The Detroit News

Fed notes detail Marlinga case

Documents show trail of campaign checks government says skirted contribution limits

By Tony Manolatos / The Detroit News
June 27, 2004

Two people who donated to Macomb County Prosecutor Carl Marlinga’s campaign for Congress visited two separate bank branches on the same day and illegally divided thousands of dollars into smaller cashier’s checks to disguise campaign contributions, according to government documents.

The contributors wanted to avoid exceeding contribution limits, which are capped at $2,000 for individuals. Ten cashier’s checks for $2,000 or less were delivered to Marlinga’s campaign from 10 people, but the money actually came from two men, according to the documents obtained by The Detroit News.

Similar schemes are documented in checks and bank statements totaling $87,000. The FBI and U.S. Attorney’s Office used the information to build a nine-count indictment against Marlinga, Warren Realtor Ralph Roberts and state Sen. James Barcia, D-Bay City. All three have pleaded innocent and are awaiting an April 5 trial.

“This is helpful to the government because it shows that contributors were trying to hide the nature of the payments,” said Peter Henning, a Wayne State University law professor and former federal prosecutor.

On Dec. 10, 2001, James Hulet of St. Clair Shores, then a rape suspect Marlinga is accused of helping with a plea deal, wrote a $10,000 check to his attorney, Dennis Johnston. Later that day, Johnston’s wife, Frances Johnston, cashed the check at a Comerica Bank branch and divided the money into five cashier’s checks.

That same day, attorney William Bufalino II went to another Comerica branch and split a $5,000 check he wrote from his business into five cashier’s checks.

Among the people involved with the cashier’s checks, only Hulet is named in the indictment, but he wasn’t indicted.

Robert Leithauser Jr., another attorney who represented Hulet, purchased a $200 cashier’s check for Marlinga’s campaign at a third Comerica branch, also on Dec. 10, 2001.

“I’m not sure what was going on that day, but one thing I am sure of is we sure as hell weren’t involved in it,” said Ralph Roberts’ attorney, David Griem.

Bufalino died last month of a heart attack. He didn’t represent Roberts, but his partner, Frank Palazzolo, did.

According to Marlinga’s calendar, also part of the government’s case, Leithauser met with Marlinga on Dec. 11, 2001, a day after the cashier’s checks were cut.

Marlinga declined to comment. His attorney, Mark Kriger, would only reiterate what Marlinga has said. The prosecutor has always maintained that he didn’t know Hulet was contributing to his campaign.

“That’s why those people haven’t been charged,” Henning, the law professor, said of Hulet and the others. “The government needs someone in the room with Marlinga to say, ‘The reason I did it this way is because I wanted this result from Carl (Marlinga).’ That makes it a bribe. Otherwise, all you have is campaign finance violations. And those usually are not prosecuted criminally.”

The government also seized three checks totaling $11,000 from Hulet to his attorney, Dennis Johnston. Those checks were cashed on June 25, 2002, the same day Johnston withdrew two cashier’s checks totaling $4,500 apiece for him and Leithauser.

Also that day, Dennis Johnston, his wife and one of their sons each paid $1,000 for money orders made out to the Friends of Jim Barcia. Marlinga has said he asked Johnston to contribute to Barcia’s campaign.

The next day, Johnston or Leithauser withdrew two $1,000 money orders for Marlinga for Congress. Leithauser’s wife, Gwendolyn Leithauser, is listed as the purchaser. The indictment says she didn’t know about the transactions.

“The timing of all this looks bad,” Henning said. “People don’t normally do this. This requires a great deal of effort, more than writing a check and throwing it in the mail.”

Another group of transactions the government seized began on Aug. 22, 2002, when Hulet wrote Johnston a $10,000 check. Johnston cashed the check the next day and made out four cashier’s checks, two to himself totaling $23,500, one to Leithauser for $25,500 and one to the Michigan Democratic Party for $10,000.

The party’s check routing form shows Johnston requested the money go to the 10th Congressional District, where Marlinga was running as a Democrat in 2002. The party insists the money was used for salaries, rents and other administrative expenses not tied to Marlinga’s campaign.

“Maybe (the contributors) were trying to buy Marlinga without him knowing, or maybe Carl was demanding the payments,” Henning said. “That comes down to who is the jury going to believe — Marlinga or the people cooperating with the government?

“And, of course, the cooperators are trying to get immunity or a lighter sentence, so they have a real incentive to make Marlinga look bad ... This is going to be a credibility battle.”

Leithauser, an Eastpointe lawyer, did not return calls for comment. Johnston, a St. Clair Shores lawyer, and his wife declined to comment through their attorney, Brian Legghio. Dennis Johnston has cooperated with the government.

“My client never tried to bribe anybody,” Legghio said, noting that the indictment says Johnston and Marlinga first talked about the Hulet case two months after the December donations. “It is completely irresponsible to draw conclusions from the documents with absolutely no knowledge of the underlying facts.”

The FBI and the U.S. Attorney’s Office did not return calls seeking comment.

The indictment maintains Barcia was used as a conduit to get around contribution caps for Marlinga’s campaign. It says a lawyer, Johnston, sent money orders to Barcia’s Senate campaign and a similar amount was sent to Marlinga’s campaign from Barcia.

Barcia is charged with making false statements to the Federal Election Commission and exceeding the limit on campaign contributions. Marlinga is charged with offenses ranging from conspiracy to mail and wire fraud. Roberts is charged with conspiracy, mail fraud and exceeding the limit on campaign contributions.

Federal authorities said that at Roberts’ request, Marlinga intervened in the appeal of a convicted rapist, Jeffrey Moldowan, whose sister worked for Roberts, in exchange for the campaign contributions. Roberts and his wife donated $4,000 to Marlinga’s campaign.

Moldowan, sentenced in 1991 to 60-90 years in prison, was acquitted at a new trial last year.

Hulet, charged with repeatedly raping and drugging a teenage girl in 2001, pleaded guilty to a lesser sexual assault charge and was sentenced to two years in prison last year. Marlinga withdrew from Hulet’s case before the plea deal was reached.

You can reach Tony Manolatos at (586) 468-0520 or tmanolatos@detnews.com.


Police/Prosecutor Misconduct
Truth in Justice