People v. Scharlau

• Decision Date: 30 November 1990
• Docket Number: No. 69847,69847
• Citation: 152 Ill.Dec. 401,141 Ill.2d 180,565 N.E.2d 1319
• Parties: , 152 Ill.Dec. 401 The PEOPLE of the State of Illinois, Appellee, v. Wilbur SCHARLAU et al., Appellants.
• Court: Illinois Supreme Court

Page 1319

565 N.E.2d 1319

141 Ill.2d 180, 152 Ill.Dec. 401

The PEOPLE of the State of Illinois, Appellee, v. Wilbur SCHARLAU et al., Appellants.

No. 69847.

Supreme Court of Illinois.

Nov. 30, 1990.

Rehearing Denied Feb. 4, 1991.

Everett L. Laury, of Hutton, Laury, Hesser & Lietz, and M. Eugene Wright, Danville, and Matthias A. Lydon and Jayne Carr Thompson, of Lydon & Griffin, Chicago, for appellants.

Neil F. Hartigan, Atty. Gen., Springfield, and Craig H. DeArmond, State's Atty., Danville, for the People.

Justice STAMOS delivered the opinion of the court:

Defendants, Wilbur Scharlau, Ernie A. Cox, Jerome D. Brown, and Raymond T. Randall, were all serving as elected commissioners of Danville during the relevant times involved in this case. Defendant Scharlau, however, was acting mayor during these events because the elected mayor had resigned. Defendant Wendell Wright was corporation counsel of the City of Danville. All defendants were convicted of official misconduct (Ill.Rev.Stat.1989, ch. 38, par. 33-3(c)) and of violating the prohibition against municipal officials' having pecuniary interests in contracts involving the governmental unit they serve (Ill.Rev.Stat.1989, ch. 24, par. 3-14-4(a); ch. 102, par. 3(a)) in the circuit court of Vermilion County. The appellate court reversed, holding that the statutes under which defendants were convicted did not apply in this case. (193 Ill.App.3d 280, 292-94, 140 Ill.Dec. 260, 549 N.E.2d 911.) We granted the State's petition for leave to appeal (107 Ill.2d R. 315), and we reverse.

Defendants had been prosecuted after they had settled a Federal class law suit brought pursuant to the Voting Rights Act of 1965 (42 U.S.C. § 1973b (1982 & Supp. V 1987)). This law suit involved allegations that the City of Danville's election practices diluted minority voting strength. The terms of the settlement changed Danville's municipal government from a mayor-commissioner system, where commissioners were elected city-wide, to a mayor-alderman system with the City divided into separate aldermanic districts. However, the settlement also guaranteed that defendants would be placed, by appointment, in newly created administrative positions, called "department heads," for three years at a fixed salary which defendants were given the power to determine.

BACKGROUND

Because the facts and procedural history of this case are explained in detail in the appellate court's opinion, we will only recite the facts necessary for the disposition of this appeal. In January 1987, defendants were nearing the end of their four-year terms as commissioners of the City of Danville and were anticipating running for reelection in February. At that time, a group of African American residents of Danville filed a Federal lawsuit against the city and its commissioners alleging that the nonpartisan, at-large, city-wide process for electing commission members excluded African American representation and diluted their voting strength.

One month later, the parties to this lawsuit filed a stipulation for a consent decree. This stipulation provided for Danville's form of government to change from a mayor-commissioner system to a mayor-aldermen system. For the defendants, the stipulation provided that: (1) for three years after the first general election under the new government, the commissioners would continue in office as the administrators of various departments which corresponded to their commission duties; (2) the occupants of these administrative, or "department head," positions would not be members of the city council and would have no legislative duties; (3) the administrators could be removed only by a majority vote of the city council for "misfeasance or malfeasance"; and (4) the current commissioners would determine the salaries for the new department heads, and these salaries could not change for four years.

The Federal district court originally entered a consent decree incorporating the stipulation's language. (193 Ill.App.3d at 284, 140 Ill.Dec. 260, 549 N.E.2d 911.) The Federal district judge later vacated this order and held hearings on the proposed settlement. At that time, several parties filed motions to intervene, arguing that the negotiation process used by defendants to reach the settlement violated State conflict-of-interest statutes and public policy. For this reason, the Vermilion County State's Attorney also was then made a party to the action.

These hearings revealed that defendants knew that they could not hope to prevail in the litigation. However, defendants had argued during negotiations that they needed to remain in office for a period of time after the new aldermen were elected in order to guarantee a smooth transition. Defendants indicated that the specific provisions regarding salary, length of term, and removal were compromises upon which the voting rights plaintiffs agreed in the interest of protecting defendants from any reprisals by the new aldermen. Both sides agreed that, even though defendants could not hope to prevail in the suit, the settlement was a reasonable means of avoiding prolonged and expensive litigation.

The State's Attorney argued throughout these proceedings that the settlement agreement violated State conflict-of-interest laws. The district judge repeatedly warned the State's Attorney that the court would not allow him to argue the merits of such claims, and indicated several times that the State's Attorney would have the opportunity to pursue the prosecution of defendants after a settlement were entered. At the conclusion of the hearings, the district judge entered an order which found that the voting rights plaintiffs had a reasonable likelihood of success on the merits. He stated that, however, both parties to the suit had negotiated a reasonable settlement considering the potential length and cost of litigation and defendants' concern for an orderly transition. Particularly, he found that the provision for the three-year transition term provided stability and continuity of government. In an apparent contradiction of his earlier statements to the State's Attorney, the district judge found the settlement did not violate Illinois law and that the commissioners had not violated their fiduciary duty to the city. In reading his opinion into the record, the district judge stated "[D]efendants, aside from avoiding years of turmoil, have saved the city the crippling expense of the litigation and diminished the cost of salaries for administrative officers. The city, had the litigation continued, would have paid commissioners' salaries for at least four and probably five more years. The defendants did not * * * secure a personal advantage in conflict with their duty to serve the city * * *. If the Illinois statutes are in conflict with the settlement, and I conclude they are not, then the state statutes should give way to the policy of the federal law. I conclude the proposed decree is fair, adequate, and reasonable and that it does not violate state or federal law."

Soon after the consent decree was entered, defendants stood trial in the circuit court of Vermilion County on charges of violating State conflict-of-interest statutes. During those proceedings, each defendant testified regarding the settlement process. Defendants admitted that they had no right to require that they retain their jobs as a condition of settling the voting rights lawsuit and that they were not legally entitled to retention. All defendants had testified at grand jury proceedings that they would receive personal benefits under the Federal consent decree and that they would never have considered agreeing to the settlement without the retention provisions.

Defendant Wright testified that defendants as a group felt that they were being asked to sacrifice their personal positions and that "if they were going to give up something, they were entitled to something in return." Although they did not use the issue in the negotiation process, Wright indicated that defendants had discussed among themselves which of their pensions would vest within the next three years. Defendants argued that their major concern was for an adequate transition, not for pension security. Wright also admitted that he had been aware that the Federal court had the ability to fashion the terms of settlement without the direct involvement of defendants in the negotiation process.

The State also introduced into evidence an indemnification ordinance which defendants enacted less than two weeks after the Federal court approved the consent decree. The ordinance, suggested by defendant Wright, provided indemnification by the city to its appointees (who included Wright along with the former commissioners) and further extended indemnification to include "any criminal action or proceeding if the indemnified person had no reasonable cause to believe his conduct was unlawful and any act or omission within the scope of the office or employment."

The circuit court found all defendants guilty. The former city commissioners were sentenced to two years' conditional discharge and fined $1,000 each. The court sentenced defendant Wright to two years' conditional discharge, 90 days in jail, and a fine of $5,000.

The appellate court reversed. Concentrating on the language of the Illinois Municipal Code (Ill.Rev.Stat.1989, ch. 24, par. 3-14-4(a)), the Corrupt Practices Act (Ill.Rev.Stat.1989, ch. 102, par. 3(a)), and the Criminal Code of 1961 (Ill.Rev.Stat.1989, ch. 38, par. 33-3), the court determined that the conflict-of-interest provisions contained in each of these enactments were not applicable to defendants' case. The pertinent language of each statute follows.

Section 3-14-4(a) of the Illinois Municipal Code states:

"No municipal officer shall be interested, directly or indirectly, in his own name or in the name of any other person, association, trust or corporation, in any contract, work or business of the...