Update: Rod Blagojevich’s Original Sentence Unchanged at Resentencing

At a resentencing hearing today, U.S. District Judge James Zagel sentenced former Illinois Governor Rod Blagojevich to the same fourteen-year sentence the judge had originally imposed in 2011. Blagojevich (known as “Blago”) was convicted on eighteen felony counts of corruption based on various “pay to play” schemes involving his powers as governor, including a scheme where he tried to obtain money or a job in exchange for appointing the successor to former U.S. Senator from Illinois Barack Obama.

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Resentencing was necessary because five of Blagojevich’s convictions had been thrown out by the U.S. Court of Appeals for the Seventh Circuit. The court of appeals concluded that the charges based on Blago’s scheme related to filling the Senate seat may have rested on an improper legal theory. Those charges were based in part on evidence that Blago had tried to trade that appointment for a favorable government job for himself; in other words, he would appoint a successor favored by Obama in exchange for a seat in President Obama’s cabinet. (That deal never came to pass because the President and his staff refused to agree.) But the court of appeals concluded that this kind of transaction, trading one political appointment for another, was simply political “log rolling” that takes place all the time and could not form the basis of a corruption conviction. (I wrote in more detail about the Seventh Circuit opinion in this post.)

Blagojevich had also hoped the Supreme Court might hear his case, particularly in light of the Court’s recent decision to accept review of and then reverse the corruption convictions of former Virginia Governor Bob McDonnell. But those hopes were dashed when the high court declined to accept Blago’s appeal.

At the resentencing, Blago’s attorneys argued he should be released much earlier in light of the vacated convictions. But the government pointed out that even without those charges the sentencing guidelines would have called for the same sentence, based on the other corruption schemes for which he was convicted. In addition, although the court of appeals rejected one theory related to the attempted sale of the Senate seat, there had been plenty of evidence at trial concerning efforts by Blago to solicit other things of value in exchange for that appointment. Prosecutors argued that the fundamental picture concerning the nature of Blago’s misconduct had not changed. Judge Zagel apparently agreed.

So after four years of appeals, Blago is right back where he started: in prison until 2024.

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Third Circuit Rejects Senator Menendez Speech or Debate Claims

The U.S. Court of Appeals for the Third Circuit today rejected claims by New Jersey Senator Robert Menendez that the charges against him should be dismissed based on the speech or debate clause of the Constitution. Menendez and his co-defendant, Dr. Salomon Melgen, were indicted in April 2015 on multiple counts of corruption. The 22-count indictment charges that between 2006 and 2013 Menendez accepted numerous valuable gifts from Melgen, including multiple trips on a private jet, vacations at a luxury villa in the Dominican Republic, and hundreds of thousands of dollars in contributions to various campaign and legal defense funds.  In exchange, Menendez is alleged to have intervened on Melgen’s behalf in disputes with the Executive Branch, including an enforcement action by the Centers for Medicare and Medicaid Services based on alleged massive overbilling by Melgen’s opthalmology practice and a dispute with the U.S. Customs and Border Patrol over Melgen’s multi-million dollar contract to provide cargo screening services in Dominican ports.  (For an analysis of the indictment and the charges, see my earlier post here.)

Menendez claims that various actions he took on behalf of Melgen, including meeting with Executive Branch officials to lobby on Melgen’s behalf, were “legislative acts” protected by the speech or debate clause and thus cannot be the basis of a criminal case. The trial court rejected those claims and Menendez appealed to the Third Circuit, where a three-judge panel has now unanimously rejected them as well. (For a more detailed discussion of the speech or debate clause and Menendez’s arguments, see my post here.)

The Third Circuit found that the evidence at this stage supports the government’s claim that Menendez was acting specifically on behalf of Melgen and was not, as he had argued, pursuing more general legislative or policy goals: “Record evidence and unrebutted allegations in the Indictment cause us to conclude that the District Court did not clearly err when it found that the challenged acts were informal attempts to influence the Executive Branch toward a political resolution of Dr. Melgen’s disputes and not primarily concerned with broader issues of policy.” (p. 29)  Although there was some evidence in the record supporting Menendez’s claims, the court found he had made selective use of the facts while ignoring other evidence that cut against him: “Senator Menendez’s selective reading of the materials in the record does not persuade us that the District Court clearly erred . . . .” (p. 36)

Two important points: this was merely a pretrial determination, where allegations of the indictment were presumed to be true and Menendez had the burden of proof. As the Court of Appeals recognized, after all of the evidence comes out at trial it is possible that Menendez will ultimately prevail on his speech or debate arguments (although it seems unlikely). In addition, this appeal dealt only with the speech or debate claims and a couple of collateral issues; Menendez may still raise many other legal defenses both before and during trial. In particular, it remains to be seen whether the Supreme Court’s recent decision reversing the corruption conviction of former Virginia Governor Bob McDonnell will end up helping Menendez as well.

The Third Circuit’s decision was not a surprise; the speech or debate arguments always seemed like a long shot. The claims will, however, continue to delay the ultimate resolution of the case. Menendez will now likely ask the entire Third Circuit to review the panel decision en banc, and if that fails will petition the Supreme Court to hear the case. Even if those appeals are ultimately unsuccessful, it looks like his trial likely will be delayed well into 2017. Sidebars will keep you posted.

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The Bob McDonnell Case May Have Been Won Months Before Trial

The U.S. Supreme Court unanimously overturned Bob McDonnell’s corruption convictions on June 27. The Court held that the actions McDonnell took in exchange for the secret gifts and loans he received from businessman Jonnie Williams did not constitute “official acts” within the meaning of federal bribery law. I’ve written here and here about why I think the Court’s decision is wrong. But in this post I’d like to examine a different aspect of the case: how a tactical move by the defense, months before trial, may well have been the key to McDonnell’s ultimate victory.

As I noted, the basis of the Supreme Court’s decision was its conclusion that McDonnell did not perform “official acts.” If you’ve been reading the commentary about the case for the past two years, you could be forgiven for thinking it was always clear that the definition of “official act” was the key issue. Virtually all media reports focused on the question of “official acts.” At trial, in the court of appeals, and in the Supreme Court, both sides agreed this was the relevant test. In its decision the Supreme Court simply noted, with no analysis, that both sides agreed the government was required to prove that McDonnell agreed to perform “official acts” in exchange for the bribes.

But in fact, it’s far from clear that this focus on “official acts” was the proper legal standard by which to judge McDonnell’s actions. That this became the central legal issue in the case is a testament to the skill of McDonnell’s defense team. By convincing both the prosecutors and the trial court that this was the correct legal standard, they may have won McDonnell’s case months before his trial even began.

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The Definition of “Official Act”

The Supreme Court began its analysis by stating: “The issue in this case is the proper interpretation of the term ‘official act.'” The definition of “official act” in question comes from the federal bribery statute, 18 U.S.C. §201.  Section 201(a)(3) provides:

the term “official act” means any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.

Under Section 201(b)(2)(A), a public official is guilty of bribery if he or she “corruptly demands, seeks, receives, accepts, or agrees to receive or accept” anything of value in exchange for being influenced in the performance of any such “official act.”

The Supreme Court agreed with McDonnell that this definition of “official act” envisions some formal exercise of government power; a public official making a decision or taking action on a particular question or matter. The bulk of the legal portion of the Court’s opinion is a rather dry analysis of the “official act” definition quoted above, with the Court using tools of statutory construction to decide what is meant by a “decision or action on” a “question, matter, cause, suit, proceeding, or controversy.”

The Court held that if all McDonnell agreed to do was introduce Williams to others in the Virginia government who might help him, or hold an event at the Governor’s mansion to promote Williams’ product, these were simply routine political courtesies and did not represent the kind of exercise of government power that this definition suggests. Because the jury was not properly instructed on the definition of “official act” as announced by the Court, the convictions were vacated and the case sent back to the lower courts.

This may all sound unremarkable, but for one fact: McDonnell was never charged with violating 18 U.S.C. §201. That statute applies only to bribery by federal public officials or those acting on behalf of the federal government. As a state governor acting on state matters, McDonnell was not covered. The really unusual thing about the McDonnell opinion is that it consists almost entirely of analysis of a statute that no one in the case was charged with violating.

The Charges in McDonnell’s Case

McDonnell was actually indicted for violating two different corruption statutes: Hobbs Act extortion under color of official right and honest services wire fraud. These are two of the most common vehicles for the federal prosecution of state or local corruption. The Supreme Court held, in Evans v. United States, that Hobbs Act extortion under color of official right is basically the equivalent of bribery. And in the landmark 2010 case of Skilling v. United States, the Supreme Court held that honest services fraud applies only to bribery and kickbacks.

Both the Hobbs Act and honest services fraud, therefore, may be used to prosecute bribery — but neither statute defines that term. From the beginning of the case, McDonnell’s defense team successfully argued that since these statutes don’t define bribery, courts should use the definition of bribery found in a different federal statute, 18 U.S.C. §201. And this led to the focus on whether McDonnell had performed “official acts” within the meaning of that law.

At first glance this argument seems reasonable: why not look to another federal statute for the definition of bribery under the Hobbs Act and honest services fraud? But as I argued in greater detail in this earlier post, using the Section 201 definition of bribery for purposes of these other statutes actually makes little sense.

In Skilling the Court said that honest services fraud applies to bribery – but it didn’t say “bribery as defined in 18 U.S.C. §201.” And upon reading Skilling it is clear that the Court had a broader, more general concept of bribery in mind. For example, honest services fraud applies to state and local public officials like McDonnell who would not be subject to bribery charges under § 201. It also applies to private sector bribery, such as an employee who violates his duty of honest services to his employer by accepting payments from a competitor to sell his employer’s secrets. Private sector bribery is not covered by 18 U.S.C. §201 and private individuals cannot, by definition, perform “official acts.” It cannot be that bribery for purposes of honest services fraud is equivalent to bribery as defined by 18 U.S.C. §201, because much of the bribery unquestionably covered by honest services fraud would not violate §201.

When the Skilling Court defined honest services fraud it looked to the broader universe of bribery law and drew upon many cases that would not have fallen under 18 U.S.C. §201. In fact, the Court expressly noted (in footnote 45) that honest services fraud, as it was defining it, reached well beyond the scope of 18 U.S.C. §201.

Similarly, Hobbs Act extortion under color of official right applies to bribery by state and local officials, who are not covered by Section 201. The definitions of Section 201 are therefore similarly inadequate to cover all of the conduct encompassed by Hobbs Act extortion.

The McDonnell case might also leave the impression that every instance of federal bribery under Section 201 involves “official acts” – but that too is incorrect. Section 201 defines three different ways to commit bribery, and only one of them involves official acts. Bribery is also committed by an official who accepts a thing of value in exchange for being induced to do or omit to do any act in violation of his or her official duty (18 U.S.C. §201(b)(2)(C)) or in exchange for agreeing to help commit a fraud against the United States (18 U.S.C. §201(b)(2)(B)). Even within the federal bribery statute itself, the crime of bribery is not limited by a focus only on whether an official performed “official acts.” Why should bribery for honest services fraud or the Hobbs Act be so limited?

The Essence of Bribery

Bribery is an ancient common-law crime that was around long before Congress attempted to define it in one statute. There is nothing magical about the definition in 18 U.S.C. §201, and as we’ve seen, that definition is inadequate to capture all cases covered by honest services fraud or Hobbs Act extortion. The key to bribery is the corrupt agreement to be influenced, or quid pro quo. It’s the influence component that is critical, more than the precise nature of the action taken. Bribery corrupts the political system because the actions of the public official are being altered for an improper purpose. The recipient of a bribe is influenced to act not in the best interests of all but rather to benefit the person who paid the bribe. Similarly, the bribe payer obtains political favors or exercises of power that are unavailable to the general public, thanks to a corrupt deal to reward the public official in exchange.

When defining bribery, the Supreme Court could have looked to many sources. For example, one standard authority, the Model Penal Code (§240.1), defines bribery as agreeing to accept “any pecuniary benefit as consideration for the recipient’s decision, opinion, recommendation, vote or other exercise of discretion as a public servant.” The heart of the crime is the same: the quid pro quo, exchange of something of value to influence an official’s discretionary action.  But the language is much more general than §201(a)(3) and does not include the specific focus on a “question, matter, cause, suit, proceeding or controversy.”

Other possible sources include other laws. In a case involving the Virginia governor it might make sense, for example, to consider the Virginia state bribery statute, since it was the citizens of Virginia to whom McDonnell owed a duty of honest services. Virginia law tracks the Model Penal Code and provides that a public official is guilty of bribery if he or she accepts any pecuniary benefit from another in exchange for being influenced in a “decision, opinion, recommendation, vote or other exercise of discretion as a public servant.” VA Code §18.2-447(2). This definition, particularly the references to the official making a “recommendation” or the “exercise of discretion,” seems clearly to cover some of the actions taken by McDonnell.

The Court in McDonnell also could have looked to the many other state and local bribery cases that historically have been prosecuted as honest services fraud. If it surveyed those cases it would have found a wide variety of state law definitions of bribery that do not include the restrictive “official act” definition of Section 201.

In short, there is no reason to believe that meeting the precise definition of “official act” in 18 U.S.C. §201 should be required in all federal bribery prosecutions under all statutes. Up until McDonnell, the Supreme Court had never held that the specific language of Section 201 applied in prosecutions of honest services fraud or Hobbs Act extortion. But thanks to the efforts of McDonnell’s defense team, by the time the case arrived at the Supreme Court everyone, including the Justices, simply assumed this was the correct standard.

How “Official Acts” Became the Focus

So how did the McDonnell case end up focusing on “official acts?” There is some suggestion in the early pleadings that this was not always a foregone conclusion. In a defense motion filed on January 21, 2014, the same day the indictment was returned, the defense said the government had suggested that bribery under honest services fraud and the Hobbs Act may not require proof of “official acts” as defined in 18 U.S.C. §201. (It’s unclear when and where the government may have made that argument; perhaps it was in pre-indictment meetings with the defense team.) In that same motion the defense argued vigorously against this broader definition and pushed their claim that the government was required to prove “official acts.”

By the time the government responded to that defense motion in February, it appears the prosecution had made a tactical decision to agree that proving “official acts” as defined in §201(a)(3) was required. From that point on, up to and including in the Supreme Court, both sides proceeded on the assumption that this was the proper standard. Although some organizations that filed amicus briefs expressed some doubts on this point, for the most part everyone else also agreed that the government had to prove McDonnell performed “official acts.”

It appears to me the defense made an aggressive early effort to narrow the playing field to McDonnell’s advantage by insisting that the “official act” definition applied, and the prosecutors ultimately acquiesced. This may be a decision the government now regrets.

The Consequences of a Definition

It’s hard to overstate the importance to McDonnell’s case of this focus on “official acts.” First of all, from day one, it allowed the defense to shift the narrative: “This case is not really about corruption and buying access, it’s about a technical dispute over the meaning of a statute. Let’s not focus on the corrupt deal where the Governor agreed to use the powers of his office to benefit the man who was secretly paying him off. Instead, let’s focus on whether McDonnell’s actions fit some precise statutory definition.” Legalistic and kind of boring; not sexy and corrupt.

Lawyers all know the old saying: “When the facts are with you, pound the facts. When the law is with you, pound the law. And when neither the facts nor the law are with you, pound the table.” The facts clearly were not with McDonnell; whether the law was with him is a matter of debate, but there’s no doubt the defense did a great job of pounding the law and thereby shifting the entire focus of the case.

Similarly, in the Supreme Court, the emphasis on “official acts” meant that we ended up with an opinion consisting largely of a dry, lawyerly statutory analysis of what precisely is meant by a “decision or action on” a “question, matter, cause, suit, proceeding or controversy.” If this had not been the focus, perhaps the Court would have been forced to grapple with the nature of the crime of bribery itself – the quid and the pro, not just the quo – and the overall corrupt agreement between McDonnell and Williams. Perhaps the opinion would have stepped back and seen the big picture, how secretly purchasing the kind of access and influence that Williams obtained is precisely what the crime of bribery is supposed to prevent. Instead, the Court dove down into the weeds of statutory interpretation and never emerged.

We will never know for certain whether the outcome in McDonnell would have changed had the definition of “official act” not become the focus of the case. But the defense victory on this one legal issue, months before trial and more than two years before the Supreme Court’s decision, may ultimately have been the key to McDonnell’s win.

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Supreme Court Narrows Federal Bribery Law in a Win for Bob McDonnell

 

Suppose I’m a state governor who knows there are many people who would like to meet with members of my cabinet or other state officials to press for some particular action. I set up a system where I say, “If you want me to arrange for you to meet with a public official to make your pitch, you pay me $10,000. It won’t be disclosed to anyone, I’ll just put it in my pocket. I’m not agreeing to influence what decision is made, I’ll just get you in the room. But if you don’t pay, no meeting.”

Most people would probably consider such a “pay for access” system to be corrupt. Access can be critically important. If two companies are competing for a government contract, the one that is able to get a personal meeting with the deciding official is likely to have a significant advantage – particularly if that meeting came at the request of the official’s boss, the highest elected official in the state.

But after today’s decision in McDonnell v. United States, according to the U.S. Supreme Court, although such behavior may be “distasteful” or “tawdry,” it does not violate federal bribery law. This unfortunate decision dramatically limits the scope of federal anti-corruption statutes by adopting an artificially narrow interpretation of “official action.” It’s a discouraging day for anyone concerned about the influence of money in politics.

In a unanimous opinion by Chief Justice Roberts, the Court today vacated the convictions of former Virginia Governor Bob McDonnell. McDonnell and his wife Maureen were convicted on multiple counts of corruption back in September 2014. The case centered on their relationship with a businessman named Jonnie Williams. Williams owned a company that made a dietary supplement called Anatabloc, and he was interested in having Virginia universities conduct research studies of Anatabloc to help him obtain FDA approval.

The evidence at trial established that Williams gave the McDonnells more than $170,000 in gifts. These included paying for the caterer for their daughter’s wedding, a Rolex watch, a shopping spree in New York for Maureen McDonnell where she purchased more than $10,000 in designer gowns, and $120,000 in no interest, no paperwork “loans.”

In exchange, the government charged, McDonnell agreed he would seek to promote Anatabloc within the Virginia government and seek to have Virginia universities perform the critical research studies. But the evidence did not establish that McDonnell’s efforts were particularly substantial or successful. He asked some government officials to meet with Williams to discuss possible studies of Anatabloc, hosted a product launch event at the Governor’s mansion, and made a few other inquiries on Williams’ behalf, but Williams never got the desired research studies or any other government benefit.

The McDonnells were convicted of two corruption offenses, Hobbs Act extortion under color of official right and honest services mail and wire fraud. When it comes to public corruption, both of these statutes effectively operate as bribery by another name. Bribery requires a corrupt quid pro quo: in exchange for receiving something of value, the public official agrees to use the power of his or her office to benefit the bribe payer.

The issue therefore boiled down to whether McDonnell’s conduct amounted to bribery under these corruption statutes. The parties throughout the case had agreed that honest services fraud and Hobbs Act bribery should be defined by using the language of the principal federal bribery statute, 18 U.S.C. § 201 (which applies only to federal public officials and was not used in the McDonnell case). As I’ve argued elsewhere, this is a questionable proposition for a number of reasons. But the Supreme Court agreed to resolve the case on that basis, and held that the outcome in McDonnell’s case should be controlled by the language of Section 201 – a crime with which he was never charged.

Section 201 defines bribery, in part, as a public official corruptly accepting a thing of value in exchange for agreeing to be influenced in the performance of an “official act.” “Official act” is defined as “any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official . . . .” There was no question that McDonnell accepted things of value from Williams; the quid side of the equation was not at issue. The case boiled down to whether the steps taken by McDonnell fit this legal definition of “official act” — in other words, whether they were a legally sufficient quo.

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McDonnell’s Conduct and “Official Acts”

Throughout the case, the defense had maintained that what McDonnell did for Williams did not amount to official acts under federal bribery law. McDonnell’s actions, they argued, were mere routine political courtesies that might be extended to any supporter or constituent. McDonnell may have introduced Williams to government decision-makers, but he never tried to put his “thumb on the scale” of any decision that those officials made. The critical distinction, they argued, was between providing mere access and actually engaging in the exercise of official power.

In an opinion that spends a good deal of time parsing the specific language of Section 201 quoted above, the Supreme Court agreed with McDonnell. The Court noted that determining whether there were “official acts” under Section 201 requires two steps: first, the Court must determine whether there was a “question, matter, cause, suit, proceeding, or controversy,” and if so, then whether the public official took any “decision or action on” that proceeding or controversy.

The Court first held that the terms “question, matter, cause, suit, proceeding or controversy” connote some kind of formal and structured exercise of government power, such as a lawsuit, determination by an agency, or hearing before a committee. The language suggests a specific and focused proceeding where something concrete is to be resolved. Simply arranging a meeting or making a phone call, the Court said, does not rise to this level.

The Court then considered whether making a phone call or arranging a meeting could be considered a “decision or action on” a proceeding or controversy, even if it was not a cause, suit, proceeding or controversy itself. The Court agreed with McDonnell that again these actions were insufficient. Making a phone call, arranging a meeting, or hosting an event is not a “decision” or “action” “on” any matter, suit, or controversy. Again, the language of the statute suggests some formal exercise of power by the official and some kind of substantive decision or action.

The government had argued for a broader interpretation of official acts that would encompass a wider range of activities routinely carried out by public officials, but the Court concluded that its narrower definition was required. Any broader reading, the Court held, would have dangerous constitutional implications due to the potential to criminalize many routine interactions between politicians and supporters that are an inherent part of our current political system. In addition, the government’s broader interpretation posed potential federalism concerns, giving federal prosecutors the power to set the standards of ethics and good behavior for state and local officials.

But the case was not a complete win for McDonnell. The Court rejected his argument that the statutes under which he was convicted should be struck down as unconstitutionally vague, holding that any potential vagueness was cured by the Court’s narrowing interpretation. It also rejected his request that the Court find he did not perform or agree to perform any “official acts” as now defined, holding that this determination should be made by the lower courts in light of the Supreme Court’s holding.

It’s the Agreement That Matters

The actions that McDonnell actually took on Williams’ behalf, the Court held, were not themselves “official acts.” But that is not the end of the inquiry. As the Court noted, for purposes of bribery law what matters is not what the government official actually did but what he agreed to do. The crime is the corrupt deal to sell your office. So even though McDonnell’s phone calls or arranging of meetings may not have been official acts themselves, they could serve as evidence that a corrupt deal existed between McDonnell and Williams in which McDonnell did agree to take official action.

The Court observed there was evidence at trial of things that would qualify as a “question, matter, cause, suit, proceeding or controversy,” such as the question whether Virginia universities should undertake research studies of Anatabloc. A government official deciding this question would be engaged in official action, as would another official (such as McDonnell) who tried to pressure or persuade that official to act.

The government failed to prove that the things actually done by McDonnell rose to the level of “decisions or actions on” any of these matters. But if there was proof that McDonnell agreed with Williams to take such action, that would be sufficient.

This will likely be the focus of the case going forward. The Fourth Circuit must consider whether there was sufficient evidence introduced for a properly instructed jury to conclude that there was an agreement between Williams and McDonnell for the Governor to engage in official acts – even if he ultimately did not really follow through or was unsuccessful.

What Happens Now

The key problem with McDonnell’s conviction, the Court held, was that the jury instructions did not accurately reflect the legal definition of “official act” that the Court has now adopted. As a result, McDonnell may have been convicted for conduct that does not violate federal bribery law. At a minimum, therefore, he is entitled to a new trial that concludes with new, proper jury instructions.

For now, the Court has sent the case back to the Fourth Circuit. That court is to decide whether, given the evidence at trial, a properly instructed jury could possibly find that an agreement existed between McDonnell and Williams that McDonnell would perform official acts in exchange for the gifts. If so, he could be re-tried and potentially convicted again. On the other hand, if the Fourth Circuit concludes that, in light of the Supreme Court’s holding, there was not sufficient evidence to prove that such an agreement existed, then McDonnell is entitled to have his case dismissed altogether and there will be no new trial. The Supreme Court said it was expressing no opinion on those questions.

Even if the Fourth Circuit determines that the evidence was potentially sufficient, it will be up to the government to decide whether they want to re-try the case. It seems likely that they would, but they would have to make that judgment in light of the Supreme Court’s holding, their own assessment of the evidence, and their judgment about the proper allocation of prosecutorial resources.

Beyond McDonnell, this case represents another narrowing of federal corruption laws by the U.S. Supreme Court. Six years ago in Skilling v. United States, the Court scaled back honest services fraud by limiting that theory to bribery and kickbacks, thus excluding other corrupt conduct such as acting on conflicts of interest. Now in McDonnell the Court has limited all of federal bribery law to an artificially narrow category of “official acts.”

The Court focused solely on the quo side of the bribery, acting out of professed fears that without a narrow definition of “official act” routine political courtesies extended in return for campaign contributions and routine support might  be criminalized. But this fails to take into account both sides of the bribery equation. This was not a campaign contribution case; the gifts from Williams to McDonnell were personal and went into his own pocket. The nature of the gifts themselves is substantial evidence of a corrupt agreement, which would not be true in a case involving routine campaign contributions. It’s not enough that there be a gift; it must be a corrupt gift. By focusing exclusively on the particular trees of McDonnell’s actions rather than the entire quid pro quo agreement, the Court missed the corrupt forest that was the relationship between McDonnell and Williams.

The Supreme Court has essentially ruled that using money to buy access the “little guy” can never hope to have is just politics as usual and is not corrupt — even when the money is in the form not of public campaign contributions but of secret, undisclosed personal gifts. The Court’s artificially narrow concept of “official action” has once again carved out a safe harbor in federal corruption law for behavior that most would consider not just unseemly, but criminal.

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Supreme Court Affirms Expansive Federal Criminal Jurisdiction in Taylor

On June 20, 2016 the U.S. Supreme Court issued its opinion in Taylor v. United Statesa case that was argued last February.  The defendant, David Taylor, was convicted of violating the Hobbs Act for taking part in two home invasion robberies near Roanoke, Virginia with members of a gang known as the “Southwest Goonz.”  The gang routinely targeted the homes of known drug dealers, hoping to find large quantities of cash and/or drugs along with victims who might be unlikely to report the crime.

In the crimes for which Taylor was convicted the robbers actually obtained only $40 in cash, some jewelry, and a couple of cell phones.  Taylor also sought to introduce evidence that even if the intended victims were drug dealers, they only sold locally-grown marijuana within the state of Virginia. He argued that the small-time and relatively unsuccessful robberies of purely local drug dealers did not have an effect on interstate commerce sufficient to support federal criminal jurisdiction under the Hobbs Act.

In a 7-1 holding, the Court rejected Taylor’s argument. The Hobbs Act requires that a robbery have an effect on interstate commerce or other commerce over which Congress has jurisdiction. Because Congress has substantial authority over the nationwide market in controlled substances, the Court said, any robbery of a drug dealer will affect commerce over which Congress has jurisdiction. And because the Hobbs Act applies to attempted robberies, this will be true even if, as in Taylor’s case, the defendant did not actually obtain any drugs.

In other words, if the government proves beyond a reasonable doubt that a defendant was attempting to rob a drug dealer, that will satisfy the federal jurisdictional requirements of the Hobbs Act whether or not that robbery was successful. The government does not need to prove that the drug dealer victim actually sold drugs across state lines or any other actual effect on interstate commerce.

The holding in Taylor is relatively narrow because it is limited to cases involving robberies of those engaged in the commerce of illegal drugs. If a defendant robbed someone who, for example, grew tomatoes in his back yard and sold them only at local markets, the outcome could be different and a more substantial effect on interstate commerce might be required. But Congress has such expansive federal jurisdiction over the market in controlled substances that any attempt to affect that market through robbery will subject a defendant to federal jurisdiction.

In short, the Hobbs Act now serves as a catch-all federal robbery statute that applies to any attempt to rob a drug dealer, no matter how local, trivial, or unsuccessful.  Justice Thomas dissented, arguing that a more substantial showing of an effect on interstate commerce should be required before such a small-scale, local robbery can be prosecuted in federal court.

For a more detailed analysis of the facts and arguments in Taylor, see this post that I wrote about the case back when it was argued.

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In Defense of the Grand Jury (Part 2): Grand Jury Secrecy

Imagine you are a criminal defense attorney whose client has received a subpoena to testify before a federal grand jury. You investigate the case, talk with the prosecutor, and gather as much information as you can. You spend hours with your client preparing him for his testimony. You drive to the federal courthouse together and proceed to the grand jury room. The door opens, the foreperson steps out and calls your client, he steps in, and the door closes behind him.

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And you remain outside, sitting in an uncomfortable government chair and wondering what’s happening behind those closed doors.

I’ve never practiced criminal defense, but I’ve always imagined this must be one of the strangest parts of the job: staying outside the grand jury room while your client is led into the proverbial lion’s den. It seems contrary to everything in an advocate’s DNA. While your client is in there you can’t object, you can’t cross-examine, and you can’t protect him. Sure, he has a right to come out and talk to you, but he may be reluctant to do that if he thinks it makes him look bad, or he may forget.

And while waiting to see whether he will come out and talk to you there’s not much you can do — except maybe work on today’s Sudoku puzzle for hundreds of dollars an hour.

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One for my defense attorney friends

One of the most distinctive features of the grand jury is secrecy. Grand jury proceedings take place out of public view and generally remain sealed even after an investigation is concluded. When a witness is testifying no one is present in the grand jury room except the prosecutor, the grand jurors, and the court reporter. When the grand jurors are deliberating over whether to return an indictment there is no one else in the room at all, and the deliberations are not even transcribed. Everyone involved in the process (other than the witness) is sworn to secrecy and prohibited from discussing what goes on in the grand jury room.

This secrecy can lead to mistrust of grand jury proceedings. After all, bad things happen in secret, and much of our government is rightly premised on the belief that sunlight and disclosure are good things. Some argue that this secrecy contributes to the ability of prosecutors to manipulate the grand jurors and convince them to do whatever the prosecutor desires, even if that means indicting a ham sandwich.

These concerns have been amplified in recent state grand jury cases involving investigations of police officers for use of deadly force. When grand juries in Ferguson MO and Staten Island NY failed to indict police officers in the deaths of Michael Brown and Eric Garner, there was widespread criticism and suspicion. Critics claimed that the prosecutors were hiding behind the secret grand jury process and manipulating it in order to avoid indicting police officers with whom they worked closely.

Reacting to such concerns, the state of California last year banned the use of grand juries to investigate cases involving police use of deadly force. California prosecutors in such cases must now decide on their own whether to bring charges.

There’s no doubt that grand jury secrecy contributes to suspicion of the grand jury and to a lack of information and understanding about the grand jury process. But grand jury secrecy is a valuable part of the criminal justice system and serves a number of important goals. Chipping away at that secrecy or prohibiting use of the grand jury in certain types of cases is a bad idea.

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The Rules Governing Grand Jury Secrecy

In the federal system, grand jury secrecy is spelled out in Federal Rule of Criminal Procedure 6(e). Rule 6(e) provides that, with some limited exceptions, no one involved in the grand jury proceeding (other than a witness) may disclose any “matter occurring before the grand jury.” A knowing violation of Rule 6(e) is punishable as contempt of court, the possible sanctions for which include prison.

Grand jury secrecy is not just some aspirational guideline; federal judges take it extremely seriously. Good prosecutors take it seriously as well, not only because it’s their duty to protect 6(e) material but also because of the potential consequences if they don’t. If newspaper articles about a grand jury investigation attribute leaked information to “government sources,” the prosecutor is likely to receive an order from a judge demanding she appear in court to show cause why she and her colleagues should not be held in contempt – never a fun career prospect.

There has been a lot of litigation over what actually constitutes “matters occurring before the grand jury.” At the core of Rule 6(e)’s protection is information about what actually took place inside the grand jury room itself, including the transcripts of testimony, information about exhibits introduced in the grand jury, and the names of witnesses who appeared. Information that would tend to reveal such matters, such as names of witnesses who are slated to testify or the substance of their expected testimony, may also be covered.

On the other hand, it is clear that Rule 6(e) does not shield all aspects of a criminal investigation. Agents may interview ten or a hundred witnesses for each one who actually testifies in the grand jury, and thousands of documents may be reviewed that never end up as grand jury exhibits. Information that exists as part of the broader investigation is not automatically covered by 6(e). Typically the actual grand jury material will be only a small subset of all information gathered during the overall investigation.

But for everything that is covered by Rule 6(e), it is part of the prosecutor’s job to protect the secrecy of that material. She must ensure that confidentiality is maintained, that grand jury materials are appropriately secure, and that access to those materials is controlled. This obligation does not end once an investigation is over; absent a court order, grand jury materials continue to be protected by Rule 6(e) indefinitely.

This secrecy is one thing that makes the grand jury proceeding fundamentally different from a trial, which usually takes place in public view and with the participation of a judge and defense counsel. And it necessarily means that when the grand jury indicts – or particularly when it fails to indict – the public typically has very little information about the basis for that action.

The Benefits of Grand Jury Secrecy

Grand jury secrecy has a number of important benefits. First, it protects the privacy and reputations of those who may be investigated but ultimately not charged. Many grand jury investigations, particularly in the area of white collar crime, end with no charges being filed. The grand jury is an investigative body, and part of its role is to determine whether probable cause exists to justify criminal charges. Sometimes the answer to that question is no, and the investigation is closed down.

Absent grand jury secrecy, those under investigation in such cases could be subject to months of media reports and speculation about their criminal culpability. Grand jury secrecy prevents their names from being unfairly dragged through the mud concerning a matter where ultimately no criminal charges might be filed. Of course, in some high profile cases such as those involving politicians or celebrities – or police shootings — the investigation is known about and widely reported. But grand jury secrecy prevents public disclosure of grand jury investigations from being the norm.

Grand jury secrecy may also protect the integrity of the investigation itself. In some cases there may be concerns that the targets of the investigation will respond to any inquiry by destroying evidence, tampering with witnesses, fleeing the jurisdiction, or otherwise obstructing justice. If the targets of the investigation are not aware it is going on, such dangers are minimized.

Similarly, there may be concerns that potential defendants will collude to “get their story straight” and present a consistent false version of events to the grand jury. If proceedings were public and witness transcripts were readily available, such efforts would be much easier.

Secrecy also protects the privacy and safety of grand jury witnesses. Absent the guarantee of secrecy, some witnesses would be reluctant to come forward or to be fully forthcoming. Witnesses may fear personal or professional retaliation or even violence based on their testimony. A corporate employee may be extremely reluctant to testify against the company if he knows his boss can review the transcript. Officers in a police corruption investigation may be far less likely to provide information against their fellow officers if they know those officers have access to the testimony.

Even when it is known that a certain witness has testified, grand jury secrecy helps to protect that witness. I recall many occasions, dealing with reluctant or frightened witnesses, when I was able to tell them: “Look, I know you don’t want to be here and are nervous/afraid about testifying. But all you need to do is tell the truth. Your boss/fellow officers/ colleagues will not know what you said. In fact, you can walk out of here and tell them whatever you want – tell them you didn’t say anything, or that you told some completely different story. They won’t know the difference.”

The comfort and insulation that grand jury secrecy provides to frightened or reluctant witnesses is probably the greatest benefit of grand jury secrecy. If witnesses routinely had to testify instead at a public preliminary hearing after a prosecutor filed charges, getting information from reluctant or frightened witnesses would be much more difficult.

Grand Jury Secrecy and the California Legislation

All federal felonies will continue to require a grand jury indictment, but the states are free to experiment with their own systems, consistent with their own laws and constitutions. Apparently California prosecutors already had the option of bypassing the grand jury and filing charges on their own in cases involving a police officer. The new law simply means that now using the grand jury in such a case is not even an option. Once the prosecutor files charges, a preliminary hearing before a judge is held to determine whether the case can go forward.

The law was opposed by California prosecutors and law enforcement officials, and with good reason. In general, grand jury secrecy should make investigations of police officers more effective, not less. Witnesses required to testify in a public preliminary hearing are going to face tremendous public pressure. In the grand jury, witnesses can testify as to what they actually observed without worrying about becoming the subject of a vitriolic social media campaign or having protestors picketing outside their home.

The benefits of secrecy in such cases cut both ways. A civilian witness who would testify in favor of the officer need not fear the reaction and outcry from a public outraged about the case. Similarly, a police officer who would testify against his colleague can do so without fearing the reaction from fellow officers. Particularly in cases where the public passions are running high, grand jury secrecy plays a crucial role in allowing witnesses to resist any perceived public pressures and simply testify as to what happened.

The grand jury also serves as the voice and conscience of the community in such high profile, emotional cases. It’s appropriate to have the facts of such cases presented to representatives of the community as embodied in the grand jury, rather than simply have the charging decision made by a prosecutor. Unless one believes (which I don’t) that grand jurors are all just mindless sheep, the members of the community that make up the grand jury are in the best position to bring the perspective and experiences of that community to bear when evaluating a case.

There was a great deal of criticism of the decision of the Ferguson grand jury not to indict officer Darren Wilson in the shooting of Michael Brown. The sponsor of the California legislation said that the failure to indict in that and other cases had fostered an “atmosphere of suspicion” about grand juries. But the grand jurors were members of the same communities that were so outraged by the shootings. And although the grand jury investigation in Ferguson does appear to have been unorthodox in some ways, an independent investigation by the U.S. Department of Justice also concluded that criminal charges against Wilson were not appropriate. There is no evidence that the grand jury process somehow led to an unjust result.

Charging decisions can’t be made in the heat of the moment, or be based on the outrage of persons who were not on the scene and who form their views of the case largely from media reports. The grand jury process and grand jury secrecy help to ensure that decisions are made with time, care and deliberation, largely free from public pressure and media scrutiny, and based on sworn testimony of those actually involved.

It’s hard to see the rationale for singling out a particular category of crimes or potential defendants and denying them the protections afforded by the grand jury process. Police officers under investigation are entitled to the same procedural rights – including, of course, the presumption of innocence – as other suspects. The grand jury process can play an important role in preserving those rights.

The irony of the California law is that, in the name of increasing transparency, it likely will make it more difficult to gather accurate information in police cases and increase the likelihood of bad charging decisions. There is understandable public concern about cases involving police use of deadly force, and broader concerns about law enforcement in general in a number of communities, including Ferguson. But the response to those concerns should not be to prohibit the use of an institution that has been a valuable component of our criminal justice system for centuries.

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Click here to read part one of this post, “The Guilty Ham Sandwich.”

Extortion Distortion: Ocasio v. United States

Note: this post is adapted from an article I published in the George Washington Law Review’s On the Docket.  You can find that article here.

In criminal law, we ordinarily think of perpetrator and victim as two distinct entities. It would be nonsensical, for example, to talk about me robbing myself or defrauding myself. But last week in Ocasio v. United States the Supreme Court ruled 5-3 that a defendant may be charged with conspiring to extort money from himself.

So what makes such a contortionist extortionist possible? Although it sounds a bit bizarre, this result doesn’t represent some new watershed in white collar crime or dramatic expansion of federal criminal jurisdiction. It’s simply the logical, albeit unfortunate, outgrowth of a questionable Supreme Court decision more than two decades old.

Samuel Ocasio was one of dozens of Baltimore police officers involved in a widespread corruption scheme with the owners of a garage called Majestic Auto Repair. Police officers would refer drivers involved in car accidents to Majestic for necessary repairs, and in return the garage owners would pay the officers $150 to $300 per car. When the scheme came to light Ocasio, a number of other officers, and the owners of Majestic were charged with conspiracy to commit extortion under the Hobbs Act.

Extortion usually connotes payments made under some kind of duress; think burly guy smacking his palm with a baseball bat while he recommends that you buy the “health insurance” he is selling. But the Hobbs Act also prohibits extortion “under color of official right,” which essentially operates as bribery by another name. And because the federal bribery statute generally applies only to federal officials, prosecutors frequently turn to Hobbs Act extortion to prosecute state and local bribery schemes such as that in Ocasio.

Evans and Extortion Under Color of Official Right

The use of Hobbs Act extortion to prosecute bribery has its roots in a 1992 Supreme Court Case, Evans v. United States. Evans, a county commissioner in Georgia, was convicted of extortion under color of official right for accepting money in exchange for a favorable zoning decision. The Court rejected Evans’ claim that he had to actually induce the payment or “shake down” the payer to be guilty of extortion. It held that at common law extortion under color of official right was the “rough equivalent of what we would now describe as ‘taking a bribe.’” It was enough that a public official accepted a payment knowing that it was given in exchange for some exercise of official power.

Justice Thomas wrote a vigorous dissent in Evans, joined by Justice Scalia and Chief Justice Rehnquist. He argued that bribery and extortion had always been distinct crimes and that the majority’s decision obliterated that distinction. In particular, in a bribery case both sides – the bribe payer and the bribe recipient – are guilty parties to a corrupt deal, and both may be prosecuted. But in extortion, the person who pays the official is considered a victim, not a willing and culpable participant.

Because the payer of extortion is generally considered a victim, extortion under color of official right applies only to public officials. On its face, the Hobbs Act does not punish the payment of the extortion. What Evans resulted in, therefore, was an oddity probably unique in criminal law: a statute that prohibits bribery but only punishes the public official side of the bribe transaction. More than twenty years later, the implications of that decision led to the dispute that landed before the Supreme Court in Ocasio.

Once Evans declared extortion under color of official right to be equivalent to bribery, it was predictable that prosecutors in appropriate cases would seek a way to charge the payer’s side of those bribery transactions. Some cases have charged bribe payers with aiding and abetting their own extortion by the officials they were paying. An equally inelegant theory is that used in Ocasio: prosecutors indicted the garage owners and Officer Ocasio for conspiracy to violate the Hobbs Act, charging that the owners conspired with Ocasio to extort money from the owners themselves.

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Ocasio and the Court’s Opinions

Ocasio’s case before the Court challenged this conspiracy theory and hinged on the language of the Hobbs Act. The statute’s definition of extortion requires that the public official obtain property from “another.” In the context of a conspiracy, Ocasio claimed, this must mean the conspirators agree to obtain property from someone outside of that conspiracy. If the co-conspirators simply agree to exchange property among themselves, he argued, they do not obtain property of “another” within the meaning of the statute.

The majority, through Justice Alito, rejected this argument. Ocasio’s conviction, the Court said, was simply a straightforward application of textbook conspiracy law: someone can be guilty of conspiracy to commit a crime even if they didn’t — or couldn’t — commit all elements of the underlying crime themselves.

For example, if I act as an agent for a Congressman to solicit bribes from defense contractors, I can be found guilty of conspiracy to accept bribes even though, as someone who is not a public official, I could not be charged with accepting bribes myself. If I participate in a bank robbery by providing the robbers with inside information about the bank vault and security, I’ve conspired to commit bank robbery even if I never take part in the actual robbery itself.

In Ocasio’s case, the Court held, it’s true the garage owners, as private citizens, could not commit the crime of extortion under color of official right, and if they obtained their own money it would not be property from “another.”  But although the owners could not commit the crime themselves, they could conspire to help officer Ocasio commit it. Ocasio violated the statute by obtaining property from another — which simply means someone other than Ocasio, in this case, the owners — and the owners agreed to help him do it. Accordingly, the conspiracy charge was not inconsistent with the language of the Hobbs Act, even though the “victims” whose property was obtained were also part of the conspiracy itself.

The Court rejected concerns that this holding might make even innocent extortion victims liable for conspiring with public officials who were shaking them down. There is a distinction, the Court noted, between grudging consent given by a payer who feels he has no alternative and the proof of intent required to establish that the payer knowingly and voluntarily joined a conspiracy. Only the latter is the equivalent of bribery that would render the payer equally as culpable as the public official.

Justice Breyer wrote a brief concurrence, saying that the convoluted result made him tend to agree with Justice Thomas that Evans was probably wrongly decided. Nevertheless, he concluded, Ocasio had not asked the Court to overrule Evans, and given that case’s holding the majority opinion was correct as a matter of conspiracy law.

Justice Thomas, not surprisingly, dissented and reiterated his view that Evans was a mistake. He argued the Court should not compound the error by extending the reasoning of Evans to encompass Hobbs Act conspiracy. Justice Sotomayor, joined by Chief Justice Roberts, wrote a separate dissent agreeing with Officer Ocasio that the most natural reading of the statutory language required the members of the conspiracy to obtain the property of someone outside the conspiracy.

The Impact of Ocasio: Not Much

I think Justice Breyer has it right; if we start with the Evans holding as a given, then Ocasio seems correct. The linguistic gymnastics required to frame a charge against the bribe payers in what is really a bribery case do highlight the shaky foundation of the Evans holding equating extortion with bribery. But as the majority noted, if you accept Evans, then basic conspiracy law dictates the result in Ocasio.

The dissenters expressed concerns about the breadth of federal criminal statutes and the scope of conspiracy law. Justice Sotomayor said she feared the Court’s ruling would invite prosecutors to round up all parties in an extortion scheme, charge everyone with conspiracy, and see “what sticks and who flips.” They also raised federalism concerns, questioning whether it was appropriate for the federal government to pursue local corruption cases that could be left to the states.

Debates about sweeping federal criminal statutes and the dangers of prosecutorial power are common these days. The pending case involving the corruption convictions of former Virginia Governor Bob McDonnell (also a Hobbs Act case) contains many of the same themes. But in Ocasio, concerns about inappropriate charges have little force. No one suggests the owners of Majestic were not blameworthy or did not deserve to be prosecuted.

As for federalism concerns, there are already many ways for federal prosecutors to charge state and local bribery. Even before the Court’s decision in Skilling v. United States, for example, it’s been clear that honest services mail and wire fraud applies to bribery and kickback schemes like that in Ocasio. Under certain conditions the Travel Act (18 U.S.C. § 1952) and the Federal Program Bribery statute (18 U.S.C. § 666) also apply to state and local corruption. It’s even likely that prosecutors could have named Majestic as a RICO enterprise and indicted everyone involved for violating RICO (18 U.S.C. § 1962) based on a pattern of state-law bribery.

In short, there are plenty of ways for federal prosecutors to pursue state and local corruption. The Hobbs Act is just one potential arrow in the prosecutor’s quiver. If Ocasio had gone the other way, I doubt there’s a single future case that would have gone unprosecuted as a result. If some members of the Court really have issues with federal prosecutors having the power to charge state and local bribery, they are several decades late to that party.

The concern about prosecutors having the power to pick and choose whom to charge with conspiracy is similarly misplaced. Prosecutors do this all the time when deciding whether a particular scheme is a true extortion scheme, where the payers are the victims, or is more like a traditional bribery scheme where the payers should be charged. That’s the essence of prosecutorial discretion and making sound charging decisions.

It’s a little disheartening to hear Justice Sotomayor, herself a former prosecutor, suggest that prosecutors might just round up everyone they see and charge them with conspiracy with no regard for their actual culpability. If that were to actually happen it would be a much bigger problem than simply the breadth of the Hobbs Act – but the presence or absence of one legal theory would not make any practical difference to such “rogue prosecutors.”

In the end, therefore, Ocasio leaves the white collar crime landscape largely unchanged. Future defendants, seeing a potential invitation in Ocasio, will likely file petitions asking the Court to overturn Evans, but it’s tough to see a current majority willing to do that. Congress, of course, could step in and clear everything up by amending the Hobbs Act, but that seems even less likely given the current gridlock on Capitol Hill.

And so the Hobbs Act remains as one of many powerful tools for federal prosecutors — and a quirky one, given the untidy legacy of Evans and its peculiar version of extortion distortion.

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