Walsh Convicted on 41 Counts

Cambridge's most controversial city councillor is now a convicted felon.

After a four-year federal investigation and a seven-week trial, William H. Walsh last week was found guilty in U.S. District Court on 41 counts of bank fraud and making false statements.

Walsh is the first elected official in Cambridge to be convicted of a crime since Mayor John W. Lyons was found guilty of public official corruption in 1941.

The city councillor was convicted of heading a scheme to defraud a branch of the Dime Savings Bank of New York out of $2.9 million.

Walsh defrauded the bank by offering and concealing illegal second mortgages in order to attract buyers for a failing condominium project he owned. The second mortgages were used by Walsh's customers to cover down payments on Dime loans in 1986 and 1987.

But despite the verdict, which was handed down by an 11-person jury last Monday, Walsh has ignored calls from political friends and foes alike that he step down.

If the city councillor, as expected, is given jail time during a sentencing hearing on June 23, he will be required to resign by state law. Massachusetts General Law Chapter 279, section 30 requires that any elected official sentenced to imprisonment for a felony be automatically removed.

But Walsh has indicated that he might defy the law. He told the Cambridge Chronicle last week that he has "no intention" of resigning.

Walsh faces a maximum sentence of five years in jail and a $250,000 fine for each count, according to a report in the Cambridge Chronicle.

That newspaper said Walsh is likely to be sentenced to between two-and-a-half and three-and-a-half years in federal prison. He may also be fined, placed on probation or both.

Walsh, who was also acquitted of 18 other counts of fraud and conspiracy, is one of nine city councillors who represent all of Cambridge's citizens, including Harvard students. Walsh, one of four Independents on the city council, is an opponent of rent control and thus receives much of his political backing from Cambridge's landowners.

Walsh and his attorney, Thomas G. Kontos of San Diego, have until April 22 to appeal his conviction. The Chronicle reported that Walsh began working on an appeal the day after the verdict was announced.

The city councillor was freed on his own recognizance after the verdict, but he must appear before a federal probation officer once a week and must telephone daily.

Federal officials want to maintain contact with Walsh because, immediately after his indictment was announced in October 1992, he fled to California and Arizona for eight days.

Many city councillors and other Cambridge leaders have called for Walsh to resign from the city council immediately.

City Councillor Jonathan S. Myers said Walsh's resignation would enable the council to function more effec- tively.

"The city has gotten itself bogged down in thissituation," Myers said. "it takes us away fromwork that we could be doing."

City Councillor Katherine Triantafillou calledfor Walsh's resignation.

"Its inimical to the concept of good governmentto have some convicted of a serious crime continueof to serve," she said.

"If the president of Harvard was convicted ofembezzling University funds, should he be allowedto continue to serve?" Triantafillou asked.

R. Phillip Dowds, president of the CambridgeCivic Association, a longtime Walsh foe, also saidthe councillor should resign.

"Convicted felons have no role to pay in publicoffice," Dowds said. "It's a betrayal of publictrust."

Dowds said a felon serving in public office wasakin to a "drug dealer being a police officer."

The Cambridge Tenants Union, which supportsrent control, has been calling for Walsh--a keypolitical opponent of the group--to resign eversince he was indicted.

"It is very cynical and very disrespectful tothe laws of the Commonwealth for him to stay,"said Malcolm L. Kaufman, a member of the tenantsunion's steering committee. "If he had any senseof integrity, he would resign."

Even group who support Walsh politically havesaid he should step down.

Denise Jillson , president of the anti-rentcontrol Massachusetts Homeowner Coalition, said itwould be a "good idea" for Walsh to resign.

"It's difficult for him to be able to governwhile he's trying to focus on his appeal and gethis life in order," Jillson said. "They city ofCambridge will run, and he should focus onhimself."

There is concern that, despite the state law,and despite opposition to him, Walsh will notresign.

Dowds said he fears it may be difficult to getWalsh to vacate office.

"It's going to take a tow truck and a chainwrench to get him out of there," he said.

In addition, opinions differ as to how enforcethe state law requiring that Walsh resign.Cambridge's elections division has no power toenforce the law, and city solicitor Russell Higleycannot issues an opinion on the issue until he isasked to do so by the city council.

Some are concerned that the city council willnot take action to get Walsh removed.

Kaufman, the tenants' union official, notedthat there was not mention of Walsh during lastMonday's city council meeting--held less just 90minutes after the verdict.

The other city councillors are mum--that'spathetic," Kaufman said.

Kaufman said he is also worried by councillorswho have "expressed sympathy for him and hismother."

"What about sympathy for his victims?" askedKaufman, referring to the people who invested inWalsh's projects and lost.

Kaufman fears that, if the council does notact, Walsh could remain in office even as heserves a prison term.

"How bizarre would it be for him to still havehis seat and be in jail?" Kaufman asked.

Kaufman said one councillor must take chargeand approach Higley and draft and resolutioncalling for Walsh to resign.

But Triantafillou is confident that Walsh willnot remain in office if he is jailed. She said she"fully expects" that the council would pass aresolution calling for his resignation.

Triantafillou also said she believes the stateAttorney General will move to enforce theMassachusetts law.

Myers said he does not see any possibility ofWalsh remaining in office if he is sentence toprison. "There is a state law and I expect that wewould be abiding by it," Myers said.

Cambridge's quirky voting system--which askvoters to rank their preferences instead of votingfor one candidate--would trigger a complexprocedure to find a replacement if Walsh resigns.

The replacement could be one of twoIndependents who lost last November's councilelections: James McSweeney or Anthony Galuccio.McSweeney finished tenth in the voting, just 47votes behind Walsh, and Galuccio finished twelfth.

In order to determine the next councillor, cityoficials would unseal all ballots that were castfor Walsh,. Each ballot will then be awarded tothe unelected candidate listed after Walsh inorder of preference.

In order word, the winner will not be theperson who got the most votes but rather thecandidate who received the highest preference onballots cast for Walsh.

The Trial

The initial indictment in the case namedseveral people who worked for Walsh, but many ofthem testified against their former boss inexchange for lighter sentences.

Major players in the trial included France G.Schwartz, a former attorney in Walsh's firm whohad a romantic relationship with the citycouncilor; Ann Jarosiewicz, an assistant toSchwartz; Dennis Cargill, real estate broker andformer close business associate of Walsh; andArthur E. Peach, a loan representative at Dime.

Despite damning testimony offered by these fourWalsh maintained his innocence and did not seek aplea bargain with prosecutors.

Schwartz and Jarosiewicz were the key witnessesagainst Walsh, testifying that he masterminded thesecond mortgage scheme. Assistant U.S. attorneyPeter. J. Mullion produced extensive documentationshowing purchase and sale agreements where Walsh'ssignature had been whited out in an attempt tocover up the councillor's involvement.

Kontos, Walsh's attorney, tried to cast doubton Schwartz's testimony by emphasizing heradmission that she had used cocaine.

For the defense, Walsh brought several notablecharacter witnesses, including Cambridge MayorKenneth E. Reeves '72.

In fact, the testimony by the mayor, a memberof the Cambridge Civic Association, raised the ireof Dowds, the association president. Dowdssuggested that Reeves testified in order to repayWalsh for the councilor's voting for the mayor'sre-election in January.

In his own defense, Walsh maintained that hedid not have complete control over his law firm.The councillor said employees mortgage schemewithout his knowledge.

Walsh also offered a compelling picture of hiswork habits. He testified that he would work from8 a.m. until after midnight, seeing up to sixtyclients and taking up to 300 phone calls per day.

At one point, the councillor's practice becametoo large for its Cambridge Street office,. andmembers of Walsh's firm would see clients in atrailer parked in the parking lot.

The prosecution tried to challenge Walsh'scredibility by demonstrating the personal realestate project's investors. Mullin produced memosbetween Walsh, Jarosiewicz and Schwartz showingthat the city councillor was involved in theproject.

In the end, the jury believed the prosecution.Walsh's bustling office, they found, was a virtualfactory of corruption which client after clientused to consummate fraudulent real-estate deals

"The city has gotten itself bogged down in thissituation," Myers said. "it takes us away fromwork that we could be doing."

City Councillor Katherine Triantafillou calledfor Walsh's resignation.

"Its inimical to the concept of good governmentto have some convicted of a serious crime continueof to serve," she said.

"If the president of Harvard was convicted ofembezzling University funds, should he be allowedto continue to serve?" Triantafillou asked.

R. Phillip Dowds, president of the CambridgeCivic Association, a longtime Walsh foe, also saidthe councillor should resign.

"Convicted felons have no role to pay in publicoffice," Dowds said. "It's a betrayal of publictrust."

Dowds said a felon serving in public office wasakin to a "drug dealer being a police officer."

The Cambridge Tenants Union, which supportsrent control, has been calling for Walsh--a keypolitical opponent of the group--to resign eversince he was indicted.

"It is very cynical and very disrespectful tothe laws of the Commonwealth for him to stay,"said Malcolm L. Kaufman, a member of the tenantsunion's steering committee. "If he had any senseof integrity, he would resign."

Even group who support Walsh politically havesaid he should step down.

Denise Jillson , president of the anti-rentcontrol Massachusetts Homeowner Coalition, said itwould be a "good idea" for Walsh to resign.

"It's difficult for him to be able to governwhile he's trying to focus on his appeal and gethis life in order," Jillson said. "They city ofCambridge will run, and he should focus onhimself."

There is concern that, despite the state law,and despite opposition to him, Walsh will notresign.

Dowds said he fears it may be difficult to getWalsh to vacate office.

"It's going to take a tow truck and a chainwrench to get him out of there," he said.

In addition, opinions differ as to how enforcethe state law requiring that Walsh resign.Cambridge's elections division has no power toenforce the law, and city solicitor Russell Higleycannot issues an opinion on the issue until he isasked to do so by the city council.

Some are concerned that the city council willnot take action to get Walsh removed.

Kaufman, the tenants' union official, notedthat there was not mention of Walsh during lastMonday's city council meeting--held less just 90minutes after the verdict.

The other city councillors are mum--that'spathetic," Kaufman said.

Kaufman said he is also worried by councillorswho have "expressed sympathy for him and hismother."

"What about sympathy for his victims?" askedKaufman, referring to the people who invested inWalsh's projects and lost.

Kaufman fears that, if the council does notact, Walsh could remain in office even as heserves a prison term.

"How bizarre would it be for him to still havehis seat and be in jail?" Kaufman asked.

Kaufman said one councillor must take chargeand approach Higley and draft and resolutioncalling for Walsh to resign.

But Triantafillou is confident that Walsh willnot remain in office if he is jailed. She said she"fully expects" that the council would pass aresolution calling for his resignation.

Triantafillou also said she believes the stateAttorney General will move to enforce theMassachusetts law.

Myers said he does not see any possibility ofWalsh remaining in office if he is sentence toprison. "There is a state law and I expect that wewould be abiding by it," Myers said.

Cambridge's quirky voting system--which askvoters to rank their preferences instead of votingfor one candidate--would trigger a complexprocedure to find a replacement if Walsh resigns.

The replacement could be one of twoIndependents who lost last November's councilelections: James McSweeney or Anthony Galuccio.McSweeney finished tenth in the voting, just 47votes behind Walsh, and Galuccio finished twelfth.

In order to determine the next councillor, cityoficials would unseal all ballots that were castfor Walsh,. Each ballot will then be awarded tothe unelected candidate listed after Walsh inorder of preference.

In order word, the winner will not be theperson who got the most votes but rather thecandidate who received the highest preference onballots cast for Walsh.

The Trial

The initial indictment in the case namedseveral people who worked for Walsh, but many ofthem testified against their former boss inexchange for lighter sentences.

Major players in the trial included France G.Schwartz, a former attorney in Walsh's firm whohad a romantic relationship with the citycouncilor; Ann Jarosiewicz, an assistant toSchwartz; Dennis Cargill, real estate broker andformer close business associate of Walsh; andArthur E. Peach, a loan representative at Dime.

Despite damning testimony offered by these fourWalsh maintained his innocence and did not seek aplea bargain with prosecutors.

Schwartz and Jarosiewicz were the key witnessesagainst Walsh, testifying that he masterminded thesecond mortgage scheme. Assistant U.S. attorneyPeter. J. Mullion produced extensive documentationshowing purchase and sale agreements where Walsh'ssignature had been whited out in an attempt tocover up the councillor's involvement.

Kontos, Walsh's attorney, tried to cast doubton Schwartz's testimony by emphasizing heradmission that she had used cocaine.

For the defense, Walsh brought several notablecharacter witnesses, including Cambridge MayorKenneth E. Reeves '72.

In fact, the testimony by the mayor, a memberof the Cambridge Civic Association, raised the ireof Dowds, the association president. Dowdssuggested that Reeves testified in order to repayWalsh for the councilor's voting for the mayor'sre-election in January.

In his own defense, Walsh maintained that hedid not have complete control over his law firm.The councillor said employees mortgage schemewithout his knowledge.

Walsh also offered a compelling picture of hiswork habits. He testified that he would work from8 a.m. until after midnight, seeing up to sixtyclients and taking up to 300 phone calls per day.

At one point, the councillor's practice becametoo large for its Cambridge Street office,. andmembers of Walsh's firm would see clients in atrailer parked in the parking lot.

The prosecution tried to challenge Walsh'scredibility by demonstrating the personal realestate project's investors. Mullin produced memosbetween Walsh, Jarosiewicz and Schwartz showingthat the city councillor was involved in theproject.

In the end, the jury believed the prosecution.Walsh's bustling office, they found, was a virtualfactory of corruption which client after clientused to consummate fraudulent real-estate deals