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United States v. Cellini

February 12, 2009


The opinion of the court was delivered by: Judge James B. Zagel


The prosecution seeks disqualification of defense counsel. The indictment charges William F. Cellini, Sr. with various misdeeds committed in connection with state pension funds and state officials (both elected and appointed). A thumbnail version of the case is this:

The state teacher's retirement system has $30 billion to invest, and private firms want the job of managing a portion of those funds. Who gets that business is decided by the system's board of trustees, eleven members of which are either appointed by the Governor or elected by the present and future beneficiaries of the system. The defendant, it is charged, had influence with the board and was, himself, a political fund raiser. As part of an alleged conspiracy (including government officials and other political fund raisers), the defendant is said to have tried to obtain political contributions in exchange for allowing $220 million of teacher pension funds to be under the management of Thomas Rosenberg's firm, Capri Capital. Rosenberg's response to the attempt was to threaten to expose Cellini, which led the conspirators to a decision to go forward with the $220 million allocation in order to forefend Rosenberg's reporting of the conversation to the authorities. The conspirators allegedly decided not to give any further funds to Capri, and Cellini called Rosenberg to tell him that none of Cellini's "group" had anything to do with the initial failure to allocate the funds to Capri. The board of trustees was not advised of the alleged scheme.

The indictment asserts the existence of a long-running scheme to use pension funds to leverage political contributions and other benefits. An alleged example is a series of actions taken to defeat proposals to consolidate pension funds and to ensure reappointment of a friendly board member. A consolidation might dilute the ability of the persons named in the indictment to influence the teacher's pension board. It is alleged that Cellini and others offered to direct funds to asset managers selected by individuals who might be able to help defeat fund consolidation and influence board appointments.

Thomas Rosenberg will be a significant witness in this case. I infer from the record before me and the proceedings in a case before another judge that one or more of the alleged co-conspirators will also testify as part of the prosecution case.

Rod Blagojevich, former Governor of Illinois is a potential witness as well since he appears (in light of statements made in respect to other cases pending before other judges) to be one of the alleged conspirators.

Both Rosenberg and Blagojevich have been clients of Winston & Strawn, the firm whose partners represent Cellini.

The rules defining conflict of interest are generally applicable in all cases. So too is the rule which permits counsel to proceed if all clients who are the source of the conflicts waive the rights they have to preclude conduct that violates the conflict rules. There is a waiver of conflicts by Cellini, and it is broad enough to permit his current counsel to continue representing him. There is no such waiver from either Rosenberg or Blagojevich. If this were a civil case, that might be the end of the matter.*fn1

While the rules may be universal in application, they are not enforced in the same way in criminal cases. As Judge Bauer wrote in the leading opinion in this Circuit:

A separate line of cases address a criminal defendant's right to the counsel of his choice. Unlike a civil defendant, a criminal defendant's choice of his counsel is protected by the sixth amendment. . . . [citations omitted] . . . Given the weight of the defendant's constitutional right to the counsel of his choice and the trial court's ability to protect the attorney-client privilege and prevent the appearance of impropriety, we refuse to apply to a criminal case the holdings in . . . civil cases. . . . We also decline to adopt a per se rule of disqualification based on Canons 4 and 9 of the A.B.A. Code of Professional Responsibility when an actual conflict of interests exists. We agree with the Second Circuit that the decision to disqualify an attorney in a criminal case requires an evaluation of the interests of the defendant, the government, the witness and the public in view of the circumstances of each particular case.

United States v. O'Malley, 786 F.2d 786, 789-790 (7th Cir. 1986).*fn2

Balancing tests require case specific decisions and so both sides find general language to support their arguments and rarely find a case directly on point. Compare United States v. Alex, 788 F.Supp. 359, 362 (N.D. Ill. 1992) with United States v. Carter, No. 2:08-CR-11-RL, 2008 WL 3992253 (N.D. Ind. Aug. 27, 2008) on the weight to be given to the interests of a witness once represented by defense counsel.*fn3

The Government asserts that current defense counsel has two conflicts: one with Rosenberg and another with Blagojevich. I discount the significance of Blagojevich who has not agreed to testify and whose consistent public position is that he has done nothing wrong and intends to dispute all allegations against him to the end. While it is possible this might change, there is no reasonable expectation now that defense counsel's representation of Blagojevich or his campaign committee will be of any significance in the trial of this case.

Rosenberg will be an important witness, and his relationship with Winston & Strawn and its partners does matter. I infer from the papers, the oral argument and the circumstances of this case that Rosenberg has been a client of the firm on some occasions. I find that he was not a client with respect to the matters ...

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