Federal office must approve decision by U.S. attorney

By Kelly Thornton
UNION-TRIBUNE STAFF WRITER

December 9, 2005

U.S. Attorney Carol Lam has decided to appeal the acquittal of former San Diego City Councilman Michael Zucchet, and prosecutors filed a notice with the court yesterday indicating their intention to do so.

However, Lam must gain approval from the U.S. Solicitor General's Office, which makes decisions about appeals and represents the United States before the U.S. Supreme Court. Such approval could take up to 90 days.

"The United States of America ... hereby appeals to the United States Court of Appeals for the 9th Circuit," said the two-page notice, which Lam signed. The second page informed the court that approval is being sought from the solicitor general.

In a stunning move last month, U.S. District Judge Jeffrey T. Miller threw out a jury's guilty verdicts against Zucchet, acquitting him of seven corruption counts and granting a new trial for the remaining two counts. During the Nov. 10 hearing, Miller sentenced former Councilman Ralph Inzunza to 21 months in prison, and former Las Vegas lobbyist Lance Malone to 36 months.

The three were convicted July 18 of extortion, wire fraud and wire fraud conspiracy in a scheme to trade campaign contributions for political favors. Malone worked for Cheetahs strip club owner Michael Galardi, who wanted the law banning touching between strippers and patrons repealed so the club would make more money. Galardi made a deal and testified against the others.

Legal experts said obtaining permission to appeal is likely, but not a certainty. The Solicitor General's Office will assess the likelihood that Miller's decision will be reversed, and it will evaluate the consequences should the government lose.

"What Washington looks for in approving an appeal is whether the appeal presents the potential for negative precedent that could be used against prosecutors in other jurisdictions," said defense lawyer Michael Attanasio, who previously prosecuted federal corruption cases.

"The potential for negative precedent exists whenever the evidence to support the convictions was not powerful, and particularly when less-than-powerful evidence is combined with a novel legal question," Attanasio said. "Any prosecution of a public official that directly involves campaign contributions has the potential to raise novel legal issues."

Lawyers for Inzunza and Malone also have filed notice that they will appeal the convictions. Miller denied their motions for acquittal and a new trial the same day he threw out Zucchet's convictions.

Zucchet, Inzunza and Malone are scheduled to appear before Miller on Monday. The matters to be discussed will be whether Inzunza and Malone will be allowed to remain free on bond pending their appeals, the government's decision to appeal the Zucchet case and whether it will retry Zucchet on the two remaining counts. Once these issues are resolved, the case moves to the 9th Circuit.

The notice was filed by the government before obtaining the necessary permission because of a deadline today. The filing preserves the government's right to proceed with the appeal, if and when it receives permission from the solicitor general.

"It indicates that the government in San Diego intends to appeal and they believe they have a righteous appeal. It remains to be seen whether Washington agrees with them," said former San Diego U.S. attorney Charles La Bella, now a criminal defense attorney who represents a defendant that Lam is personally prosecuting on corporate corruption charges.

La Bella said appeals are typically approved, if the risk is low that a precedent unfavorable to the government would result, and predicted this one would be no different.

Miller acquitted Zucchet of the three extortion counts and four of the wire fraud counts. Miller ordered a new trial on the remaining charges of wire fraud conspiracy and wire fraud.

The judge sided with Zucchet's lawyers, Jerry Coughlan and Dennis Riordan, who argued that he could not be convicted because there was insufficient evidence of a quid pro quo agreement. Coughlan could not be reached for comment late yesterday.

Miller ruled there was no clear relationship between campaign contributions Zucchet received in 2001 and 2002 from Malone and the action he took on behalf of Malone in 2003. At Malone's behest, Zucchet referred adult entertainment matters to the City Attorney's Office for review.

Miller also wrote that testimony by Galardi about a $10,000 cash payment to Zucchet, Inzunza and the late Councilman Charles Lewis was not credible, and that there was no evidence the cash was distributed to Zucchet – even if Galardi did give the money to bagman Malone. Lewis was indicted but died in August 2004, before the case went to trial.

And Miller wrote that Galardi's testimony about the cash payments may have been an unfair surprise to Zucchet. The judge noted there was no mention of the alleged payment before trial, nor during the government's three-hour opening statement.

The government's appeal would likely argue there was convincing circumstantial evidence of a quid pro quo, and there was a promise and plan at the time the money was given in 2001 and 2002, but the action didn't come until later.

Assistant U.S. Attorney Robert Ciaffa, under questioning from Miller when the judge was considering the motion for acquittal, explained that action could not be taken on the promise until April 2003, after Zucchet and Lewis took office in December 2002.

The government is also likely to argue that the court erred when it required the jury to find a quid pro quo to convict on the wire fraud charges.

During the three-month trial, when the judge met with lawyers from both sides to discuss jury instructions, the prosecution and defense had agreed that a quid pro quo must be proved for the extortion counts.

But they clashed on whether quid pro quo – a Latin term meaning "one thing in return for another" – applied to the "honest services" wire fraud violation. The government said it was not a required element of the crime.

Miller ruled the jury must find that there was an explicit quid pro quo agreement between the councilmen and Malone to exchange official action for money in order to convict them of both wire fraud and extortion. Experts said Miller's decision gave the defense an advantage, but jurors found a quid pro quo in both the extortion and wire fraud counts.

Several legal experts said it's no surprise that the prosecutors are bent on appealing, and it's likely Lam will prevail in her efforts to gain approval.

"You very, very infrequently see this unique set of circumstances," said defense attorney Geoffrey C. Morrison, who represented John D'Intino, a defendant in the case who pleaded guilty. "So from the government's perspective, it's sort of the perfect storm that's come together. I would suggest the government probably feels as if they have to appeal given the circumstances.

"I'm not saying I agree, but the government's position may well be they have to appeal in order to preserve the integrity of the jury verdict."