United States District Court, E.D. Pennsylvania
October 24, 2017, a federal grand jury in the Eastern
District of Pennsylvania named defendant Kenneth Smukler and
co-defendant Donald “D.A.” Jones in a six count
Indictment. On March 20, 2018, the Government filed a
Superseding Indictment. The Superseding Indictment charges
Smukler with: participation in a conspiracy in violation of
18 U.S.C. § 371 (Count I); causing unlawful campaign
contributions in violation of 52 U.S.C. §§
30109(d)(1)(A)(i), 30116(f), and 18 U.S.C. § 2 (Counts
II & VII); causing false campaign reports in violation of
52 U.S.C. §§§ 30104(a)(1), 30104(b)(5)(A),
30109(d)(1)(A)(i), and of 18 U.S.C. § 2 (Counts III, IV
& X); causing false statements in violation of 18 U.S.C.
§§ 2 and 1001(a)(1) (Count V & VI); making
contributions in the name of another in violation of 52
U.S.C. §§ 30109(d)(1), 30116(f), 30122, and 18
U.S.C. § 2 (Counts VIII & IX); obstruction of a
pending agency proceeding in violation of 18 U.S.C.
§§ 2 and 1505.
before the Court is Defendant Kenneth Smukler's Motion to
Dismiss the Indictment for Vindictive Prosecution (Document
No. 45, filed February 2, 2018). The Court conducted a
hearing on the Motion on March 13, 2018. At that hearing,
counsel for defendant requested leave to file a supplemental
memorandum in support of defendant's Motion to Dismiss
the Indictment for Vindictive Prosecution in light of the
Superseding Indictment, which the Court granted. For the
reasons that follow, defendant's Motion to Dismiss the
Indictment for Vindictive Prosecution is denied. The Court
also denies defendant's request for discovery on the
issue of vindictiveness.
Superseding Indictment charges defendant with campaign
finance violations in connection with two congressional
campaigns: (1) the 2012 congressional primary campaign of
United States Representative Robert Brady
(“Brady”) and (2) the 2014 congressional primary
campaign of Marjorie Margolies. The charges are summarized
Charges Related to Brady for Congress Campaign
April 24, 2012, Candidate A-later identified as Robert
Brady-was to face Jimmie Moore for the Democratic Party's
nomination for Member of the United States House of
Representatives. Superseding Indictment Count I ¶ 1. The
Superseding Indictment charges that defendant-a political
consultant and close associate of Brady-and his
co-conspirators arranged for and facilitated payments from
the Brady campaign to the Moore campaign to induce Moore to
drop out of the 2012 Democratic primary. Id. ¶
the Government states that Brady and Moore reached an
agreement whereby the Brady campaign would pay Moore $90, 000
to cover campaign debts, using intermediaries and, in
exchange, Moore would drop out of the primary election race.
Indictment ¶ 16(a), (e). On February 29, 2012, Moore
withdrew from the primary race. Id. ¶ 16(c).
Moore and a member of his campaign staff, Carolyn Cavaness,
then prepared a list of debts owed by the Jimmie Moore for
Congress campaign, which included nearly $90, 000 owed to
Moore himself and $35, 000 owed to Cavaness. Id.
¶16(d). Thereafter, defendant agreed with Moore that the
Brady campaign would make three payments totaling $90, 000,
and it did so. Id. ¶¶ 16(e), (f). The
first two payments, the Government alleges, were to be
disguised as payments for the purchase of a poll and the
third payment was to be disguised as a payment for consulting
services. Id. ¶ 16(f). Defendant allegedly
instructed Cavaness to form a shell company-CavaSense and
Associates, LLC-to facilitate these payments. Id.
11, 2012, the Brady for Congress campaign sent a check in the
amount of $40, 000 to defendant's entity, Voter Link Data
Services (“VLDS”). Indictment ¶ 16(1), (m).
Two days later, VLDS sent a check in the amount of $40, 000
to Cavaness with the memo line, “Poll.”
Id. ¶ 16(m). The Brady for Congress campaign
sent a second payment of $25, 000 to VLDS on July 10, 2012.
Id. ¶ 16(r). Then, on July 17, 2012, VLDS sent
a check in the amount of $25, 000 to Cavaness bearing the
memo line, “Poll.” Id. ¶ 16(s). The
Government charges that the parties agreed to justify the
first two payments as payments for a poll which analyzed the
primary election matchup between Moore and Brady.
Id. ¶¶ 16 (h), (i). But by the time the
poll was purportedly purchased by Brady, Moore had already
dropped out of the race, the poll was more than a year old,
and the Brady campaign already had access to a poll nearly
identical to the one allegedly purchased from the Moore
campaign. Id. ¶ 16(i). The final payment of
$25, 000 was sent by the Brady for Congress campaign to D.A.
Jones' entity-D.Jones and Associates-on August 23, 2012.
Id. 16(x). On August 30, 2012, D. Jones and
Associates sent a check to CavaSense in the amount of $25,
000 that purported to be payment for consulting services.
Id. ¶16(y). The Government charges that neither
Cavaness nor CavaSense performed any consulting work for the
Brady or Jones campaigns. Id.
Moore's direction, Cavaness used $21, 000 of the money
provided through VLDS and D.Jones & Associates to pay
vendors owed by the Moore for Congress campaign. Id.
16(bb). Cavaness also paid $19, 500 directly to Moore by
checks bearing the memo line “Reimbursement.”
Id. 16(cc). The Superseding Indictment states that
Cavaness and Moore kept the remainder of the money provided
by Brady through VLDS and D.Jones & Associates in
Cavaness's personal bank account. Id. 16(dd).
Superseding Indictment further charges that the conspirators
caused the Brady campaign to submit campaign finance reports
to the Federal Election Commission (“FEC”) which
falsely described the payments as for consulting services and
polling. Indictment ¶¶¶ 16(o), (v)(z).
Finally, the Superseding Indictment states that the
conspirators caused the Moore campaign to submit reports to
the FEC falsely omitting the payments from the Brady for
Congress campaign, VLDS, or D. Jones & Associates.
Id. at ¶¶¶¶ 16(ee), (ff), (gg),
Charges Related to Marjorie 2014 Campaign
“C”-later identified as Marjorie Margolies-ran in
the 2014 Democratic primary election for Pennsylvania's
Thirteenth Congressional District. Superseding Indictment
Count VI, ¶3. During that time, defendant owned and
operated two political consulting companies, Black and Blue
Media Inc. (“BBM”) and InfoVoter Technologies
(“InfoVoter”). Id. ¶9a. BBM and
InfoVoter received approximately $210, 750 from Marjorie
2014-Margolies' campaign committee-for expenses
associated with the primary election. Id.
Federal Election Campaign Act (“FECA”) prohibits
candidates from spending campaign contributions raised for
the general election on expenses in connection with the
primary election. Superseding Indictment Count I ¶ 9(f).
A candidate who does not prevail in the primary election is
required to refund any contributions raised for the general
to the Superseding Indictment, the Margolies campaign ran out
of funds that it could lawfully spend on the primary
election. Superseding Indictment, Count V ¶ 9(c). As a
result, in or about April and May of 2014, defendant directed
Jennifer May, the campaign treasurer, to continue spending
funds, thus causing the campaign to impermissibly spend funds
raised for the general election on primary election expenses.
Id. On April 29, 2018, defendant informed May that
he would wire $78, 750 to the campaign from BBM. Id.
¶ 9(d). On May 2, 2014, defendant wired $78, 750 from
his personal brokerage account to BBM. Id. ¶
9(e), (f). He then transferred those funds from BBM to the
campaign on May 5, 2014. Id. ¶ 9(d).
Defendant's personal account was subsequently replenished
in the amount of $75, 000, on May 7, 2014, by a close
associate. Id. ¶ 9(g). As a consequence, the
Government charges that Marjorie 2014 submitted a report to
the FEC on July 15, 2014, which falsely described the payment
from BBM as a “refund, ” when the payment was
actually an unlawful campaign contribution. Id.
subsequently lost the primary election. Following that loss,
the campaign lacked sufficient funds to refund general
election contributions as required under FECA, because it had
impermissibly spent funds designated for the general election
on primary election expenses. Id. ¶ 9(i).
Defendant told May that the general election contributions
had been “escrowed” in an InfoVoter account and
that InfoVoter would issue the refunds to the campaign.
Id. ¶ 9(j). In reality, the Government charges
that defendant used unlawful campaign contributions-which he
funneled through InfoVoter and BBM-to replenish the campaign
account. Id. ¶¶ 9(k)-(o). Specifically, a
close associate of defendant wired $150, 000 to
defendant's personal brokerage account on July 11, 2014.
Id. ¶ 9(k). Two days later, defendant wired
$40, 000 to BBM and $110, 000 to InfoVoter. Id.
¶¶ 9(1), (m). On July 14, 2018, BBM and InfoVoter
wired the money received from defendant to a bank account
associated with the Margolies campaign. Id.
¶¶ 9(n), (o). The Government alleges that, as a
result of these payments, defendant caused the Marjorie 2014
campaign to file FEC reports falsely stating that the
payments were “refunds” of general election
expenses, when they were unlawful campaign contributions.
Id. ¶¶ 9(p), (q).
April of 2014, Margolies' primary challenger, Daylin
Leach, filed a complaint with the FEC in which he alleged
that her campaign had unlawfully used general election funds
in connection with primary election expenses. The Margolies
campaign retained Perkins Coie attorney Karl Sandstrom in
connection with the FEC inquiry. The Government alleges that
defendant misrepresented the nature of the
“refunds” allegedly issued from BBM and
InfoVoter-which were in fact, unlawful campaign
contributions-to Sandstrom. Superseding Indictment Count V,
¶ 9(r). As a consequence, the Government charges that
defendant caused Sandstrom to falsely report to the FEC that
they payments made by BBM and InfoVoter to the campaign were
refunds of general election expenses. Id. The FEC
subsequently dismissed the complaint filed by Daylin Leach.
2015, the FEC determined that InfoVoter had refunded to the
Margolies campaign approximately $18, 000 more than the
campaign had paid it initially. Id. ¶ 9(t). As
a consequence, the Margolies campaign was required to repay
InfoVoter the excess $18, 000. Id. After the
campaign repaid InfoVoter the $18, 000, the campaign account
had a negative balance. Id. ¶ 9(v). To
replenish the campaign account, the Government alleges that
defendant sent a check for $25, 000 from BBM to
Margolies' personal bank account and instructed Margolies
to transfer $23, 750 from her personal account to the
campaign account. Id. The Government charges that
defendant caused Marjorie 2014 to file a report with the FEC
which falsely stated that the $23, 750 payment from
Margolies' personal account to the campaign was a loan
from the candidate herself, when in fact, the payment was an
unlawful campaign contribution. Id. ¶