG seeking to throw the book at Schneider?  Is the AG counseling people to hide evidence?  Is the AG promising to get Schneider if that's the last thing he'll do?  Nope, quite the opposite.  The AG's office has filed it's mea culpa seeking to be relieved from the case and appointing the Democrat Commonwealth's Attorney from Prince William County (more on that later) to handle the prosecution.  This would include any plea deals or decisions to drop the charges.

So the AG's office probably should have handed this off sooner, but what does it matter?

Not content to simply seek to embarrass Governor McDonnell with some interesting discovery, Schneider's counsel are seeking everything.  They have filed an opposition to the motion to recuse, trying to keep the AG's office in the case.  I am not really sure why.

Moreover, yesterday Schneider's counsel filed a motion to dismiss on the grounds that the indictment should never have been filed by the AG's office due to the alleged conflict of interest in the AG's office.  Essentially their claim is that because AG Cuccinelli can not prosecute the matter fairly, simply by filing the case with an alleged conflict, Schneider should be let off for ALL alleged criminal charges. 

I am often asked the following question:  "Mr. Prados, do you have any case authority for that position?"  Either I'm prepared to hit that matter out of the park, or I'm about to lose a substantive point.  The major cases cited by Schneider's counsel do not stand for the proposition that if a prosecutor with a conflict of interest obtains an indictment against a Defendant, that the mere existence of the conflict of interest allows the Defendant to be free from all further prosecution.  It would be an absurd result.

In fact, in my opinion, the main Virginia case they cite makes clear that the remedy available to Schneider is to force the AG's office to recuse itself, something the AG's office is doing voluntarily, and that Schneider's counsel has objected to.

So why the remarks about the Commonwealth's attorney for Prince William County?

Paul Ebert is the decades long Commonwealth's attorney for Prince William County.  Defense counsel felt it was important to point out that Ebert himself was a poor choice for replacement counsel as Schneider's counsel alleges "Mr. Ebert and his office have engaged in a pattern of intentionally withholding exculpatory information from defendants."  If you have some extra time you can read about this history in the Justin Wolfe case here and here.

So what happens next?

The parties are before the Court May 2 for a hearing on the motion to recuse.  No matter what happens, a prominent Republican statewide official is going to be dissatisfied with the decision.  If the recusal motion is granted, McDonnell will likely risk an extensive probe into his families records.  If the recusal motion is denied, the case might be dismissed, but more importantly it puts AG Cuccinelli in an ongoing difficult position.

I believe recusal will be granted and the motion to dismiss will be denied.  Contact me directly to discuss all non-monetary wagers.

The only thing guaranteed is that this will get messier before the truth becomes clear.

And my strongly held (albeit biased) belief is that AG Cuccinelli did not do anything wrong.

Virginia Can Engage in Mid-cycle Redistricting

Monday's redrawing of Virginia Senate Districts was likely Constitutional.

On Monday, Virginia Senate Republicans redrew Virginia's state senate districts utilizing their bare majority due to the absence of Senator Henry Marsh who was a couple hours up the road attending inauguration activities.

I have seen repeated calls for the plan to be struck down as unconstitutional under the Virginia Constitution.  Up until a few days ago, I agreed that mid-cycle redistricting was likely unconstitutional.

I repeatedly heard of a redistricting case from early 2012 in Richmond that prohibited mid-cycle redistricting, but no one seemed to have read the case.

I looked into some arguments, and had changed my mind.

Then I obtained a copy of the opinion.

In part:

The Constitution of Virginia dictates that “[t]he authority of the General Assembly shall extend to all subjects of legislation not herein forbidden or restricted; and a specific grant of authority in this Constitution upon a subject shall not work a restriction of its authority upon the same or any other subject.”  VA. CONST. art. IV, § 14 . . . The Court is unable construe Article II, Section 6, [regarding apportionment] as cabining the General Assembly’s authority to enact decennial reapportionment legislation to 2011 and foreclosing the enactment of such legislation in 2012.  Moreover, the 2004 amendments to this provision, specifically the addition of the word, “decennial,” and the replacement of the date in a section containing two-hundred-fifty-one words, do not support a finding that these revisions divested the General Assembly of its authority to enact decennial reapportionment legislation in 2012 after it failed to do so in 2011."  Slip Op pp. 7-8.

Reading the entire opinion is necessary if you want to understand the breadth and detail of the ruling.  The Judge did leave a loophole for later adjudication, and this legislation may beget the test case for that loophole.

Please note that this opinion is not binding outside of the parties in that case.  Nonetheless, the reasoning is sound, and I do not feel I could say it better myself.

The lawsuit to strike down the bill will likely fail, but the press generated will be damaging.  Republicans concerned about the effects on our statewide ticket this November need to urge the House to reject the legislation and the Governor to veto it.  Pass the bill in the light of day, and we will talk. 

As previously laid out the current senate districts from the Democrats are a travesty.

Debt Ceiling Hypocrisy, and the Right of Congress to Check Government Spending

Today, President Obama threw out his latest volleys on the debt ceiling, stating in part:

"The debt ceiling is not a question of authorizing more spending.  Raising the debt ceiling does not authorize more spending.  It simply allows the country to pay for spending that Congress has already committed to."  Source: Washington Post.

The Treasury Department has issued a policy document echoing similar sentiment:  Debt Limit Myth v. Fact, stating in part:

"The debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations . . . Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history."

What is this debt limit crisis?

Not being one to accept presumptions of disaster at face value, I have looked into the function of the debt ceiling to determine the legitimacy of the above sweeping claims.  Below are my results:

·                    Having found no indication otherwise I accept that raising the debt ceiling does not directly authorize more spending. 

·                    Paying already incurred debts appears reasonable, the devil is in the details of the definition of "already incurred."

·                    Raising the debt ceiling not only allows the payment of obligations already incurred, but also allows the payment of obligations already approved by Congress and the President, but not yet spent ["ongoing obligations"].  For example, if the debt ceiling is sufficiently raised then the executive branch could effectively pay for obligations in February, March, April, May, June, etc. of 2013.  The Debt Limit: History and Recent Increases p. 4.

·                    Not raising the debt ceiling does not cause an automatic default on the nation's debts.  The Treasury Department has about $42 billion in its bank account from which it continues funding ongoing obligations.  Daily Treasury Statement.

·                    In order to illustrate current spending, the numbers from November 2012 are telling.  The federal government spends approximately $11 billion dollars per day, while bringing in an approximately $5 billion per day, resulting in a daily deficit of about $6 billion.  "How Much does the Government Spend Every Day?"

·                    The current debt subject to the limit is $16.393975 trillion, the current debt limit is $16.394 trillion.

Based on the foregoing:

The crisis time for raising the debt limit is now.

Based on the reports form the treasury the debt limit has been maxed out.  With $42 billion in funds, and a $6 billion dollar per day deficit, we have about one week until ongoing obligations begin to go unpaid.  Nonetheless, there appears to be a jump in the debt subject to limit as of late December as reflected in this chart:

Source January 14, 2012

This has the makings of a manufactured crisis.

Not all ongoing obligations will remain unpaid

As the treasury will continue to bring in revenue, and pay some of its obligations, it is not that every recipient of the government will go unpaid.  Instead, the Treasury will have to decide which recipients to pay and which to delay payment until some later deal is reached on the debt limit.

The debt ceiling was created for the express purpose of reigning in government spending

The debt limit also provides Congress with the strings to control the federal purse, allowing Congress to assert its constitutional prerogatives to control spending.  The debt limit also imposes a form of fiscal accountability that compels Congress and the President to take visible action to allow further federal borrowing when the federal government spends more than it collects in revenues.  The Debt Limit: History and Recent Increases p. 6.

The debt ceiling was not created as a formality.  The debt ceiling instead was the result of a compromise during World War I to finance our entry into the war.  Congress retained power over setting the debt limit as part of its assertion over its constitutional powers of the purse, of taxation, and the initiation of war.  The Debt Limit: History and Recent Increases p. 7.  In fact, our current President, while a legislator (in additional to many current Senate Democrats), thought controlling the debt limit was an important tool to curtail executive power.

The ultimate result:

President Obama does not actually believe the fear mongering about default coming from our Treasury Department.

More importantly, President Obama actually meant to say in today's news conference:

"The debt ceiling is not a question of authorizing more spending [on already incurred obligations].  Raising the debt ceiling does not authorize more spending [on already incurred obligations].  It simply allows the country to pay for spending that Congress has already committed to [with the understanding that spending cuts would be forthcoming and the power to rein in spending with the debt limit would remain a tool available to Congress]."

Congress needs to stand their ground and hold out for the cuts promised in August 2011.