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Betsy Combier

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The E-Accountability Foundation announces the

'A for Accountability' Award

to those who are willing to whistleblow unjust, misleading, or false actions and claims of the politico-educational complex in order to bring about educational reform in favor of children of all races, intellectual ability and economic status. They ask questions that need to be asked, such as "where is the money?" and "Why does it have to be this way?" and they never give up. These people have withstood adversity and have held those who seem not to believe in honesty, integrity and compassion accountable for their actions. The winners of our "A" work to expose wrong-doing not for themselves, but for others - total strangers - for the "Greater Good"of the community and, by their actions, exemplify courage and self-less passion. They are parent advocates. We salute you.

Winners of the "A":

Johnnie Mae Allen
David Possner
Dee Alpert
Aaron Carr
Harris Lirtzman
Hipolito Colon
Larry Fisher
The Giraffe Project and Giraffe Heroes' Program
Jimmy Kilpatrick and George Scott
Zach Kopplin
Matthew LaClair
Wangari Maathai
Erich Martel
Steve Orel, in memoriam, Interversity, and The World of Opportunity
Marla Ruzicka, in Memoriam
Nancy Swan
Bob Witanek
Peyton Wolcott
[ More Details » ]
New Orleans, Louisiana School Board Shifts $ Millions to Raise Salaries ; HOBBS Act and Felony Convictions

Auditor, others seek to calm flap over Orleans school budget

NEW ORLEANS Louisiana's legislative auditor joined the state schools chief here Thursday to help calm a conflict over changes New Orleans school superintendent Tony Amato's staff made to the local school budget.

The Orleans Parish School Board had approved the budget at its Sept. 27 meeting. But the version submitted to the state contained changes; Amato's staff shifted millions of dollars without informing the board.

The changes involved additional funding for administrative salaries.

Changes in the budget were needed for the Orleans system to meet contractural obligations, Legislative Auditor Steve Theriot said in prepared remarks Thursday, but the changes should have been the subject of public hearings and a board vote.

Amato had come under fire from his critics on the board and from Theriot earlier in the month because of the changes.

On Thursday, Theriot said Amato was not guilty of malfeasance or fraud and said the original budget adopted by the School Board is in place. However, some salaries were figured incorrectly in that original budget. Amato has put together a budget reflecting the necessary changes, Theriot added.

"It is the board's responsibility to accept this revised budget or to reject it and outline their reasons for rejection," Theriot said in prepared remarks.

"Needless to say, I am looking forward to getting this year's budget behind us so we can get on with the business of educating our children," Amato said.

State Rep. Ed Murray, D-New Orleans, said he arranged for Thursday's get-together at the school system offices, saying "everyone needed to be brought to the table."

Amato, hired in early 2003 in hopes that he could turn around the foundering Orleans school system, has had to struggle with problems resulting from past mismanagement and corruption in the school system, as well as political struggles with some board members. Some of his critics on the board will be gone next year as a result of September elections.

"Superintendent Amato inherited a system in crisis and is expected now to lead this system out of crisis, but that takes time," Louisiana schools superintendent Cecil Picard said, adding that some improvements have been made in school performance, particularlty in eighth-grade math scores.

Some board members said they will vote to adopt the new budget. Others said it's too early to make any decisions.

Amato, Theriot end squabble over budget
They vow cooperation to solve money woes
Friday, October 22, 2004
By Brian Thevenot, The Times-Picayune, October 22, 2004


After an ugly squabble last week, New Orleans schools Superintendent Tony Amato and state Legislative Auditor Steve Theriot announced Thursday that they would cooperate for the sake of moving forward to fix the system's troubled finances.

Amato and Theriot were joined by state schools Superintendent Cecil Picard at a news conference, and all three urged the Orleans Parish School Board to approve an amended budget that Amato plans to present Monday at a board meeting. The amendment fixes million-dollar math errors and moves money around to reorganize Amato's administration.

The peacemaking news conference followed heavy public criticism last week from Theriot, who blasted Amato and his staff, accusing them of stonewalling the state's efforts to fix the system's finances. Theriot also complained that Amato submitted to the state a budget that included millions of dollars of changes that had not been approved by the School Board, as required by law.

Amato had responded that he never meant the new budget to supplant the legally approved document, and that he was puzzled by Theriot's accusations of stonewalling.

Theriot had asked the Legislature's audit advisory council chairman, Rep. Ed Murray, D-New Orleans, to pull him off the assignment to help the system or limit his role to adversarial fraud investigations. The council in February asked the state auditor to send a team to help Amato right the system's severely botched financial books, a job far from finished. Murray, though he has had his own sharp criticism of Amato's staff, encouraged both men to resolve their differences.

Reversed criticism

Before Thursday, Amato had claimed he had the right to move money within the budget without School Board approval, so long as he didn't change the budget's bottom line, a position Theriot challenged. Amato dropped that assertion Thursday.

"I'm going under the counsel of Mr. Theriot that the budget needs to be approved by the board," he said. "We're hopeful that they will approve it. If they reject it with recommendations, we'll get right to work on the recommendations."

Under the new state law that transfers many powers of the School Board to the superintendent, the board retains control over the budget -- but not over line items. The board can either approve or veto the document, with the option of suggesting changes its members would accept.

Theriot also gave some ground, reversing his harsh comments of last week, when he portrayed Amato's staff as uncooperative and paranoid that the auditor's office was engaged in political sabotage rather than trying to help. After a three-hour meeting with Amato, Theriot said he has full confidence in his cooperation.

Recently re-elected School Board member Una Anderson was among those standing with Amato at the news conference, but board President Cheryl Mills sat among reporters and other audience members. In a later interview, she said that she will not vote to approve the amended budget Monday.

Several changes sought

Under the amendments for which Amato now seeks approval, he would:

-- fix a $5 million accounting error involving the underreporting of administrative salaries;

-- fix another $1.8 million error in the reporting of benefit costs;

-- create a "chief of staff" position and eliminate an area superintendent's post;

-- spend $450,000 on an in-house legal staff, a move Amato says will save money on outside contract attorneys;

-- reduce $3.4 million in appropriations for special-education aides and monitors that Amato says are no longer required or should be charged to federal funds;

-- add $1.8 million to undefined "schoolwide expenses" for instructional materials;

-- eliminate $1.6 million from what budget documents called the "overstaffed and ineffective" compliance department, which monitors the system's adherence to law, among other wide-ranging duties. That amount is the department's entire budget.

Mills said the superintendent will get no cooperation from her. The administration, she said, has botched the budget process from start to finish, and she has no confidence in it.

"There's so many budgets floating around here, and which is the correct budget? It's fuzzy math if I ever saw it," she said. "The superintendent was dishonest. All of this is about dishonesty and deception."

'Some kind of cover-up'

Mills and fellow board member Ellenese Brooks-Simms, the superintendent's leading critics, said the superintendent has made a habit of presenting the board with a complex decision at the last minute, allowing them no time to properly review the items.

"We still don't have a copy. How can I approve something I haven't seen?" Brooks-Simms said later. "Today is Thursday; we meet Monday. . . . What are we going to do with something we can't ask questions about?"

Brooks-Simms, the only member who abstained from approving Amato's budget Sept. 27 -- three days before he sent an amended budget to the state -- said the board, not Amato, ultimately has responsibility for the accuracy of its contents.

"I believe that what happened today was some kind of cover-up, because there are so many errors made by the administration (in the budget), they're looking for a scapegoat," she said. "This board will end up being the scapegoat that's charged with malfeasance."

Mills had made a request of Theriot to investigate the superintendent for "fraud or malfeasance" in his submitting of the amended budget to the state. Theriot said publicly Thursday he will not act on the request.

"In my opinion, Superintendent Amato didn't commit any fraud of malfeasance in the budget," he said.

Brian Thevenot can be reached at or (504) 826-3482.

Analyst: School board vote sent clear message of support to Amato
By Jonathan Betz / WWLTV News, September 20, 2004


Responding to the ousting of two New Orleans School Board incumbents who were perceived as his adversaries, school chief Anthony Amato offered no parting shots Sunday, but said he was looking forward to the new start.

Political analysts agree that even though Amato wasn't even running, he came out the big winner in Saturday's election. Two of his vocal opponents - Ellenese Brooks-Sims and Cheryll Mills - were overwhelmingly voted off the school board, neither receiving more than 30 percent of the vote.

Runoffs will decide the winners of two other seats on the Orleans School Board. Amato said he does not prefer any candidate over the other.

The only board members immediately re-elected were two of Amato's strong supporters - James Fahrenholtz and Una Anderson.

Sunday, Amato downplayed claims his popularity swayed how people voted.

"I was gratified the great citizens of this city voted with their hearts, their minds, their souls," he said. "It wasn't about me - wasn't about anybody in particular. It was about our children and our city."

But Amato has more influence than he admits, said political analyst Ed Renwick. The school superintendent's popularity spiked in June after several school board members allegedly tried to secretly fire him. The controversy that arose from "failed coup" encouraged many people to run for the board and many people to come out to the polls. Renwick believes voters sent a clear message to the board.

"They were sending a message: It's time to start over and reward the good guys as they view it," Renwick said.

But, Renwick warned, if conditions in New Orleans schools don't improve soon, the popularity of Amato and the board members riding on his coat tails could fade just as quickly as it rose.

New Orleans School Board Members -- The ruling majority on the Orleans Parish School Board got KO'd when it tried to convene hastily and fire Tony Amato. Now he holds the patronage and personnel cards. The board was already on shaky ground amid federal corruption investigations; the move on Amato sealed their legislative -- and perhaps electoral -- fate


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Orleans Parish School Board Election 2004

2403 Hobbs Act -- Extortion By Force, Violence, or Fear

In order to prove a violation of Hobbs Act extortion by the wrongful use of actual or threatened force, violence, or fear, the following questions must be answered affirmatively:

Did the defendant induce or attempt to induce the victim to give up property or property rights?

"Property" has been held to be "any valuable right considered as a source of wealth." United States v. Tropiano, 418 F.2d 1069, 1075 (2d Cir. 1969) (the right to solicit garbage collection customers). "Property" includes the right of commercial victims to conduct their businesses. See United States v. Zemek, 634 F.3d 1159, 1174 (9th Cir. 1980) (the right to make business decisions and to solicit business free from wrongful coercion and cited cases). It also includes the statutory right of union members to democratically participate in union affairs. See United States v. Debs, 949 F.2d 199, 201 (6th Cir. 1991) (the right to support candidates for union office); United States v. Teamsters Local 560, 550 F. Supp. 511, 513-14 (D.N.J. 1982), aff'd, 780 F.2d 267 (3rd Cir. 1985) (rights guaranteed union members by the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 411).

Did the defendant use or attempt to use the victim's reasonable fear of physical injury or economic harm in order to induce the victim's consent to give up property?

A defendant need not create the fear of injury or harm which he exploits to induce the victim to give up property. See United States v. Duhon, 565 F.2d 345, 349 and 351 (5th Cir. 1978) (offer by employer to pay union official for labor peace held to be "simply planning for inevitable demand for money" by the union official under the circumstances); United States v. Gigante, 39 F.3d 42, 49 (2d Cir. 1994), vacated on other grounds and superseded in part on denial of reh'g, 94 F.3d 53 (2d Cir. 1996) (causing some businesses to refuse operations with the victim sufficiently induced the victim's consent to give up property, consisting of a right to contract freely with other businesses, as long as there were other businesses beyond defendants' control with whom the victim could do business).

Moreover, attempted extortion may include an attempt to instill fear in a federal agent conducting a covert investigation or a defendant "made of unusually stern stuff." See United States v. Gambino, 566 F.2d 414, 419 (2d Cir. 1977) (argument that FBI agent pretending to be extortion victim could not be placed in fear is not a defense to attempted extortion of the agent); see also United States v. Ward, 914 F.2d 1340, 1347 (9th Cir. 1990) (an attempt to instill fear included a demand for money from a victim who knew that the defendant was only pretending to be a federal undercover agent when he threatened the victim with prosecution unless money was paid).

However, the payment of money in response to a commercial bribe solicitation, that is, under circumstances where the defendant does not threaten the victim with economic harm, but only offers economic assistance in return for payment to which the defendant is not entitled, is not sufficient to prove extortion by fear of economic loss. United States v. Capo, 817 F.2d 947, 951-52 (2d Cir. 1987) (solicitation of money from job applicants by persons having no decisionmaking authority in return for favorable influence with employment counselors was insufficient evidence of inducement by fear); but see United States v. Blanton, 793 F.2d 1553, 1558 (11th Cir. 1986) (inducement by fear was proven by the defendant's solicitation of a labor consulting contract, to help employer stop outside union organizing, when the solicitation was accompanied by defendant's threat to form another union and begin organizing employees if the consulting contract was not accepted).

Did the defendant's conduct actually or potentially obstruct, delay, or affect interstate or foreign commerce in any (realistic) way or degree?

The Hobbs Act regulates extortion and robbery, which Congress has determined have a substantial effect on interstate and foreign commerce by reason of their repetition and aggregate effect on the economy. Therefore, the proscribed offenses fall within the category of crimes based on the Commerce Clause whose "de minimis character of individual instances arising under [the] statute is of no consequence." United States v. Bolton, 68 F.3d 396, 399 (10th Cir. 1995) (upholding Hobbs Act convictions for robberies whose proceeds the defendant would have used to purchase products in interstate commerce), quoting, United States v. Lopez, --- U.S. ---, 115 S.Ct. 1624, 1630 (1995); material in brackets added; see also United States v. Atcheson, 94 F.3d 1237, 1243 (9th Cir. 1996) (robbery of out-of-state credit and ATM cards); United States v. Farmer, 73 F.3d 836, 843 (8th Cir. 1996) (robbery of commercial business); United States v. Stillo, 57 F.3d 553, 558 n.2 (7th Cir. 1995).

Hobbs Act violations may be supported by proof of a direct effect on the channels or instrumentalities of interstate or foreign commerce, as for example, where the threatened conduct would result in the interruption of the interstate movement of goods or labor. See United States v. Taylor, 92 F.3d 1313, 1333 (2d Cir. 1996) (extortion of money, unwanted labor, and subcontracts on construction projects by threatened shutdowns and labor unrest); United States v. Hanigan, 681 F.2d 1127, 1130-31 (9th Cir. 1982) (robbery of three undocumented alien farm workers while they were traveling from Mexico to the United States in search of work); United States v. Capo, 791 F.2d 1054, 1067-68 (2d Cir. 1986), vacated on other grounds, 817 F.2d 947 (2d Cir. 1987) (scheme to extort local job applicants had a potential effect on interstate applicants who might otherwise be hired).

Indirect effects on such commerce are also sufficient, as for example, where the obtaining of property and resulting depletion of the victim's assets decreases the victim's ability to make future expenditures for items in interstate commerce.
Taylor, supra (depletion of contractors' assets). However, the Seventh Circuit has distinguished Hobbs Act cases involving depletion of a business' assets from those involving the depletion of an individual employee's assets which, the court has ruled, are not as likely to satisfy the jurisdictional requirement of the Hobbs Act. United States v. Mattson, 671 F.2d 1020 (7th Cir. 1982); United States v. Boulahanis, 677 F.2d 586, 590 (7th Cir. 1982). Other circuits have agreed where the extortion or robbery of an individual has only an "attenuated" or "speculative" effect on some entity or group of individuals engaged in interstate commerce thereby diminishing the "realistic probability" that such commerce will be affected. See United States v. Collins, 40 F.3d 95, 100 (5th Cir. 1994) (conviction for robbery of a computer company employee reversed on grounds that theft of victim's automobile with cellular phone had an insufficient effect on his employer's business); United States v. Quigley, 53 F.3d 909 (8th Cir. 1995) (upholding the acquittal, following guilty verdict, of defendants who beat and robbed two individuals in route to buy beer at a liquor store).

Was the defendant's actual or threatened use of force, violence or fear wrongful?

Generally, the extortionate obtaining of property by the wrongful use of actual or threatened force or violence in a commercial dispute requires proof of a defendant's intent to induce the victim to give up property. No additional proof is required that the defendant was not entitled to such property or that he knew he had no claim to the property which he sought to obtain. See United States v. Agnes, 581 F.Supp. 462 (E.D. Pa. 1984), aff'd, 753 F.2d 293, 297-300 (3d Cir. 1985) (rejecting claim of right defense to defendant's use of violence to withdraw property from a business partnership).

However, the Supreme Court has recognized a claim-of-right defense to Hobbs Act extortion in labor-management disputes.

In a 1973 decision, the Court reversed the conviction of union-member defendants who had used violence against an employer's property, during an otherwise legitimate economic labor strike, in order "to achieve legitimate union objectives, such as higher wages in return for genuine services which the employer seeks." United States v. Enmons, 410 U.S. 396, 400 (1973). The Court reasoned that the legislative history of the Hobbs Act disclosed that Congress had been concerned with attempts by union officials to extort wages for unwanted and fictitious labor, to which employees were not entitled, as contrasted with the policing of legitimate labor strikes in general. Therefore, the Court concluded that the union members' use of violence during the strike was not "wrongful" for purposes of Hobbs Act extortion. The Supreme Court also made a broadly worded statement that "wrongful" has meaning in the Act only if it limits the statute's coverage to those instances where the obtaining of the property would itself be "wrongful" because the alleged extortionist has no lawful claim to that property.

In its labor-management context, the claim-of-right defense is not applicable where defendants do not have legitimate labor objectives. The labor claim-of-right defense has been held not to excuse the following kinds of coercive demands:

payoffs to union officials and employee representatives in violation of the federal labor laws (29 U.S.C. § 186); United States v. Quinn, 514 F.2d 1250, 1259 (5th Cir. 1975) (solicitation of church donation in return for removal of labor pickets); United States v. Gibson, 726 F.2d 869 (1st Cir. 1984) (request for payoff to remove pickets);

sham fees which labor unions are not entitled to collect under the labor laws; United States v. Wilford, 710 F.2d 439, 444 (8th Cir. 1983) (economic coercion of dues and initiation fees from truck drivers who were self-employed or who were told they would receive no member benefits);

employee payments which violate existing labor contracts; United States v. Russo, 708 F.2d 209, 215 (6th Cir. 1983) (under threat of job loss, employees' payment of health and pension contributions which labor contract required employer to pay);

employer payments to labor unions which are not included in existing labor contracts; United States v. Traitz, 871 F.2d 368, 381-82 (3d Cir. 1989) (violence used to collect fines on employers for non-compliance with union rules which were not made part of the labor contract);

demands that a non-union employer cease business operations during a sham union organizing campaign; United States v. Edgar Jones, 766 F.2d 994, 1002-03 (6th Cir. 1985) (violent campaign by union officials and union-represented competitor to drive the non-union employer out of business under the pretext of persuading employees to join the union and enforce area wage standards);

employer payments for labor consulting to establish a bogus "sweetheart union" and thereby discourage legitimate organizing by other unions; United States v. Blanton, 793 F.2d 1553 (11th Cir. 1986).

construction contractors' payments of money, wages for unwanted and superfluous employees, and subcontracts with employee representatives which were unrelated to the hiring of employees. United States v. Taylor, 92 F.3d 1313, 1319 and 1333 (2d Cir. 1996) (extortion of contractors by leaders of minority labor coalitions).

Several courts of appeals have limited the claim-of-right defense to the context of labor-management disputes by refusing to extend the defense to extortionate violence and economic fear in commercial disputes and public corruption cases. United States v. Debs, 949 F.2d 199, 201 (6th Cir. 1991) (violence against union members in retaliation for support of opposition candidate for union office); United States v. Castor, 937 F.2d 293, 299 (7th Cir. 1991) (violent threats to obtain consent to enter into business arrangement); United States v. Zappola, 677 F.2d 264, 269 (2d Cir. 1982) (beating of debtor to coerce repayment of purported debt); United States v. Porcaro, 648 F.2d 753, 760 (1st Cir. 1981) (franchisor's violence to compel franchisee to vacate premises); United States v. French, 628 F.2d 1069, 1075 (8th Cir.1980) (public official's kickbacks on bail bond settlements); United States v. Cerilli, 603 F.2d 415, 419 (3d Cir. 1979) (solicitation of political contributions); United States v. Warledo, 557 F.2d 721, 729-730 (10th Cir. 1977) (violence by Native Americans to compel railroad to pay reparations for tribal lands).

However, other courts have held that the extortionate use of fear of economic harm in commercial disputes is subject to a claim-of-right defense on the grounds that, unlike violence, the use of economic fear is not inherently "wrongful." See United States v. Kattar, 840 F.2d 118, 123-24 (1st Cir. 1988) (threat to expose church to litigation unless purported "award" for information was paid to defendant was not a legitimate use of economic fear where the information was false and defamatory); United States v. Clemente, 640 F.2d 1069, 1077-78 (2d Cir. 1981) (extortion of bogus consulting payments from subcontractor coerced by the threat of labor unrest against the subcontractor's principal).

Where the claim-of-right defense applies, courts have generally held that the Government must prove that the defendant knew that he was not entitled to receive the property which he sought to obtain. United States v. Arambasich, 597 F.2d 609, 611 (7th Cir. 1979) (demand by labor union official on employer that the official and others be hired for no-show employment using threat of labor unrest); United States v. Sturm, 870 F.2d 769, 774 (1st Cir. 1989) (in prosecution involving debtor's withholding of property from a creditor-bank, "the term 'wrongful' requires the government to prove, in cases involving extortion based on economic fear, that the defendant knew that he was not legally entitled to the property that he received."); United States v. Dischner, 974 F.2d 1502, 1515 (9th Cir. 1992) (failure to instruct that defendant must know he had no entitlement to property he sought by use of economic fear did not rise to the level of plain error; but "knowledge of the extortion encompasses knowledge of the lack of lawful claim to the property.").

October 1997 Criminal Resource Manual 2403

© 2003 The E-Accountability Foundation