Will former Wilmington council president Theo Gregory face criminal charges?

Christina Jedra | The News Journal

Show Caption Hide Caption Raw Video: Theo Gregory films The News Journal staff / President Shabazz declines comment on funds Raw video of former Wilmington City Council President Theo Gregory filming The News Journal staff members during a meeting of the Wilmington City Council Finance Economic Development Committee meeting.

When Delawareans learned that former Wilmington City Council President Theo Gregory earmarked $40,000 in taxpayer funds for his own nonprofit — up to half of which went directly into his pocket — some said the issue should go to court.

"A jury of his peers should be the ones to make that determination," said City Councilman Bob Williams.

But Gregory's case presents a legal, and perhaps political, dilemma for city and state officials. Did Gregory commit a crime when he used his elected position to allocate public funds to himself? If so, how should he be held accountable? And who is responsible for enforcing the city ethics code, the city or the state?

All of that is not yet clear. Some observers feel the political will to prosecute this case isn't there, and even if it is, legal experts say Delaware's ethics laws require violations to be blatant and "intentional."

BACKGROUND

Too much discretion: Little oversight for Wilmington City Council discretionary fund

Wilmington council president gave $40,000 in taxpayer money to predecessor

Council president earmarked grant for himself before leaving office

Former council president's $35K grant request: I'm here for kids

State Auditor Tom Wagner released a report earlier this month that said Gregory's actions violated city ethics laws that carry criminal sanctions. Attorney General Matt Denn's office is reviewing that report.

"We're looking into it," said Deputy Attorney General Sonia Augusthy, who heads Denn's Office of Civil Rights and Public Trust.

But Augusthy said the office is only examining Gregory's case from the perspective of state law, not city code.

She said enforcement of city code is the job of Wilmington City Solicitor Luke Mette, who reports to Mayor Mike Purzycki. Whether Mette will get involved, and in what way, is unclear.

The city code states violators of ethics rules can face up to a year in jail and up to a $10,000 fine, but it doesn't explicitly say whose job it is to prosecute such cases. City law states the solicitor is the prosecuting officer for Wilmington in the municipal court — but that court no longer exists and hasn't since 1998.

The city law department said it isn't aware of any cases wherein the solicitor criminally prosecuted someone for a code of conduct violation. The solicitor's office does handle other "criminal" matters in the city. For example, homeowners whose grass is higher than eight inches can face misdemeanor charges.

The Attorney General's office may prosecute city law violations, the city code states, but it doesn't detail what would trigger the AG's involvement.

Mette declined to be interviewed for this story, and in a statement on Thursday, he didn't offer any clarity.

"It would be inappropriate to speculate at this time as to what role, if any, the City Solicitor’s Office might play in connection with any criminal prosecution in any particular matter," he said.

"The City Solicitor’s Office and the State Department of Justice have worked together professionally in the past on certain matters impacting both the city and the state."

Gregory did not respond to requests for comment. He has said the money was used to support his nonprofit, Student Disabilities Advocate, which provides legal representation to children who are homeless, disabled or bullied. Half the grant was budgeted for his salary, although he said last year his pay ended up being $15,000.

If enforcement of the city ethics code falls on Mette, Councilman Williams said the public shouldn't expect much to happen.

"(Purzycki) doesn’t want to upset that apple cart," he said.

In a statement on Thursday, Purzycki expressed concern but didn't offer a clear path forward.

“This is a serious matter, and based on what I’ve read, decisions seemed to have been made in a careless way that served to cast suspicions on our government," he said.

"While this may have been a sincere effort to help children and families maneuver through education-related issues, elected officials have an obligation to avoid any potential conflicts. I think all the facts should continue to be gathered and that this matter should be allowed to run its course through the appropriate channels.”

Proving a state of mind

In the end, Gregory may face no legal consequences.

Delaware's ethics laws are hard to prosecute, according to Wilmington attorney Steven Wood, who served more than 30 years as a deputy attorney general.

"In Delaware's criminal code, statutes that would often be of use in an investigation of unethical conduct by an elected official are generally weak and very difficult to enforce unless it can be proven that an elected official received a bribe or was literally stealing," he said.

The Office of Civil Rights and Public Trust, established on Denn's second day on the job in 2015, has not prosecuted any elected officials. It has two full-time attorneys, two investigators and one researcher, plus administrative staff, Augusthy said.

Wood declined to comment on Gregory's case specifically but said the state's legal language on politicians' conduct might help explain why convictions of elected officials are so rare.

To prove a public servant is guilty of official misconduct, prosecutors must show that an individual intended to "obtain a personal benefit or to cause harm to another person," according to the state statute. Wilmington's ethics code requires a person to have "knowingly or willfully" violated the law.

Proving intent, or one's state of mind, is tough, Wood said, especially to meet the criminal standard of proof beyond a reasonable doubt.

Cases that may seem like obvious violations to the public don't always meet the legal standard required to take someone to court, Wood said.

"A prosecutor's job is not to determine right and wrong, but only whether or not probable cause exists to determine whether a criminal law has been violated," he said. "Those are very different things."

Over the years, Wood said efforts have been made to legislatively strengthen the official misconduct statute, but they've been unsuccessful.

Charles M. Oberly III, a former U.S. Attorney and Delaware's longest-serving attorney general, is familiar with the limitations of Delaware's ethics laws. He was unable to bring criminal charges against former U.S. Senate candidate Christine O'Donnell in 2011 for alleged campaign finance violations.

"There was no question the expenditures were inappropriate," he said. "The question was: Did she have an intent to violate the law?"

In the end, he said it didn't rise to the level of criminality.

"She didn't sit around and say, 'I'm going to steal this money,'" Oberly said. "When someone breaks into a store and points a gun at somebody and says, 'Give me your money,' there's no question about the intent. When you get into financial crimes and the like, you’ve got issues."

Oberly hopes and expects that Denn's office, at the conclusion of their review of Gregory's case, will announce whether or not they intend to bring charges.

Williams, a former police officer, said it's important that Gregory's actions be thoroughly investigated.

"People elect you on your word and your promise, and if you violate that, people need to know there were some repercussions," he said.

"We’re always looking to squeeze more juice out of the lemon, and when people find out about things like this, it's like, 'Why are you tapping me for money when you're wasting it?'"

Considering Delaware's record, or lack thereof, of prosecuting politicians, Williams said he doubts it will happen to Gregory.

"I see it being another instance of 'Don't do that again, we're keeping an eye on you,' or ‘He’s no longer in office, so it's no longer an issue,'" Williams said.

"With elected officials, I think there’s some political backscratching, and they are fearful of pursuing it. They don't take it seriously, and they think that time and distance heals all ills."

Former Wilmington City Solicitor Jeff Goddess said he would be "pleasantly surprised" if prosecutors filed charges against Gregory.

"Not because I bear Theo Gregory any ill well and not because I think anything very serious would come of it," said Goddess, who said he's contributed to Gregory's political campaigns. "But I think some light has to be shed on this and it has to be put in the open. I think the people would want that."

Previous run-ins with ethics code

The allocation of the $40,000 grant wasn't the first time ethics issues have been linked with Gregory in public office.

In 1998, the Wilmington Ethics Commission found Gregory guilty of three counts of violating the city code after he accepted a $5,000 loan from then-Wilmington Clerk Leo T. Marshall, according to News Journal archives.

Marshall's appointment was confirmed by a council vote, which included Gregory, and council set his salary.

"It's a matter of public trust," Commission Chairman Sherman N. Miller said at the time.

The commission also charged Gregory with ethics violations after it was revealed Thomas J. Capano, the city's former bond lawyer and later convicted murderer, co-signed a $20,000 loan for Gregory and his wife in 1994, archives show.

At the time, Gregory had voted on bond measures that resulted in business for Capano's former firm, according to the archives.

The commission threw out the charges pertaining to Capano in 1998 but censured Gregory for the Marshall loan. Gregory was forced to step down as the council's finance chairman.

In 2014, the Ethics Commission received a complaint that Gregory hired a member of his law firm to do city council work. Gregory said the probe into the alleged conflict of interest was based on "bogus allegations."

"There is no partnership," Gregory said at the time. "Our books are set up separately. He has his. I have mine."

Gregory was also criticized after The News Journal reported last year that he used the council discretionary fund to direct nearly $600,000 to Education Voices Inc., a nonprofit he founded which relied almost entirely on Gregory's cash flow for its survival.

For Williams, it's unrealistic to think Gregory was unaware of the ethical implications of his $40,000 grant.

"You can’t claim ignorance," Williams said. "You should know this."

It's unclear if the city Ethics Commission, reinstated last year after years of dormancy, is investigating Gregory or pursuing any action against him. The body has the power to recommend employee disciplinary action and to report to appropriate federal, state and city authorities any substantial violation of any criminal law.

Investigations are confidential until the commission determines a violation has likely occurred, and suspects are formally served with a statement of allegations, according to the city code.

Until that point, members are not even allowed to acknowledge whether a probe exists, according to the city.

As of Thursday, the commission had not served anyone with a statement of allegations.

Williams sponsored and passed legislation last year to make the discretionary fund, from which Gregory's grant came, more transparent and accountable. The council now votes on grants over $5,000, but Williams doesn't think the reforms went far enough. President Hanifa Shabazz and staff members still decide which large grants make it onto the council floor for a vote.

Wagner's audit recommended to the city council that another audit be done of the discretionary fund going back going back to 2014 when the fund was substantially increased. Shabazz has asked the city auditor, an appointee of the mayor, to pursue that, but Williams said it should be someone else.

"It's got to be done by someone independent, someone who is not connected," he said.

John Flaherty, a director for the Delaware Coalition for Open Government, said Gregory's use of the discretionary fund shows it should be eliminated.

"Their record is not one the public can have a great degree of confidence in," he said.

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Complaints to the Delaware Attorney General's Office of Civil Rights and Public Trust can be submitted at: attorneygeneral.delaware.gov/publictrust/complaint-form/

Contact Christina Jedra at cjedra@delawareonline.com, (302) 324-2837 or on Twitter @ChristinaJedra.



