Categories: Courtroom Buzz
      Date: February 25, 2009
     Title: Defense Lawyer Says Nobody Was Defrauded At Citizens Alliance

Live at the Fumo trial: the defense counterattacks

By Ralph Cipriano

The defense in the Vince Fumo political corruption trial today attempted to blunt a number of federal charges in the case by asserting that nobody was ever defrauded at Citizens Alliance for Better Neighborhoods.

"By the way, who did we defraud?" defense lawyer Eddie Jacobs asked the jury point-blank. Jacobs, the lawyer for Fumo's co-defendant, Ruth Arnao, former executive director of the Fumo nonprofit, said the government began its case way back on Oct. 22 by making a mistatement of fact, namely that it was illegal for a nonprofit to spend money for political purposes.

After all the evidence was heard in the 19-week trial, Jacobs said the defense proved that what a government prosecutor told jurors in his opening statement about nonprofits not being able to spend money for political purposes was just plain wrong.

Jacobs cited testimony from four accountants, as well as the judge's instructions to the jury, to say that both sides in the case now agree that a nonprofit can spend money for political purposes. Indeed, nonprofits do it all the time, the defense lawyer said.

If the government could prove its original assertion, Jacobs argued, "there would have been an expert here to tell you that."

Jacobs also told jurors that testimony in the case showed that there was nothing wrong with a nonprofit giving gifts to a founder or benefactor, such as power tools to Vince Fumo.

Jacobs reminded the jurors that four board members of the Citizens Alliance had testified in the case, and that the board members all said they were proud of the work done by the nonprofit, and that they also believed that giving Fumo "perks and gifts was absolutely OK."

"Nobody here was bothered," Jacobs said of the four Fumo allies who served as directors of the nonprofit board.

Jacobs dwelled on the loosey-goosey nature of the nonprofit, and its history of sloppy accounting.

"They didn't have a payroll," Jacobs said. The nonprofit went its first five years, from 1991 to 1996, without applying for a 501C3 nonprofit status, Jacobs said. And once Citizens applied, it took three more years to get that nonprofit status.

"What we did, we did in good faith," Jacobs told the jury. He blamed "novice" accountants, saying many of the nonprofit's transactions were "not recorded correctly."

Jacobs said there was room for phillosophical disagreements with some of the nonprofit's expenditures. He conceded that the nonprofit had excercised "bad judgment" from time to time making "improper political expenditures." He talked about some of the nonprofit's many expenses that have criticized by government prosecutors, such as a $70,000 junket to Cuba, supposedly to drum up support for lifting the 50-year-old American trade embargo against Cuba.

Jacobs then made a suggestion that sounded sensible to some of us who've had to sit through this 19-week trial. He suggested that many of the disputes over what were or were not proper expenditures for the nonprofit could have been settled in an "administrative proceeding" with the IRS. Many of the debates over the nonprofit's political expenditures  could have simply been resolved with admonishments or fines.

Instead, Jacobs said, the government prosecutors insisted on seeing every Citizens Alliance transaction in the worst light.

"Everything that we did is a crime," Jacobs told the jury. In the government's view, Jacobs said, every trasaction of the nonprofit masked a sinister "intent to defraud."

Jacobs then took a political swipe at the zealousness of the prosecution. It may have helped his case that he came on after Ast. U.S. Atty. Bob Zauzmer had just concluded a fire-and-brimstone closing statement that lasted two-and-a-half days.

"They seem to be of the view that for every Vince Fumo action, there was a single intent, a criminal intent," Jacobs said. "Human conduct can have multiple purposes, multiple motivations."

To prove his point, Jacobs talked to the jurors about buying a puppy.  Everybody likes puppies, Jacobs said, because they're warm and cute and fun to play with. So you can buy your kid a puppy for all those reasons. But maybe you also buy a puppy to teach your kids something about responsibility, when they have to walk that puppy and feed that puppy.

Jacobs went from buying a puppy to Vince Fumo's decision to use the nonprofit to finance a lawsuit against a political rival, state senator Robert Jubilirer, then serving as president pro tempore of the senate as well as lieutenant governor.

Jacobs suggested that perhaps Fumo had multiple motivations for filing the lawsuit. Maybe it was true, as Fumo has asserted, that he wanted to settle a constitutional issue of whether one public official could hold offices simultaneously in two branches of government. And maybe it was also true, as prosecutors have charged, that Fumo was taking an opportunity to put a hit on a political rival.

But if so, Fumo was joined in the suit by a Republican legislator, who also questioned the constitutionality of what Jubilirer was doing, Jacobs said. And that Republican legislator had no reason to knock off Jubilirer.

Jacobs also took delight in pointing out how, after the government found out it wasn't illegal for nonprofits to spend money on political purposes, that prosecutors changed their tune, saying "it doesn't matter" because all of the nonprofit's causes ultimately benefitted one guy -- Vince Fumo.

"They have now shifted gears," Jacobs said of the prosecutors. He was taking a mild swipe at Zauzmer, who had devoted a portion of his lengthy closing statement to the defense's changing arguments in the case.

But Jacobs reminded jurors that even though the government may have changed their tune, the song remained the same. Namely that Vince Fumo, and Ruth Arnao, as well as the Citizens Alliance, always operated with criminal intent. 

"Sometimes you can get too close and lose your objectivity," Jacobs said of the prosecutors.