Opinion ID: 1314537
Heading Depth: 3
Heading Rank: 2

Heading: The Consulting Contracts Bribe

Text: Before the $150 million investment agreement was finalized, Silvester asked Spadoni to pay Thiesfield and Christopher Stack, a close associate of Silvester, a 1% finder's fee even though they had not in fact acted as finders in connection with the deal. Thiesfield was unemployed due to her resignation from the Treasurer's Office to serve as Silvester's campaign manager, and Silvester was concerned about finding employment for her and for his other staffers. Stack was not an employee of the Treasurer's Office, but he had acted as a finder on previous investment opportunities with the state in the past. [2] Silvester told Spadoni that Stack's company, Collegiate Capital, was in trouble, and that he wanted to help Stack out of his financial difficulty. Spadoni told Silvester that he would discuss the proposed finder's fee arrangement with Triumph's owner, Frederick McCarthy. At trial, Silvester testified that Spadoni subsequently informed him that McCarthy did not want to pay the fee as a finder's fee, but wanted to wait until Silvester was out of office and then work it out at that point, which Silvester understood to mean that he and Triumph would later devise some arrangement that would be economically identical to the finder's fee he had proposed. Trial Tr. vol. 5, 161-62. [3] Silvester testified that this influenced him to increase the amount of funds being invested from $150 million to $200 million in order to increase the amount that Stack and Thiesfield would receive, but he did not discuss with Spadoni this decision to increase the value of the contract. On November 12, 1998, Silvester executed a $200 million investment contract with Triumph-Connecticut II, L.P., a partnership that Triumph created to invest these funds. At some point Stack and Thiesfield, each using a wholly-owned LLC, executed a consulting contract with Triumph which would pay each $1,000,000 over three years. The government claimed at trial that these were sham contracts under which Stack and Thiesfield assumed virtually no duties and were paid regardless of any results, contrary to industry practice. At trial, the date on which Stack's contract was signed was the subject of dispute. Stack testified that his contract was signed on November 11, 1998, a day before the investment contract was executed, and that his contract was postdated to appear that it was executed after Silvester left office in January of 1999. Stack testified that he remembered that this was the date his contract was signed because he found tickets to a matinee he had attended on that date, and he remembered that he signed the contract on the same day that he attended the matinee. Visitor logs from the law firm offices where Stack testified that he signed the contract confirmed that a meeting involving Stack, Spadoni and McCarthy took place on that date. Stack also testified that he received a draft contract by fax shortly before the signing, and Triumph's records reflect that Triumph sent a fax to Stack on November 9, 1998. However, on several occasions during the course of his cooperation with the government, Stack told prosecutors that his consulting contract was signed at the end of December in 1998, between Christmas and New Year's Day. When he was first interviewed by the government, Stack made no mention of the November 11, 1998 meeting at the law firm and instead stated that he first learned of a possible consulting contract while vacationing in Tortola after Triumph's investment contract with Connecticut was signed. According to Stack, Silvester and Thiesfield were also vacationing with him in Tortola, and Silvester told him that he would later get a consulting contract. [4] Stack also told the government that by the time the consulting contract was eventually signed, the Triumph-Connecticut investment contract had already been fully funded, which did not happen until December 4, 1998. Although Silvester was not present for the signing of Stack's consulting contract, his trial testimony indicated that the consulting contract was signed after the investment contract between Triumph and Connecticut. Specifically, Silvester testified that after he and Stack returned from Tortola, which was after the investment contract was signed, Spadoni told him that McCarthy was favorably inclined to enter into a contract with Stack. Trial Tr. vol. 6, 59, June 20, 2003. He also testified that he and Stack discussed Stack's arrangements to sign the contract in mid-December 1998 or later, and that it was his understanding that Stack's consulting contract was signed in December 1998 or in January 1999. [5]