IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA

v.

FRANCISCO ACOSTA

: : :

CRIMINAL NO. 15-266

GOVERNMENT'S GUILTY PLEA MEMORANDUM I. INTRODUCTION

The defendant agrees to plead guilty to Count One of an information, waiving

prosecution by indictment, charging him with conspiracy to commit bribery offenses, in violation

of 18 U.S.C. ' 371, all arising from his misusing his public office by accepting a campaign

contribution in exchange for taking official action in his capacity as President of Readings City

Council, misconduct that violates 18 U.S.C. '' 1952, 1343, and 1346. The defendant further

acknowledges his waiver of rights, as set forth in the attachment to this agreement.

An unsigned copy of the Waiver of Indictment is attached as Exhibit A. The

defendant has entered into a written plea agreement, a copy of which is attached as Exhibit B.

II. STATUTORY MAXIMUM PENALTY

The maximum penalty for a violation of 18 U.S.C. ' 371(conspiracy) is five years

imprisonment, a $250,000 fine, three years supervised release, and a $100 special assessment.

-2-

III. ELEMENTS OF THE OFFENSE

In order to prove the defendant guilty of committing conspiracy under 18 U.S.C.

371, the government would have to prove the following elements beyond a reasonable doubt:

1. That the defendant knowingly entered into an agreement to commit an

offense against the United States; and

2. That one or more persons did an overt act to effect or further the object of the conspiracy

The object offenses of the conspiracy charged in the information were honest

services wire fraud and Travel Act bribery. The elements of these offenses are defined below.

A. 18 U.S.C. 1343, 1346 (honest services wire fraud)

In order to establish a violation of the laws against honest services wire fraud, the

government would have to prove the following elements beyond a reasonable doubt:

1. The defendant devised or participated in a scheme to defraud the public of its right to the honest services of a public official through bribery or kickbacks;

2. The defendant did so knowingly and with an intent to defraud;

3. The scheme or artifice to defraud involved a material misrepresentation, false statement, false pretense, or concealment of fact; and

4. In advancing, or furthering, or carrying out the scheme to defraud, the defendant transmitted, or caused to be transmitted, any writing, signal, or sound by means of a wire communication in interstate or foreign commerce.

B. 18 U.S.C. 1952 (Travel Act bribery)

In order to establish a violation of the Travel Act, the government would have to

prove the following elements beyond a reasonable doubt:

-3-

1. That defendant used a facility in interstate commerce, or caused someone else to use such a facility;

2. That this use of an interstate facility was done with the intent to promote, manage, establish or carry on an unlawful activity, including extortion or bribery in violation of the laws of the State in which committed or of the United States; and

3. That after this use of an interstate facility, the defendant performed or

attempted to perform, or aided, abetted or caused, an act in furtherance of this same unlawful activity.

In this case, the bribery was committed in Pennsylvania. Title 18 Pa. Cons. Stat.

Ann. ' 4701 (Bribery in official and political matters) provides as follows:

(a) Offenses defined.--A person is guilty of bribery, a felony of the third degree, if he offers, confers or agrees to confer upon another, or solicits, accepts or agrees to accept from another:

(1) any pecuniary benefit as consideration for the decision, opinion, recommendation, vote or other exercise of discretion as a public servant, party official or voter by the recipient;

(2) any benefit as consideration for the decision, vote, recommendation or other exercise of official discretion by the recipient in a judicial, administrative or legislative proceeding; or

(3) any benefit as consideration for a violation of a known legal duty as public servant or party official.

IV. FACTUAL BASIS FOR THE PLEA

A. The Relevant Duties of Honest Services

The defendant and the individuals identified in the Information as Public Official

#1 and Public Official #2 were all public officials in Reading. As such, each had fiduciary

duties to the City of Reading and its citizens. These duties of honest services, defined in part by

Readings Code of Ethics (the Code of Ethics) and the Pennsylvania Public Official and

Employee Ethics Act, prohibited public officials in Reading from seeking improper influence,

-4-

accepting improper influence, and engaging in bribery, kickbacks, or other conduct constituting a

conflict of interest.

To limit the influence of money on candidates seeking public office, Section 1012

of Readings Code of Ethics established limits on campaign contributions to, and certain reporting

requirements for, certain political candidates. Section 1012 established the following annual

limits on campaign contributions to any particular candidate: a $2,600 limit on contributions from

an individual; a $10,000 limit on contributions from an organization; and an aggregate limit of

$250,000 for any candidate for Mayor.

To limit the influence of money on public officials in Reading, Section 1006(H) of

the Code of Ethics prohibited Reading from awarding of a no-bid contract that is, one which

was not awarded or entered into pursuant to an open and public process to any recipient who

had made a recent campaign contribution to a Reading public official in excess of the contribution

limitations set forth in Section 1012.

B. Public Official #1s Scheme

Public Official #1 was a candidate in the Democratic Partys primary election,

scheduled for May 19, 2015. Having received campaign contributions which he believed to be

prohibited by the Code of Ethics, Public Official #1 sought to keep these contributions and raise

additional funds which would otherwise be prohibited by the Code of Ethics. To facilitate this

end, Public Official #1 sought to repeal or nullify Sections 1006(H) and 1012 of the Code of

Ethics. Public Official #1 and others knowingly devised and intended to devise a scheme and

artifice to defraud and deprive the City of Reading and its citizens of the honest services of several

public officials through a bribery and kickback scheme, wherein Public Official #1, via

intermediaries, offered to provide campaign contributions to certain members of City Council in

-5-

exchange for their passage of an ordinance repealing or nullifying Sections 1006(H) and 1012 of

the Code of Ethics. Public Official #1 had the power to sign such an ordinance into law.

Public Official #2, an ally of the defendants, was also a candidate in the May 2015

primary election. Public Official #1 and others agreed that Public Official #1 would offer the

defendant a loan of $1,800 to the campaign committee of Public Official #2 which would be

forgiven upon the defendant successfully orchestrating the passage of the repeal bill. Public

Official #1 and others agreed that Public Official #1 would offer the defendant additional funding

for the campaign committee of Public Official #2 as a reward for the defendant successfully

orchestrating the passage of the repeal bill. To conceal his participation in the scheme, Public

Official #1 sought to finance the campaign contributions to Public Official #2 with funding from

third parties.

C. The Defendants Participation in the Conspiracy

Between March 30, 2015 and April 22, 2015, Public Official #1, the defendant, and

others agreed that, in exchange for campaign funding for Public Official #2, defendant would use

his official position as City Council President to introduce and obtain passage of legislation, to be

approved by Public Official #1, repealing portions of the Code of Ethics in accord with Public

Official #1s preferences (the repeal bill), all prior to the Democratic Partys primary election on

May 19, 2015. Public Official #1, the defendant and others agreed that the repeal bill would

repeal Section 1012 in its entirety, thereby eliminating the restrictions on campaign contributions

and nullifying Section 1006(H)s prohibition on awarding no-bid contracts to certain donors.

On or about April 10, 2015, Public Official #1 and others caused a check for

$1,800, payable to the campaign of Public Official #2 (the bribe check) to be delivered to the

defendant. The defendant then took possession of the bribe check and agreed that, in order to

-6-

avoid scrutiny of his agreement with Public Official #1, neither the defendant nor Public Official

#2 would deposit the bribe check until a later date.

On or about April 13, 2015, the defendant, acting in his capacity as City Council

President, introduced the repeal bill, a proposed ordinance which would immediately repeal

Chapter 5 Administrative Code, Part 10, Code of Ethics, Section 1012, Campaign Contributions

and Reporting Requirements. . . [and] [a]ll ordinances or parts of ordinances which are

inconsistent herewith.

The defendant attempted to persuade other members of City Council to pass the

repeal bill before the primary election by asserting that he was motivated solely by the best

financial interests of Reading and by concealing that he had received the bribe check when, in fact,

as the defendant well knew, he had made a corrupt bargain with Public Official #1.

On or about April 21, 2015, in order to conceal and continue the conspiracy, the

defendant made materially false statements to FBI agents who were investigating the bribery

scheme. The defendant falsely denied that he had accepted a bribery offer from Public Official

#1 (or Public Official #1s surrogates) and that he had ever possessed or received the bribe check.

In fact, as the defendant well knew, he had previously agreed to Public Official #1s bribery offer

and still had possession of the bribe check at the time of his false statements to the agents.

The members of the conspiracy used facilities of interstate of commerce, that is,

telephones and the Internet, in order to discuss, promote, manage, establish, carry on, and

otherwise facilitate the conspiracy. For example, on or about April 10, 2015, Public Official #1

used a cellular telephone, a facility of interstate commerce, to send the defendant a text message

inquiring whether the defendant had received certain information that would impact the passage of

the repeal bill. That same day, the defendant used an Internet e-mail account, in interstate

-7-

commerce, to cause to be sent to members of Public Official #1s government and campaign staffs

a draft of the repeal bill that the defendant intended to introduce in his official capacity as City

Council President.

D. The Defendants Withdrawal from the Conspiracy

Within 24 hours of his interview with FBI agents on April 21, 2015, the defendant

took affirmative steps to withdraw from the conspiracy, all without alerting other members of the

conspiracy of the FBIs inquiry into this matter. The defendant then met with the government at

his earliest opportunity in order to accept responsibility for his wrongdoing. The defendant

subsequently absented himself from the vote on the repeal bill, which was defeated unanimously

by the remaining members of City Council.

Respectfully submitted,

ZANE DAVID MEMEGER United States Attorney

__/s/ Joseph J. Khan_________________________ JOSEPH J. KHAN NANCY BEAM WINTER Assistant United States Attorneys

CERTIFICATE OF SERVICE

I hereby certify that on this date I caused a true and correct copy of the foregoing

Government's Guilty Plea Memorandum to be served by e-mail upon counsel for defendant:

Robert Goldman, Esq. reg@bobgoldmanlaw.com

__/s/ Joseph J. Khan_________________________ JOSEPH J. KHAN Assistant United States Attorney

Date: 8/3/15