standard Brooklyn Brief: The Indictment of Congressman Michael Grimm

Congressman Michael Grimm (Wikimedia Commons)

Congressman Michael Grimm (Wikimedia Commons)

A synopsis of the indictment, its ramifications, the political fallout and polarized reaction (largely along party lines).

What You Need to Know

On April 28, 2014, Michael Grimm, a Republican congressman representing southern Brooklyn and Staten Island, was charged with a 20-count indictment by federal authorities. The indictment claims that from 2006 to 2010, Grimm concealed over a million dollars in sales and wages from an upper east side restaurant (“Healthalicious”) he co-owned and managed, that he employed undocumented workers, failed to pay them proper wages, and perjured himself under oath during a deposition on the subject. Many of the allegations stem from a civil lawsuit brought by former restaurant workers, which was later settled.

What Happens From Here

A former marine, Gulf War veteran and FBI agent, Grimm turned himself in to the bureau the morning of the indictment. He currently awaits trial on $400,000 bail. Though he stepped down from a prominent committee post, the congressman otherwise remains in office. Grimm has called the prosecution a “smear campaign” and a “witch hunt,” pled not guilty to all charges, and vows to clear his name while running for re-election this fall. Mired by a possible conviction, however, his electoral and legal prospects are unclear, though he retains a devoted core constituency.

Why This is Important

  • The indictment upends the congressman’s re-election campaign. Grimm’s democratic contender, Domenic Recchia, an attorney and former city council member who represented southern Brooklyn from 2002 to 2013, was presumed to only have a slim chance of victory. But in the  wake of the indictment, his odds have now improved tremendously.
  • The initial, unsuccessful investigation of the congressman lasted two years and centered on suspicious funding for his 2010 election campaign. Many of Grimm’s business associates and other contacts were pursued during this time, often booked on separate but related charges and pressured to testify against him. But when that investigation was not fruitful in producing charges, prosecutors turned to the allegations in a civil lawsuit filed against Grimm regarding the “Healthalicious” restaurant.
  • The timing of the indictment makes it nearly impossible for Grimm to exit the election or for his party to substitute a candidate on his behalf. The deadline for the candidate petitioning process ended just two weeks before the indictment was announced. Absent some convoluted and unlikely maneuvers, Grimm will remain on the ballot.
  • Reaction to the indictment has been polarized along political lines: Democrats have little sympathy for the only Republican Congressman in New York City who was elected during the crested wave of Tea Party insurgents. Further, Grimm’s brazen antics, which include threatening to throw a television reporter over a balcony of the U.S. Capitol, make him an even more unsympathetic character. For Republicans, the indictment’s rapid change of fortune for their party (and the limited alternative candidate options they have, based on its timing) stings of a pre-election plot. A further wrinkle, however, involves the fact that many “mainstream” Republicans were never comfortable with Grimm’s disruption of the political order during his first election, where he beat an party-backed favorite in the 2010 primary.
  • The indictment raises important questions as to the congressman’s numerous suspicious business dealings, along with his questionable fundraising activities that were the source of the original investigation, while also offering new inquiries as to the possible political timing and agenda of indictments of public officials, and the potency such indictments carry in their impact on a politician’s career.
  • On a practical level, there are unanswered issues as to what extent a politician can continue to carry on responsibilities of the office they hold while under indictment and preparing a criminal defense, and whether election laws should be amended to allow candidate substitutions when certain extenuating circumstances arise.

Documents & Data

The indictment charges Grimm with:

  • Five counts of mail fraud
  • Five counts of wire fraud
  • Three counts of aiding and assisting in the preparation of false federal tax returns
  • One count of conspiring to defraud the United States
  • One count of impeding the Internal Revenue Service
  • One count of health care fraud
  • One count of engaging in a pattern or practice of hiring and continuing to employ unauthorized aliens
  • Two counts of perjury, and
  • One count of obstructing an official proceeding.

The case is pending in Federal Court (United States District Court, Eastern District of New York), docket number 1:14-cr-00248.

press release from the United States Attorney’s Office explains the charges in more detail.

We have also made the indictment, the underlying civil action, and the judgment for failing to maintain workers’ compensation insurance available.

Perspectives

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Indictment Spotlights Workers in the Shadows

They work for five dollars an hour, with frequent requests to stay late, or perform additional tasks. Their tips are often stolen and their wages can go unpaid. For those in the restaurant industry’s shadow economy—catering, busing, cooking and delivery— the story of the workers who brought a civil suit against Michael Grimm is all too common.


 

IMG_1373

“Please! Everybody and their mother is in this.”

Michael Faillace represented the “Healthalicious” workers in a civil lawsuit. He is colorfully combative and unrepentant in his disgust for most restaurant owners, along with the opposing attorneys they retain. But he actually feels bad for the indicted congressman, who he believes was targeted as a “big cheese,” while abuses remain rampant. He is also fond of the use of expletives.


 

Cast of Characters

Two Years Chasing a Tight-Lipped Cast of Characters

The initial, unsuccessful investigation of the congressman lasted two years and centered on suspicious funding for his 2010 election campaign. Many of Grimm’s business associates and other contacts were pursued during this time, often booked on separate but related charges, and pressured to testify against him. It appears few of them did.


 
Stanley Cohen

With the Power to Indict, the Power to Condemn

It’s not just the Congressman’s case that’s suspect: prosecutions across the political and cultural spectrum are dogged by similar accusations.

 


 

Richardson_Law_021914_524

Expert Check-in: Charges are Warranted

Morghan Richardson, Esq., a criminal defense and divorce attorney, analyzes the charges. Despite the likely ubiquity of the activities alleged in the restaurant industry, the claim that the congressman maintained two sets of records was enough for prosecutors to confidently move forward.


Supplemental Coverage

The Congressman could have avoided most of his legal problems if he settled the civil suit early, but he stubbornly refused and was roped into lying during his deposition testimony. [Daily News]

Tallying all of the charges, he now faces up to 257 years in prison. [Village Voice]

Many Republican operatives and other supporters have expressed their belief that the indictment was politically motivated. [Staten Island Advance]. Among other things, they point to the fact that one of the prosecutors who investigated Grimm and prepared the indictment is now running for office. [Politico]

Before the charges were announced, Grimm had already gained notoriety for threatening to throw a television news reporter over a balcony of the U.S. Capitol Building. [New York Times] He later apologized. [ABC News] Capitol Police declined to press charges. [Daily News]

More prior antics included allegations of sex in a Bay Ridge restaurant bathroom. [BK Mag]

The congressman briefly eloped in 1994, but the marriage was quickly annulled. Years later, his ex-wife appeared in the front row of a campaign debate during Grimm’s 2010 election–in support of his opponent. [SI Advance]

“Tea Party” or “mainstream” Republican? Grimm, first elected during the Tea Party “revolution” of 2010, has described himself as fiercely against many government programs and agencies [Salon]. He sided with the Tea Party during the recent government shutdown, [Daily News] but only after he opposed an earlier shutdown effort in 2011. [Politico] Upon entering office, he did not join the Tea Party’s caucus, instead linking with a more moderate group [New York Observer]. He expressed “limited support” for immigration reform. [Wall Street Journal] When asked in an interview if he was a “conservative,” Grimm retorted that he was “American first,” noting that “we have become way too polarized.” [Fox News]

Despite his impressive resume, the congressman is persona non grata at F.B.I. regional offices. [Bensonhurst Bean via DNAInfo]. His involvement with the bureau was also criticized for some cases of entrapment, overzealous prosecutions, and too much leeway for disreputable individuals working undercover. [New Yorker]

A few media outlets have pondered the extreme and unlikely maneuvers that could remove Grimm from the ballot. [ABC News] Others have lamented the need for election law reform. [New York Times]

Desired Further Coverage

Brooklyn brief would like to talk to an authority on federal elections (about the underlying fundraising improprieties, as well as a proposed change to allow emergency candidate substitutions) and a restaurant owner (for a take on the prevalence of undocumented workers and profitability in the industry).