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The Honolulu Advertiser
Posted on: Thursday, February 2, 2006

New plea deal in case involving ex-labor leader, son

By Jim Dooley
Advertiser Staff Writer

Terms of a new plea agreement in the federal criminal case against former Hawai'i labor leader Anthony "Tony" Rutledge Sr. and his son, Aaron, will be entered in court this afternoon, but parties in the case declined to discuss details of the deal yesterday.

An earlier agreement in which the Rutledges, charged with multiple felonies, would have pleaded guilty to greatly reduced charges and avoided any prison time, was rejected in November by U.S. District Judge David Ezra.

Ezra said it was only the second time in 18 years on the bench that he had even considered rejecting a government-approved plea deal. But the judge said he could not "countenance" a portion of the agreement that would have allowed the Rutledges to return to consulting positions at Unity House, a nonprofit labor organization seized by federal agents in late 2004.

Defense and prosecution attorneys would not comment yesterday on the terms of the new deal, but Eric Seitz, lawyer for former officials of Unity House who were ousted after the government takeover, said the agreement "has been described to me as very similar to the first one, although it addresses the concerns the judge raised in court."

A hearing on the new plea bargain has been scheduled for 2 p.m. today before U.S. Magistrate Judge Leslie Kobayashi. The agreement would then be forwarded to Ezra for acceptance or rejection.

A federal grand jury returned a 13-count fraud and conspiracy indictment against the Rutledges in December. Tony Rutledge faced a maximum punishment of 93 years in prison, but under the original plea deal he admitted guilt to a single charge of filing a false income tax return and was to have served a five-year term of probation. Aaron Rutledge was facing up to 53 years in prison but had agreed to plead guilty to a misdemeanor charge of witness intimidation during the course of an IRS criminal investigation. He was to serve a one-year term of probation.

Last year's plea bargain would have allowed Tony Rutledge to return to a consulting job at Unity House after he completed his probation. Aaron Rutledge would have been allowed to return to a Unity House consulting job immediately. The plea deal also called for the return of the former Unity House board of directors and would have let the board approve payment of more than $1 million in Rutledge legal bills.

"This court cannot countenance a defendant pleading guilty to these crimes and then stepping back to a fiduciary responsibility with an organization like Unity House," Ezra said in November.

Edward Groves, the prosecutor who obtained the criminal indictment of the Rutledges but who retired from government service last year, called the original plea agreement "a travesty of justice."

Edmund Power, lead prosecutor in the case now, did not respond yesterday to a request for comment on the new agreement.

William McCorriston, attorney for Tony Rutledge, could not be reached for comment.

Brian DeLima, attorney for Aaron Rutledge, confirmed that terms of a new agreement have been ironed out with prosecutors, but said, "I don't want to say anything more about it until the hearing tomorrow."

Reach Jim Dooley at jdooley@honoluluadvertiser.com.