Two federal bribery charges against Orville Moe, the embattled former operator of Spokane Raceway Park, were suddenly dismissed Tuesday by U.S. District Court Judge Edward Shea, who said he couldn’t legally give the case to a jury.
The dismissal of the twin public corruption charges came just before the 12-member jury was to hear closing arguments and begin deliberations after a four-day trial. The jurors were sent home after being thanked for their service and told the case had been resolved.
Moe appeared surprised, red-faced and teary eyed as he hugged his defense attorney, Mark Vovos, before walking out of the U.S. Courthouse.
The stern-talking judge dismantled the Justice Department’s case against Moe in two phases.
First, at the end of the prosecution’s case at midday, the judge dismissed one count involving a $109,000 loan Moe made in 2004 to Dale Perry, who was mayor of Airway Heights.
Then, after the defense rested its case by calling five witnesses, Vovos renewed his defense motion, asking the judge to dismiss the second and only remaining count, involving an $18,000 loan Moe made to Perry in 2002. Moe did not take the stand in his own defense.
First Assistant U.S. Attorney Tom Rice argued that the case should proceed to jury deliberation.
“Mr. Perry was hungry for money and he was willing to trade votes for money,” Rice said.
Vovos argued that it made no sense for Moe, an ardent foe of imposition of an admission tax, to bribe an official who also had a long-standing record of opposing such a tax on tickets sold at Spokane Raceway Park.
The judge agreed.
“Mr. Moe wasn’t out trying to influence anybody,” the judge said, referring to Perry’s 9-year record as a city councilman of opposing the admission tax.
The judge said the bribery charges against Moe weren’t like a “classic public corruption case” where contractors hand paper bags full of money to elected officials or blackmail them with photos of “their indiscretions.”
Shea said the U.S. attorney’s office certainly was operating within the law when it sought and got a grand jury indictment, believing there was probable cause that Moe had committed a federal crime. But at the trial level, the standard rises to beyond a reasonable doubt, and the judge said the prosecution had not met that level of proof.
Moe and Perry were named in the same October 2004 indictment. Perry was charged with four counts; Moe with two.
Perry pleaded guilty in August to bribery and agreed to testify against Moe in exchange for the prosecution recommending a lighter prison sentence.
But on the witness stand, Perry did not say Moe had ever asked for anything in return for the two loans. He did acknowledge under prosecution questioning that his plea agreement said he was “corruptly influenced” as a public official by accepting the loans from Moe.
“Mr. Perry is a gambling addicted (individual) who found himself in a terrible position,” the judge said of the ex-mayor’s role in seeking loans from Moe.
The $18,000 loan Moe initially made to Perry carried 12 percent interest, the judge said. And the second deed of trust for $109,000 – paying off the initial loan, a mortgage, a second-mortgage and other personal loans – carried a market rate interest of 6 percent
Rice argued to the court, with the jury out, that there was substantial circumstantial evidence that Moe “corruptly influenced” the Airway Heights mayor. The $18,000 loan Moe initially made Perry was put in the name of Moe’s daughter, who had never met the Airway Heights mayor, Rice argued.
Under such “Rule 29” dismissals of criminal charges by a federal judge before the case goes to the jury, the Justice Department apparently has no right to appeal.
The judge said there was no evidence linking Moe to the $109,000 transaction put together by his longtime friend and associate, Pat Kenney, a Realtor and former Spokane city councilman.
A title agent testified Monday that Kenney asked that the lender on that loan be listed as Farmers & Merchants Bank, but she refused that request, knowing the loan money was coming from Moe.
“Mr. Kenney took care of every aspect of this transaction,” the judge said from the bench. The judge said the $109,000 loan transaction, listing Moe’s name as the lender, was filed as a public document and didn’t involve any aspect of secrecy.
“Mr. Kenney is above suspicion,” the judge said of his role in that Moe-Perry loan. “No one is suggesting he did anything wrong.”
The Airway Heights City Council imposed an admission tax beginning in November 2003. The $109,000 loan was made in October 2004, after the City Council voted 6-1 that March to repeal the tax.
The prosecutor argued that the second loan was Moe’s reward to Perry for spearheading the repeal effort.
Spokane attorney Joseph Delay was called as the leadoff defense witness Tuesday, testifying that he drafted the $18,000 promissory note in 2002 for Moe, using his daughter’s name, Terry Graham, knowing she wasn’t a party to the loan.
Graham, given immunity from prosecution, previously was called as a prosecution witness and put in the seemingly awkward position of testifying against her father.
She testified that she didn’t know Perry and wasn’t involved in drafting or signing the promissory note, but knew her father was using her name and subsequently forging her signature on repayment checks.
Delay, who said he had done other legal work for Moe, testified he suggested using a third party’s name because he believed Moe likely would have to sue Perry to recover the money because he had no equity in his Airway Heights home.
“His security, in my opinion, was worthless,” Delay testified.
The prosecutor asked Delay why he would draft legal documents in the name of Moe’s daughter when she wasn’t present or a party to the loan.
“Did you ever get Terry Graham’s permission to use her name on this document?” the prosecutor asked the 81-year-old real estate attorney.
“No, I did not,” Delay responded.
“Did you know Dale Perry was the mayor of Airway Heights?” Rice then asked the witness.
“I didn’t know anything about Mr. Perry,” Delay testified.