Walter Reed, the former district attorney for St. Tammany and Washington parishes, won’t go to trial until January, but attorneys for both sides have been arguing about the scope of the government’s case in recent weeks, with federal prosecutors filing their answer Thursday to Reed’s earlier motion to dismiss half the charges against him.
U.S. District Judge Eldon Fallon will hear oral arguments on the motions Oct. 1.
The case against Reed rests largely on accusations that he took taxpayer money that wasn’t his and diverted campaign donations to personal use, conspiring to funnel some of the money to his son, Steven Reed. Walter Reed was indicted on 18 counts, his son on two.
Reed’s motion to dismiss many of the charges, filed earlier this month, called the case “an Olympic-size leap” over the bounds of federalism, arguing that the government is trying to use alleged violations of state campaign finance law as a basis to prosecute Reed for federal wire fraud and money laundering.
Attorney Richard Simmons asked the court to dismiss one count of conspiracy, six counts of wire fraud and two counts of money laundering.
In their response, prosecutors defended the scope of the indictment, saying it is not an overreach. The fact that Reed’s conduct may have violated state regulations, ethics rules and laws “does not mean that he cannot also have violated federal law without trampling federalism principles,” they said.
The defense says there is no plausible victim who was defrauded by Reed’s actions and that the government has failed to show any harm to taxpayers, campaign contributors or the Louisiana Board of Ethics.
But federal prosecutors retort that Reed held large fundraisers, representing to supporters that the money would be used to help return him to office. Instead, they say, he used money for romantic dinners, to drum up business for his private legal practice and to prop up his son’s failing business ventures, including one for which the elder Reed was responsible — Tugendhaft’s Tavern.
“Walter Reed engaged in a systematic pattern of using campaign funds from his donors to pay for his personal expenses unrelated to the campaign,” the filing said. “To conceal his past misuse of the funds and to obtain additional contributions, he chose not to disclose to past donors, future donors and the campaign how he was using campaign funds.”
The defense cited a case that it says precludes charging defendants with federal criminal violations for fraud committed in conjunction with state elections. But prosecutors said the earlier case, United States v. Ratcliff, does not establish a blanket prohibition against federal prosecutions for fraud committed under the auspices of a campaign for state office.
Prosecutors also cited other cases, including that of a former Milwaukee alderman who was charged with wire fraud for soliciting donations for his campaign, using the money to cover personal expenses and submitting false campaign finance reports. A court concluded his conduct was enough to establish that each donor was a victim of false representations, and the prosecutors in Reed’s case describe that conduct as similar to Reed’s.
Prosecutors also attacked another defense argument: that the campaign funds belonged to Reed and he could not defraud himself.
Nine other counts were not included in Reed’s motion to dismiss: four counts of making false statements on income tax returns and five counts of mail fraud. The latter counts deal with allegations that Reed took money for legal work for St. Tammany Parish Hospital that should have gone to the DA’s Office.
In a separate motion also filed Thursday, Reed’s attorney asked the court to separate the 13 charges related to campaign finances from the five counts stemming from his relationship with the hospital. Reed should be tried separately on the two sets of charges because they are unrelated, Simmons argued.
In fact, “the only common thread” between the charges is Reed, and forcing him to defend both at the same time could prejudice the jury against him, Simmons said.
If the court does separate the charges, Reed intends to take the stand to testify about the nature of his relationship with the hospital, which, he has said, was formed in an oral agreement with the now-deceased chairman of the hospital’s board.
The facts of the other 13 counts do not rely on Reed’s testimony, Simmons said.
Simmons also said Reed had no objection to a separate motion filed Thursday by his son, who asked the judge to separate out the first nine charges so that he would not be tried with his father on the latter nine counts.
Staff writer Faimon A. Roberts III contributed to this report. Follow Sara Pagones on Twitter, @spagonesadvocat.