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Bruce indictment 'pretty bare-bones,' expert says

April 21, 2011

Anti-tax advocate Douglas Bruce was indicted earlier this month on four counts of tax-related crimes, but two tax-crime lawyers say the indictment doesn’t necessarily mean the state has a strong case against him.

“It’s a pretty bare-bones indictment,” said Denver attorney Cliff Stricklin of the firm Holme Roberts and Owen, who read the indictment. Stricklin, who also is an adjunct law professor at the University of Colorado at Boulder, was the lead prosecutor in the case of former Qwest CEO Joe Nacchio. Nacchio was convicted in 2007 of insider trading and sentenced to six years in prison.

Bruce, who lives in Colorado Springs, is accused of attempting to influence a public official, tax evasion, filing a false tax return and failing to file tax returns. If convicted on all charges, he could be sentenced to as much as 12 and a half years in prison and a $700,750 fine. He said Monday that he’s innocent of all charges.

Stricklin said that from reading the indictment, it’s difficult to tell what kind of case the government has against Bruce. He also said the most serious charge — attempting to influence a public official — isn’t necessarily as condemning as it sounds, because the indictment says Bruce attempted to influence staffers at the state Department of Revenue by lying to them, not through threats or bribery.

“Say you have a case where it’s just a tax case where someone did not provide the right tax information, well, it’s covered by the tax counts, which have a lower penalty. It seems to me that you would use the ‘attempt to influence a public servant’ in cases where they’re really trying to intimidate or threaten somebody,” said Stricklin.

Mike Saccone, communications director for Attorney General John Suthers, said the government is confident  its evidence will support the indictment.

“We believe we have a solid case, and we look forward to trying it in court,” said Saccone.

Saccone declined to comment further on the state’s evidence.

Denver tax attorney Joe Thibodeau, who has worked on tax settlement cases for almost 38 years, said it’s also common for the state to use the threat of tax charges to settle cases, instead of pursuing criminal charges. That means  there could be either serious evidence behind the indictment, or there could be a sort of fishing expedition.

“There’s an old saying that on any given day, a prosecutor can indict a ham sandwich. That’s not too far off,” said Thibodeau.

He noted that to get an indictment, the state can present a little as a single witness with second-hand testimony, and argue that there’s probable cause that a crime has been committed. No defense is offered, and no cross examination is made.

Stricklin said the government must prove that Bruce not only broke the law, but that knew he was breaking it when he did so.

“People make mistakes on tax cases all the time,” said Stricklin. “The question here is going to be did he just make a mistake, or did he intentionally lie?”

El Paso County Clerk and Recorder Wayne Williams said that that will be the most interesting part of the case. Williams served on the county commission with Bruce from 2004 to 2007, until Bruce was appointed to the state House of Representatives by a vacancy committee. Williams said that Bruce, a former lawyer, is well-versed in the law.

“I believe that Doug is a very intelligent individual, and I suspect that he has a legal basis for what he did,” said Williams. “Having said that, Doug’s view of the law is often very different from other people’s.”

Bruce said the indictment stems from a political vendetta. Referring to his response to a state audit of his tax returns, Bruce said, “What’s so special about somebody’s challenging a charitable deduction? Why is that a matter of a statewide press release? Got Mr. Suthers’s name in the paper, though, launching his run for governor.”

It was in Bruce’s written response to the audit that the state says he lied to the Department of Revenue and tried to influence a public official. According to the indictment, Bruce lied about his 2005 tax return in his letter to the department, but the indictment doesn’t specify what he lied about. The alleged lie in his response to the department is what led to the charge of attempting to influence a public official.

The letter Bruce wrote to the department was not released by the attorney general’s office.

Bruce said Monday, “It’s just another in a long line of political harassment publicity stunts. They got their headlines, and they’re going to be humiliated when I am exonerated.”

Saccone said this week that politics played no role in the indictment, and that Bruce had been treated the same anyone in any tax crime case.

Even if politics doesn’t enter into the equation, it certainly looks like it does, said Stricklin.

“There’s always prosecutorial discretion. You have to wonder, why focus in on Doug Bruce, who’s been involved in tax issues?” said Stricklin. “Is it because of the irony? Is it because he’s been a lightning rod, that maybe they have inside information, that people would come to them, who would say, ‘You have to prosecute him because it’s so hypocritical’?”

Tax-related indictments are rare. The attorney general’s office has issued indictments for tax evasion, for example, for 10 people since 2005. In all but one case, each of the charges were attached to a  more serious crime, including identity theft and being involved in an illegal gambling ring.

Bruce’s first appearance in court was Monday, when a judge advised him of his rights.

His next appearance is scheduled for June 3.

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