Back to square one for Bruno

PHOTOGRAPHER: Stephen Williams

Former state Senate Majority Leader Joseph L. Bruno should face a new federal trial on corruption charges, an appeals court ruled Wednesday.

The Second Circuit Court of Appeals in New York City, as expected, vacated Bruno’s two 2009 convictions for honest services fraud based on changes in the law.

But the court went on to find that there is enough evidence against Bruno that a new jury should consider whether he is guilty under the new and tougher legal standard for honest services fraud, which requires proof an official took payoffs or bribes.

After the ruling, U.S. Attorney for Northern New York Richard S. Hartunian and Albany FBI Special-Agent-in-Charge Clifford C. Holly announced that “consistent with the court’s decision, their offices will work expeditiously” to seek a new indictment.

The government has six months to obtain a new indictment, but beyond that, predicting the timing of a new trial would be speculation, said William C. Pericak, the assistant U.S. attorney who led the first prosecution.

At issue in a new trial would be consulting payments businessman Jared Abbruzzese made to his friend Bruno during a time when Abbruzzese had matters pending before state government.

“The government’s evidence would permit a reasonable jury to find that Bruno performed virtually non-existent consulting work for substantial payments,” the three-judge panel wrote.

The same could be said for Abbruzzese’s payment of $40,000 to Bruno for a young racehorse that prosecutors said was virtually worthless, the court found.

“We hold that double jeopardy does not bar retrial because of insufficiency of the evidence,” the court concluded.

The judges had heard arguments in the case in June.

Abbe Lowell, a prominent Washington, D.C., defense attorney who led Bruno’s trial defense, said in a statement that he hopes the U.S. attorney “will now let go of its pursuit of this 82-year-old man who has given so much to New York state and suffered for six years under wrongful charges.”

Bruno, now 82, was Senate majority leader from 1994 to 2008. He was convicted on two counts of honest services fraud in a high-profile federal court trial in Albany in December 2009, after the jury deliberated for seven days.

The Rensselaer County Republican had resigned from the Senate in 2008, after a 32-year career in which he rose to become perhaps the most powerful legislator in New York state.

In 2006, the FBI started investigating his financial relationships with individuals and groups that had business before state government, and in January 2009, Bruno was indicted on eight charges of having taken inappropriate and undisclosed consulting payments. Between 1993 and 2006, the indictment alleged, he improperly received $3.2 million in undisclosed consulting fees.

Bruno consistently proclaimed his innocence, saying he was a part-time legislator entitled to earn outside income from business consulting. He was a telecommunications executive before entering politics.

At trial, prosecutors argued — and a jury found with regards to Abbruzzese — that Bruno has conflicts of interest that he failed to disclose. Abbruzzese’s payments to Bruno totaled $240,000, according to the government.

The jury also acquitted Bruno on five other fraud counts and was hung on one charge.

In 2010, in a case involving former Enron executive Jeffrey Skilling, the U.S. Supreme Court dramatically reduced the scope of the federal honest services law, under which it was illegal for public officials to deny the general public their “honest services.” The decision eliminated prosecutions based solely on undisclosed conflicts of interest.

Based on that, both sides agreed Bruno’s conviction would have to be vacated. The appeals arguments turned on whether he should be re-tried.

Bruno’s lawyers argued that the evidence was insufficient for conviction under the redefined law, which limits honest services prosecutions to cases of bribery and kickback. Prosecutors said they could meet the new evidence standard at a new trial, as least with regard to Abbruzzese.

The appeals court sided with prosecutors and ruled a jury could reasonably conclude Bruno was getting bribes or kickbacks from Abbruzzese from 2004-06.

“A quid pro quo is a government official’s receipt of a benefit in exchange for an act he has performed, or promises to perform, in the course of the exercise of his official duties,” the judges wrote.

Abbruzzese was an investor in Evident Technologies, a startup nanotechnology company that received $1.5 million in state funding. Bruno controlled the distribution date of that money, according to the appeals court’s summary of trial testimony.

While Evident’s funding request was pending, Bruno asked Abbruzzese to hire him as a telecommunications business consultant, and the men settled on payments of $20,000 per month. Prosecutors argued that the payments were intended to influence Bruno to release state grant money to Evident, and that Bruno did little if any work in return for the payments.

Abbruzzese also paid Bruno $40,000 for a thoroughbred filly in 2005, at a time when Bruno was helping arrange a new home for Evident Technologies at Russell Sage College in Troy. Abbruzzese eventually gave the horse away, and prosecutors contended the two men knew the animal was worthless.

In both instances, the court said, a jury could conclude there was a quid pro quo arrangement.

“A reasonable jury could conclude that Bruno deprived New York citizens of his honest services by accepting payments that were intended to and did influence his conduct as a public official,” the appeals court wrote.

In addition to saying Bruno can be re-tried on the Abbruzzese charges, the court said he can be retried on the count of the original indictment on which the jury hung.

That count alleged Bruno was receiving $3,000 a month from Vytek Technologies, owned by businessman Leonard Fassler, at a time in 2005 when the company was part of a Motorola-led group bidding to build a statewide wireless emergency communications network. The network was never built.

After the trial, U.S. District Court Judge Gary L. Sharpe sentenced Bruno to two years in federal prison, but Bruno has served no time as he awaited the outcome of his appeal.

While he was in office, Bruno was credited with steering state money to many major Capital Region economic development projects, including Albany Nanotech, the Luther Forest Technology Campus and the modernization of Albany International Airport.