Iowa – Court Documents: Ex-Mayor of Postville May Have Tried To Extort Money From Rubashkin

Iowa – A former Postville mayor may have accepted cash payments from former Agriprocessors executive Sholom Rubashkin while in office, or tried to extort money from the one-time eastern Iowa slaughterhouse chief, according to documents filed in federal court.

The conflicting accusations are buried in sentencing memos filed by prosecutors and defense lawyers in Rubashkin’s financial fraud case.

Rubashkin lawyer Guy Cook said his client “flatly denies that he bribed Robert Penrod,” who was Postville’s mayor between 2006 and 2009.

Penrod, in an interview this week, said he couldn’t remember any exchange of money between himself and Rubashkin.

“It’s been so long ago, I can’t remember,” said Penrod, who was Postville’s mayor when immigration agents raided Agriprocessors in May 2008. “I can’t comment on it anyway. I really don’t know.”

Prosecutors are silent about why the mayor might have received money. A court document filed by Rubashkin’s defense indicates that efforts to unionize the plant’s workforce might have led to money changing hands.

Rubashkin, 50, faces sentencing today for his conviction last year on 86 financial fraud charges. Defense attorneys have asked for a prison term no greater than six years; prosecutors say his actions merit a life sentence.

It’s unclear from the sentencing documents whether cash changed hands between Rubashkin and Penrod; when any alleged transactions took place; how many payments were made; or what happened to the money.

Another pre-sentence report written by the former businessman’s probation officer remains confidential. It is not known if that document provides additional detail about any transactions between Rubashkin and Penrod.

Prosecutors mentioned the alleged cash transaction to bolster their argument that Rubashkin deserves a longer sentence.

U.S. District Judge Linda Reade can factor such behavior into Rubashkin’s sentence if she believes it, even though Rubashkin was never formally charged with bribery. Reade also can consider offenses for which a defendant was acquitted, or charges that were dismissed.

Defense lawyers argued that the report mischaracterized Rubashkin’s conduct. The allegations were never noted during Rubashkin’s month-long trial in Sioux Falls, S.D., but the trial included testimony about Rubashkin’s clashes with outsiders trying to unionize his workers.

In the court documents, prosecutors say Rubashkin made “illicit cash payments” to a former Postville mayor that totaled $15,000 to $20,000.

Prosecutors, who did not name the mayor, said in the sentencing papers that the alleged transactions took place “during the time the mayor was in office.”

Bob Teig, a spokesman for the U.S. attorney, said he could not comment on the allegations.

Rubashkin, in the sentencing papers, denies the bribery allegation but names Penrod as the Postville official in question. Rubashkin says Penrod used a secretly recorded conversation with union officials to pressure Rubashkin into making a loan to Penrod.

“Rubashkin does not deny that Agriprocessors loaned Penrod money,” defense lawyer Alan Ellis said in sentencing documents. “Agriprocessors made the loan, however, under duress from Penrod who essentially extorted the loans.”

Ellis said in the documents Penrod approached his client at an unspecified date and played him a tape from a meeting with union officials. The union officials made clear that they would “make life difficult” for Agriprocessors, Ellis wrote. Penrod then suggested that “if the loan was not extended, the city council would make things very difficult for Agriprocessors,” Ellis wrote.

The threat worried Rubashkin, who had clashed with city officials, Ellis wrote. Rubashkin consulted his brother, Heshy, and their father, Aaron, who approved the loan, the defense papers claim.

Penrod has not been charged in federal or state court and none of Rubashkin’s federal charges involve bribery.

In an interview, Penrod said he couldn’t remember the alleged conversation with Rubashkin or an exchange of money. He said he was unaware of any recorded conversation with union officials. Penrod then declined to comment.

Allamakee County Attorney Mary Jane White said she was unaware of the allegations.

Penrod, 60, resigned in March 2009 because of an apparent spat over a cell phone purchased with city money and criticism of the council from some city employees.