Welcome to the Weekend Wrap! Here are the week’s white collar highlights:
Supreme Court Narrows Two White Collar Statutes
Fischer v. United States
On Friday the Court decided Fischer v. United States, the case involving the obstruction of justice statute used to prosecute January 6 rioters. I sent around a post about the decision on Friday, along with a link to an article I had published in The Atlantic criticizing the decision. If you missed it, you can find it here:
As I wrote on Friday (and have argued repeatedly on Sidebars in the past, including here and here), I think the Court got it wrong. But in the end this decision will affect relatively few January 6 cases and should not jeopardize the charges against Trump in the D.C. indictment.
It was interesting that Justice Barrett, a Trump appointee, wrote the dissent, joined by two liberals, Kagan and Sotomayor. I think her opinion is exactly right. Unlike her conservative colleagues, she stuck to her textualist principles and demonstrated that the clear language of the statute resolved the case.
Snyder v. United States
On Wednesday the Court decided Snyder v. United States, a case involving 18 U.S.C. 666, a federal anti-corruption statute. The issue was whether the law, which clearly prohibits bribery, also criminalizes gratuities. In a 6-3 decision, the Court held that it does not.
The law, sometimes referred to as federal program bribery, targets corruption connected to federal funding. It applies to state and local government officials, agents of private organizations, and agents of Native American tribes, if their agency or organization receives at least $10,000 a year in federal benefits. It prohibits those agents from corruptly demanding or receiving anything of value from another person “intending to be influenced or rewarded” in connection with any transaction valued at $5,000 or more.
The defendant, James Snyder, was the mayor of a small town in Indiana. The town bought five garbage trucks through a process that Snyder allegedly helped rig to steer the contracts to a particular company. That company later gave him a check for $13,000. Prosecutors charged that this was a gratuity to thank him for the contract, although Snyder claimed it was payment for legitimate consulting work. He was convicted for violating section 666.
The difference between a bribe and a gratuity is the intent to influence. A bribe seeks to influence a public official’s behavior, to get him to act in a way that benefits the bribe payor. It is the true corruption offense, because the political system is corrupted when officials act not in the public interest but to benefit those who are bribing them. A gratuity, on the other hand, does not require that the official’s actions were influenced. It is a gift given because of an act already taken, or committed to be taken. A good shorthand way to remember the difference is that a bribe says “please,” and a gratuity says “thank you.”
The issue in Snyder was whether 666 covers only bribes or also applies to gratuities. The lower courts were divided on this question. The statutory language is confusing: on the one hand, it requires corrupt intent. That’s usually the language of bribery; gratuities typically do not require corrupt intent. On the other hand, the statute prohibits taking a thing of value to be influenced or rewarded. “Influenced” is the language of bribery, but “reward” sounds like the language of gratuities, a thank-you gift given after the fact.
The majority identified six different reasons in support of its conclusion that 666 does not apply to gratuities:
The statutory text closely resembles the federal bribery statute but not the federal gratuities statute
When first enacted 666 included language from the federal gratuities statute, but Congress amended the law two years later to remove some of that language
Bribery and gratuities are different crimes with different elements, and there is no other statute in the U.S. Code that prohibits both in the same paragraph
Not only is gratuities usually listed as a separate crime, but the punishment is typically far less severe - a maximum of only two years in prison under federal law, as opposed to fifteen for bribery. If 666 applied to both, it would provide exactly the same penalty for both bribes and gratuities, and a penalty for gratuities by state and local officials five times that for federal officials
States regulate gratuities and their treatment varies widely. If 666 covers gratuities that would implicate federalism concerns by overriding all these state legal and regulatory regimes and criminalizing even gratuities that are allowed by state law
The government’s interpretation would leave state and local officials with no notice or guidance about when they might be subject to federal prosecution for a gratuity that is allowed under their own state laws or regulations
Justice Jackson dissented, joined by Justices Sotomayor and Kagan. She accused the majority of ignoring the plain language of the statute, arguing that the word “reward” clearly means that gratuities are covered. She argued that the majority supported its argument by conjuring up imagined cases involving trivial gratuities that are never actually prosecuted. She also argued that other statutory requirements, including the requirement of corrupt intent and the required link to federal funding, limit the statute’s reach.
I’m sympathetic to Jackson’s point that the majority uses fanciful examples of trivial gratuities prosecutions in order to limit the statute. I’ve made the same point in criticizing the result in Fischer and in McDonnell, the case involving bribery and the former governor of Virginia. The Court is frequently willing to cite a “parade of horribles” of future cases that will never happen in real life, in support of narrowing a white collar statute. It’s yet another sign that the Court no longer believes in, or trusts, prosecutorial discretion.
(As an aside - given Jackson’s dissent in Snyder, I was very surprised that she joined the majority in Fischer. Many of her criticism in Snyder about the Court ignoring the plain language of the statute would apply with even greater force to the opinion in Fischer, in my view.)
In a brief concurrence, Justice Gorsuch said that after considering the arguments on both sides, he believed the meaning of the statute was left unclear. As a result, he argued, the rule of lenity comes into play: if there is any vagueness or uncertainty in a criminal statute, it is resolved in favor of the defendant.
This is the another in a line of Supreme Court cases in the last decade limiting the scope of federal corruption laws. In this case, although I don’t like the result, I have trouble arguing that the majority opinion is unreasonable. Section 666 is a poorly worded and confusing statute. But the majority is correct that it doesn’t make sense to provide the same penalties for both bribes and gratuities and to cover both in a single prohibition. The dissent rests a great deal of its argument on the word “reward,” and that has some force, but I don’t think that’s enough to overcome the other factors cited by the majority. In the end the statute is left unclear, and then I think Justice Gorsuch is correct: the tie goes to the defendant.
Contrary to some of the misconceptions floating around about the case, this doesn’t mean the Court legalized bribery. The point is just the opposite: this wasn’t bribery at all. Bribery is still prohibited by 666. It does mean that after-the-fact “tips,” even very large ones, are not prohibited by this particular statute, and that’s not a good thing. They may, however, still be prohibited by other federal or state criminal laws.
This decision also doesn’t mean that officials will be off the hook if they just cleverly arrange to receive bribe payments after they have already acted. The key in the bribery/gratuity distinction is whether there is an agreement to be influenced, not the timing of the payment. If an official agrees to be influenced in an official action but doesn’t accept payment until after he acts, that’s still bribery. The crime is the agreement, not the payoff.
Congress could step in and amend the statute if it wants to make it clear that it intends 666 to apply to gratuities (and it could do the same to overturn the result in Fischer). That would be a more comforting thought, of course, if we had a Congress that was actually functional.
Trump Prosecutions
D.C. Federal Case - January 6 Allegations
Tomorrow is the final day of the Supreme Court’s term, and we expect to get the decision on presidential immunity. After we see it we’ll have a better sense of whether there’s any chance the case goes to trial before the election.
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