Monday, April 15, 2024

SCOTUS To Test Limits of Federal Anti-Bribery Statute

The Supreme Court will hear arguments today in Snyder v. United States, the case testing whether the federal anti-bribery statute criminalizes only quid pro quo bribery, or also after-the-fact "gratuities." Here's my argument preview, from the ABA Preview of United States Supreme Court Cases, with permission:

ISSUE

Does Section 666 cover only quid pro quo bribery, or does it also cover after-the-fact gratuities?

FACTS

James Snyder was elected Mayor of Portage, Indiana, and took office in January 2012. Around that time, Snyder was experiencing financial difficulties. He owned a company, First Financial Trust Mortgage, which by 2009 owed nearly $100,000 in payroll taxes, and he was behind in his personal taxes. In December 2010 and February 2011, the IRS had levied Snyder’s bank accounts.

Soon after Snyder took office, Portage needed to purchase new garbage trucks. Snyder “hand-picked” his “close friend” Randy Reeder to run the bidding process, even though Reeder had “no experience” with public bidding. Reeder “tailored the bid specifications to favor” Great Lakes Peterbilt (GLPB), a trucking company owned by two brothers, Robert and Stephen Buha. GLPB submitted the only bid that satisfied the requirements that Reeder set out, and a board consisting of Snyder and two of his appointees voted to award the contract to GLPB.

Snyder later attempted to get the city to buy “an unused, 2012 model truck that had been sitting on GLPB’s lot for two years.” The Buhas were unable to sell the truck, and they soon “would have had to start making balloon payments on [a] loan in order to avoid losing [it].” Reeder again tailored the bidding process so that the city’s specifications matched “the truck sitting on GLPB’s lot.” During the bidding process, Snyder exchanged dozens of e-mails with the Buhas, but none with any other bidder. GLPB again won the city contract. The total value of the two contracts was $1.125 million.

Less than three weeks after GLPB received the second contract, GLPB issued a check for $13,000 to a firm owned by Snyder. Snyder offered different explanations for the payment, ultimately telling the FBI that it was for “health insurance and information technology consulting.” But neither Snyder nor the Buhas produced any “documentation relating to any consulting agreement or services performed . . . for GLPB,” and Snyder did not include the payment on a city compensation-disclosure form. At the time, Robert Buha told GLPB’s controller that “they were paying Snyder for his influence.”

In 2016, a federal grand jury in Indiana indicted Snyder on two counts of corruptly taking money “intending to be influenced or rewarded in connection with” city business, in violation of 18 U.S.C. § 666(a)(1)(B)—one for the truck purchases, and the other for city towing contracts. (Snyder was also indicted on one count of corruptly interfering with the administration of federal tax laws, in violation of 26 U.S.C. § 7212(a).)

Snyder moved to dismiss the Section 666 indictment on the ground that Section 666 prohibits only quid pro quo bribery, and not a “gratuity” case. The district court denied the motion, and a jury found Snyder guilty on the Section 666 count for the garbage-truck purchases, but not for the towing contracts. (The jury also found Snyder guilty on the tax count.) The district court granted a new trial on the Section 666 count due to the “cumulative effect of several irregularities.” (For one, the Buhas unexpectedly declined to testify, invoking their privilege against self-incrimination.)

At Snyder’s second trial, Robert Buha testified (under a grant of immunity) that soon after GLPB won the second contract, Snyder told the Buhas that “he needed money,” and asked for $15,000 to cover his back taxes and holiday expenses. The Buhas declined to give Snyder the money. According to Buha, Snyder said, “Well, I could work for it,” and agreed to provide healthcare consulting to GLPB for an upfront payment of $13,000. Buha testified that Snyder had “ideas and advice,” but also said that Snyder didn’t provide “[a]nywhere close” to $13,000 worth of consulting and couldn’t identify any concrete work that Snyder performed. The second jury, like the first one, convicted Snyder on the Section 666 charge related to the garbage-truck contracts.

The court denied Snyder’s post-trial motion for a judgment of acquittal on the ground that Section 666 doesn’t apply to gratuities. The United States Court of Appeals for the Seventh Circuit affirmed. This appeal followed.

CASE ANALYSIS

18 U.S.C. § 666(a)(1)(B) makes it a crime for a state or local official to

corruptly solicit[] or demand[] for the benefit of any person, or accept[] or agree[] to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving any thing of value of $5,000 or more . . . .

The parties wrangle over whether this language includes only quid pro quo bribery (as Snyder would have it), or whether it also includes after-the-fact gratuities (as the government would have it).

Snyder argues first that Section 666’s plain text criminalizes only bribery, not gratuities. He claims that “rewarded” means only a bribe, and that the phrase “intended to be influenced or rewarded” “ensures that Section 666 captures officials who agreed on a quid pro quo payment but deny they were ‘influenced’ by claiming that they would have taken the same action anyhow or that the money was paid after the act.” He says that the government’s interpretation of “intending to be . . . rewarded” “creates superfluity,” because the statute already outlaws bribery, and “[a]ll bribes can be recast as gratuities.” He contends that the statute’s use of “corruptly” supports his reading, because “[b]ribery statutes routinely use ‘corruptly’ to describe deliberately and wrongfully agreeing to a quid pro quo.” And he asserts that the statute’s title states only “[t]heft or bribery,” not gratuities.

Snyder argues next that “Section 666 looks nothing like the many gratuity provisions in the U.S. Code.” He says that gratuity provisions in other statutes “use vastly different language” and appear separate from bribery provisions. Moreover, he contends that other statutes “punish[] bribery far more harshly than gratuities, reflecting those crimes’ relative seriousness.”

Snyder argues that Section 666’s history confirms his conclusion. He points to the 1986 amendment of the provision, where Congress deleted the phrase “for or because of”—“the classic . . . formulation that Congress used . . . to criminalize gratuities to federal officials.”

Snyder argues that the government’s reading raises significant constitutional problems. He says that “the government’s theory . . . turns all thank-you gifts into potential federal crimes” for “tens of millions” of state and local officials and anyone who gives them a gift—a breadth that “raises serious due-process concerns.” Moreover, he claims that the government’s reading is in tension with “[f]ederalism concerns,” because it “disrupt[] state and local governments’ traditional control over the core sovereign matter of their own officials’ ethical duties.” He contends that the provision doesn’t give clear notice that recipients of federal funds cannot accept gratuities, and in any event that “unlike theft or bribes, gratuities do not affect the integrity of federal funds.” Finally, Snyder asserts that the government’s reading “risks chill[ing] core First Amendment-protected activity.” In particular, he says that the government’s reading could prohibit campaign contributions when “[c]itizens donate to politicians to express approval of official conduct” and “[p]oliticians accept those donations presumably knowing they are being thanked for their votes.”

The government counters that Section 666—and in particular its use of the word “rewarded”—“is precisely suited to cover after-the-fact payments” like Snyder’s. The government says that Section 666’s plain text covers “gratuit[ies],” which the Court has defined as “reward for.” Moreover, it claims that Section 666’s prohibition on “corruptly” accepting “anything of value . . . intending to be influenced or rewarded” “covers both the beforehand agreements to trade payment for influence that constitute quid pro quo bribery and the after-the-fact payments intended to ‘make a return . . . for a service.’” The government contends that Snyder’s reading to the contrary is too narrow.

The government argues next that the history of Section 666 demonstrates that it covers gratuities. It says that Congress originally designed Section 666 in 1984 to clarify that the bribery statute applicable to federal officials, which covered both bribes and gratuities, also applied to state and local officials. The government claims that Congress changed Section 666 in 1986 to conform to another statute, updated just three months before, that was “well understood to prohibit both bribes and gratuities given to bank officials.” The government points out that Congress also added “corruptly” in 1986 as “an exclusion for bona fide compensation,” underscoring that “corruptly” didn’t narrow Section 666 to quid pro quo bribery, but instead specifically exempted “bona fide compensation” from the provision’s coverage.

The government argues that Snyder’s constitutional arguments lack merit. It contends that Snyder’s concern about the First Amendment’s application of Section 666 to campaign contributions “can be addressed, if such applications arise, in case-specific ways that do not require [Snyder’s] facial—and atextual—limitation of the statute’s language.” Moreover, it says that the bribery statute that applies to federal officials also bars gratuities, and that statute’s “constitutionality is not disputed.” The government asserts that Section 666’s language is not vague, because it clearly prohibits “bribes and gratuities to public officials.”

Finally, the government argues that Snyder’s “policy concerns . . . provide no basis to override [the] text and in any event are overblown.” It points out that several limiting features of the statute, including its use of “corruptly,” “preclude its application to the sorts of innocuous gift-giving that [Snyder] hypothesizes it might cover.” And it points out that the Court has already ruled that the bar on gratuities in the bribery statute for federal officials “excludes innocuous gift-giving” with language similar to the language in Section 666. The government says that Section 666 goes even further in limiting its sweep, however, by including a $5,000 floor, which means that “everyday occurrences” and small gifts are not covered.

SIGNIFICANCE

This case tests whether the state- and local-official anti-corruption statute covers after-the-fact gratuities in addition to quid pro quo bribery. Snyder says no: the anti-corruption statute applies only to quid pro quo bribery. The government says yes: the anti-corruption statute encompasses after-the-fact gratuities, like Snyder’s.

The difference could matter. The narrower scope (advocated by Snyder) could make it harder for the government to crack down on corruption by state and local officials, at least in those cases where the official accepted a gratuity after the act, with no express quid pro quo. It could even create an incentive for parties to engineer “gratuities” to sidestep the statute. (Snyder’s case itself could provide a blueprint for this.) On the other hand, the broader scope (advocated by the government) could allow the government to prosecute more forms of corruption, including after-the-fact wink-and-nod corruption of the type that occurred here.

In the end, though, at least according to the government (in its cert.-stage brief), “it is unclear that the issue is outcome-determinative in a significant number of cases.” That’s because many defendants’ gratuities may also amount to bribes. According to the government (again, in its cert.-stage brief), even in Snyder’s case “there is no reason to think the jury convicted [Snyder] on a gratuity theory alone, since the jury instruction paralleled the statutory text and, as both the district court and the court of appeals expressly held, there was ample evidence that petitioner engaged in quid pro quo bribery.”

Finally, the lower courts are split on the question, with five circuit courts holding that Section 666 covers gratuities, and just two holding that it doesn’t. The Court’s ruling will resolve the split and set a nationwide standard. Still, as with any case in which the Court interprets statutory language, Congress will (at least in theory) have a final say.

https://lawprofessors.typepad.com/conlaw/2024/04/scotus-to-test-limits-of-federal-anti-bribery-statute.html

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