Governor Rick Perry Indicted in Texas, Indiana Challenges IRS Tax Credits, Gangster Whitey Bulger Files Appeal

Texas Governor Rick Perry has been indicted for alleged abuse of his veto power, Indiana joins the ranks of states challenging the IRS’s authority to issue Obamacare tax credits, and Boston-based crime boss ‘Whitey’ Bulger files an appeal of his 2013 criminal conviction.

Texas Governor Rick Perry Indicted for Abuse of Veto Power

A Texas grand jury in Travis County indicted Gov. Rick Perry last week on charges that he abused his power by allegedly pressuring a Democratic district attorney to step down by threatening to cut off state financing to her office.  Perry came under investigative scrutiny when he called for district attorney Rosemary Lehmberg to resign after she was convicted of a DUI last year.  When Lehmberg, who is head of Austin’s public corruption unit, refused Governor Perry threatened to veto a provision of a funding bill that granted $7.5 million to her department.  After the governor followed through on his promise, special prosecutor Michael McCrum began building his legal case alleging abuse of gubernatorial authority that resulted in last week’s criminal charges.

Critics of Mr. Perry argue that he overstepped his bounds and violated Texas anti-corruption law by using his veto authority in an attempt to force Ms. Lehmberg to resign.  Governor Perry, who is not running for re-election this year but has been considering a second run at the Republican nomination for president, gained the attention of the nonprofit government watchdog organization Texans for Public Justice, which filed a complaint last June over the Governor’s use of his veto.  Travis County, a heavily Democratic island in the otherwise Republican-controlled state, is home to Ms. Lehmberg’s public corruption division that created a stir for indicting a former official of the state’s Cancer Prevention Institute of Texas – a Perry initiative – for allegedly mishandling an $11 million grant.  Perry’s attempt to remove Lehmberg was seen as an effort to remove a powerful political opponent and dismantle the public corruption division in response to its investigation into his cancer institute, a move prosecutors argue made his use of the governor’s veto illegal.

Opponents of the indictment allege that McCrum and his fellow prosecutors have abused the criminal justice system by using it as a vehicle for political attacks against Governor Perry – a long-tenured enemy of the Democratic Party.  The indictment alleges two counts: one for the threat of veto, and one for Perry’s veto itself – each count relies on a different section of Texas Penal Code.  If convicted on both counts, Mr. Perry faces a possible 5 – 99 year prison sentence.  Beyond the impact on Governor Perry, the criminal case dances around a dangerous Pandora’s Box of criminalizing the use of executive veto power, and should the prosecutors earn their conviction it is unlikely Mr. Perry will be the last governor to face the justice system for using a veto that political opponents deem indefensible. 

Federal Court to Hear another Challenge to IRS Obamacare Tax Credits

Last month two federal courts created legal ripples by issuing conflicting rulings on the IRS’s authority to provide tax credits to American consumers who purchased health insurance from a federal exchange.  Under the Affordable Care Act (ACA), the Internal Revenue Service is authorized to provide tax credits for insurance plans purchased through an exchange “established by the State.”  With 36 states declining to adopt the provisions of Obamacare that enabled them to establish a government-run insurance exchange, the federal government has filled the gap.  The question of whether these federal exchanges qualify for IRS tax credits was answered in the negative by the DC Circuit in Halbig v Burwell and the in the positive by the 4th Circuit in King v Burwell.  Losing parties in each case have announced their intention to appeal to the Supreme Court.

While the two leading cases progress through the higher levels of the federal system, another lawsuit in Indiana regarding the same question will soon have its day in court.  In Indiana v IRS, the state of Indianan and 39 state school districts are challenging the IRS’s authority to issue tax credits for insurance purchased on federal exchanges.  There is a fourth case pending in Oklahoma, and with the appeals from Halbig and King working their way upwards, it is clear that this legal question is not insignificant.  The federal court in Indiana will hear arguments on the matter in October.

‘Whitey’ Bulger Files Appeal in Mob Crime Conviction

Notorious Boston gangster James ‘Whitey’ Bulger has filed an appeal of his criminal conviction arguing that he was unfairly denied the immunity defense he was promised by a now-dead federal prosecutor.  A year ago, Bulger was convicted after nearly 16-years on the run during a high profile criminal trial that featured stories of mafia-style killings and brutal mob activity that spanned decades during his heyday operating in Boston.  Bulger, now 84, submitted a 200-page appeal alleging that the trial court unfairly precluded him from raising his immunity arrangements – allegedly stemming from deals made long ago for testimony against fellow gangsters.  The US Attorney’s office in Boston will review the appeal and respond accordingly.

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