Sharpe James illegally used campaign cash on legal bills in criminal probe, court rules

By Bill Wichert | NJ Advance Media for NJ.com
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on January 16, 2015

Former Newark Mayor Sharpe James, seen at federal court in this 2008 photo, violated state law by spending campaign funds on legal expenses in a criminal investigation, according to an appellate decision issued today.

 

NEWARK — A state appeals court today upheld a ruling that former Newark Mayor Sharpe James violated the law by using about $94,000 in campaign cash to pay for legal expenses in the criminal probe that ultimately sent him to federal prison.

But the appellate panel modified the amount of campaign funds to be reimbursed by James, and ordered that a $30,000 fine be re-evaluated.

James had argued campaign funds could be spent on legal bills before his indictment, because he said they represent “an ordinary and necessary expense of holding public office,” according to the appellate decision.

The appellate judges rejected that argument.

“There is no support for the claim that being under criminal investigation is a customary, usual, or normal occurrence when one holds public office,” the decision states.

Angelo Genova, an attorney representing James in the matter, could not be immediately reached for comment.

The decision was handed down as part of a lawsuit filed in 2011 by the Election Law Enforcement Commission against James; his campaign treasurer, Cheryl Johnson; and the Election Fund of Sharpe James.

In an August 2012 ruling, Superior Court Judge Harriet F. Klein found that James violated state campaign finance laws by spending $94,004 in campaign funds on his legal defense and ordered him to repay it, along with a $30,000 fine.

Those funds were spent on legal services provided before and after James was indicted in July 2007 on charges of fraud and conspiracy.

In 2008, a jury convicted James of illegally steering city land to a former girlfriend at the time, Tamika Riley. He served an 18-month sentence in federal prison in Virginia before returning to Newark in April 2010.

James served as mayor from 1986 to 2006, and served as a state senator from 1999 to 2008.

In his appeal of the lower court’s ruling, James conceded it is illegal to use campaign funds for legal expenses after an indictment, according to the appellate decision.

But James argued he could use the money on legal bills he incurred before the indictment, because they represent “an ordinary and necessary expense of holding public office” – one of the definitions for how campaign funds may be spent under state law, the decision states.

James claimed “hiring counsel to ward off or prepare for potential criminal charges is a necessary duty and responsibility of holding public office and is an expense that would not have arisen but for the fact he was holding public office,” according to the decision.

The appellate judges, however, rejected that argument and found that retaining an attorney in a criminal matter “is by no means an ordinary expense of holding public office,” the decision states.

“The money taken from the fund was for James's personal benefit. He used the money in an effort to keep from being indicted or, at the least, reduce the severity of charges in the indictment. The fact James used his office to further his criminal activities or that his office records were subpoenaed hardly makes his defense costs an ordinary expense of holding office.”

But the appellate panel found that James and Johnson should not both be held responsible for the entire $94,004.08 reimbursement, because $86,504.08 was spent on James’ legal fees and $7,500 went towards Johnson’s legal fees.

As a result, the panel ordered James to reimburse his campaign fund in the amount of $86,504.08 and Johnson to pay $7,500.

The appellate judges also vacated the $30,000 fine, because the Superior Court judge “failed to consider the aggravating and mitigating factors,” the decision states.

The panel remanded the matter for a hearing at which the trial court must consider those factors and determine the appropriate penalty for James and Johnson, the decision states.

 

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