Sheldon Silver May Be Able To Beat This - Law360

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Sheldon Silver May Be Able To Beat This

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Law360, New York (February 24, 2015, 1:01 PM ET) -- 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, Im 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 re-examined in light of the federal
grand jurys decision on Feb. 19 to return a three-count indictment
against Silver charging him with honest services mail fraud, honest
Edward J. Loya Jr.
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 Silvers 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 Governments 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.

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In the landmark 2010 case of Skilling v. United States, the U.S. 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 Silvers 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 Dr. Robert N. Taub,
now-former director of Columbia Universitys Mesothelioma Center. Silver is charged with directing
a total of $500,000 in state funds to Dr. Taubs research lab, directing $25,000 in state funds to a
nonprofit organization where one of Dr. Taubs family members served on the board, and helping Dr.
Taubs 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 Silvers law firm Weitz & Luxenberg, which, in turn, paid Silver $3.2 million
for the referrals.
A key trial strategy for Silvers 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 doctors immediate
family, and that at least in Silvers mind, the work that Silvers firm did on behalf of Dr. Taubs
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 Silvers 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 nations 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. Taubs Columbia lab and for Silver to honor Dr. Taub, who, by all accounts, is a giant in
his field.
Likewise, Silvers efforts to help Dr. Taubs 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. Taubs
wife sat on the board. As with the cancer research funds sent to Dr. Taubs 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 Silvers role in helping Dr. Taubs son land a job at OHEL Childrens
Home and Family Services, a Jewish organization dedicated to provided social services to families in
need.
Moreover, Silvers defense team is likely to emphasize Silvers and Dr. Taubs strong personal bond

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as further justification for Silvers 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 mens 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 firms 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.
Silvers 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 Silvers 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 firms managing partner has already gone on record to defend the
firms employment of Silver, likening Silvers 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 Silvers lawyers have several lines of attack. Dr. Taub will testify under a nonprosecution 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.
Silvers defense team will likely point to the governments 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. Taubs conduct did not
warrant prosecution but Silvers 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.
Silvers team will also seek to exploit an apparent inconsistency in the governments 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. Taubs 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, Silvers attorneys will make a strong case that the nature and timing of the

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transactions at issue favor Silvers 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. Taubs patient referrals and Silvers 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
Silvers position that there was no connection.
Thus, the asbestos scheme is anything but a slam dunk. Much will depend on Dr. Taubs direct
testimony about his allegedly unlawful dealings with Silver and information, if any, that might
corroborate Dr. Taubs 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. Taubs testimony
can be believed.
The Real Estate Scheme
The real estate scheme might be even more manageable for Silvers 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, Silvers former assembly counsel, is the lead partner
at Goldberg & Iryami.
Since the details of Silvers official acts are unknown at this time, it is impossible to determine if
there are any obvious temporal links between Silvers use of his official position and the referral fees
that he collected.
Like the asbestos scheme, however, Silvers 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 Silvers 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 governments decision to drop the
conspiracy count relating to the purported real estate scheme, including reference to Goldberg as
CC-1, is remarkable.

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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 Goldbergs 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. Goldbergs successful law practice which, according to press reports, includes
hundreds of clients could add validity to such testimony.
In addition, Silvers 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 nonprosecution agreement with the government that identifies him merely as
a fact witness) to talk about Silvers 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 Goldbergs 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 Silvers 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 persons
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
governments proof. But based on the information that is now publicly available, Silvers 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.
By Edward J. Loya Jr., Venable LLP
Edward J. Loya Jr. is counsel in Venables Los Angeles office. He previously served as a federal
prosecutor in the Public Integrity Section of the Criminal Division of the U.S. Department of Justice.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm,
its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general
information purposes and is not intended to be and should not be taken as legal advice.

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