Walter Reed lost what could prove to be a key legal skirmish this week when a federal judge refused to dismiss any of the 18 counts against the former longtime district attorney for St. Tammany and Washington parishes.
U.S. District Judge Eldon Fallon, who heard oral arguments earlier this month, issued a written ruling denying a request by Reed and his son, Steven, to dismiss charges that hinge on the elder Reed’s alleged improper personal use of campaign funds, including spending that benefited his son.
Reed, who was indicted in April, is scheduled to go to trial Jan. 11.
Reed’s attorney, Richard Simmons, sought the dismissal of one count of conspiracy, six counts of wire fraud and two counts of money laundering. That would have left the part of the government’s case dealing with money Reed received from St. Tammany Parish Hospital — payments that prosecutors say should have gone to the DA’s Office — and counts of making false statements on tax returns.
Simmons said Wednesday that some of the issues raised in the motion to dismiss may get another hearing because they are included in another motion he has filed. That pleading seeks to strike some of the indictment’s language as prejudicial and unrelated to the charges against Reed.
He’ll make arguments for that motion, and others that seek to split up the indictment into a series of trials, on Oct. 29.
Steven Reed wants to be tried separately from his father, and Walter Reed wants to divide the charges that accuse him of defrauding contributors from those that accuse him of defrauding his office of funds earmarked for the office.
Simmons has consistently portrayed the case against Reed as one that does not touch on his actions as a public official, pointing out that campaign donations are distinct from taxpayer money.
In his motion to dismiss, he attacked the government’s case as a federal overreach and an encroachment on Louisiana’s right to establish and enforce state campaign finance laws. He has been openly critical of the government’s focus on campaign spending, calling it an “Olympic-sized leap over the prudent bounds of federalism.”
But Fallon rejected the notion that the government is overreaching. He said the case law cited by the defense does not provide a blanket prohibition against federal prosecution of fraud committed under the auspices of running for state office.
Fallon also cited other cases, including one in which the 5th U.S. Circuit Court of Appeals said the fact that a scheme may have violated state laws doesn’t exclude it from being prosecuted under the federal mail fraud statute.
Federal fraud statutes “can criminalize conduct that is also penalized under state election laws,” Fallon wrote.
The government’s allegations are “consistent with the conduct the federal fraud statute was intended to proscribe,” he wrote elsewhere.
Simmons also argued that the government failed to identify a plausible victim, leaving no basis for the wire fraud and money-laundering charges.
But Fallon rejected that reasoning, too. Even though Reed may not have specified exactly how he was going to spend campaign funds, contributors didn’t expect him to use their donations for personal expenditures that violated Louisiana campaign finance law, Fallon said.
The judge did leave the door open for arguments that Reed’s campaign organization cannot be considered a fraud victim. The defense has argued that the money can’t simultaneously belong to both contributors and the campaign. Simmons also insists that the organization is not distinct from the candidate.
“While these arguments have merit, the court declines to issue a ruling as to whether the campaign fund is a legitimate victim,” Fallon wrote.
But that may not matter in the long run, because Fallon determined that campaign contributors are “appropriately named as victims.”
Matt Coman, a defense attorney who formerly worked as a federal prosecutor, said motions to dismiss charges are rarely granted.
He called the ruling a victory for the government but said the defense can take some solace from the judge’s apparent willingness to hear additional arguments about striking the campaign organization as a victim.
If the defense succeeds in doing so, that could shave down part of the case that’s presented to a jury, Coman said.
But “as long as there’s one victim, a dollar of fraud is a dollar of fraud,” Coman said.
Follow Sara Pagones on Twitter, @spagonesadvocat.