Cases by Issue - Corruption

United States v. Sun-Diamond Growers - Oral Argument

Fri, 09 Jan 2009 14:50:14 +0000

Case:

United States v. Sun-Diamond Growers

Media File:

98-131_19990302-argument.mp3

Related Transcript:

1998_98_131_argument.xml

Transcript:

Argument of Robert W. Ray

Chief Justice Rehnquist: We'll hear argument first this morning in No. 98-131, United States v. Sun-Diamond Growers of California.

Mr. Ray.

Mr. Ray: Mr. Chief Justice, and may it please the Court:

Respondent, Sun-Diamond Growers, was extensively regulated by the United States Department of Agriculture.

In the first 14 months of Secretary of Agriculture Mike Espy's tenure, Sun-Diamond lavished on its chief regulator thousands of dollars in gifts, while it had millions of dollars at stake in USDA programs.

The jury convicted Respondent of giving unlawful gratuities under Section 201(c) by finding that Sun-Diamond gave the gratuities for or because of the Secretary's official position.

Under the plain language of the statute, an official act... Section 201(a)(3)... means any decision or action on any matter which may be pending before the public official in his official capacity.

Here, the statute reaches $ 6,000 in gifts given by a regulated entity for or because of the official's position, his capacity to act, on matters pending or on matters which could be brought before USDA.

The district court...

Justice O'Connor: Well, counsel, I thought that the section we're looking at, (c)(1)(a), says that it covers the situation where the defendant directly or indirectly gives anything of value to a public official for or because of any official act performed or to be performed by that official.

Mr. Ray: Justice O'Connor...

Justice O'Connor: There is a link there between an act performed or to be performed.

It isn't baking brownies for the Senator or knitting a pair of socks for some public official, is it?

Mr. Ray: Justice O'Connor, you are correct.

The element is for or because of an official act.

That element was provided by the district judge to the jury in this case.

The issue, however, is whether or not the district judge's explanation of what would be sufficient proof of the requisite motivation was satisfied by a jury finding that the motivation behind the gift was for or because of the official's position.

In this case, involving a regulated entity, our position is that the position of the official is coextensive with his capacity to act on any number of acts coming before him.

Justice O'Connor: Well, but that's quite different from linking it to an act performed or to be performed.

And you want to say that anything given because the official is an official is enough.

Mr. Ray: Only, Your Honor... and that was why we answered the question presented by the Court in... in a qualified way: only when it is the official's position, understood as the capacity to act, do we believe that there is an equivalence, that they are coextensive with one another

Justice Souter: But isn't... isn't the difficulty, or one of the difficulties, for your position, at least with respect to these instructions, that the judge, in giving the instructions, went so far as to say that there... literally, there need be no link with any act at all?

And at that point, even assuming there's some... there's some merit to your argument, it seems to me, at that point, the judge just totally untethered the... the... if you will, the position from the... from the capacity to act or the anticipation of action.

And... and even if we were to accept your position, we... wouldn't we have to find error in... in that instruction?

Mr. Ray: No, Justice Souter, for the following reason.

The link that Your Honor is referring to is a link that came during the portion of the instruction where the judge was making clear to the jury that this was not a bribery offense.

The link being...

Justice Souter: Well, he sure did that.

Unidentified Justice: [Laughter]

Justice Souter: But, I mean, he went a lot further than that, didn't he?

I mean, the bribery... the bribery offense, as... as we've described it, requires a... a fairly specific quid pro quo kind of link, specific act, specific gift.

This went far beyond anything that would be appropriate to distinguish this from the bribery statute.

Mr. Ray: Your Honor, but it was in the portion of the charge where the judge was trying to explain to the jury that no such link was required.

That is, that the jury did not have to find that there was a particular official act or a matter in mind at the time of the gift.

Chief Justice Rehnquist: But that isn't what he said.

Justice Souter: He said it doesn't have to be linked to any act.

Mr. Ray: Your Honor, our... our position...

Justice Souter: Which... which seems to go much further.

Mr. Ray: Our position is that if it is the prospect of official conduct that motivates the gift, it's enough to find that to satisfy this offense.

To hold otherwise... that is, to distinguish between gifts given for official acts in general...

Justice Breyer: Well, I know that's your position, but why does it make sense?

That is to say, why should we read a criminal statute to suddenly make a group of old-age home residents decide to... to send a little present because they think the Senator has been generally in favor of old-age homes?

Or... I mean, why should you have such an expansive reading of a criminal statute when there are a large number of ethics rules and other noncriminal matters that adequately, at least arguably, control conduct like this when it is unethical?

Why should we give prosecutors such broad discretion to prosecute people who may have done things that are not even immoral?

That... that's the general kind of question that I'd like you to address.

Mr. Ray: Let me answer thequestion first.

Thequestion is that it shouldn't be any less offensive to integrity in government that gratuities were given with a particular matter in mind, a whole multitude of matters in mind, or no specific or any official act in mind at the time of the gift, as long as there is sufficient proof of motivation of the prospect of official action; in other words, the prospect of official conduct.

To answer your hypothetical, in that hypothetical circumstance, it is our position that our logic... the logic to theofficial position argument would be sufficient to encompass your hypothetical if the motivation behind that gift was the senior citizen offering a gift to a public official, in... in that circumstance, because of the official's position or, indeed, because of official action... action with respect to legislation that was of interest to that senior citizen.

Justice Scalia: Mr.... Mr. Ray, my... my... my problem is just the opposite of... of Justice Breyer's.

I... I don't find it at all amazing that Congress should seek to write a statute of the sort that you say this is.

And the reason I don't find it amazing is that they already have, but in a different section of the United States Code.

And the problem is that we normally interpret a statute in such fashion as not to duplicate something else that is already on the books.

How does this statute, as you interpret it, differ from 5 U.S.C., Section 7353, which prohibits Federal employees from accepting anything of value from persons, quote, whose interests may be substantially affected by the performance or nonperformance of the individual's official duties?

That sounds like your... your very argument.

Mr. Ray: It is not, Justice Scalia.

Because that...

Justice Scalia: What's the difference between those two, then?

Mr. Ray: The difference under 7353 (a) is that the statute is simply asking there, as a fact, whether or not those interests were ones before the public official.

It is not asking what the motivation was behind the gift.

Our... our position absolutely depends...

Justice Scalia: Well, this one is included within the other one, you mean?

The other one requires even less.

Mr. Ray: No, Your Honor.

The Federal gratuities statute requires proof of intent, criminal intent, a motivation, the motivation for or because of official position or for or because of official acts, the prospect of official conduct.

7353 (a), first of all, only applies...

Justice Scalia: To the employee.

Mr. Ray: to the employee.

So, it does not... it would not encompass Sun-Diamond's conduct in this case, clearly.

But, even apart from that, it doesn't require any proof of intent.

It simply says: If you shall solicit or accept anything of value from a person

Chief Justice Rehnquist: I see.

Mr. Ray: whose interests may be substantially affected.

That is what is encompassed by that provision.

Justice Scalia: Well, but it still duplicates the other.

I mean, the one is a lesser included of the other, it seems to me.

The one statute says, if you accept it from someone who can be affected by your decisions, knowing that he is giving it to you because you... he... he is affected by your decisions, you're guilty.

That's your... that's your statute.

This statute says, if you accept it from somebody who may be substantially affected by your... your decisions, even if he doesn't know that he may be substantially affected by your decisions, you're guilty.

Mr. Ray: Your Honor...

Justice Scalia: It doesn't make sense to have two statutes overlapping like that.

Mr. Ray: Your Honor, we believe it does make some sense.

First of all, there is, necessarily, some overlap from what 7353 invites, which is the passage of regulations that deal in an administrative matter with conduct of Federal employees.

And clearly there may be circumstances where the conduct of a Federal employee would violate a regulation, leading to dismissal or other sanction, and also... might also, on the same conduct, include criminal prosecution.

Justice Scalia: This is not a regulation.

I... I can understand how a regulation may go further than a statute, and render any violation of the regulation automatically a violation of the statute.

But this is another statute.

And it... it... since there is another way to read the statute that... that you're prosecuting under here, I'm... I'm inclined to read it in such fashion that it will do something different, insofar as the employee is concerned, than 7353 does.

Mr. Ray: Your Honor, this statute, 5 U.S.C., 7353, first of all, does not do anything other than authorize the enactment or passage of Federal regulations to deal with its... its general conduct.

But, again, to return to the answer to your question, why this is different than Section 201, it is significantly different because there is no criminal intent; there is no knowledge requirement in this proscription, 7353.

Which is... we believe, is the substantial difference between what Congress had in mind in 1962, when it passed 18 U.S.C., Section 201(c), which covers the situation of a gratuities offense.

Chief Justice Rehnquist: Well, the other statute doesn't purport to deal with donors, does it?

Mr. Ray: It does not, Your Honor.

It is limited by its express terms to gifts to Federal employees, covering only Federal employees.

Justice Kennedy: But... but the point still remains, if there's more than one plausible reading of... of the statute, why should we adopt that reading that creates such a large gap between the law and everyday practice?

Mr. Ray: Your Honor, Justice Kennedy, we... we...

Justice Kennedy: I mean, the cookie hypothetical and... and any number of such ones.

Unless we're just going to rely on prosecutorial...

Mr. Ray: Your Honor, the only safe harbor that is apparent with respect to prosecution under the Federal gratuity statute, under our theory, again, is this question of whether or not there's a gift given to a public official solely because of that public official's status, completely untethered from official acts.

In other words, the Department of Justice's hypothetical, which deals with the... the general question of a status gift, unconnected to the capacity for official action.

Justice Breyer: But that's exactly the problem.

Mr. Ray: That's different...

Justice Breyer: That's... I mean, my position was, when I asked you the question, was the same, I think, as Justice Scalia's: 5 U.S.C., 7353 is not a criminal statute, is it

Mr. Ray: Correct, Your Honor.

Justice Breyer: All right.

So, this kind of area, I gathered from what you prosecute, sometimes every public official is sometimes invited to go on a trip, to speak to people.

They... they might give him dinner.

They... they might... and evidently, some of those things are sometimes actually prosecuted.

Well, why not, given the difficulties in this area, assume that Congress intended this general kind of present-giving; i.e., we invite you on a trip to speak to a trade association, or give... that kind of thing should be handled by civil regulations rather than somebody bringing the blunderbuss of the criminal law in... into the prosecutor's arsenal, where they could prosecute trivial things?

Mr. Ray: Justice Breyer, but that's not what Congress intended.

And it became apparent in 1989, with the passage of 5 U.S.C., 7353.

At the time the Congress passed this statute, it recognized the Department of Justice's broad sweep in interpretation to the 201 gratuity statute, consistent with the intent of Congress, going back to the beginning, which was when it was passed in 1962.

It recognized that there was in fact overlap between the scheme that it was going to further, post-1989, in connection with Federal regulations that would be applicable to all Federal employees.

It recognized, further, that the intent, sufficient to satisfy a 201 (c) offense, was motivated for or because of an official's position.

That was the sweep...

Justice Ginsburg: But the Congress didn't say position; and that's the problem.

You were about to give us a safe harbor, but the charge to the jury was that the gratuity statute makes it a crime to give a public official a thing of value because of his official position, now, whether or not the giver or receiver intended that particular official's acts to be influenced.

So, that seems to say it's because of the official position, whether or not there was any intent that... that the... that the official's acts... the official's acts, very broadly... not particular acts, but the particular official's acts, be influenced.

First, I had a question of how this charge came to be.

Was this a result of a request to charge by the prosecution?

Mr. Ray: Justice Ginsburg, it was.

But it... it included, as part of that charge, both requests by the government, as well as requests by the defendant.

Justice Ginsburg: But this particular charge was proposed by...

Mr. Ray: Correct, Your Honor, the part that you just read, yes.

Justice Ginsburg: Was...

Chief Justice Rehnquist: By whom?

Mr. Ray: By the government.

And with respect to that portion of the charge, the reason the government included it, Your Honor, is because intent to influence is not an element of a bribery... of a gratuity offense.

It is, by contrast, an element of a bribery offense, which is Section 201 (b).

We believe the...

Justice Ginsburg: But you made it... you could have done the same thing using the words of the Act instead of you inserting the word.

Mr. Ray: hat's correct, we could have done that.

And the district court certainly could have instructed in that fashion.

We're... we're here simply to say, Your Honor, that a... an additional requirement which, if you instruct in a fashion such as official acts, begs the question about whether or not you're requiring, for example, a specific official act to be shown.

We believe no such requirement exists in the Federal gratuities statute.

Chief Justice Rehnquist: But... but it may be that no specific act is required, but it still would... the language would suggest that perhaps a somewhat more amorphous future possible acts on the part of the official.

Mr. Ray: You are correct, Mr. Chief Justice.

That's right.

And it could have been... we... the government could have talked in terms, and the district judge could have talked in terms of acts rather than position.

Chief Justice Rehnquist: But there is a difference, don't you think?

I mean, one could give a gratuity to somebody because he just likes... you know, who had no connection with ag... agriculture at all, just because he likes to sit next to the Secretary at a football game or something like that.

And I don't think that would come within the language of the statute.

And yet that's given to him because of his official position.

Mr. Ray: You are correct, Your Honor, it is not within the language of the statute.

It is not our position or the Department of Justice's position that that would be included under our theory of the case under

"for or because of official position. "

That, however, was not presented by the facts of this case.

And it was not left to the jury to simply speculate about what type of official action they were to be concerned about.

In this case, the judge further instructed the jury that the jury had to find official acts... the portion of the charge which is in the appendix, at page 88, said: With respect to official acts... I'm reading from the second full paragraph... the government has to prove that Sun-Diamond Growers gave knowingly and willingly Secretary Espy things of value while it had issues before the United States Department of Agriculture

I mean, our position is that, ultimately, what the gratuity statute is about is the prospect of official action... in Justice Ginsburg's hypothetical... ultimately, the prospect of... of intending to have some influence on official action.

The issue in this case is what is the element of the offense that Congress required?

Justice Breyer: Well, but I think you've...

Justice Ginsburg: But it's at least... at least confusing if... if the jury... you've just isolated this sentence: thing of value, because of official position, whether or not there was an intent to influence acts

If you just took that out and... I mean, it... it just says: official position

Mr. Ray: And our difficulty with that, Your Honor, to answer your question, is that the element of the offense, intent to influence, is a bribery concept.

Much of what a district judge does... and this has been proven by experience since this... this statute has been enacted in 1962... is a... a large effort to make sure that the jury understands the difference between a bribery offense and a gratuities offense.

A bribery offense has essentially three important components different than a gratuity offense.

One of them is an... an intent to influence.

Another is a corrupt intent.

The third is a quid pro quo or an agreement.

Justice Souter: Well, may I ask you about your... the distinction that you are drawing on,because the plausibility of that distinction, it seems to me, given the text of... of 201, will vary greatly depending on whether we use the wordas our focus oras our focus.

What I'm getting at is the... the phrase... what is it... for... for or because of... if we say that a... a gift violates the statute if it's given for or because of the position, then I think it follows quite readily from what... as you have been saying... that the notion of intent to influence is outside the statute; it's not the focus of the statute.

Mr. Ray: Yes, Your Honor.

Justice Souter: But if... if we... if we go back to the original language, and we speak of for or because of acts, then it becomes quite implausible, in... in a way, I... I suppose, suggested by Judge Wald's remark, to think of a gift that might plausibly be given for or because of acts which wasn't intended to influence the way those acts were performed.

Would you comment on that?

So, I guess my point is, if we... if we accept the equation of position and acts, then the notion of intending to influence really does seem to drop out.

But if we stick to the text, and we say

"for or because of acts, then the notion of intending to influence, it seems to me, is rather hard to get out of the statute. "

Mr. Ray: We believe Judge Wald correctly recognized the point, that inherent in a gift given in a regulated context is ultimately the prospect of official action.

And to talk... to start to talk about intent to influence as an... as a required element of the offense we believe leads the jury astray.

Justice Souter: Well, would you... would you... would you request... would it be appropriate for a judge to say, in charging under this statute, whether or not there was any, even general intent, on the part of the donor to influence the official in the manner in which the official performed his acts is totally irrelevant; would that be a correct instruction?

Mr. Ray: I would think that would be as misleading as... as instructing with intent to influence.

We have to be careful about, obviously, how to instruct a jury.

Justice Souter: Well, let's just talk as lawyers now for a minute.

As a technical statement of law, would that instruction have been right or wrong on your view?

Mr. Ray: With respect to a... sort of a generalized intent?

Justice Souter: That's... that's right.

Mr. Ray: I think wherever you talk about... and a generalized intent to influence seems to me to be no different than saying you're going to require some sort of a specific intent to influence.

Justice Souter: Was... was the instruction right or wrong?

Mr. Ray: We believe the... the instruction, read as a whole, in its entirety...

Justice Souter: No, I'm... I'm talking about my hypothetical instruction.

Mr. Ray: Oh, your hypothetical.

Justice Souter: Would that have been right or wrong?

Mr. Ray: In isolation, I mean, I... I think, in isolation, it's not wrong.

We think it would require some further explanation to be clear about what is meant.

I mean, certainly you can envision other ways to explain this to a jury.

Justice Scalia: It doesn't seem to me that... that the choice is... is between reading this statute as... as one that... that requires an intent to influence and reading it as one that requires merely giving a gift because of a person's office.

It seems to me this statute covers a situation in which you reward someone for an act already performed.

Mr. Ray: That's half of it, Your Honor.

Justice Scalia: Well, I think that's... that's a part of it that doesn't trouble me, but it's a good deal short of saying that any gift because of a person's office comes within the statute.

I mean, let's assume that the... the person has... has come out with a ruling that... that greatly favors a particular company.

And then the... then the company gives him $ 10,000.

Now, you couldn't get that under the bribery statute because the decision was already made.

Mr. Ray: That's correct, Justice Scalia.

And that would...

Justice Scalia: But you could get it under this statute, right?

Mr. Ray: That's correct.

And the... and the reason...

Justice Scalia: Well, why isn't that enough?

Why do we have to go further, and say, whenever you give a gift to a... to a public official, you're covered?

Mr. Ray: That's only half of the statute.

The statute also deals with prospective activity, to be performed.

Your hypothetical deals simply with the first half, which is what has already been performed, the reward for past official action.

And...

Justice Kennedy: Well, suppose... suppose the... the official has announced that he will perform an act, and then... but he hasn't performed it yet... he then gets the gratuity or the reward Justice Scalia describes.

Mr. Ray: Justice Kennedy, that's three...

Justice Kennedy: I... I think... I think that would be covered by the statute.

And that also explains thelanguage.

Mr. Ray: It does, Your Honor.

And our position is that's three-quarters of the way there.

Chief Justice Rehnquist: But if... if he has under... if the official has under advisement a proposed regulation, I think the... your view is it would be covered...

Mr. Ray: Yes.

Chief Justice Rehnquist: because it's an act to be performed.

Mr. Ray: That's correct.

And that would get us even further the way there, but not all of the way there.

Chief Justice Rehnquist: Well, where are we lacking?

Mr. Ray: Where we're lacking...

[Laughter]

We'll get there eventually.

[Laughter]

Mr. Chief Justice, where we're lacking is, again, the prospect of future conduct, where it is not speculative, but there's a likelihood that it will be there.

Clearly presented by the facts of this case, absolutely no question, in a regulated context, where Sun-Diamond is a large agricultural cooperate... cooperative, regulated on a day-to-day basis by the Secretary of Agriculture, in a situation where the jury is also required to find that there were matters pending before the Department of Agriculture of interest to Sun-Diamond, that it is sufficient, under the statute, to embrace and encompass within its scope the prospect of official actions by that official.

Justice O'Connor: Well, Mr. Ray, it could well be that the evidence in this case could support a conviction by a properly instructed jury.

And I think the question is whether the jury is properly instructed here.

Let me ask you this.

The... you have filed this petition on behalf of the independent counsel.

Mr. Ray: That's correct, Your Honor.

Justice O'Connor: And the Solicitor General has filed a separate brief on behalf, I guess, of the Department of Justice.

Mr. Ray: Yes.

Justice O'Connor: How does the Solicitor General's position differ from yours, would you say?

Mr. Ray: We believe that the positions are the same.

Both deal with the question of whether or not

"for or because of official position. "

is sufficient to satisfy the statute.

The Department of Justice explains that that's an appropriate shorthand, a shorthand used by the Fifth Circuit in Evans and Bustamante and by the Third Circuit in Standefer for a showing for or because of official acts so long as official position is understood to mean the prospect of official action, the capacity to act, consistent with the definition under 201(a)(3).

As long as it is properly understood, our position and the Department of Justice's position is the same.

We don't believe there's any discrepancy.

Your Honor's question goes toward, ultimately, whether or not this was a properly instructed jury.

We believe that it was.

If there was any error in the instruction, we believe that it was harmless beyond a reasonable doubt, and that the jury's verdict should be reinstated.

That's our position.

Also, every...

Justice Stevens: Did you... I really didn't read the Solicitor General's brief as being identical to yours.

You really think it's the exact same position you maintain?

Mr. Ray: Ultimately, we believe the positions are the same, yes, Your Honor.

It is the capacity to act.

Justice Stevens: So, we can rely entirely on his brief, and you'll be satisfied?

Mr. Ray: Well, I wouldn't go that far.

[Laughter]

Justice Stevens: Well, why not?

Why not?

Mr. Ray: Obviously, we have an interest in defending the instruction that was given by the district court in this case.

That is not a position that the Solicitor General rendered any opinion on, for obvious reasons.

I mean, every lawsuit is a... a dispute between the parties.

We believe, in this lawsuit...

Justice Stevens: What are the obvious reasons?

They're not obvious to me.

Mr. Ray: I'm sorry?

Justice Stevens: What are the obvious reasons?

Mr. Ray: Well, we have an interest in defending the... the... the instruction and the jury's verdict.

The Department of Justice's position in this case as an amicus is in making sure there's a proper understanding and interpretation of the language of the Federal gratuity statute.

So, in that sense, they are different.

Justice Breyer: How... how does it work, in your opinion?

Suppose a... a group of farmers asks the Secretary of Agriculture to come and talk to us.

They say, we'd like you to tell us about the Department's policies that affect us.

Here is the ticket, or we'll buy you lunch.

It's a banquet.

Bring your wife to the banquet.

In your view, is that a Federal crime?

Mr. Ray: We don't believe...

Justice Breyer: And if not, why not?

Mr. Ray: We don't believe there's a sufficient showing of motivation, based on the facts.

Justice Breyer: No, no.

What they want is they definitely want him to come out, indeed, what they want him to do is talk about price supports.

They're in favor of price supports.

They want him to talk at lunch.

Mr. Ray: If it's completely untethered to the prospect of official action, that would not be a sufficient showing.

Justice Breyer: What do you mean?

hey want him to talk about official action.

They want him to talk about his policies as Secretary of Agriculture.

I give you the example, and I want to know, in your opinion, how does this statute apply?

Mr. Ray: On those facts as you've just added them, that would appear to suggest a motivation involving some capacity to act.

Justice Breyer: It's a Federal crime, in your opinion?

Mr. Ray: There would have to be additional facts that were not present in your hypothetical that were present here.

Did they have any matters before that official?

Justice Breyer: Yes, yes.

Of course, farmers do.

They all do.

That's what the Secretary of Agriculture does.

He decides things that affect farmers.

Mr. Ray: And... and under those circumstances, if that motivation were shown that it was for or because of that position, we believe that would be within the four corners of this statute, yes.

Justice Breyer: And, therefore, if farmers who ask the Secretary to speak, to come to lunch, to talk about his policies, are all committing Federal crimes.

I would have thought that was fairly common.

I may not understand...

Mr. Ray: Well, unless... remember that there were also defenses presented in this case.

In this particular case, as in your case potentially, the defense of friendship might apply, social purpose, or other innocent reason.

Justice Breyer: Business.

Mr. Ray: And... and that... if those defenses were shown, then that would be sufficient... if that was the motivation for the gift, to defeat liability.

Justice Kennedy: In any case, you're saying...

Do you think any public officials in Washington will be surprised by your interpretation?

Unidentified Justice: [Laughter]

Mr. Ray: Well, public officials...

Justice Kennedy: I'm serious about that.

There's a huge gap between the general understanding and your interpretation.

And if... and if the statute is open to two plausible interpretations, it seems to me that we shouldn't adopt yours for that reason.

Mr. Ray: Your Honor, we don't think so.

Because already there's a scheme in place, under the Federal regulations, that deal with precisely the issue that you describe.

Public officials are already on notice about...

Justice Breyer: They don't go... I would have thought it was good for Secretaries of Agriculture to explain to farmers what their policies will be in the future.

I mean, is it now the... the general understanding that they don't?

Mr. Ray: Your Honor, I see that my time has expired.

May I respond?

Chief Justice Rehnquist: You may answer the question.

Unidentified Justice: [Laughter]

Mr. Ray: We're not saying that we're trying to bar access.

There's no question that farmers have a right to appear before these individuals, these officials, and... and advance their position.

The question is buying access.

I mean, the official can appear as long as the official pays his own way.

The problem is when the official is in a relationship with someone who prospectively has action before them and takes these gifts and takes them on the nickel of the... the person who has an interest.

Justice Souter: I think you've answered the question, Mr. Ray.

Mr. Ray: Thank you, Your Honor.

Justice Souter: Thank you.

Argument of Eric W. Bloom

Chief Justice Rehnquist: We'll hear from you, Mr. Bloom.

Mr. Bloom: Thank you, Your Honor.

Mr. Chief Justice, and may it please the Court:

I'd like to turn immediately to a couple of issues raised in the questioning of the Appellant.

Justice Ginsburg, you asked the question: How did these instructions come to be

And I think it's very important to go through the procedural posture.

In this case, Sun-Diamond filed a motion to dismiss the indictment.

The government opposed that motion and, in very explicit terms, said that courts have made clear that for a gratuity to be established, it is not necessary to allege a direct nexus between the value conferred and an official act by the public official.

That's page 5 in the government's opposition.

Indeed, after...

Justice Scalia: But do you... do you...

Chief Justice Rehnquist: in the district court?

Mr. Bloom: Yes.

That was...

Justice Souter: Do you contend that was erroneous?

Mr. Bloom: I'm sorry?

Justice Souter: Do you contend that that statement was erroneous, about the direct nexus?

Mr. Bloom: Yes, Your Honor, we do.

Chief Justice Rehnquist: Well, that's way, way back in time in... in the proceedings.

I mean, it's something the government said in opposition or a motion to dismiss in the district court.

How does that bear on what we have here?

The government may have changed its position.

Mr. Bloom: I understand that.

And I literally want to walk you through it.

Because the next step was...

Chief Justice Rehnquist: We've got half an hour.

Unidentified Justice: [Laughter]

Mr. Bloom: I understand.

I walk very quickly.

[Laughter]

Then we go to trial.

And at trial, in opening statements, the independent counsel... when I refer to the independent counsel, I mean the Office of Independent Counsel... told the jury, quote, what this is and what the law prohibits is giving a thing of value to a public official because the person is a public official, when there's some business that you have before the public official.

That's pages 3 and 4 of the transcript.

Then, at a sidebar, the independent counsel reaffirmed this view.

Chief Justice Rehnquist: it's the United States that's the Petitioner here.

Mr. Bloom: I'm sorry... after 4 years... the United States.

The prosecutor then reaffirmed this view to the court, and said, essentially, the court did not require the showing of a nexus between the thing of value and the particular acts the Secretary may have taken.

It is not necessary under the law.

And that's page 734 of the transcript.

This case was being tried under the

"for or because of an official position. "

standard.

So, when the parties filed our respective proposed jury instructions, it is not surprising that the jury instructions do not come close to one another.

With respect to the jury instructions themselves, we believe that, effectively, it stripped the factfinder of finding the one question... essential question... in this case.

Specifically, whether in fact Sun-Diamond's gifts were for or because of any official act.

Now, as I understand Mr. Ray...

Justice Scalia: Do you say it has to be because of some particular official act?

Mr. Bloom: Ultimately, that's not Sun-Diamond's battle, but we do believe that... that the statute calls for a link between a gift on one hand and some specific or identifiable official act.

Justice Scalia: Specific or identifiable.

Well, I mean... I mean, let's say I'm... I'm AT&T, and I just give enormous quantities of money to the Chairman of the Federal Communications Commission.

Mr. Bloom: Well...

Justice Scalia: That doesn't violate this Act?

Mr. Bloom: Well, two answers...

Justice Scalia: Saying, you know, I'm not asking you to do anything in particular.

I have no particular case in mind.

Unidentified Justice: [Laughter]

Mr. Bloom: Two answers...

Justice Scalia: I just... I just want you... just... I just want you to be a friend; that's all.

Unidentified Justice: [Laughter]

Mr. Bloom: I strongly suspect that if I had matters before the FCC or before any department, it's not going to be terribly difficult for the prosecutor, especially with the resources of the grand jury, to be able to identify matters.

The second point...

Justice Scalia: No, no.

Wait.

You have to take my hypothetical.

There is no particular matter that AT&T mentioned to the Chairman.

It just said, you know, I just love Chairmen of the FCC.

They are wonderful people.

They're... you know, they could make a lot more money elsewhere.

I... this is in appreciation of your taking all this time out to serve the people.

And I... you know, here's a couple of million dollars.

Unidentified Justice: [Laughter]

Mr. Bloom: Well, I strongly suspect that a jury could find that it was for an act, if one were identified.

But using your hypothetical...

Justice Scalia: No particular act.

Mr. Bloom: I understand, sir.

Using your hypothetical, I would suspect that that person could be charged under one of the other statutes... the salary supplementation statute.

It sounds like he's giving the money because of the job and because of his acts as... pursuant...

Justice Scalia: My question was... was not whether he could be charged under one of the other statutes.

It's whether he can be charged under this statute.

Mr. Bloom: Right.

And our answer is no.

Justice Scalia: Is no?

Mr. Bloom: Is no.

Justice Souter: Now, in your view, what's the... tell me what the distinction is between the requirement of... the specificity requirement of this statute and the specificity requirement of the bribery statute.

Mr. Bloom: Under bribery, you need a quid pro quo, there's clearly strings attached.

Justice Souter: Well, the quid pro quo is the agreement that connects the... the thing given with a specific act.

Mr. Bloom: Right, I understand.

Justice Souter: It doesn't have to... the act doesn't have to be completed to violate the bribery statute...

Mr. Bloom: Right.

Justice Stevens: We agree on that.

Justice Souter: So... so, there's... there's a specific gift, specific act.

Now, you've been talking about... I think... about specific acts under the gratuity statute.

So, what's... how do we distinguish between the two?

Mr. Bloom: Let us hypothesize that I'm giving a lot of gifts, not in exchange for, not with any implicit or explicit agreement that the government official is going to do me a favor in return.

There are no strings attached.

I'm plying this guy with gifts, hoping that it may influence him.

Hoping that when the time comes, that he's going to rule on MPP or methyl bromide, that he's going to think twice about me.

Justice Souter: Well, then there is no... then I... maybe I misunderstood your position.

There is no specificity requirement under the... specificity as to the act requirement under the gratuity statute on your view; is that correct?

Mr. Bloom: No.

Our view is that the prosecutor has to identify one or more acts for which the gifts are given.

Justice Souter: Okay, we're back to the specific.

what's the difference between the one or more acts that he's got to identify for the gratuity statute and the identification of one or more acts under the bribery statute?

Mr. Bloom: Under the bribery statute, there's a quid pro quo.

Justice Souter: Well, the quid pro quo... and correct me here... I thought quid pro quo meant that there was an agreement that the... that the gift would be in exchange for action in this particular instance.

Mr. Bloom: That is correct.

Justice Scalia: All right.

Justice Souter: And I think what you're saying is, if you have to... the only difference, then, is you don't get too explicit about the agreement under the gratuity statute.

Mr. Bloom: There is no agreement.

Justice Souter: You've got an... you've got an explicit... you've got a... you've got a particular gift, and you've got a specific act in mind, and the prosecutor has got to show it and prove it, but we just don't get down to so many words in identifying... when... when we're giving the gift, we don't get down to so many words in identifying the connection between this gift and this act; that's the difference?

Mr. Bloom: Right.

Essentially, there is no agreement in the case of a gratuity.

The... the typical or classical or traditional gratuity is the reward.

A reward for not taking... or one where the government official has committed themselves to performing that act.

Justice O'Connor: Okay.

Justice Souter: But... but the distinction is simply one of... of explicitness, of a lack of articulation of the connection; is that your position?

Mr. Bloom: Well, not even articulation.

There is no agreement.

Justice Souter: Then why does the prosecutor have to prove specific acts?

Mr. Bloom: Because we believe that the statute almost cries out for it.

The words of the statute...

Justice Ginsburg: When you were asking... if you're arguing this, then you're going beyond where the Court of Appeals went, because the Court of Appeals didn't say it had to be this act or that act.

It... didn't the Court of Appeals contemplate a multitude of acts that might be in the agency's bailiwick?

Mr. Bloom: In the appendix, the Court of Appeals decision is attached and... at page 8... and whatever degree of intent to influence may be necessary for a bribe.

A gift looking to future acts can be an unlawful gratuity, where the giver is motivated simply by the desire to increase the likelihood of one or more specific favorable acts.

Justice Breyer: And you say that's... that's wrong?

Mr. Bloom: No, we say that's correct.

Justice Breyer: Well, why?

Why is it... I... I am confused by the two.

I thought the classical bribe is I want the public official to do something for me.

Unidentified Justice: And, moreover, I go to him and say, I'll pay you $ 1,000 if you do X.

Justice Breyer: And it's a fairly specific thing.

I thought the classical gratuity is what it says; it's a tip.

The person did it anyway.

I say, thank you; thank you for giving me 48 million acres.

Justice Scalia: Thank you.

Justice Breyer: And here's your tip, $ 1,000.

Now, normally, that would be in the past.

He would have done it.

But sometimes, I guess, it could be in the future.

He just doesn't know I want him to do it, but he does it...

Mr. Bloom: Well...

Justice Breyer: independently, and I give him a tip.

And I give him a tip for what... I mean, I don't understand how the future works.

But if that's the distinction, you don't need any agreement whatsoever in the gratuity case.

None.

Nor does it matter that you're trying to influence him.

It couldn't matter less that you're trying to influence him.

Influence has nothing to do with it.

Now, am I right?

Explain... I'm not at all sure I'm right.

Mr. Bloom: No.

You are absolutely, perfectly correct.

As a matter of fact, what you articulated is very recently what the Fourth Circuit adopted in United States v. Jennings.

And perhaps it's best to kind of set up a hierarchy of conduct.

Clearly, the top tier would be bribery.

And there you have a quid pro quo, this for that, there are strings attached.

There is a tier... gratuities... clearly covering... and I believe what Congress, in the legislative history, suggested it was intending to cover... were rewards, a tip, a thank you.

The question is whether a gratuity can also cover instances with respect to influence.

And I kind of like the Court of Appeals...

Chief Justice Rehnquist: Well, how... how about thepart of the statute?

Mr. Bloom: Well, what the courts have done that interpret the gratuity statute as merely a reward... in fact, there was an Eighth Circuit case that affirmed an instruction.

And the instruction said this: Find the defendant guilty if you find that the gift was intended as a reward for any acts the government official committed or committed to perform

Chief Justice Rehnquist: Well, but committed to perform is bribery.

Mr. Bloom: No, because...

Chief Justice Rehnquist: That's simply reading out the part of the statute that says.

Mr. Bloom: ell, let me give you the hypothetical.

What about a...

Chief Justice Rehnquist: Well, don't ask me questions.

Unidentified Justice: [Laughter]

Mr. Bloom: Let me give you an example of what it is I'm talking about, Mr. Chief Justice.

[Laughter]

And that is, I, as a Senator, make out a very public statement: I am going to vote for this piece of legislation

I am committed to performing it.

I haven't acted on it yet.

In fact, that legislation may not even be pending.

I'm thrilled that he's taking this stance.

It is an act to be performed.

I give him the reward.

Justice Breyer: But then the dif... the difficult... why this case isn't so totally obvious, is because... take a gratuity statute... you'd say that that... that, okay, I understand perfectly well you're giving a person a tip.

That's what you're not supposed to do.

Well, you don't give a person a tip for being who he is; that's clear... I don't think... that's not a tip.

So, being in a position, no, that's not in the statute.

But it isn't so clear that it has to be an absolutely precise act.

You could give... you could be giving a person a tip because of a whole series of things that he did or a whole series of things that he now has promised to do.

What a good guy he is.

He says: I promise to buy this piece of property next year

That's to be performed.

You say: That's wonderful

Now, he doesn't say to buy this piece of property, he says to buy some property.

Now, he doesn't say to buy some property, he says to take a certain course of action.

And then it becomes vaguer and vaguer.

And that doesn't necessarily stop it from being a tip.

And that's why I think this case isn't obvious, one way or the other.

Mr. Bloom: And certainly it's a legitimate question...

Justice Scalia: Yes.

Mr. Bloom: whether or not...

Justice Breyer: What's your response?

Mr. Bloom: That... that's exactly right.

And one of the things that we try to grapple with is...

Justice Breyer: Yeah, but you've got to argue that this general course of conduct is not something that falls within the statute.

Rather, you want it to be more specific acts.

Mr. Bloom: Well, we believe that the statute does call for that, that's right.

And one of the questions here that I think it's a difficult...

Justice Ginsburg: But... but Judge Williams didn't say that.

Indeed, I think he rejected your position.

You called our attention to page 8 in the appendix.

If you look at page 13 and 14, where Judge Williams said: at the same time, we reject Sun-Diamond's broader tack on the indictment

Chief Justice Rehnquist: Where are you reading from?

Justice Ginsburg: Appendix page 13.

The... the paragraph...

Justice Breyer: Okay, thank you.

Justice Ginsburg: at the end of the page.

Chief Justice Rehnquist: Okay.

Justice Ginsburg: Where the D.C. Circuit said that it isn't necessary to tie the particular free service provided to particular ticket or tickets.

Leniency in a multitude of specific acts was enough.

That an official has an abundance of relative... relevant matters on his plate should not in... insulate him from the gratuity statute.

Mr. Bloom: And, ironically, we actually agree with this.

It's still a multitude of specific acts.

You can tell us what those... what the group of specific acts are.

Justice Scalia: I... okay, let's use a hypothetical.

I... the new Chairman of the FCC, and AT&T comes in and says: You're going to have a multitude of acts in your office

And, you know, no specific one, but here's $ 2 million; think well of us in all of these... in everything you do in this office.

Unidentified Justice: [Laughter]

Chief Justice Rehnquist: Okay.

Justice Scalia: Is that a violation?

Mr. Bloom: Well, I think the answer is probably yes.

And I think that the answer to why it's probably yes...

Justice Scalia: What specific acts are involved?

Mr. Bloom: Well, I was going to just say, provided the government can identify the myriad of specific acts.

In other words, clearly, if I've got 10 matters pending, and I could literally give all that money...

Justice O'Connor: It's just everything he does.

Justice Scalia: It's just everything he does in his office.

Which is why it's not a very... a very far stretch to say that I'm giving him the money because of his office.

Because everything that he does as Chairman of the FCC...

Mr. Bloom: What we're trying to...

Justice Scalia: or at least everything that affects point-to-point telecommunications.

Mr. Bloom: What we're trying to protect against is a jury just saying, wait a minute, these guys gave money; it must have been to influence.

Influence what?

The Act requires a gift on the one hand, act or acts on the other hand, and some nexus for or because of an official act in the middle.

And...

Justice Breyer: To influence... in... in the hypothetical, here is the money, now think well of us.

I'm giving you some money.

Please, think well of us.

That's bribery, not a gratuity, isn't it?

Mr. Bloom: Well, I... I...

Justice Breyer: It's not... if... if I'm giving you the money because you will think well of us, it's a gratuity.

Mr. Bloom: Well, I think that's correct.

Justice Breyer: If I'm giving you the money in order to, is it bribery?

Or may... maybe I'm not right about that.

Mr. Bloom: Well, certainly, I think what the jury would infer there is I'm giving the money so that he will act favorably with respect to us, with respect to these 10 matters we have pending.

Justice Scalia: Well, that's... that's... you don't think it's a... it's a violation of the bribery statute, do you?

Mr. Bloom: If it's a quid pro quo...

Justice Scalia: But I haven't asked for any commitment on his part.

You... you've been telling us that there has to be an agreement.

Mr. Bloom: Right.

If there's an implicit agreement, I mean, that's going to be a question in fact for the jury.

Justice Scalia: How is it an implicit agreement when I say, here, please, think well of us?

Mr. Bloom: If that's all there is... if that's all there is...

Justice Scalia: That... that was my hypothetical.

Mr. Bloom: Then it may well be a gratuity.

And all we would say is, in the indictment, identify what those acts are that are pending.

Justice Stevens: Well, but then, also, if he rules against the giver in every case, it would pretty clearly not be a bribery, but it would clearly still be a gratuity if the gift was given in order to motivate him to... to act favorably.

Mr. Bloom: To make acts more likely.

Justice Stevens: Yes.

Mr. Bloom: Yes.

Justice Kennedy: And is it possible to interpret the statute so that it has a retroactive reach?

There has to be a commitment to take an act or an act has to be taken?

Mr. Bloom: Well...

Justice Kennedy: You apparently don't take that position.

Mr. Bloom: Well, I was going to say, several courts have.

The reason why we haven't is because the wordswe think are probably broad enough to capture not only a reward, but it probably embraces improper attempts to influence, where it does not rise to the level of bribery.

Justice Kennedy: The problem, once you do that, and couple the analysis with the possibility of being multiple, specific acts, or at least more than one, you're very close to.

Mr. Bloom: ell, I... I disagree.

Oh, no, I don't disagree, because it's actually close, but it's... it's still a long way from... from home.

In fact, this is really, I think, the key, as I understand it, to the independent counsel's argument.

The independent counsel says, in this case...

Justice Kennedy: The government.

Mr. Bloom: I'm sorry.

The government.

Thank you.

In this case, Sun-Diamond is a regulated entity.

Therefore, we don't have to prove it's for or because of any official act.

We merely have to prove it was for or because of an official position.

Essentially, as I understand what the government is doing here, is they are saying that there are two classes of potential defendants.

And the matter of proof is different, depending on whether or not you are within one class or the other.

Chief Justice Rehnquist: Well, the... the hypothetical that might distinguish the situation is where someone who just likes to be around high... high-ranking government officials, if Sun-Diamond gave the money to the Secretary of Energy, and... or gave a gift... and they had nothing in the world the Secretary of Energy could do to affect Sun-Diamond... that would be because of official position, but not because of acts to be performed, don't you think?

Mr. Bloom: Yes, I do.

And I think... and I don't think we should presume that because they like to be around cabinet officers, that because it happens to be the Secretary of Agriculture, that it must have been for or because of an official act.

Chief Justice Rehnquist: Well, but at least it was permissible... it would be permissible for the jury to find that, in that case.

Mr. Bloom: Yes.

Yes.

And that's obviously our concern here.

The jury did not get that question.

And, look, the jury can take a look at a lot of factors to determine whether or not it should make the inference that indeed the gift is for or because of an official act.

The jury may take a look at the fact that the entity giving the gifts has matters pending.

Justice Kennedy: Is one of those factors whether or not the receiving official could reasonably interpret, or should reasonably interpret, the action as being designed to reward a particular official act?

Mr. Bloom: I think it could be a factor, yes.

I mean, clearly, what I would think are the most...

Justice Kennedy: Should you instruct the jury to that effect in every case?

Mr. Bloom: I tend to be partial to the plain vanilla circumstantial evidence that we get in all the jury instructions.

What I do believe...

Justice Scalia: You keep saying.

ou keep using that term.

But... but the kind of hypotheticals you're accepting do not have.

hy isn't it enough that the person gave the money to obtain favorable action in the abstract?

I gave him money just because, you know, you have been a friend to AT&T over the years, in... in your position as Chairman.

I'm not referring to any particular decisions.

And if the government had to come up with the particular ones that it was given for, you couldn't identify any particular ones.

But I think you'd be under the statute if you said, I'm just giving you this because you have been a good friend to our company over the years.

Wouldn't that be a violation of the statute?

Mr. Bloom: I don't believe so.

I don't believe so.

Justice Souter: May I ask...

Chief Justice Rehnquist: Well, it would be if...

Justice Stevens: May I just... one question, if I may.

Would you tell me the difference between your position and the position of the Department of Justice in their separate brief?

Mr. Bloom: Well, we certainly agree a lot with the Department of Justice, in that it's generally a jury matter to determine the issue of intent.

We probably disagree with the Solicitor General, I could think of, in three ways.

First, the Solicitor General says that based on the regulatory relationship only, a jury should be able to infer guilt beyond a reasonable doubt.

We agree that the substantiality of the gifts and the fact that there are matters pending are in fact factors for the... for the jury to consider.

And I think we can't decide in a vacuum whether or not that would be sufficient from which a reasonable jury can find beyond a reasonable doubt that gifts were given for or because of an official act.

Second...

Justice Ginsburg: Could you clarify that in terms of an instruction?

Suppose the judge said: You may, but are not required, to infer from the fact that this corporation has matters, or this entity, has matters pending before the agency that this gift was given to influence official acts

Mr. Bloom: I would prefer...

Justice Scalia: Would that be a proper charge?

Mr. Bloom: I would prefer a broader charge, that... that instructs the jury...

Justice Ginsburg: Well, I didn't ask whether you preferred it; I asked if that would be a legally correct charge?

Mr. Bloom: It... it may be.

I, frankly, think it may be a bit prejudicial.

The charge, if I may, that I would suggest to the jury is that the jury may consider the substantiality of the gifts, both to the donor and to the donee, the substantiality of the interests to the donor, the timing of the gifts vis-a-vis acts.

Justice Stevens: Would you finish your answer to my question, please?

Mr. Bloom: Sure.

The second place where we disagree with the Solicitor General is that at one point it seems to us that he equates capacity to act with act.

And I believe that capacity to act is an awful lot like position, and suggests status.

For example, I may want to hobnob with someone who has the capacity to act because it will enhance my prestige.

The third place where we disagree is specifically on the... whether or not the statute requires a nexus to a particular act or just a general act.

Aside from that, I think...

Justice O'Connor: On that point, we don't have to agree with you on that position to affirm the judgment below, do we?

Mr. Bloom: Absolutely not, Your Honor.

Justice Souter: But let me get back to your... what you mean by

"the nexus to the particular act. "

And I guess I'm going back to Justice Ginsburg's hypothetical.

If the... if the jury charge... if the judge charged the following, would it be legally sufficient?

In order to show that the gift was given for or because of an official act, the government must prove that the gift was given with an intent to influence the performance of an official act.

You may... you need not necessarily, but you may find, on this evidence, that the gift was so given because, at the time it was given, there were two matters pending before the Secretary in which the donor, Sun-Diamond, had an interest.

One was the insecticide interest and the other was the... the grants to subsidiaries interest.

Would that have been a legally sufficient instruction?

Mr. Bloom: I suspect that the answer is yes.

But, to be candid, the converse of that question says, could I, as a defendant, prevail on a Rule 29 motion?

And I will tell you that I, as a defense counsel, would make a very strong Rule 29 motion, based on the facts in this case, that no rational trier of fact could find Sun-Diamond guilty on this record.

Justice Scalia: Why?

Justice Souter: Make your argument.

Mr. Bloom: Certainly.

There were two matters that the government proved were pending.

One was the MPP, the grant program.

Justice Kennedy: Yeah.

Mr. Bloom: The evidence was that Sun-Diamond wanted... wanted the Secretary... this is... I'm sorry, this is the... the indictment... alleged that Sun-Diamond wanted the Secretary to adopt a definition of a small entity to cover its member cooperatives.

Yet the evidence at trial was that Richard Douglas told the Secretary this is probably something that is better left for Congress.

That's one.

There's no effort and there's no evidence to reflect an effort to influence the Secretary of Agriculture in any way to assist Sun-Diamond.

The second matter that was pending dealt with the issue of methyl bromide.

Methyl bromide is a fumigant that the EPA was proposing to phase out.

The history, I would argue, of the USDA was opposing the phaseout.

Indeed, the evidence in the record demonstrates that the USDA was the largest user of methyl bromide.

Justice Souter: So, you're saying they were doing it anyway.

That's your argument.

Okay.

Mr. Bloom: That is correct.

Chief Justice Rehnquist: I understand.

Mr. Bloom: What I was going to go back to is the issue of these two classes, and the fact that because Sun-Diamond is a regulated entity, somehow we deserve a different standard.

I think, effectively, what that does is create an impermissible irrebuttable presumption.

That is, if the jury were to find... and if the jury did find... that Sun-Diamond gave gifts for or because of any official position, then the court, as a matter of law, was saying, then Sun-Diamond must have given it for or because of any official act.

And under In re Winship, of course, it is the government's burden to prove each and every element of the offense beyond a reasonable doubt.

I wanted to go back, also to the issue of this hierarchy of conduct.

Clearly, at the top of the hierarchy is bribery.

Clearly, below that we have the gratuity as a reward.

In our view, at the bottom is for or because of an official position, which is governed, we believe, administratively.

There is a question as to whether or not there is a gap between bribery and the gratuity.

Does bribery... clearly, bribery covers improper attempts to influence.

Clearly, gratuity covers the issue of rewards.

The difficult issue is whether or not there is a gap that is filled by the gratuity statute.

And that's why I'm partial to the language of the Court of Appeals that says, essentially, we don't have to decide what the bribery statute line is.

But wherever we draw that line, the gap will be filled by the gratuity statute.

To conclude, we believe that the district court, by instructing the jury that the government did not have to prove that Sun-Diamond gave gifts for any act at all stripped the jury of its fact-finding mission.

It simply did not have an opportunity to decide the one question that was crucial to this case.

That question was purposefully kept away from the jury because the government argued, and the district court agreed, that no connection needed to be shown.

That relieved the government of its constitutional obligation to prove every element of the offense beyond a reasonable doubt.

That was error.

And for that reason, we therefore ask for this Court to affirm the decision of the Court of Appeals.

Chief Justice Rehnquist: Thank you, Mr. Bloom.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Evans v. United States - Oral Argument

Fri, 09 Jan 2009 14:49:33 +0000

Case:

Evans v. United States

Media File:

90-6105_19911209-argument.mp3

Related Transcript:

1991_90_6105_argument.xml

Transcript:

Argument of C. Michael Abbott

Chief Justice Rehnquist: We'll hear argument now in No. 90-6105, John H. Evans, Jr. v. United States.

Mr. Abbott.

Mr. Abbott: Mr. Chief Justice, and may it please the Court:

The two issues presented in the case of Evans v. the United States have to do with first, under the Hobbs Act, title 18, United States Code, section 1951 (b)(2), whether an affirmative act of inducement by a public official such as a demand or threat has to be shown by the Government in an extortion case under color of official right.

The second issue presented is whether, in the absence of that Hobbs Act conviction, should we be successful here, the petitioner was properly convicted for making a false statement on his income tax return when he failed to report a $7,000 payment given by an FBI undercover agent.

Unknown Speaker: What about if the conviction is valid?

Mr. Abbott: Then we are out of luck on count two, Your Honor.

Unknown Speaker: Yes.

Thank you.

Mr. Abbott: The petitioner was convicted on one count of extortion, one count of false statement that was affirmed by the Eleventh Circuit Court of Appeals in September of 1990.

Briefly, in summarizing the facts, in March of 1985 the FBI began an undercover investigation of John Evans that was to continue for approximately 31 months.

They were investigating allegations that there was public corruption in zoning matters.

The agent, the FBI agent, posed as a land developer who was new to the Atlanta area.

They first met with Evans in March of 1985.

That meeting essentially was one in which they indicated they would be meeting with governmental bodies.

Evans indicated that he would be glad to assist them if he were able to, and he made no attempt to recontact them after that meeting.

They met again in August of 1985 and the scenario is much the same except that that particular meeting was videotaped.

The focus of the investigation began or it began to heat up in May of 1986, because at that time Evans was running for reelection as a commissioner of DeKalb County, Georgia.

And if elected, it would be his second term.

There were two contributions made during the course of the investigation.

In May of 1986, in a meeting with the undercover agent and some associates, Evans was asked if in fact he needed any expenses.

There had been previous talk of campaign... of his reelection campaign, and he took the reference to mean campaign expenses.

He indicated that he needed expenses... or a campaign contribution for a precinct mailing.

They gave him $300.

He reported the contribution.

He sent a thank-you note.

He made no attempt to recontact the agents, and in fact, he spent approximately $300 that month for his precinct mailing.

He was not charged for that particular event.

The focus of this particular case concerns the events of July 23rd, 24th, and 25th, 1986.

There was another meeting on July 8th prior to that in which a specific parcel of land was identified by the undercover agent as one they were interested in rezoning.

On July 23rd, there were three different calls between Evans and the undercover agent.

The middle call was recorded.

The undercover agent did not record either the first call or the third call.

There were two factual disputes centering from those two calls.

One, who initiated the call.

Evans said the agent did and he was returning the agent's call.

In fact, he introduced into evidence his phone records which showed that the agent had called him at about the time he said, at his undercover apartment, and leaving that number.

In the third call, Evans said that the agent asked him to bring to a meeting that he was setting up for the following day a list of his campaign needs, because the campaign, the primary campaign, was approximately 2 weeks away.

The agent said he did not ask Evans to bring any such list, although he concedes that he did set up a meeting for the following day.

In any case, on July 24th, Evans promised his assistance before anything was offered to him, as he had every time he had met them since March of 1985.

He had previously indicated that he thought a meaningful contribution would be around $1,000.

He told them that in May of 1986.

But he had brought with him a budget for this 2 week period before the primary campaign which showed a budget of $14,000, and he had an $8,000 shortfall.

The agent indicated that he was willing to give Evans $8,000.

Evans testified at that point he was so stunned by the amount of the contribution that what he did was he reported only $1,000 of it.

He took $7,000 of it in cash and did not report it until much later, after he was aware of the investigation.

He did send a thank-you note to the agent at the time for the contribution and told him when he received it that he was just thankful that the agent would even talk to him about a campaign contribution.

Evans testified that he used that campaign contribution--

Unknown Speaker: Did he thank him for $1,000 or for $8,000?

Mr. Abbott: --I don't believe there was any reference to the amount of the contribution, Your Honor.

He testified... Evans testified that he used that contribution, $7,000 which was not reported, $4,100 went back to his mother who had given him a cash contribution of $5,200 in 1982, 4 years earlier... which was duly recorded.

And the other $2,900 he paid back to himself because he had made loans to his own campaign, in fact, some 350 loans, all of which were duly documented over the years.

Evans' contention is he did not condition his assistance on any payment to him whatsoever.

The undercover agent admitted as much on cross-examination, that Evans did not condition his assistance.

The Eleventh Circuit agreed in their opinion that in fact Evans did not condition his assistance, but they said he's not required to.

The Eleventh Circuit says that in extortion under color of official right, no inducement is required.

As the Court is familiar, nine circuits employ what is known as the majority rule, which is basically that if a public official accepts a payment and he knows that that payment is made to him to influence his official action, that is sufficient.

Although the nine circuits, or most of them appear to pay some lip service to the word inducement, which is a part of the statute, many of them say that the power of the office itself provides all the coercion necessary.

And in fact, that's what the Eleventh Circuit says.

Unknown Speaker: Now at common law, I suppose, that would have been the case, that extortion under color of right would not be said to require inducement.

Mr. Abbott: There certainly are cases, Justice O'Connor, under common law, in which that is true.

Unknown Speaker: Quite a few.

Mr. Abbott: There are quite a few.

In fact, at common law it was a... the offense was a misdemeanor.

Many of those cases are cases--

Unknown Speaker: What difference does that make?

I know you make that point in your brief, and say well, it's more serious here, I don't see what difference that would make.

Mr. Abbott: --I think it makes a difference because when you back to 1946 when the Hobbs Act was passed, it seems unlikely to me that Congress intended to take a common law misdemeanor in which you could commit the offense by passive acceptance and put it into a statute aimed at professional gangsters where the problem was coercion, violence, and extortion, and make it a 20-year felony without giving an explanation.

Unknown Speaker: Well, I guess everyone agrees that it was patterned... that color of right aspect was patterned after the New York law?

Mr. Abbott: We certainly contend that, and I believe the Government does also, although at least they did in the McCormick case.

Now, the New York law is interesting, because first of all it is, of course, a misdemeanor.

It does allow passive acceptance.

But it's receiving a fee in excess of that allowed by statute.

What it appears to be, if I understand it correctly, is something like a bill collector who collects fees for the body politic.

And the offense is committed when he either charges you more than you're supposed to pay, or he charges you when you don't really owe anything, or he charges you before it's actually due.

Those are how the statutes are normally worded.

And that's very similar, in fact, to the common law.

But in this particular case, he was collecting fee in excess of a fee allowed by statute.

It seems to me in that kind of a case there is actually, probably, coercion, even though you just receive it.

If a bill collector comes to my door and he wants to collect a fee from me, I know that when he's collecting for the body politic, if I don't pay, there's going to be a penalty for that.

I mean, he is a coercive individual simply by the fact of his presence.

That is not true, I think, of John Evans or anybody who, as an independent agent running a campaign, whether he's just running for office for the first time, or like Evans, in fact he's running for reelection.

Secondly, as you know, extortion schemes then and now, even to present day, make a distinction between a victim, whose the person who's the payor, and the extortionist, who is the payee.

We do not prosecute the victim, we prosecute only the person who extorts it.

Bribery, on the other hand, we prosecute both parties; the person who offers the bribe and the person who receives the bribe.

There is no better case, I think, that blurs the distinction than the Evans case.

Because clearly in the Evans case, the FBI agent here, even leaving aside his undercover role, was clearly the aggressor in the scenario.

By the time that he made the contribution he had courted Evans for some 16 months.

By our count, he had offered Evans money some 30 times.

He made virtually every call to Evans.

He virtually set up every meeting to Evans, with exception of one call which was disputed on July 23rd.

So it's very hard to perceive of the undercover agent in our case as a victim.

Certainly, had he not been an undercover agent, you would presume that he would have been prosecuted because it was a bribe.

So I think it's... it is significant, I think, that both New York and in common law it was a misdemeanor.

Unknown Speaker: You say on these facts evidence, could have been convicted of bribery but not of extortion?

Mr. Abbott: Whether or not he could convict it, Your Honor, I don't know, but certainly that I think it is... it is a classic bribery case.

I'm offering you money, here's what I want you to do.

Unknown Speaker: You say that you agree the legal elements are there, whether or not a jury would find him guilty or not guilty.

Mr. Abbott: Yes, I do.

It simply seems very unlikely to me that when the Hobbs Act was passed in 1946, Congress intended to make this common law misdemeanor into a 20-year felony and allow passive acceptance, where in fact the statute itself was aimed at violence, at coercion, and at extortion.

It seemed to me unlikely that Congress intended to incorporate this into what appears to be an 18th and 19th century scheme of collecting fees at a time when the people who collected those fees were basically paid.

Unknown Speaker: Do you think inducement requires more than just acceptance of money by somebody who holds an office that if he acts in a certain way it will help you?

Mr. Abbott: I do, Your Honor.

I think that you have to ignore the plain meaning of the word extortion, not to say that inducement requires more than that.

In its brief in McCormick, the Government said... took a position that I agree with... that the common understanding of extortion is obtaining money by consent when that consent is induced by some kind of future threat.

And if in fact you look at the extortion statutes on the books of the Federal Government today, in title 18, virtually every one of them, and I think every one of them, either talks about a demand or a threat.

Those are, it seems to me, the two key words for extortion--

Unknown Speaker: So it wouldn't be sufficient inducement in your mind if someone just let it be known around town, or if he just solicited money... just solicited monies.

You know, I've got... I'm in a position in the Government.

I can do you a lot of good.

How about paying me a little bit?

And he doesn't say otherwise I'll oppose you, he just solicits.

That wouldn't be enough, would it?

Not in your view.

Mr. Abbott: --I think if he makes a demand or--

Unknown Speaker: He didn't make a demand, he just solicits.

And he doesn't threaten anything.

Mr. Abbott: --Then I think it depends on what you believe that he means when he says it.

If what he means is if you want to deal with me, then you must pay me money in advance, if he's conditioning his performance, yes, I think it's extortion.

If you're not conditioning his performance, I think it's a bribe.

I think that is the distinction.

It's a distinction that's not required under the majority rule, but I think it's a distinction that's present in all the extortion statutes, and certainly in the title 18, 1951(b)(2).

Unknown Speaker: Mr. Abbott, you certainly could read the Hobbs Act as the... the under color of official right language modifying the verb obtaining rather than the inducement language.

In other words, extortion is defined in the Hobbs Act.

We don't have to look to some common present-day meaning.

It's defined there.

Meaning the obtaining of property from another with his consent induced by wrongful use of actual or threatened force or fear, or under color of official right.

So it could be that it means obtaining property under color of official right, no inducement there at all required.

I mean that certainly... it could be read that way.

Mr. Abbott: I think... I find that a strange reading.

I note with interest that the Government makes that argument in this case, although they took the opposite argument when the McCormick brief was... when the McCormick case was briefed and argued back in January.

It's... certainly the easiest way to have done that, if that's what Congress intended, would have been to put the under color of official right language at the beginning and the other language at the end.

And then that would have been clear.

Likewise it seems to me that you have take the language with his consent, because it's with his consent and induced.

That is not, I think, the way one would commonly read it.

And if Congress intended to do that, all they had to do is put that under color of official right, right at the beginning and put the other at the ending, it would have been very clear.

Likewise, it just doesn't seem to be likely that Congress intended to do that, making passive acceptance a part of a statute which is aimed at violence, coercion and extortion.

Certainly under color--

Unknown Speaker: Well, under your... they didn't even need to put on under color of official right under your... they didn't add a thing.

Mr. Abbott: --Well, I think that it was necessary, apparently--

Unknown Speaker: Or under color... what did it mean if... I mean you could, under your provision, it would cover no more than what the threat of... what the threat language would take care of.

Mr. Abbott: --You could make that argument.

The course of extortion part says force, violence, or fear.

And what we say is it has to be a demand or a threat under color of official right, which comports with the common understanding of extortion.

Why they would put that, under color of official right, in an extortion statute, if they didn't intend to comport with the basic understanding of extortion, will certainly remain a mystery, I think.

But I understand the point Your Honor is making.

Unknown Speaker: Well, it's hardly a mystery if they intended to incorporate the old common law offense.

It's not a mystery at all.

It's plain as day.

Mr. Abbott: I think it is a mystery, Your Honor, if in fact they intended to equate... you'd have to believe, obviously Congress intended to equate passive acceptance with violence, coercion or extortion under... by a private individual.

Unknown Speaker: Well, that's Congress' privilege, to lump things together in concocting criminal offenses.

Mr. Abbott: It certainly is, although I think in doing so, they are also incorporating a new meaning of extortion, a sense of extortion that we have not known before.

Unknown Speaker: An old meaning of extortion, not a new one, a very old meaning of extortion.

Mr. Abbott: Meaning the common law.

Unknown Speaker: Yes.

Mr. Abbott: Yes, sir.

Unknown Speaker: May I just ask... I don't want to interrupt you... this one question.

You keep using the term passive acceptance... I think that's what your term is.

Mr. Abbott: Yes, sir.

Unknown Speaker: Is this passive acceptance, in your view: a constituent comes to a legislator and says, I will give you a $10,000 campaign contribution if you vote yes on bill so-and-so.

And he says, I agree.

Is that passive acceptance?

Mr. Abbott: Yes.

Unknown Speaker: That's your idea of passive acceptance.

Mr. Abbott: Yes, sir.

Unknown Speaker: Even though it's a specific undertaking?

A promise to do something for money.

Mr. Abbott: Yes.

I mean, I know that is the Court's... admonition of the Court, that it has to be a specific undertaking.

Unknown Speaker: No, only if it's a campaign contribution.

Mr. Abbott: If it's a campaign contribution, yes, Your Honor.

Yes, it seems to me that's passive acceptance... and it's essentially a bribe, Your Honor.

It's essentially what we classically refer to as a bribe.

Unknown Speaker: But isn't it possible that the same transaction could be a bribe by the giver of the money and extortion by the recipient of the money?

Mr. Abbott: Yes.

I mean it could be.

I don't think in the illustration you gave me that it was.

Unknown Speaker: Well, it would be a bribe by the donor.

Mr. Abbott: It would be a bribe by the donor.

I think it's accepted as a bribe by the donee.

If he doesn't demand it, if he doesn't say I won't perform unless you give it to me, it seems to me it's not extortion.

It certainly may be illegal, it may be a bribe.

Unknown Speaker: I must say that's a very odd use of the term passive acceptance.

In the law of contracts, we wouldn't say there's an implied contract or a passive contract, we would say there's an explicit contract in the hypothetical Justice Stevens put to you.

Mr. Abbott: Well, there's certainly acceptance of the money offered, but there's certainly no condition that I'm not going to do it unless that's a part of the scenario, that's part of your factual scenario.

I think it's a classic bribery case.

I offer you money in exchange for you doing whatever you're going to do.

Unknown Speaker: Well, I think we're all agreed it's a classic bribery case, the question is what does passive acceptance mean.

It seems to me that's a very strange use of the term.

Mr. Abbott: Well, my position, of course, is to fit it into an extortion definition.

It's got to be something more than simply acceptance, whether you call it passive acceptance or merely accepting money that is offered.

I think it's got to be more than merely accepting money.

I don't know if it's the passive part that bothers you or what it is, but it's certainly not a demand or a threat.

It's certainly what we... not what we commonly refer to as extortion.

Unknown Speaker: Mr. Abbott, you said in response to Justice O'Connor that you concede that what the Government is arguing for is an ancient common law meaning of extortion.

Is that the ancient common law meaning of it, what the Government is arguing for?

Mr. Abbott: That apparently is what the Government is arguing for, although I would note that under the New York law it wasn't exactly the common law meaning, it was the fee collection by statute that was the misdemeanor under New York law.

Now at common law, it was a little broader than that.

It wouldn't necessarily be a fee collection by statute.

I suppose that if the sheriff wanted to let somebody out of jail in return for money, that might have been a common law misdemeanor.

Unknown Speaker: Even though the sheriff... even though the sheriff told the person he was letting out of jail I know I'm not entitled to this money, but if you give it to me, I'll let you out of jail.

That was extortion?

Mr. Abbott: Apparently that was extortion in common low.

Unknown Speaker: Would that have been called under color of right?

I mean, you've been arguing about the text of the statute.

This doesn't say under color of law, or it doesn't say under color of office, it says under color of right.

What color of right is there in this case?

Mr. Abbott: To me, I think you have to interpret the statute as under color of office, even though I understand it says under color of right.

Unknown Speaker: Why do you have to do that?

Mr. Abbott: Because that has been the historically, I think, how that term has been... has been defined, even though I know there are some cases in which there's an assumption of false pretense.

Unknown Speaker: Historically beginning when?

Mr. Abbott: Historically, certainly beginning in 1934 and in 1946 with the Hobbs Act.

Unknown Speaker: Beginning in '46 with the Hobbs Act.

I'm aware of some court of appeals decisions that went in that direction, but I'm not aware that that was the common law meaning of it or the meaning of it under the New York statute.

Mr. Abbott: The meaning of it under the New York statute was a fee collection, as I've indicated.

The common law, as I've indicated, I think was a little broader than that and brings to mind your... our example about the sheriff.

Unknown Speaker: You say the New York statute was fee collection?

Mr. Abbott: Yes.

Unknown Speaker: What do you mean by fee collection?

Mr. Abbott: An officer or a public official who collects a fee authorized by statute.

That's what it was under New York.

Unknown Speaker: And claims that the fee is in fact authorized when it's not.

Mr. Abbott: Yes.

When it's not or when it's more than--

Unknown Speaker: I can understand calling that under color of right.

He pretends to be entitled to it and he's not.

Mr. Abbott: --Exactly.

To me that is--

Unknown Speaker: But you're not arguing for that meaning.

Mr. Abbott: --No, I'm not.

Unknown Speaker: Well, let's say a registrar of deeds, the fee for filing a quick claim deed is $10.

The registrar of deeds comes to the window and says that'll be $20 when I bring it.

Is that under color of right?

Mr. Abbott: Yes, sir, that is under color of right.

But that, I think, is very different from a politician who is seeking a campaign contribution.

Unknown Speaker: Well, I know, but what if he isn't... just forget the campaign contribution for a little while.

Suppose you agree that he doesn't take the money as a campaign contribution.

Mr. Abbott: If he is a public official.

Unknown Speaker: Well, yes, he's a Congressman, or he's a State legislator.

Mr. Abbott: If he doesn't take the money as a campaign contribution, obviously he's certainly guilty of something.

He has no reason to be taking money other than as a campaign contribution.

Now whether he's guilty of extortion--

Unknown Speaker: Well, that's what I want to know.

Is he... does he commit a Hobbs Act violation?

Mr. Abbott: --Only if he conditions his performance on under color of official right, yes.

Only if he--

Unknown Speaker: He says if you don't give me the money, I will oppose what you want.

That certainly is.

Mr. Abbott: --Yes, absolutely.

Unknown Speaker: But it has to be something like that.

Mr. Abbott: Under color of official right, yes.

Now there certainly is the--

Unknown Speaker: He just can't... he doesn't violate the Hobbs Act if a constituent comes and says, I'll give you $10,000 to help me out and he says, I'll take the money, but I won't promise you a thing.

Mr. Abbott: --Well--

Unknown Speaker: He just takes the money.

Mr. Abbott: --It seems to me he's certainly guilty of bribery.

Unknown Speaker: Well, I know, but not extortion, you say.

Mr. Abbott: Not extortion under color of official right.

Unknown Speaker: Why don't you take the... I'm sorry.

Why don't you just make the argument that Justice Scalia suggested that color of right refers to... refers back to right to fees?

And in a case in which a public official is not entitled to fees, that condition can never be satisfied in a Hobbs Act case.

Mr. Abbott: Well, that's certainly true in terms of taking the New York misdemeanor that was applied to the Hobbs Act.

That was a fee statute.

And if that's where the Hobbs Act came from, then you could certainly make that argument.

Unknown Speaker: Isn't that the best reading of how we get the word right in there as opposed to color of law or abuse of authority or something of that sort?

Mr. Abbott: I understand the argument you're making, Justice Souter, and I certainly agree that is a plausible argument to make.

And in that case, certainly we wouldn't be under color of official right because it's not under color of the fee statute, which was adapted from New York law.

That is correct, and I agree with that.

Unknown Speaker: Yes, but under that argument the official can say I will vote against you unless you give me X dollars.

I mean, a legislator can just go around and say I'm going to introduce a bill condemning your house if you don't give me $100,000.

And that would not be extortion under that reading.

Mr. Abbott: Under that definition it was would not be extortion.

Unknown Speaker: And no court has ever bought that reading yet.

Mr. Abbott: No court has ever bought that.

Unknown Speaker: That's why you're not arguing it today.

Mr. Abbott: That's why I'm not arguing it, Justice Souter.

Unknown Speaker: Now, wait a minute.

It wouldn't be extortion under color of official right, but it could be the obtaining of property from another induced by actual or threatened force, violence, or fear, couldn't it?

Mr. Abbott: That's true.

And perhaps that is what Justice White--

Unknown Speaker: So you don't need the official right, except the reason you need the color of official right is the person who says you have to pay me this money because I'm entitled to it does not put anybody in any fear of anything at all.

So you need that separate section.

But you don't need it for the situation you've just responded to.

Mr. Abbott: --If you define fear as being a demand or a threat, then you're right, Justice Kennedy.

Unknown Speaker: And no court has ever done that either, has it?

They've always used that phrase to talk about the thug who goes out and threatens physical violence.

Mr. Abbott: They seem to compare the coercive section with the under color of official rights section, obviously, assuming that color of office has something to do with coercion.

But certainly I think that's not true in your normal campaign--

Unknown Speaker: It doesn't say color of office.

That's the point, it does not say color of office.

Mr. Abbott: --You're right.

Unknown Speaker: It could have said color of office.

It could have said color of authority.

It could have said color of law.

It says color of right.

I don't know how you can just so blithely ignore criminal statute.

Mr. Abbott: It is a criminal statute, and certainly the rule of lenity applies, Your Honor.

You're absolutely right.

And certainly we have a fee statute, and I have no problem with the argument that you are making.

It's just that no court to my knowledge has ever made that argument.

But it certainly--

Unknown Speaker: Counsel may have made the argument--

--This may be your last chance.

[Laughter]

Mr. Abbott: --Well, to the extent you make the fee argument, it is certainly one that I can live with, Justice Scalia.

Unknown Speaker: It certainly was laid on your plate... laid right on your plate in McCormick by Justice Scalia.

Mr. Abbott: Yes, it was, Your Honor.

Yes, it was.

Unknown Speaker: And you're still not making it.

Mr. Abbott: Well, it was not an argument that we had made in the appellate court, you can argue that under rule... you know, under the Supreme Court rules we have no right to present it now.

Just as you said in McCormick, they had no right to present it.

But that was the real problem with us.

Our brief was already through the appellate courts and we had not made that argument yet.

I understand what Justice Scalia is saying, certainly to the extent that the New York law, which everybody agrees is the law, was a fee statute.

And certainly in this particular case the petitioner was not trying to collect money under a fee statute.

So to that extent, it would not apply.

Let me just very briefly come to count two, which is only, of course, alive if in fact you should vote for me on count one.

Our argument on count two is very simple and very brief, that count one and count two are inextricably linked, that on count two the jury had to find that it was a campaign contribution and that Evans used it to pay campaign expenses or debt.

If they do not find that, then obviously he didn't report it, he was guilty.

It's our belief if the jury finds extortion on count one, the natural inference is that in fact an extortion of payment is an illegal payment, and therefore not a campaign contribution.

And in fact, I note in the McCormick argument that there were several questions from this Court along the same lines.

One of the justices asked the question, if we assume the judge told the jury a campaign contribution is legal, must we therefore not conclude when they found him guilty of extortion, that it wasn't a campaign contribution?

I think that is the natural inference.

In this case you have even more, because the judge told the jury that if it comes in the form of a campaign contribution, it still may be extortion, suggesting... in other words, he didn't say if it is a campaign contribution, but if it's accepted in exchange for requested exercise of official power, it is still extortion.

He said if it comes in the form of the campaign contribution as such, it becomes disguised as a campaign contribution, if it comes labeled as a campaign contribution, or if it comes in the form of a campaign contribution, it's still extortion.

I think the jury would naturally infer a campaign contribution was illegal if in fact they found extortion.

Finally in this case we have the additional element not present in McCormick, that it was a campaign contribution made by an undercover agent.

And the question arises, can an undercover agent make a campaign contribution?

An issue we raised in the district court as to who has the burden to show that.

And to the extent that we believe that the focus of the charge was on the undercover agent, rather than on John Evans.

The undercover agent's position, as the Government's position, certainly was that it was not a campaign contribution.

So I think if they found extortion on count one, they were likely to find it was not a campaign contribution, therefore, convict on count two.

I would like to reserve the rest of my time for rebuttal.

I see that I'm out of time.

Unknown Speaker: Thank you, Mr. Abbott.

Mr. Bryson.

Argument of William C. Bryson

Mr. Bryson: Mr. Chief Justice, and may it please the Court:

Our position in this case is that the under color of official right portion of the Hobbs Act codifies, in effect, the old common law crime of official extortion, which was taken directly from New York law, which in turn had this crime of official extortion.

Unknown Speaker: Mr. Bryson, if you're right on that, why is a maximum 20-year penalty attached to this particular offense, whereas at both the common law and in New York law, as I understand it, it is a misdemeanor with a very minor penalty?

Mr. Bryson: Well, of course, at common law, Your Honor, a misdemeanor didn't mean that... what it now means, which was that you would, in Federal law for example, be subject only to a 1-year penalty, but it rather meant that it was not a crime that was subject to the death penalty, typically, and forfeiture of property.

So a misdemeanor could be... could result in imprisonment for life.

Unknown Speaker: Well, could you be imprisoned for life under a common law rule--

Mr. Bryson: Yes.

Yes, Your Honor.

Unknown Speaker: --for the extortion?

Mr. Bryson: Yes, you could, Your Honor.

Unknown Speaker: And the registrar of deeds who asked for $20 and got... when he was only entitled to $10?

Mr. Bryson: Yes, Your Honor.

It was a misdemeanor, but again misdemeanor applied to a very large number of cases.

And the number of crimes that were subject to felony description was really rather small.

It was still larger than those crimes that are subject to the death penalty today.

Unknown Speaker: How about under New York law?

Mr. Bryson: Under New York law it was a misdemeanor.

And that did not subject you to a long period of incarceration.

But I think the answer to the question is that what the Hobbs Act did was to take a whole range of offenses right out of New York law, including some very serious violent offenses, and say we're putting a, as it was originally passed, a 10-year cap on this and you can sentence from anything from zero up to 10 years.

And the crimes, of course would range in seriousness from very serious violent crimes, perhaps resulting in death, to armed robberies, to very violent extortions, down to something that you might regard as being quite minimal such as taking $10 to which you weren't entitled, if you were a public official.

And the sentencing court would of course have the freedom to sentence from anything from probation up to 10, and as it was later changed to 20 years.

But we think it's so clear that Congress intended simply to take the entire New York law of extortion, which included not only what we now could call official extortion, but also coercive extortion, two separate crimes, and put it into Federal law defining those two crimes separately.

That is so clear that you have to look to New York law and the common law that undergirds New York law to determine what the scope of under color of official right is.

Unknown Speaker: Mr. Bryson, do you know of any New York case?

I looked in McCormick, and I could not find any... could not find a single New York case that involved this crime of extortion, that is, under color of official right, that did not involve the classic case of asking for money that you were not entitled to by your office.

Mr. Bryson: The only prosecution that we could find under the official extortion branch of the New York law was the old Whaley case.

Unknown Speaker: The Whaley case.

That's the only one I could find.

Mr. Bryson: That's right.

Now that on its facts did involve, as you pointed out in your concurring opinion in McCormick, did involve a false pretenses type of offense.

Unknown Speaker: A claim of official right.

Mr. Bryson: Well, if the claim--

Unknown Speaker: And you don't think that's suspicious, that the language says official right?

And the only case you can find under it in fact involved a claim of official right over how long a period?

It was an old law.

It went way back to--

Mr. Bryson: --It's an old case, sir.

Your Honor--

Unknown Speaker: --In all those years, the only prosecution happens just accidentally to track the language of the statute.

Mr. Bryson: --Your Honor, the... what's important, I think about the Whaley case, which was the source for the penal code, which in turn is the basis for the New York statutory code, the important thing about Whaley is not what it in fact involved.

Yes, it involved in fact a false pretenses type of extortion.

And there's no question that false pretenses type of violation by an official was included within the common law notion of official extortion.

But so was bribery and so was, for that matter, coercive activity by the official.

And the point of the Whaley case is found, I think, not so much in its facts, as in what that court says the crime is.

And what's really critical here, I think, is to look at the description of the crime, which is described in exactly the terms that Hawkins uses, and cites Hawkins... Hawkins' Pleas of the Crown... which is the taking by color of office.

It doesn't say taking by color of official right.

What the penal code did--

Unknown Speaker: Bribery was a separate offense under New York law, wasn't it?

Bribery was not reached through this.

Mr. Bryson: --Bribery could certainly be reached through this.

This was an alternate means of punishing bribery.

It was called official extortion.

Unknown Speaker: Never used.

Mr. Bryson: It was not used... well, we don't know if it was never used.

Well, all we know is that the cases did not come to the appellate courts.

There were some instances, for example of... there was at least one instance of a police disciplinary action which was premised on that statute for taking money on the side in which there was no indication that there was a false pretenses aspect of it.

But that was not a prosecution as such.

But what's important, I think, about the way the case is, to repeat, is that it adopts in haec verba the common law formulation of official extortion, color of office, and what I think the penal code and later the New York statutes themselves meant by official right is not right to the fee, but authority to perform official services.

In other words, color of official right is not my claim of right to be paid, but my claim of right to take these kinds of activities.

And the example I would give, Your Honor, is the policeman, who as in a case which is very parallel to the New York statute coming from Pennsylvania in which the policeman said, give me $50, and I'll let you open this house of prostitution.

Now, there's no question that there was no assertion of entitlement to the $50 by virtue of there being a $50 fee associated with opening houses of prostitution.

Everyone that was a party to that transaction understood that the $50 was not legitimate, not a legitimate fee.

But nonetheless, it was by virtue of his authority, his claim of right, his use of his office, or misuse of his office... that was the basis for his obtaining the $50, and that is consistent with everything in the common law, all the way back to the first statute of Westminster in 1275, when... where there was no crime of bribery at all.

The crime that was created was the crime of official extortion, and it covered a whole range of official misconduct, including classic bribery conduct, including conduct involving false representation, and including coercive conduct.

And some examples, and I think the best source for these examples is the Law Review article which we cite several times by Lindgren.

But he goes through a number of these cases.

The examples from the common law, one after another after another, are cases in which, for example, a jailer says to somebody who's being held, and says, I will let you out if you give me some money.

Everybody... there's no indications that there's... it's a representation by the jailer that he's entitled to that fee, it's an obviously corrupt transaction.

That's extortion under color of office.

Now our contention is that's exactly the crime that the New York law codified in 1881 when it passed what amounts to the penal code.

Unknown Speaker: So you say in effect that under color of office means pretty much the same thing as under color of right?

Mr. Bryson: Exactly.

We say it means the same thing.

And I think you can find the source for that in the New York law itself because if you take the New York statute that was enacted after the penal code, this was the statute of 1881, and the provisions of this statute have continued right on through the period in which the Hobbs Act was enacted, and right up until there was a large revamping of New York criminal law in 1965.

But throughout the period Congress was looking at both the Antiracketeering Act and the Hobbs Act.

Unknown Speaker: Mr. Bryson, do your... I'm sorry.

Do your examples take you the further step to make it clear that in common law it would have been official extortion if the official had not made the first statement, give me the $50 and I'll let you out, but instead had been the recipient of the statement saying, here's $50, it's yours if you let me out.

Would that have been comprehended in common law to?

Mr. Bryson: We think absolutely and I--

Unknown Speaker: Do you have examples like the examples you just gave to us?

Mr. Bryson: --I can't give you a case which says specifically that only in cases in which the official was not the initiator of the transaction he is nonetheless guilty.

But it's quite clear that no common law case turned on who was the initiator of the transaction.

And in fact, the treatises that discuss the common law all talk in terms of obtaining property, not in terms of soliciting it or going out and seeking property.

Unknown Speaker: There's this argument to be made, isn't there, that at least in the nonofficial extortion by force, threat, and so on, the person who's going to end up with the money is making some kind of affirmative act to, in other words, making the threat or applying the force, twisting the arm, or whatnot.

And that at least would be our analogy with the official who initiates the transaction by saying, I will do thus and so if you give me the money.

Whereas that analogy doesn't hold if he just simply sits there and in response to the offer takes the money.

Mr. Bryson: Well, actually I think the analogy... first of all I think that the way the common law courts looked at this problem was to say that someone's office itself has a very powerful potential coercive effect, and the officer doesn't have to underscore the matter by going out and soliciting.

But I think the analogy further breaks down because there are coercive extortion cases in which the defendant is not the person who puts someone at fear, the defendant, let's say a mob boss, is not the person who either initiates the fear or takes any sort of steps to put the person in fear.

He merely exploits the fear.

He knows that that person fears that if he does not pay money to be allowed to run his business in the neighborhood, for example, that he will... something will happen to him.

Unknown Speaker: Yes, but that's because he's broken somebody else's arm.

Mr. Bryson: Well, not necessarily.

Unknown Speaker: At some point, he's initiated something.

Mr. Bryson: Well, that is typically true, of course, in official extortion, too.

There's a reason that people come to officials thinking that they may benefit from dealing with this official.

But setting that aside, it isn't necessary to show that he has threatened somebody in the past, merely that he knows that he is feared and that he takes money exploiting that fear.

But in any event, it's quite clear that the common law did not distinguish between payments that were excepted without solicitation, as in classic bribery cases, and payments in which one went out and solicited a bribe.

Unknown Speaker: So is there an instruction required that the payor must know that if he doesn't pay that there will be adverse action taken against him?

Mr. Bryson: Well, it doesn't matter.

You mean in the course of extortion cases such as I--

Unknown Speaker: Yes.

Mr. Bryson: --No, no.

That's not necessary.

All that's necessary is that the payee believe that the payor is paying either in order to induce the payor to take action for... in his favor, out of fear that adverse action will be taken.

In the--

Unknown Speaker: But in this case was the jury instructed that there had to be some anticipation or fear on the grounds of the payor that adverse action would be taken?

Mr. Bryson: --No, no, it was not.

And that isn't necessary, we contend, under official extortion.

In other words, extortion--

Unknown Speaker: Is that because we presume that that fear is present whenever you're dealing with an official?

Mr. Bryson: --No.

It is because in the common law, and again in the New York law, there didn't have to be a sense of compulsion and a sense of fear in order to establish official extortion, even if you were seeking only benefit.

In other words, even if you had nothing, no concern at all that you would be dealt with unfairly unless you made the payment, but were seeking only to get an unfair advantage over all your competitors, let's say in bidding, you would be guilty of... or the official who takes the money would be guilty of official extortion.

Unknown Speaker: How do you know that under New York... and I say the only case I know of involving this under New York law, is that one case that you mentioned.

And what I also know about New York law is that bribery was a separate crime, and that if you proved that the payment was voluntary, you could not be convicted of extortion.

That was the great divide between bribery and extortion.

If it was a voluntary payment it was bribery.

Mr. Bryson: Your Honor, two points.

First of all, with respect to the latter point, there is... that the cases to which you are pointing in New York law regarding this distinction between bribery and extortion related to coercive extortion.

That is to say, those cases involved the leg-breaker type extortion.

And there, sensibly enough, the court said, you can't be convicted of bribery if somebody has threatened to break your leg unless you pay.

Those cases--

Unknown Speaker: But would it not make sense to put in with those cases official extortion in the very narrow sense of extortion by an official who says you've got to make the payment.

I won't break your arm, but I'll put you in jail.

It's a matter of right.

I have a right to this payment as a Government official.

It makes sense to put that in with the arm-breaker.

Mr. Bryson: --Let me go to my second point, which is to read the provision of the 1881 New York code, which again has come all the way through the period of the Hobbs Act to 1965, that relates to official extortion, that goes beyond just the definitional section that found its way into the Hobbs Act.

There were three different pertinent sections of New York law here.

First there was the definitional section, which is almost identical to the section that appears as the definition of extortion in the Hobbs Act.

Then there was another section which described extortion by fear, that is to say coercive extortion.

Then there was a section that separately set out the offense of official extortion.

Let me read it to you and see if this doesn't resolve what exactly it was that this offense was directed at, because I think it's quite clear.

Unknown Speaker: Is this in your brief?

Mr. Bryson: Yes.

Unknown Speaker: Where?

Mr. Bryson: This is... this statute is not set out, but it is described at page... let's see, at page 25 of our brief, in the middle.

And I think... yes, that's where it appears.

But let me read it, that section for you.

It says--

Unknown Speaker: On page 55?

Mr. Bryson: --25.

I'm sorry.

25 of our brief.

Unknown Speaker: Section 855.

Mr. Bryson: It's a... yeah, section 855, which was originally section 557 of the 1881 code.

In 1909 it was changed to 855.

Extortion by public officers: a public officer who asks or receives or agrees to receive a fee or other compensation for his official service commits extortion.

That includes someone not only who asks, but also who receives.

Those are alternate grounds for liability.

Compensation--

Unknown Speaker: Could you read that once more?

Mr. Bryson: --Certainly.

A public officer who asks or receives or agrees to receive a fee or other compensation for his official service.

There's no suggestion here that there is a claim of right to that money.

This is simply an I'm taking it for official services, and official services as understood throughout the common law was--

Unknown Speaker: So I take it if some constituent just sends in $10,000 to a Congressman or a Senator saying, I know you're performing great services for the country, and I want to supplement your compensation.

And the fellow takes it.

Mr. Bryson: --I think that would not be, Your Honor, because that would not be a payment... the common law is very clear, the payment had to be related to a specific service.

If, however, the constituent sent the money and had said I want to pay you for having... or for voting on bill X, or even for having voted on bill X--

Unknown Speaker: I know you're a great supporter of the farmer, and I'm a farmer.

Mr. Bryson: --Well, the closer you get to saying thank... you know, please vote for the farm bill, here's $10,000.

Setting aside the campaign contribution complexity, but--

Unknown Speaker: From the language you read, it sounds as if the registrar of deeds who asks for $10 to record a deed and the fee is $10 is guilty of extortion.

Mr. Bryson: --Well, no, Your Honor, I think this... when they refer to fee or other compensation--

Unknown Speaker: Well, the registrar asks for fees.

Mr. Bryson: --I'm sorry, but the rest of the statute goes on for a while and says in excess of the amount permitted or where it's not permitted.

I--

Unknown Speaker: Thank you.

[Laughter]

Mr. Bryson: --That is... well, I think it's not pertinent to our inquiry here because there's no question that we're not talking about--

Unknown Speaker: Why isn't it pertinent, Mr. Bryson?

Our statute is quite different.

It refers only to obtaining property from another with his consent under color of official right.

Mr. Bryson: --That's right.

Unknown Speaker: It doesn't have a limiting factor.

It doesn't say in excess of.

So why isn't the $10 fee extortion?

Mr. Bryson: Well, because this... our statute picks up on the New York definition.

And in order to determine what New York law is, we would have to go down to this section--

Unknown Speaker: I'm not talking about that.

If we refer to the Hobbs Act--

Mr. Bryson: --Yes.

Unknown Speaker: --The term extortion means the obtaining of property from another with his consent under color of official right.

Mr. Bryson: Right.

That's right.

Now, the way we suggest that this has to be read is that it has to be read as incorporating New York law.

But we have to determine what does obtaining property under color of official right... and what it means is with respect to official extortion, you have to look to section 557 of the New York law, which talked in terms as the common law had of taking compensation which is beyond that which is permitted to you.

There's no question that you can take the... you can cash your check each week without violating the Hobbs Act.

And that New York law makes clear, as does Federal law, there's no question--

Unknown Speaker: Well, I understand that, but the statute doesn't say that.

Mr. Bryson: --Well, the statute uses a term of art, and our position is that term of art is not... it has to be read in light of its origins, which were in New York law and the common law.

And its origins make quite clear that we are talking about compensation in excess of that which you are permitted.

Unknown Speaker: But you will admit that on its face it has no limiting principle?

Mr. Bryson: Well, I think, yes, I think that the words under color of official right on their face do not answer the question of how broad the statute is.

That's true of many common law terms that show up in criminal statutes.

You can have... the word mayhem in and of itself does not strike one as having a particular meaning, but you look to the common law for the meaning of a term like that when it shows up in a statute.

Unknown Speaker: Mr. Bryson, the step in the argument that I guess I'm unclear on is taking the definition as you just read it from the New York statute, how does that become subsumed under the term of art that is being used in the Hobbs Act?

I mean, the New York statute didn't use the same term that the Hobbs Act used.

Mr. Bryson: No.

The New York statute uses the term in its definitional section of extortion under color of official right.

That is clear that that points to official--

Unknown Speaker: Okay, but it did use that term?

Mr. Bryson: --Oh, absolutely.

Unknown Speaker: Okay.

Mr. Bryson: The language from the definitional section was taken word for word and put right into the 1934 act, which was the predecessor of the Hobbs Act, and the Hobbs Act changed about two words that aren't pertinent here.

Unknown Speaker: Mr. Bryson, I'd like to ask you two questions.

One, I think you may have misspoken, and I want to be sure, or I misunderstood you.

I think you said that if a constituent sends in a check for $10,000 and says I'm giving you this money because last year you voted for bill X, may he keep that check?

Mr. Bryson: He may not.

Unknown Speaker: Even if it's for past services?

Mr. Bryson: For past services.

Unknown Speaker: I mean, no prior communication between them at all and no quid pro quo there?

Mr. Bryson: Well, that would involve the gratuity as opposed to the taking of a bribe.

But we think that the Hobbs Act does extend to certain kinds of gratuities when the performance and the payment are linked as closely as they would be in your hypothetical.

And let me give you a case that exemplifies why that is so.

The Cuda case from the Seventh Circuit involved a case in which a, I suppose it was a builder in Chicago sought a zoning... permission to have a zoning variance from an alderman.

The alderman gave his permission, and then the builder went back later and said how much do I owe you.

And the alderman said $1,500.

Now there was no prior understanding or arrangement or whatnot, but that was deemed to be extortion under color of official right because it was a compensation for a specific official act.

That, we think, would apply.

Unknown Speaker: Yes, but the evidence there would suggest that the parties understood that compensation would be paid sooner or later.

I'm not sure that's similar.

Mr. Bryson: I'm sorry.

Unknown Speaker: I say I'm not sure that's exactly like my hypothetical.

Mr. Bryson: Well, it is our position--

Unknown Speaker: But in any event, that's not raised by this case.

Mr. Bryson: --That's right.

That isn't this case, but it would be our position that at least with respect to a specific payment for a specific act, it would include certain kinds of gratuities.

Unknown Speaker: May I ask one other question, just as a matter of information?

If we disagreed with your reading of the extortion statute, is there a provision of the criminal code that covers the knowing acceptance of money that the donor expects to be used to pay for a legislative vote or something like that?

Mr. Bryson: I would think you would have to go to the Travel Act, which is the statute that governs interstate travel or transportation, the use of interstate facilities to effect a violation of State bribery or extortion laws.

Then you would have to prove, of course, there was some--

Unknown Speaker: But there's no independent, just plain garden variety, like a bribe, that no separate crime other than extortion... Federal crime... for the receipt of a bribe?

Mr. Bryson: --Well, except with respect to official... Federal officials, of course.

Federal officials would be covered, but with respect to State officials and local officials--

Unknown Speaker: Oh, I see.

Mr. Bryson: --they would not be covered.

I'm sorry, section 201 covers Federal officials.

The Travel Act would cover, depending on what the particular State law was, would cover bribery and extortion.

Unknown Speaker: And also the donor, the donor is not picked up under this statute either.

I mean, you just get the person who receives it for the extortion, unlike the bribery statutes which typically get both giver and receiver.

Mr. Bryson: That's right, although there's a question, the question would be open as to whether you can prosecute the donor under certain circumstances for aiding and abetting.

But that is a separate question on which there has been some case law.

But it has not been resolved.

Unknown Speaker: Were donors or payers ever prosecuted under the New York statute?

Mr. Bryson: Well, since... well, there haven't been, to my knowledge, very many prosecutions under that statute.

I am not aware of donors ever being prosecuted for extortion under either the New York statute or even any of the other State statutes where prosecutions were more common, as in New Jersey or Pennsylvania, where the prosecutions were more common.

You found in those cases, as I mentioned before, standard bribery-type conduct, but you always found only the recipient, the official being prosecuted.

And that is consistent with the traditional common law approach, which is to say this is a crime committed by the official.

It's really a violation against public justice rather than any form of property crime or any form of crime as to which the payor would be separately liable.

I think, if I may very briefly address the question of the language of the statute, not the official right, but the inducement feature, if you look at the 1934 act, it becomes even clearer, I think, than it is in the 1946 act, that induced, the induced clause, applies to the coercive instruction portion of the statute, and not to the under color of official right.

The 1934 statute says, whoever obtains with his consent property, comma, induced by fear or force, comma, or under color of official right.

In other words, it makes the... there's less language in the coercive induced section, and therefore it's clearer that the induced relates to force or fear and not to color of official right.

And that is consistent with the common law concept of obtaining property under color of official right.

You never find in the treatises of the time, in the cases, you never find the language induced under color of official right.

You find obtains or takes by color of office, or under color of office, or again--

Unknown Speaker: But is it not true that most of the courts of appeals that have addressed this have assumed that the induced... that it was inducement to accept the money in exchange for the commitment?

Mr. Bryson: --That's correct.

They have assumed that.

And I think the assumption was incorrect because I think they found it unnecessary to... nothing turned on it because they say well, the office does the inducing, therefore, it... no additional inducement is required.

If there are no further questions, thank you.

Chief Justice Rehnquist: Thank you, Mr. Bryson.

Mr. Abbott, your time had expired, so the case is submitted.

Unknown Speaker: The Honorable Court is now adjourned until tomorrow at ten o'clock.

Attribution:

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Featured:

Mccormick v. United States - Oral Argument

Fri, 09 Jan 2009 14:49:44 +0000

Case:

Mccormick v. United States

Media File:

89-1918_19910108-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Rudolph L. Di Trapano

Chief Justice Rehnquist: We'll hear argument next in No. 89-1918, Robert L. McCormick v. United States.

Mr. di Trapano, you may proceed.

Mr. Trapano: Mr. Chief Justice, and may it please the Court:

The essential issue on this appeal is under what circumstances and to what extent can a noncoercive solicitation of campaign contributions to defray an election expense be in violation of the color of official right provision of the Hobbs Act, and also to what extent and under what circumstances would income declared or the failure to declare a campaign contribution as income violate the tax fraud statutes.

The petitioner in this case was a legislator in the House of Delegates in West Virginia with a history of having sponsored and having worked very hard for a hospital in Southern West Virginia that had to be staffed by foreign-trained doctors, in this case Filipino doctors.

For a period of years the activities of this legislator was limited to extending a temporary license.

Without that extension, without legislative enactment, this hospital would not be able to have operated, and those people in need of health care in that region of Appalachia would have had to travel some 2-1/2 hours to Charleston.

This was a very crucial need in that area, and this... and the petitioner involved was heavily involved with that objective.

Unknown Speaker: Where exactly was his district?

Mr. Trapano: The district is the... it's the southern district of West Virginia; Logan County is the county that he is elected from, Your Honor.

Unknown Speaker: Logan County.

Mr. Trapano: A couple of days before the June 1 payment, the contribution was made, there was a phone call... and this is the only evidence, the only evidence that links the petitioner with a solicitation.

A phone call made by the lobbyist where the conversation had to do with the campaign.

The petitioner said I have an expensive campaign, I haven't heard from the doctors, and what are you going to do about it.

The lobbyist who made the phone call and the Government's chief witness, Vandergrift, goes to see the head of the foreign-trained doctors organization, a Dr. Manuel, and repeated the conversation, and said we ought to help the petitioner in his campaign, Mr. McCormick in his campaign.

The... Dr. Manuel... they go to the bank, and although the petitioner did not ask for cash, and under West Virginia law cash contributions over $50 is in violation of the law, punishable by three times the fine, but not an incarcerative offense.

They go to the bank, writes a check for $2,000.

Part of it goes to the lobbyist for expenses, and $900, in $100 bills, is put in an envelope and delivered to the petitioner.

Now, the court... rather the United States Attorney's Office indicted... had Mr. McCormick indicted under color of official right.

It is the... it is our thesis that color of official right, a plain reading, the plain meaning of color of official right is a pretended assertion of right, that the Congress of 1946 never contemplated that color of official right would be used to prosecute election laws and enforce election laws of the state.

Color of official right and the debate in Congress in 1943... the law was enacted in 1946 but Congressman Hobbs from Alabama, when questioned about color of official right and what it meant, the debate is very limited, and he said it means a pretense assertion of right.

A public official who doesn't have the right who is asserting the right, more rights than he does have, in extracting money.

Now, for 25 years the Justice Department has never prosecuted for campaign violations until the 1970's.

That particular passage went unobserved and was not used as a vehicle to prosecute defendants for violating State election laws.

In the Government's brief the Government--

Unknown Speaker: Excuse me, Mr. di Trapano.

As I understand it, the Government's theory for not using it, however, is quite different from the one that you have said.

Mr. Trapano: --Yes, Your Honor.

The Government--

Unknown Speaker: Their theory was that there had to be some coercion or threat of force.

That was what they thought.

That it was not an independent clause, color of official right, that it just went with the other ones.

Right?

Mr. Trapano: --No, Your Honor.

The Government's theory in the case, as I understand it, is that they contended that this payment was not a political contribution at all.

Unknown Speaker: No, no, no.

I'm not talking about this case.

I'm talking about those years--

Mr. Trapano: In those years, yes.

Unknown Speaker: --in which, as you have just described, the Government never used this provision--

Mr. Trapano: Never used it, right.

Unknown Speaker: --for things of this sort, political corruption.

Their reason for not using it was not, was not the legislative history that you have just described.

Their reason for not using it was not, as I understand it, that they thought you had... in order to come within it you had to assert a right to it that you really didn't possess.

Mr. Trapano: That's... that appears to be the Government's reasoning, but it's not... it's not justified by the, by the language of the act.

Unknown Speaker: Well, my understanding is that that was not the Government's reason.

That the Government's reason for not using it was that they thought it was not an independent clause at all, but that that whole clause,

"or under color of official right. "

was attached to the other clauses, and you had to show the other ones in addition to that one.

Mr. Trapano: That's correct.

Unknown Speaker: Okay.

Mr. Trapano: That was used... for the first time in the 1970's used, and disjunctive in the Kenny case.

That is correct, Your Honor.

In any event, the Government chose to call this transaction a personal payoff.

Now, the contribution was admittedly made in contravention to State law, because the state law in West Virginia makes cash contributions in excess of $50 illegal, and it is punishable, as I have said, by three times the fine.

It also went unreported.

Now, we feel that the... that the color--

Unknown Speaker: It went unreported because the petitioner didn't report it, I take it?

Mr. Trapano: --Yes, Your Honor.

Yes, the petitioner didn't report it.

Unknown Speaker: Not only didn't report it for State law purposes as campaign contribution, but didn't report it as Federal income.

Mr. Trapano: Yes.

But the petitioner... but there is no evidence that the petitioner had not used this to reimburse himself for advance that he had made to his campaign.

And the evidence, and the Government concedes that that was the campaign--

Unknown Speaker: Well, I suppose those facts are evidence about... that go to whether it was a campaign contribution or not.

If it isn't treated by the candidate in compliance with the laws for receiving campaign contributions, I suppose the jury can consider that fact.

Mr. Trapano: --Well, the jury apparently did consider that, but we, we strongly urged the court not to instruct the jury because under the color of official right and under the Hobbs Act the means... the definition of a political contribution, the purpose of it is to influence the nomination, the election, or defeat of a candidate.

The form of the contribution has never been used either in State or Federal definition as part of the definition.

This was in fact a campaign contribution.

Every conversation that had to do with the transaction, it was described as helping Bob in the election, helping him in his campaign.

There was nothing in any of the conversations that had to do that this was some kind of a personal payoff.

Now, the, the petitioner... the court in its--

Unknown Speaker: How do you explain the failure to report it as a campaign contribution and the failure to report it as income?

Mr. Trapano: --How do I--

Unknown Speaker: Explain it.

Mr. Trapano: --Well, the campaign... money received to defray expenses is not income.

And if it's not income, it shouldn't be reported.

The tax regulations recognize that, that you can have fund raisers to pay you back, you can advance money to a campaign and you can have fund raisers, and that is not income.

And there was no obligation for him to report this as income.

With respect to the... to the application of the Hobbs Act, the color of official right--

Unknown Speaker: Mr. di Trapano, I think Justice O'Connor also asked how do you explain the failure to report it under West Virginia law?

Mr. Trapano: --I don't... I don't have an explanation why he didn't report it, other than he simply didn't comply with the West Virginia reporting laws.

There may be... there may have been other contributions not reported.

But our strenuous objection to the charge of the, of the, to the jury... the court in charge of the jury in connection with these contributions said that it was... that if the contribution, and specifically the contribution from the doctors to the petitioner, if it was not voluntarily made.

And voluntary was described as not having an expectation of benefit, whatever benediction the defendant received as a result of that instruction was stripped away by the court's conditioning every voluntary contribution unless it was made... it was not voluntary if there was some expectation of benefit.

In this case, obviously, the doctors did have an expectation of benefit, as virtually every political contribution carries.

In the instructions that the court gave the jury after our... we strenuously objected to these instructions.

But the jury in this case really had no options, because the, the court had labeled this... the court said that if, that a political contribution, even if not reported and even if it was in cash, in violation of state law, can still be a political contribution if voluntarily made.

But then again destroyed the effect of that by saying that it's not a voluntary contribution if there is some expectation of benefit.

Going back to the Hobbs Act and the Enmons case, a request for contribution is a First Amendment prerogative.

Political contributions are necessary, and the donors, the contributors, as well as the candidate, has the right to ask for contributions.

The court in its... the color of official right provision as interpreted, and the Hobbs Act as interpreted of this Court, if the... if it had... if there is a legitimate entitlement to the contribution... there was in this case... then the means, whether it was not reported, whether it was in contradiction of State law, is not a dispositive factor as to whether or not there is guilt in the Hobbs Act.

In the Enmons case, as the Court will remember, there there was a strike, a collective bargaining.

The end, the legitimate end, was a collective bargaining benefit of higher wages.

The means used were violating State laws by violence, by using rifles, by blowing up substations, and the Court held that that was not a violation... the means used, and the use of the word "wrongful" as when it precedes "wrongful use"--

Unknown Speaker: Mr. di Trapano--

Mr. Trapano: --Yes, Your Honor.

Unknown Speaker: --Do you think that it would be a violation of the Hobbs Act for a legislator to say if you will give me a so-called... a campaign contribution, then I promise I will try to help you get the legislation you want?

Mr. Trapano: If the color of official right could be expanded to reach into campaign contributions, I'd say yes.

Unknown Speaker: Does it cover that?

Does it cover that?

Mr. Trapano: I don't think the intent covers that, but I do--

Unknown Speaker: Does the language cover it?

Mr. Trapano: --No, Your Honor.

Unknown Speaker: Color of right.

Mr. Trapano: Color of official right has a specific meaning.

Unknown Speaker: In exchange for a promise.

Mr. Trapano: Color of official right has a... no, Your Honor, I don't think it covers it.

I don't think--

Unknown Speaker: Some courts have so held.

Mr. Trapano: --Some courts have held that there has to be a quid pro quo in order to convict--

Unknown Speaker: And a promise could be a quid pro quo.

Mr. Trapano: --A promise, yes, Your Honor.

And I--

Unknown Speaker: Which could be express or implied.

Mr. Trapano: --I think there has to be an identifiable quid pro quo.

There should be a more precise standard in this situation, because it is--

Unknown Speaker: But it could be a promise?

Mr. Trapano: --There should be... there should be a promise made on behalf--

Unknown Speaker: It could be a promise, is that right?

Mr. Trapano: --Yes, Your Honor.

It should contemplate a promise, it should contemplate a consideration and a promise.

Unknown Speaker: Um-hum.

But it should... it should be something very specific, because there is a vast difference in a nonelective public official, who has no business getting money in the first instance.

There is no, there is no conceivable reason why a nonelective official should be asking for money.

And you can understand the decisions in that context.

But where you have a candidate for public office whose very... whose very life depends upon raising campaign contributions, then the laws, the standards should be different.

We were prejudiced by the instructions.

The trial court said if the payment focused on the office.

Now, that has no business in this kind of a case, because every contribution focuses on the office.

And the jury was instructed--

--May I just ask you this question?

Is it essential to your position that we conclude that this was a campaign contribution?

The reason I ask the question is, as I read the instructions, the judge told the jury that there was nothing illegal about making a campaign contribution.

And do we not have to conclude from the verdict of guilty that the jury therefore determined that it was not a campaign contribution?

Mr. Trapano: Your Honor, to answer your question, the court did instruct the jury in that connection.

However, it... the court kept repeating that the voluntary contribution had to be made without some expectation of benefit.

And that is wrong for two reasons.

Number one is that every contribution has some expectation of benefit, and that was the definition that was spontaneously suggested to the court by the United States attorney.

There is no basis for that as defining a voluntary contribution.

So it took it outside the ambit of a political contribution once the court said unless it was voluntarily made, and voluntary means that the donor cannot have an expectation of benefit.

And, Your Honor, that destroyed any... that took it outside the purview of a campaign contribution.

Unknown Speaker: I'm not sure I completely understand your answer.

It seemed to me the judge did say it's not illegal in and of itself to solicit or accept legitimate campaign contributions, and so forth.

Mr. Trapano: He did.

He did, Your Honor.

Unknown Speaker: And the mere receipt of such political contribution is not illegal.

Now, they found he acted illegally, so did... does it not necessarily follow they found he did not receive such a campaign contribution?

Mr. Trapano: No.

If the court had... if the court had defined... if the court had not conditioned to define the voluntary, I agree with you, Your Honor.

I agree with you.

But when the court said you must also find that it is voluntarily made, and when I say voluntary I mean that the donor had no expectation of benefit.

Again, that, Your Honor, is in conflict with the Enmons case, or rather with the 807 case, I mean, where the state of mind of the donor, the payer, should not be the guiding principle in determining the legal liability of the recipient.

Unknown Speaker: You're referring... I'm sorry.

You're referring to page 34 of the Joint Appendix, I take it, in which the instruction says in order to find Mr. McCormick guilty you must be convinced beyond a reasonable doubt that the payment alleged was made with the expectation that such payment would influence Mr. McCormick's official conduct and with knowledge on his part that it was made, that the payment was made, with that expectation?

Mr. Trapano: Yes, Your Honor.

Unknown Speaker: And you say that that is quite different from a quid pro quo?

Mr. Trapano: Yes, Your Honor.

Yes, Your Honor.

I think--

Unknown Speaker: So you're saying that the quid pro quo instruction is necessary in effect to distinguish a campaign contribution from something which is not?

I mean, that's what it boils down to?

Mr. Trapano: --Yes, Your Honor.

Unknown Speaker: All right.

Now, you answered... if I recall, a moment ago you answered one of Justice O'Connor's questions by saying that a promise merely to use best efforts to help in the passage of legislation would not be a sufficient quid pro quo.

Is that correct?

Was that your answer?

Mr. Trapano: I would say that if the candidate, before he received a contribution, and had no history one way or the other, would say to a contributor, to a contributor, that if I get a contribution I'll do my best, I think that approaches a quid pro quo.

Unknown Speaker: So that would be enough?

Mr. Trapano: I think it approaches it, Your Honor.

I, I still think it should be, when you are dealing with the First Amendment, when you are dealing with campaign contributions and with the Buckley-Valeo, the... where it says that it will be rigorously... the standards will be rigorously reviewed, I believe that there should be more, or it should be an identifiable quid pro quo in the... in the election law.

Unknown Speaker: Well, the quid pro quo, I suppose, can either be a promise to use best efforts, or I suppose the next step would be a promise to deliver the legislation.

And I take it you're not going so far as to say that there has somehow got to be a promise to deliver the finished product before a legislator could provide a quid pro quo for purposes of this statute?

Mr. Trapano: If the candidate said to the contributor, I will not use my best efforts if I don't get your money, I will use my best efforts if I do, that's a quid pro quo.

Unknown Speaker: Do you think it was finable on the evidence in this case that that's what your client was indicating?

Mr. Trapano: There is not one word to suggest that.

Unknown Speaker: Well, does there have to be one word?

Mr. Trapano: Yes, there does have to be one.

There has to be--

Unknown Speaker: In other words, it's not so much the definiteness now of the quid pro quo, as the definiteness of the statement expressing the promise or the demand for a quid pro... or the promise of a quid pro quo for the demand that you are requiring?

Mr. Trapano: --Your Honor--

Unknown Speaker: He's just got to be more explicit about it, is what you're saying.

Is that fair to say?

Mr. Trapano: --I'm saying he had to be... yes, Your Honor.

I think you have to be... you know, you could cite 100 examples.

The NRA doesn't contribute to people who don't have a history of voting against gun laws, against gun regulations.

Labor, labor PAC committees would never contribute to somebody who votes against minimum wage.

I mean, it's, it's--

Unknown Speaker: No, I don't, I don't need... I don't think you need to argue that to me.

I just want to make sure that I am understanding exactly what you're saying.

And I think what you're saying is that if there had been an explicit solicitation by which your client said either I am going to use no more efforts to help these doctors if they don't contribute, or conversely, I will continue to use my best efforts if they do contribute, that would have been enough to provide a quid pro quo.

Is that correct?

Mr. Trapano: --Yes, Your Honor.

I would think so.

And in the--

Unknown Speaker: Well, don't you think that that understanding could be implicit rather than express?

Isn't that possible?

Mr. Trapano: --Your Honor, I do think that is possible.

Unknown Speaker: And if not, why not?

Mr. Trapano: Your Honor, I think that it's possible for somebody serving in the legislature, State or in Congress to... and implicit in a campaign contribution is that he's got to continue on a course of conduct.

I do think it's implicit.

I think that's the nature in this country of campaign contributions given to candidates who have empathy with--

Unknown Speaker: Well, if the promise is implicit, as Justice Souter has described it, then it would be a violation of the Hobbs Act.

It's a quid pro quo.

Mr. Trapano: --Well, Your Honor, I don't... I think it has to be... there has to be identifiable quid pro quo.

Unknown Speaker: Your argument is it has to be express.

Mr. Trapano: Yes, Your Honor.

Unknown Speaker: But there is nothing in the statute that says that.

Mr. Trapano: There is nothing in the statute that says they have any business in large to cover campaign contributions, and Congress never intended this act to get involved in regulating State elections.

There is nothing in this debate that suggests... suggests that color of official right has anything to do with regulating State elections.

Unknown Speaker: Counsel, suppose a Congressman says to some people, I'm not running for the next... I'm not running for office next time.

I know you want this bill passed.

I will use my best efforts to get the bill passed if you pay me $10,000.

And there is... it doesn't even, it doesn't purport to be a campaign contribution.

Now, I suppose you would say that that is subject to the Hobbs Act.

Mr. Trapano: I'd say that's... that could be subject... the color... under color of official right.

Unknown Speaker: That's just a payoff.

Mr. Trapano: That's a payoff.

Unknown Speaker: Well, suppose that that same Congressman's... suppose the facts are what they exactly are in this case, and it did not purport to be a campaign contribution.

There was no... there's no express anything.

The facts are these facts except the legislator doesn't even claim that it's a campaign contribution.

Mr. Trapano: Well, the legislator did then report it.

The legislator'll never--

Unknown Speaker: All right, but doesn't it... this pay... suppose in this case the payoff never purported to be, and was never claimed to be a campaign contribution, but there still was no express quid pro quo agreement?

The facts are just like they are in this case, except that it doesn't purport to be a campaign contribution.

Mr. Trapano: --Well, Your Honor, in this case it's not, because the only conversation in evidence is that--

Unknown Speaker: Well, but I... my question is on those facts would the legislator be subject to prosecution under the Hobbs Act?

Mr. Trapano: --I don't think so.

I don't think so under the Hobbs Act, Your Honor.

Unknown Speaker: Even though there is no claim that it's even a... campaign contribution?

Mr. Trapano: Yes.

There's additional reason in the Hobbs Act, Your Honor, because in the Hobbs Act the means, the means of attaining a contribution has been condemned in the Enmons opinion.

That's not a relevant consideration.

Unknown Speaker: Well, if it isn't, it's either a campaign contribution or it's a payoff.

I had thought you said the only way you could win in this case is if it's a campaign contribution?

Mr. Trapano: I'd... I... I misspoke if I said that.

I'm not suggesting... if it's a quid pro quo reason, it violates the law.

If the Court is expanding--

Unknown Speaker: What business has a legislator got taking this kind of money except as a campaign contribution?

Mr. Trapano: --He has none.

To defray expenses, that's what this was taken for, to defray expenses that he had advanced.

Unknown Speaker: Mr. di Trapano, let me take you back, if I may, to the jury charge that you were speaking about and which questions were asked on page 34 of the Joint Appendix, where the language used in that first paragraph is that the payment had to be made on behalf of the doctors with the expectation that such payment would influence Mr. McCormick's official conduct.

Now, that is the charge that you think was mistaken in stating the law?

Mr. Trapano: I think that charge is mistaken, yes, Your Honor.

Unknown Speaker: You said earlier that there was a charge that it had to be... the jury would have to find it was given in expectation of benefit, and is there another charge to that effect, or were you just paraphrasing this charge?

Mr. Trapano: No, Your Honor.

The court... let me read this.

The court actually said... the court said, and the court recognized our defense that the fact that the contribution was made in violation of State law could still be a political contribution made in cash.

But the court said that a voluntary political contribution, though it may have been made in violation of local law, it was a defense in this case, it was permissible.

However, the court went on to say voluntary is that which is freely given without expectation of benefit.

Unknown Speaker: What page of the Joint Appendix is that on?

Mr. Trapano: That's on 30, page 30.

Unknown Speaker: Thank you.

Mr. Trapano: And page... and again the court repeated on page 31, when it reread.

The jury was confused, came back, and the court said again, the mere voluntary payment of money, without expectation of benefit, does not constitute extortion.

It had to be without expectation of benefit, and there is no way we could argue that these four or five doctors didn't have some expectation of benefit, because they wanted their license.

Unknown Speaker: Counsel, do you read the Solicitor General as agreeing with you that if you are going to rely on a quid pro quo it has to be an explicit agreement?

Mr. Trapano: Yes, Your Honor.

Unknown Speaker: And shouldn't... and I take it you read the Solicitor General as not resting on the notion that there was a quid pro quo for a campaign contribution?

Mr. Trapano: Yes, Your Honor.

I read the Solicitor General as mischaracterizing the transaction as being a personal payoff without any evidence in the record to support that.

Unknown Speaker: Okay.

Mr. Trapano: I would like to reserve my several minutes I have.

Unknown Speaker: Very well, Mr. di Trapano.

Mr. Wright, we'll hear from you.

Argument of Christopher J. Wright

Mr. Wright: Thank you, Mr. Chief Justice, and may it please the Court:

The issue in this case, in our view, is whether petitioner received a personal payoff or a campaign contribution, and the court of appeals held, quote,

"The evidence supports the conclusion that the money was never intended by any of the parties to be a campaign contribution. "

I'd like to briefly review the facts to show that the court of appeals and the jury were both correct in that finding.

Unknown Speaker: Before you do, the evidence... one can concede that the evidence supports that conclusion without conceding that the jury was required to arrive at that conclusion.

What in the instructions requires the jury to find that this was not a campaign contribution, in the sense... in the proper sense of a campaign contribution?

Mr. Wright: I would be happy to review the instructions with you at this point.

Unknown Speaker: What I'm concerned about is specifically the sections of the instruction that we were talking about.

If something is not a campaign contribution if it is given with the expectation of deriving some benefit from it, then indeed nothing is a... or very little is a campaign contribution.

Mr. Wright: Well, first let me say that the portion of the instructions that Mr. di Trapano was referring to don't really have to do with campaign contributions.

But I'd like to take a minute and really go through this, if you're troubled by it.

I think that Justice Stevens and others suggested that the instructions are really quite clear, that the jury could not convict if they concluded that this was a campaign contribution, and I think that that is correct.

I'll focus on the instructions that were given, the supplemental instructions, since--

Unknown Speaker: What page of the Joint Appendix will you be dealing with?

Mr. Wright: --They start on page 27 and they run until the end.

I'd like to first note that if you start on page 29 the court sets out the basic elements of a Hobbs Act violation, and on page 29 and 30 it talks about inducement.

On page 30 through 32 it speaks about the meaning of color of official right.

On page 33 and going over to the top of 34 the court is still speaking of the Hobbs Act and it covers campaign contributions.

It returns to campaign contributions on page 37 as part of the tax fraud defense.

Now, looking at pages 33 to 34 I'd like to note that there are 1, 2, 3, 4... 5 paragraphs.

Each one of those paragraphs was delivered verbatim from the instructions the petitioner requested.

Of course there was no objection.

Nothing was deleted from their requested instructions.

Excuse me.

It says that many public officials in this country receive campaign contributions--

Unknown Speaker: Where are you reading from now?

Mr. Wright: --The second full paragraph.

Unknown Speaker: Of what page?

Mr. Wright: 33.

"Many public officials in this country receive political contributions from individuals who, the official knows, are motivated by a general gratitude toward him. "

I won't finish that paragraph.

The next paragraph says,

"The mere solicitation or receipt of such political contributions is not of itself illegal. "

The next paragraph reviews the facts of this case and says that there is evidence that Mr. McCormick might have received campaign contributions.

The paragraph after that says, and I'll quote it,

"It would not be illegal, in and of itself, for Mr. McCormick to solicit or accept political contributions from foreign doctors who would benefit from this legislation. "

I'd like to turn briefly to page 37.

The tax fraud instruction--

Unknown Speaker: Excuse me, before you do that, what about the top paragraph on 34?

The first full paragraph on 34.

Was that a part of the instructions that the defendant requested?

Mr. Wright: --No.

No, I don't believe that that is part of the campaign contribution defense instruction.

And--

Unknown Speaker: Well, wait--

Mr. Wright: --Let me say next that they did not object to this instruction either.

Unknown Speaker: --There was no objection to the instructions at all?

Mr. Wright: Not to the paragraph on page 34 that you've just referred to.

Unknown Speaker: Well, as I see the difference between 34, the first paragraph on 34 says what extortion does consist of, and the paragraph you just quoted says what a campaign contribution that is not extortion consists of.

And the only difference between the two is that paragraph on page 33 beginning "Many public officials".

It says it's okay if you give the money even in the hope that the goodwill generated will make the official more receptive.

And then this paragraph on 34 says however, it's bad and it's extortion if it's given not with the hope but with the expectation that it will produce his conduct.

Is that the line that you think is the correct one between hope and expectation?

That's the line between extortion and a campaign contribution?

Mr. Wright: No, Your Honor.

I don't think the jury instructions are reasonably read that way.

I think, reading them in context, the court has explained what color of official right means, and the instruction you're speaking of goes more to that.

But the jury has also been instructed at considerable length that if it was a campaign contribution he can't be convicted.

And I don't think that anything in the color of official right instructions can be read to negate the longer express instruction that petitioner requested on campaign contributions.

Unknown Speaker: Well, Mr. Wright, how about the instruction that petitioner mentioned, the last full paragraph on page 30 of the Joint Appendix?

Mr. Wright: Well, I think that it's very unusual for a petitioner to be commenting on this.

Let me explain that it was the Government who objected to this instruction.

As originally given, the Government objected to the word "voluntary" because in context it seemed to suggest that because the doctors consented to the payments that it would be a defense, and hence it would be impossible to convict anyone who consensually made a payment.

The district court then came up with the phrase

"freely given without expectation of benefit. "

And--

Unknown Speaker: Do you think that's a correct statement of the law?

Mr. Wright: --I think that in context it distinguishes what the district court meant it to distinguish, and what I think the jury understood it to be, that there is a difference between a consensual payment and a voluntary--

Unknown Speaker: But Mr. Wright, doesn't every person who makes a political contribution almost expect some kind of benefit in some form?

Mr. Wright: --Yes.

Unknown Speaker: You expect to be benefitted by having their service, or because of the positions you expect them to take.

I mean, it's a very difficult line unless you rely on a line that says there has to be a quid pro quo.

And in that event we know what is a contribution and what isn't.

Mr. Wright: Well, Your Honor, I think whether it's a contribution or not can be determined from the facts.

Now, we agree that if it is in fact a campaign contribution, a sort of heightened quid pro quo would be required.

In our view vote selling is what is covered in the case of campaign contributions.

If it's a personal payoff, however, in our view, it is always a misuse of public office for an official to accept a payoff for doing his job.

Unknown Speaker: But Mr. Wright, isn't it the case that the jury would be left, given these instructions, with the understanding that the difference between the... what is or is not a campaign contribution, and hence what is or is not a payoff, is a difference which depends on the distinction between giving with hope and giving with expectation?

Isn't that a fair assessment of the instructions?

Mr. Wright: I don't think so.

I think, again, that the jury was instructed what the meaning of color of official right was, and was instructed that that meant that the official had to know that the public official was receiving money on account of his office.

In this case that Mr. McCormick was receiving it--

Unknown Speaker: Yeah, but every... every candidate receives money on account either of the office that he holds or hopes to hold.

Mr. Wright: --And it was told that it couldn't convict if it was a campaign contribution.

Unknown Speaker: But... and maybe I'm just going around in circles here, but I don't see what the jury had to go on to determine what was or was not a contribution, except this distinction between hope and expectation.

Mr. Wright: Well, Your Honor, let me turn briefly to the tax fraud instructions.

Let me add first that any ambiguity in the campaign contribution charge would be chargeable to petitioner, who again requested those instructions.

Unknown Speaker: Yes, but he was... he was also requesting more.

I mean, it's not as though, at least as I understand it, the petitioner never said implicitly or otherwise that the instructions as they stand are fine.

I think he was saying that the instructions without the addition of some kind of quid pro quo language are misleading.

Isn't that true?

Mr. Wright: There was one objection to the quid pro quo instruction, yes.

None to the campaign contribution portion of the charge.

On page 37 of the Joint Appendix with respect to the tax fraud charge with jury was told that in order to constitute nontaxable political contributions payments must have been made for one or more of the following purposes.

(1) utilized for generally recognized campaign expenses, regardless of when such expenses were incurred, or (2) used to reimburse the political candidate for out-of-pocket campaign expenses paid by him, et cetera.

In light of those instructions, and the jury convicted petitioner on the tax fraud offense, I think it's really very clear that the jury could not have concluded that these were in fact campaign contributions.

They just couldn't have convicted him on the tax fraud charge otherwise.

If I may return briefly to the facts--

Unknown Speaker: So is this a harmless error analysis?

Mr. Wright: --Your Honor, I don't... the way I read the instructions, I don't believe there was any error.

I think--

Unknown Speaker: Well, suppose there had been no conviction, an acquittal on the tax charge?

Mr. Wright: --I still, I believe--

Unknown Speaker: Then you couldn't make the argument you just made.

Mr. Wright: --Well, I believe that the argument that the instructions on pages 33 to 34 of the Joint Appendix with respect to the campaign contribution defense to the Hobbs Act violation are perfectly adequate.

So, that is the argument I would make.

I think that the tax fraud instructions are perhaps even more clear.

Unknown Speaker: Well, Mr. Wright, if we thought a quid pro quo was an element of the offense, then I suppose the instructions were deficient?

Mr. Wright: It depends on exactly what you mean, again, by quid pro quo.

If you mean only vote selling is illegal, the instructions are deficient.

Unknown Speaker: Well, that there has to be some promise, express or implied, of benefit that the office holder makes in exchange for the payment.

Mr. Wright: Oh, I'm sorry.

If you mean quid pro quo in that sense--

Unknown Speaker: Yes.

Mr. Wright: --I don't think that they are deficient.

I think the jury understood that Petitioner was going to continue to support them.

What's missing in this case--

Unknown Speaker: Well, did the instructions not say that it is not necessary that the Government prove the defendant promised to commit a quid pro quo?

Mr. Wright: --What the... no, they don't say that, phrased that way.

What the instructions--

Unknown Speaker: Well, would you look at the bottom of page 32 and 33 and tell me?

Mr. Wright: --Yes, that's where I am, Your Honor.

The instructions first say, in the last full paragraph on page 32, that whether a public official accepts a payment for an implicit promise of fair treatment, there is an inherent threat that without such payment the public official would exercise his discretion in an adverse manner.

But it then goes on to reject a defense.

In the next paragraph, it says it's not necessary that the Government prove that the defendant committed or promised to commit a quid pro quo.

Now, that means it's not a defense for petitioner here to say he would have supported the doctors anyway.

The fact is he obtained the money from the doctors, knowing that they were giving it to secure his support.

Now, he never said I'm going to change my position unless you give me the money.

Unknown Speaker: Well, but it goes on and says in either event a quid pro quo... it says it... a quid pro quo is not an essential element of the crime.

Now, I guess some courts think it is, and I suppose that's why we took this case.

Mr. Wright: Well, I don't think any court thinks it is in a payoff case.

I know of no holding of that sort.

And we agree that if this were a campaign contribution that what was missing here was better evidence of vote selling.

Unknown Speaker: When you say it isn't necessary in a payoff case, isn't that the paradigm example of a quid pro quo?

What is a payoff if it isn't a quid pro quo?

Mr. Wright: Well, that's why, Your Honor, I think there--

Unknown Speaker: I don't understand.

Mr. Wright: --There are two different sorts of quid pro quo's that we're talking about here.

There was a quid pro quo here.

The doctors understood that their payoffs to petitioner were to secure and retain his support of the bill.

But we didn't--

Unknown Speaker: Is that not a quid pro quo?

Mr. Wright: --Yes, it is.

Yes, it is, Your Honor.

Unknown Speaker: And you think the statute doesn't require that?

Mr. Wright: No, the statute does--

Unknown Speaker: That there be a quid pro quo?

Mr. Wright: --does require that.

Unknown Speaker: It does.

Mr. Wright: And the jury was told--

Unknown Speaker: But the jury was told that there is... that's not an essential element, that it's not necessary.

Mr. Wright: --I... I think that this... the jury has been told previously on the color of official right... instructions, rather... that the jury has to understand... or, I'm sorry, the jury has to be convinced that the money was given on account of the official's office.

That's under color of office.

What the jury was told, on the quid pro quo instruction that you're focusing on, was that it's not a defense for the doctor to say that... I mean for petitioner to say that he would have voted for the doctors anyway, and it's not a deficiency in the Government's--

Unknown Speaker: Well, it doesn't say that.

It isn't couched in terms of a defense at all.

Mr. Wright: --I... well, and it's not a deficiency in the Government's evidence that we didn't show that he said give me the money or I will switch position.

It's enough that they gave him the money knowing that... expecting that this would keep him from switching position.

If this were a campaign contribution we would think that we would need clearer evidence of vote selling.

Unknown Speaker: Well, Mr. Wright, you know, it isn't as if the Hobbs Act had a legislative exception for campaign contributions.

I mean, the statute prohibits certain conduct, and you're agreeing that ordinarily a campaign contribution does not come within that prohibition.

But to charge the jury that the money must have been given on account of the defendant's office, certainly that covers an awful lot of campaign contributions, doesn't it?

Mr. Wright: Yes.

Unknown Speaker: If you're... you know, if I'm Senator so-and-so and I go before some group that... raising funds, and they say well, gee, he has sure voted the way we wanted him to the last 6 years, let's give him some.

Isn't that giving him money on account of his official... his office?

Mr. Wright: Yes, Your Honor.

And if it's a campaign contribution it's not a misuse of office.

Unknown Speaker: But you talk as if the term, quote, "campaign contribution" is somewhere defined in a statute.

It isn't.

Mr. Wright: Let me try to explain where we get it.

In Classic this Court defined the similar phrase under color of laws, under color of State laws by misuse of State law.

And the lower courts have similarly defined under color of official office to mean by misuse of official office.

It is a misuse of official office to accept a payoff to do your job.

It is always a misuse.

It is not a misuse in the example you gave for an elected official to seek a campaign contribution from people whose positions he has supported.

And that... that's the real difference.

Unknown Speaker: Your argument suggests that there is a very clearly established definition of the term campaign contribution which he who runs may read, and therefore we don't have to worry about the line between campaign contribution and something that violates the Hobbs Act.

It turns out to be a very fuzzy line.

Mr. Wright: Well, there is a line.

I guess I disagree as to just how fuzzy it is.

Any money that is given to be used to defray campaign expenses is, in our view, a campaign contribution, whether or not it violates a State election law, although we would certainly agree that whether--

Unknown Speaker: Unless there's an explicit promise to exchange legislative efforts for the money.

Mr. Wright: --That's right.

That's the vote selling example that we think is the one case where a campaign contribution constitutes extortion.

Unknown Speaker: Mr. Wright, as I... may I call your attention again to page 37 of the Appendix?

You made an argument to the effect that whatever error was made in the campaign contribution section of the instructions was harmless because the jury found that there hadn't been a campaign contribution anyway, and you quoted that section on 37 where in order to constitute nontaxable political contributions the payment must have been made for one or more of the following purposes.

And then you say the jury, in order to find him guilty of this count, must have found that one of those two existed.

Correct?

Did I understand your argument correctly?

Mr. Wright: The jury must have rejected that it was used for generally recognized campaign expenses or to reimburse the candidate.

If it found that he had... that he had either used them to pay campaign expenses or to reimburse himself, then it would have concluded that they were nontaxable, and would not have convicted him of tax fraud.

Unknown Speaker: That's right, but they would have been non-taxable not because they were not political contributions originally when made, but because they were not nontaxable political contributions, because although they may have been contributed for his campaign, he converted them to his own use.

That would make them taxable, but it wouldn't prove that the jury did not find them to have been political contributions originally.

Mr. Wright: Well, I don't think that that's right with the instruction you have read, Your Honor.

Now, on the prior page there is an instruction that says that conversion would make a campaign contribution taxable.

However, Ms. Beatty suggested that there was simply no evidence for such a, an instruction, and I'd agree that that was right.

They certainly never argued that he accepted a campaign contribution and then pocketed it.

Their argument has always been... well, of co rse, first their argument was he didn't take the money.

Unknown Speaker: But the issue is what the jury understood by these instructions.

And at the bottom of page 36 the judge says if you find that they were campaign contributions you must further be convinced that the... that he converted them.

And that's what the later instruction goes to: even if they were campaign contributions.

I don't see that this, that the jury's conviction on the later count necessarily shows that they came to any conclusion on campaign contributions, other than the kind of conclusion that would have been affected by the campaign contribution instructions, which didn't require a quid pro quo to invalidate it.

Mr. Wright: I'm not sure I followed all that.

I would agree that there are two different kinds of instructions here.

One is a conversion instruction and one is if these were used for campaign expenses or to reimburse the candidate, then they are not taxable in any event.

There was no conversion argument here.

There was a reimbursement argument in this case.

We think that the jury clearly rejected that reimbursement argument.

Unknown Speaker: Well, Mr. Wright, suppose we... suppose we think the jury might have found that these were campaign contributions, but that there was a quid pro quo, based on these facts?

I take it you would say to... that the jury was wrong as a matter of law?

Mr. Wright: That these were campaign contributions, but that there was a quid pro quo?

Unknown Speaker: Based on these facts.

Mr. Wright: I don't think that the jury could have found that in light of these instructions.

Or I don't think that they did.

Unknown Speaker: I thought you a while ago said that if it's a campaign contribution there has to be an explicit statement of the exchange, and I thought you meant that on the facts of this case there wasn't such an explicit--

Mr. Wright: We... that's right, we did not present evidence, and I am sorry, when I said quid pro quo again I meant the heightened sort of quid pro quo.

Unknown Speaker: --All right, but there was not evidence--

Mr. Wright: Mr. McCormick--

Unknown Speaker: --in the campaign contribution there was not evidence to justify a conviction in this case.

Mr. Wright: --Yes, we did not show that the doctors reasonably believed that Mr. McCormick was definitely going to change position unless they gave him this.

We simply argued they gave him the money to secure his support, but it wasn't clear vote selling.

Unknown Speaker: Mr. Wright, can I ask you a rather basic question?

In the court of appeals, as I understand the opinion, the basic argument the appellate made was there wasn't sufficient evidence to support the conviction.

I don't understand from the court of appeals' opinion that there was any argument about instructions at all.

Am I right, or did they specifically challenge particular instructions that were erroneously given or erroneously failed to be given?

Mr. Wright: They objected to one portion of an argument, of an instruction respecting the quid pro quo instructions.

Unknown Speaker: They objected in the trial court?

Mr. Wright: Yes.

The first time--

Unknown Speaker: And did they argue that on appeal in the court of appeals?

Mr. Wright: --I believe that they mentioned that in their brief, but--

Unknown Speaker: Because the court of appeals... reading the court of appeals' opinion, one would get the impression that the case was argued on the assumption that the jury was properly instructed.

Mr. Wright: --Yes.

Unknown Speaker: And I don't find in your opponent's brief a particularization of the instructions that he contends were erroneously given or failed to be given.

Mr. Wright: Oh, no, no.

They... the focus of their argument has always been that this--

Unknown Speaker: That the evidence is insufficient--

Mr. Wright: --is a campaign contribution, not a payoff.

That's right, and that the evidence is insufficient to support the conclusion that it was a payoff.

That's certainly how the case was argued in the court of appeals, and that's how it was argued in the... in the district court once they gave up the position that the money had never been paid at all, halfway through the trial.

Unknown Speaker: --I'm not sure it follows that because the legislator said he wouldn't change his position that there is still not, that you still can't prove some quid pro quo.

Mr. Wright: I'm not sure that we couldn't have proved a quid pro quo, but we didn't... we didn't go for the very strict... we proved that this money was given to secure his support.

We didn't prove that he explicitly said I'm going to change position, or we didn't meet that heightened requirement that we think might well be needed in a case of a campaign contribution.

Unknown Speaker: But you seem to be saying that a quid pro quo is very constrictive of this statute, as exemplified by your answer to Justice O'Connor, that oh, well, a payoff is not a quid pro quo... which is something I still can't understand.

And here it seems to me that there can very well be a quid pro quo if he simply says he's going to maintain his position with vigor, and that that is quite a plausible requirement to put into this statute.

Mr. Wright: That's true, Your Honor.

We... we're very sensitive about not, not criminalizing ordinary campaign behavior, and we want to make quite clear that we don't think it's a misuse of office... I believe it was the Chief Justice's hypothetical... for a candidate to stand in front of a group and say I'm a supporter of your position and I'm running for reelection and you ought to contribute to my campaign.

But again, that's not this case, where Mr. McCormick went to the doctors' lobbyist, who had previously picked up a $766 hotel tab for him, thus indicating his willingness to dispense favors, and said I've paid about $2,000 out of my own pocket and I haven't heard from your doctors.

They deliver $2,900 in cash the next day, which is even more than he claimed he'd spent.

They deliver it in $100 bills, placed in sealed envelopes, personally delivered to him.

They make three more payments later on, long after the election, and petitioner finally says the debt is paid, and they cease to make payments.

Now, under those facts we think it's plain that this was a payoff, not a campaign contribution, and that it was a misuse of office for him to obtain them.

Unknown Speaker: Would you just help me on the term payoff?

By that I take it you mean money that was to be received and used by him personally, as opposed to reimbursing campaign expenditures?

Mr. Wright: Yes.

Money given to him unconditionally, to be used for any purpose he wanted.

Unknown Speaker: If he proved that he had in fact used it for campaign purposes, would it be a payoff?

Mr. Wright: If it was given to him as a payoff and he happened to pay them off... to use it towards a campaign contribution, yes, it would still be a payoff.

I think that might get him off the tax fraud charge.

I'm not sure of that.

But of course, the jury found that this was a payoff, and also convicted him of tax fraud in this case.

So it clearly rejected his argument, as did the court of appeals, and we think it's decision is reasonable.

If there are no further questions, I have nothing more.

Unknown Speaker: Thank you, Mr. Wright.

Mr. di Trapano, do you have rebuttal?

You have 3 minutes remaining.

Rebuttal of Rudolph L. Di Trapano

Mr. Trapano: Thank you, Your Honor.

I would just like to make--

Unknown Speaker: Mr. di Trapano, before you start may I just ask you to tell us specifically which instructions you objected to that... and argued in the court of appeals were erroneously given, and you still pertain?

Mr. Trapano: --We devoted a third of our brief to the instructions in the court of appeals.

The court never mentioned it.

Unknown Speaker: You did?

The court of appeals never mentioned the issue?

Mr. Trapano: No.

It didn't address it at all.

Unknown Speaker: You don't identify in your brief here which instructions you thought were erroneously given, do you?

Mr. Trapano: Well, what we didn't... the court of appeals didn't rule on it and we don't address it in our... in this brief, except we do--

Unknown Speaker: So your argument is basically not that the jury was improperly instructed, but rather that the evidence in the record is insufficient to support the conviction?

Mr. Trapano: --No, we objected to the... we vigorously objected to the court defining or instructing the jury with respect to what a voluntary payment, that it... the expectation of benefit took it outside the ambit of a campaign contribution.

We debated that, vigorously objected to it.

We fought over... see, our trial judge did not let us read the charge he was going to give the jury.

We have to... after the charge, he says what he's going to do... for example, we didn't... specific intent was just... was charged to the jury without our having any prior knowledge of what the instruction was going to be.

But we did object to the instruction.

We offered instructions that made quid pro quo an essential... and quid pro quo has to be conditional.

And that was our... that was our argument.

We did object to it, Your Honor, and we objected vigorous to it, and devoted a third of our brief.

Not mention it, as the Assistant Solicitor says.

We devoted a substantial portion of our brief arguing over the instructions that were given to the jury.

We objected vigorously to them, to the instruction.

The one instruction was where the court said every payment... any payment made, in focusing on the official office is illegal and comes within the purview of the color of official right provision.

But moreover, see, the Government charged... the Government argued to the jury, he says we don't have to show that he gave some quid pro quo or threatened any action.

Simply that when it was paid the doctors paid it with an expectation of benefit.

That's what they argued here.

Whether it's a campaign contribution makes no difference, either if it was extorted or under color of official right.

That's what the Government argued in their instructions, that's what they argued to the jury, and the defendant was prejudiced by those instructions.

The court, moreover, as Justice Scalia was questioning about the tax fraud case, again voluntary was... on four occasions that definition was given to the jury that voluntary is that which is given without expectation of benefit.

And if they found that it was a contribution with that definition, then he was... then he was guilty of the tax fraud case.

The jury was, in our opinion, and as we point out in our brief to the Fourth Circuit, was badly instructed with respect to those matters I have just mentioned.

Thank you very much, Your Honor.

Chief Justice Rehnquist: Thank you, Mr. di Trapano.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Crandon v. United States - Oral Argument

Fri, 09 Jan 2009 14:49:22 +0000

Case:

Crandon v. United States

Media File:

88-931_19891106-argument.mp3

Related Transcript:

1989_88_931_argument.xml

Transcript:

Argument of Phillip Allen Lacovara

Chief Justice Rehnquist: We'll hear argument first this morning in Number 89-931, Lawrence Crandon v. United States, and Number 88-938, Boeing Company v. United States.

Mr. Lacovara.

Mr. Lacovara: Mr. Chief Justice, and may it please the Court:

The government's claim to recover the severance payments that Boeing made to its employees suffers from several significant flaws.

The three issues before the Court this morning are the following.

First, Section 209 of Title 18, on which the government relied exclusively as defining the fiduciary duty that the employees allegedly breached, does not apply to pre-employment severance payments.

Second, the Fourth Circuit overstepped the proper bounds of a reviewing court in disregarding the amply-grounded findings of the trial court that none of these men accepted that severance payment with the kind of intent that Section 209 in other situations may prescribe.

And third, under a common law claim to recover the value of any secret payments, adequate disclosure of the type that the trial court found here, bars a claim by an employer for recovery of any conflicting financial arrangements.

Let me turn first to the statutory coverage question.

This is an issue on which all... all roads lead to Rome: statutory language, legislative history and legislative purpose.

The language of the statute, as it was revised in 1962, which appears on page 1a of our brief from Mr. Crandon, et al., could not be more clear, we submit.

The statute, as it is common ground, defines two correlative offenses.

Certain kinds of compensatory payments that are made by or received by government employees are prohibited.

Looking first at the statutory application to the payor, in this case Boeing, the statute says, and I will, I think fairly allied the unnecessary language, whoever pays or makes any contribution to or in any way supplements the salary of any such officer or employee, meaning officer or employee of the United States, is guilty of a crime.

The one overarching issue with which the government has never come to grips in this case is the following.

Could the government, the day after these payments were made by Boeing to employees still on its payroll, who, as it was stipulated below and found by the trial court, not only were not government employees, but not had... had not been assured government employment or even formally offered government employment, could the government have indicted Boeing for violating Section 209 the day after these payments were made, days or weeks or in several cases months before these men actually became government employees.

I submit the answer to that is clearly no, for the same reason Boeing could not have indicted the employees.

Unknown Speaker: Could there have been an attempt indictment in that situation?

Mr. Lacovara: I think not.

The government certainly has never alleged in this case that the conduct here constituted an attempt to commit crime.

Unknown Speaker: I'm just asking hypothetically.

Could, would the facts you state support an indictment for an attempt?

Mr. Lacovara: I think probably not, although the general law of attempt does apply to many criminal cases.

But here what you have is a statutory definition of a particular conflict of interest crime, and for reasons that we will discuss in a moment, Justice Kennedy, Congress drew the line where it wanted to draw the line in distinguishing lawful conduct from unlawful conduct.

And it is important, I think, to preserve that bright-line distinction, lest we criminalize a whole category of relationships that Congress never intended to cat... to criminalize.

Unknown Speaker: What if the employer, before the government service began, paid a sum to the employee on the understanding and expectation that the employee might provide some favors to that employer later, during government service.

Mr. Lacovara: That is an issue with which Congress has dealt, Justice O'Connor, in other sections.

And it is very important to--

Unknown Speaker: Would it violate this section as well?

Mr. Lacovara: --No, no.

It would not.

Unknown Speaker: Simply because of the timing.

Mr. Lacovara: That's right.

And that is explicable, I think, in light of the--

Unknown Speaker: Well, you certainly can read the language of the statute as not turning on the timing of the payment.

If... if the payment is made to supplement the government salary, you certainly can read Section 209 as being applicable.

Mr. Lacovara: --Well, our opening submission, Justice O'Connor, is that that is not a correct reading of the language and that under the rule of lenity, if your suggestion is that one could read the statute this way, ambiguities in criminal statutes are to be resolved against the government.

Where you have statutory language that talks about making a payment to, or a contribution to, or... supplementing the salary of a government officer or employee, I suggest it is at least a strained reading to say that the timing makes no difference.

But when you look at what Congress has done in trying to deal with the problem that you identify it becomes clear, and this is why I say that in reading this statutory language, as revised in 1962, the Court ought to consider the other statutes that Congress revised in 1962.

The bribery statute expressly deals with that situation.

Congress knew how to write that language.

It covers payments made not only to incumbent federal officers or employees, but, as the statute defines it, persons "selected to be" public officers or employees.

Similarly, Section 203 of Title 18, which was revised at the same time as this statute was revised, punish... punishes certain kinds of compensatory payments made to a person for services to be rendered at a time when he is a government officer or employee.

So there are two examples of Congress' knowledge of how to reach pre-government employment payments, if they are made with the kinds of intent that are described in Section 201 and Section 203.

Unknown Speaker: Mr. Lacovara--

--Mr. Lacovara, the Fourth Circuit relied upon the 1962 change in this statute to say that whatever may have been the case before then, they thought it now covered pre-employment payment.

Mr. Lacovara: That is correct.

The Fourth Circuit relied exclusively on that change.

It is, I think, common ground now that the predecessor to this statute only reached payments to incumbents.

It said whoever being a government officer or employee accepts the payment is guilty of a crime.

Congress took that out in 1962.

It did it, however, with an explanation of what limited changes it intended to accomplish in revising the language.

We have set these out in our brief because we think it is important to do what the Fourth Circuit apparently didn't do, which is to read Congress' own explanation of whether it was intending to make what I submit would be a fairly substantial change in the coverage that the statute had in its prior form, which was clearly limited by time to incumbent government employees.

Page 10a is the Senate report; page [= 25a] of our appendix to the brief sets forth the House report, and just let me read the two sentences.

Section 209 is similar to Title 18 United States Code, Section 1914.

The latter, that is the predecessor, prohibits a government employee from receiving any salary in connection with its government service from a private source.

Subsection (a) of Section 209 would reenact this prohibition in substance, et cetera.

The House report reads the same way.

Attorney General Kennedy, whose administration had proposed the bill that ultimately became law, and this is set forth on page 47a, said exactly the same thing.

Comparing the old statute with the new, Subsection (a) prevents an officer or employee of the executive branch from receiving, and anyone from paying him any salary or supplementation from a private source, et cetera.

This... provision uses much of the language of former Section 1914 and does not vary from that statute in substance.

Congress--

Unknown Speaker: So it leaves a rather large hole in the statutory scheme, doesn't it, if an employer, a month before someone becomes a government employee, can pay them a large amount of money to tide them over the time that they will be a government employee.

Mr. Lacovara: --If we were sitting down today to write legislations, Chief Justice, we might want to draw the line differently.

But that is not the purpose that the statute had in mind when it was... Congress had in mind when it first enacted this statute in 1917, which was to prevent carrying people on the payroll of a private benefactor with the concern being, a concern that doesn't apply when the payment is made before government service, the concern being that the person who is supposedly discharging his duties with an eye solely on the public interest may be looking over his shoulder to see whether or not his judgments will... will affect whether that economic lifeline, as the New York City Bar put it, is going to be cut off.

That danger is simply not there, the danger of divided loyalty, serving two masters, when an irrevocable, fixed, non-contingent payment is made before government service.

Now, as Justice O'Connor pointed out, if there is some other understanding, that could constitute a bribe.

Congress has defined the point where the bribery statute applies, at a certain point before government employment, but not at the... not infinitely back from government employment.

So, Congress has decided to deal with a particular problem, divided loyalty.

It rationally chose to draw the line at incumbency.

Section 1914, it has certainly drawn the line there.

The explanation for the changes in language in 1962 suggest only... only a narrowing purpose, changing the prior phrase in connection with government employment to a phrase, as compensation for government employment.

And if Congress had intended to cover a whole new class of payments, especially in light of the fact that severance payments, pre-employment severance payments, are, as the government has agreed, quite common, one would think that Congress would have said something about that.

When one looks at the reasons for dropping the magic phrase on which the Fourth Circuit exclusively focused, one sees that, in the original staff report back in 1958, a House staff report, there was a suggestion that that phrase be taken out, because the staff wanted to cover not only officers of the executive branch, but also members of Congress.

And the phrase being a government officer or employee would not have covered those congressmen, that the--

Unknown Speaker: Do you make the... Mr. Lacovara, do you make the same analysis of the first section... of the first paragraph of the statute as of the second?

Could the government's position fare any better under the first paragraph than it does under the second?

Mr. Lacovara: --I think not, Justice Kennedy, because it... I think it is common ground that these are supposed to be correlative offenses.

Indeed, in the second paragraph the payer's defense--

Unknown Speaker: Well, but the second paragraph is in part controlled by the first, because they talk about such officer or employee, and the first paragraph begins whoever receives.

Mr. Lacovara: --Yes, for services as a government officer or employee.

And what I am suggesting is that, to the extent there is any doubt about whether Congress intended to reach only payments received by government... incumbent government officials, one can appropriately take guidance from the second paragraph, which says all Congress is penalizing on the payor side is the payment to a government employee under circumstances that would make it illegal for him to accept it, namely it's accepted with compensatory intent.

Unknown Speaker: Mr. Lacovara, the first paragraph doesn't say... it doesn't say receives as an officer or employee.

It says receives a salary, contribution to, supplementation of salary, as compensation for his services as an officer or an employee.

You can receive it as compensation for your services as an officer or an employee whether or not you are now an officer or an employee.

Mr. Lacovara: Justice Scalia, as I mentioned before, there might be an ambiguity--

Unknown Speaker: In the first paragraph.

Mr. Lacovara: --In the first paragraph.

If one--

Unknown Speaker: Now, I think you are stronger on the second paragraph.

Mr. Lacovara: --If one read this paragraph, if that was all that existed in Title 18, there would be an ambiguity, which under the rule of lenity would have to be resolved in our favor in any event.

But one has the second paragraph here, and one also has Section 201 and Section 203.

And when you read those statutes, without even getting behind them into legislative purpose or legislative history, I think you are drawn rather firmly to the conclusion that when Congress wanted to reach pre-employment payments it used a form of words.

Indeed, the City Bar, in proposing a revision of this predecessor, Section 1914, the predecessor of this section, did propose to add language that not only dropped the being a government officer or employee language, but proposed adding the language that Congress used in 203, for services to be rendered when the person is a government employee.

So, you have here, I think, a rather clear statutory pattern.

Certain kinds of pre-employment payments are covered, others are not--

Unknown Speaker: Mr. Lacovara, do you mind my asking whether you concede that there is a civil cause of action by the government for whatever it is the statute... the criminal statute, says?

Is there a common law cause of action to cover the exact contours of whatever this statute means?

Mr. Lacovara: --We have never doubted that there is a common law cause of action to recover secret profits obtained in breach of trust.

There is ample common law doctrine, federal common law doctrine, that that does exist.

All of the cases, however, as the Fourth Circuit itself recognized, are limited to circumstances in which the... the tainting outside financial relationship is undisclosed, secret, so that the employer, new employer--

Unknown Speaker: Well, what is your answer?

That the cause of action for recovery is not covered exactly by the contours of the statute?

It is something else?

Mr. Lacovara: --That is... the government would make out its prima facia burden if there had been an illegal receipt of... in violation of Section 209, but it is at least a defense that that relationship was disclosed.

And that is what we have argued below and what we think is supported by federal common law.

Unknown Speaker: Thank you, Mr. Lacovara.

Mr. Sharp.

Argument of Benjamin S. Sharp

Mr. Sharp: Mr. Chief Justice, and may it please the Court:

Both the district court and the court of appeals held that the 209 required some proof of subjective intent on the part of the parties.

In fact, the court of appeals expressly found, or expressly rejected, the government's assertion that the statute could be violated with simply a showing of objective intent, or without any intent at all.

The construction that the courts below gave that, the statute, we think is compelled, because otherwise the statute would proscribe all manner of payment, including severance payments to which the government does not object.

Having determined that the district court was correct in its holding on the law, the court of appeals nonetheless reversed on the facts.

It reviewed the facts, the objective facts cited by the district court below and drew different inferences, but in doing so it necessarily drew inferences that the district court had in fact rejected.

This Court has, on many occasions, held that the questions of intent are factual questions for the trier of fact.

In fact, where intent itself requires some showing of actual motive or purpose or understanding, this Court's opinion in Pullman-Standard v. Swint held that the legal presumption to be drawn from factual showings less than actual motive was not proper.

But that is precisely what the court of appeals has done here.

It found new facts by making certain limited inferences, but in doing so it did not cite Rule 52(a), it did not discuss or define the proper standard of review, other than to make a passing reference that the court below was clearly erroneous, it did not discuss testimony--

Unknown Speaker: Mr. Sharp, what is it... what is your understanding of the intent requirement in the statute?

What do you think the government had to prove?

Mr. Sharp: --I think the government had to prove expressly that the parties intended to make payments that were compensation for federal services.

Unknown Speaker: What other motive could there possibly have been for the payments by Boeing?

Mr. Sharp: I think a motive to fairly sever relations with long-standing employees, to make sure that--

Unknown Speaker: But nobody got this except people who were going into government service.

Mr. Sharp: --No one got it except individuals who were compelled to terminate their employment with the company to enter into public service.

There is ample evidence in the record that Boeing supported a general policy of encouraging public service, and that under circumstances it did not require that there be a complete severance from the company, no severance payment was paid because no severance was made.

Under those circumstances, it was not infrequently the case that people were permitted to continue to participate in various company benefits programs, were able to take a leave of absence without pay, or in some cases a leave of absence with pay.

This was the only circumstance, federal government service, of an encouraged, public service that required absolute severance from the company.

And that is the reason that severance payments were only made in those circumstances.

Unknown Speaker: What exactly do you understand was the government's theory at trial in its cause of action against Boeing?

Mr. Sharp: That has long perplexed us.

At trial the government for the first time took the position that its cause of action of Boeing, against Boeing, was a common law tort of inducing a conflict of interest situation.

Unknown Speaker: Is that how it went to the trier of fact?

Mr. Sharp: It is.

Unknown Speaker: A common law tort of inducing breech of a fiduciary relationship?

Mr. Sharp: Well, the exact language in paragraph 16 of the complaint says the common law tort of inducing a conflict of interest situation.

Unknown Speaker: Uh huh.

Mr. Sharp: Conversely, the claims against the individuals was sounded in quasi contract for their supposed breech of an undivided... duty of undivided loyalty.

Unknown Speaker: Under that theory would the government be entitled to recover the amounts of the payments from the employees and also from Boeing, a double recovery sort of?

Mr. Sharp: I do not think they would, and the district court and court of appeals both held they could not based on the precedent of Continental Management case.

I believe that if the government made out a prima facia case, that the standard, or the quantum of damages, based on other precedent, might be the amount of a payment.

Unknown Speaker: How did the statute ever get into the case?

Mr. Sharp: The supposed tort duty that the government claimed was--

Unknown Speaker: Was measured?

Mr. Sharp: --derived from this criminal statute.

So, in order to show... to make out the common law tort, they would have to show a violation of the criminal statute.

Unknown Speaker: Mr. Sharp, can I return to Justice Stevens' question?

What do you take to be the subjective intent that is required by the phrase "as compensation for his services"?

Specifically, does there have to be an exchange, does there have to be a quid pro quo?

Is it... is it rather like consideration in the law of contracts?

Mr. Sharp: I, I... we don't believe that the intent requires a quid pro quo or a specific intent to influence government service, but at least must be an intent to compensate for government services.

At the very minimum, Justice Scalia--

Unknown Speaker: Well, what does to compensate mean?

I mean, suppose somebody comes up to me after I have retired from government service and they say Scalia, we really admire you, you have done a great job for your country.

We want to give you an award of $50,000 for outstanding public service.

I am sure a lot of people get awards like that.

Is that compensation for... for public service?

Mr. Sharp: --I don't think so.

Unknown Speaker: Why not?

Mr. Sharp: It is paid under circumstances... among other reasons it is paid under circumstances that could not conceivably create a conflict of interest or a potential for divided loyalties--

Unknown Speaker: There is nothing in here about that.

This is a prophylactic rule.

You don't have to examine case by case to see if there is a potential for conflict of interest, it is obviously prophylactic.

But why is... in your mind that one is not covered.

Now, I could explain why that is not covered, I could say there is really no quid pro quo.

It is not if you go into the government, I'll pay you this amount of money.

And therefore I could say it is not compensation for your being in the government.

That way I could understand your arguing an intent requirement.

But I don't understand what kind of intent requirement you are arguing.

You say it has to be intent to give it to him as compensation.

Well, that sounds very nice, but what does "as compensation" mean if it doesn't mean quid pro quo?

You work for the government, and I will pay you the money.

Mr. Sharp: --In the facts of this case it would fall far short of a quid pro quo in any event, in that these payments were fixed, final and irrevocable.

Unknown Speaker: Oh, I know that.

I know that.

But I don't understand what you mean by "as compensation".

There has to be a subjective intent to give it to you as compensation.

But, but it doesn't cover the situation where I say you have done a wonderful job for your country; in admiration of your work for your country I am giving you $50,000.

That... that isn't covered.

Mr. Sharp: The only suggestion I can make is to read some meaning into the phrase that would cover a conflict of interest, and if you construe that phrase in a fashion where there could be no conceivable conflict of interest, it seems to me that it is an overbroad reading of it, that doesn't serve the purpose of preventing the evil which Congress sought to prevent.

Unknown Speaker: Well, every prophylactic rule is over broad, I mean, and--

Mr. Sharp: The statute, as originally enacted, obviously was directed at the... at the receipt of payments during a period of time where the performance of government services was being rendered, where there was a temptation, or at least a potential for influence of that government service, to assure that that economic benefit was continued to be received.

If you have a factual pattern that does not present that same potential, I don't understand how it would be reasonable to construe the statute so broadly as to... as to sweep up factual patterns which could not conceivably constitute a conflict of interest.

Unknown Speaker: --Except here you have got a series of findings which totally negate any improper actual conduct.

There is no... no motive to do anything like that.

But then there is this finding 22 that says they were not intended as supplementation for government service or as compensation.

I don't know quite... I'm really kind of puzzled as to what that means.

Does that mean that Boeing did not have a policy of giving extra money to people who were going into service because they thought that (a) there's a public purpose to be served, and (b) these may be more valuable employees when they get back later, which are... neither of which is... when they get out of government service, neither of which is necessarily an invidious motive.

I'm not suggesting that.

But it does seem rather clear that the company must have thought that these people were going to have a financial sacrifice during this period of government service, and they wanted to help them over a tough period.

And... but you are saying... I am trying to figure out... is that what the statute prohibits?

Or, if it is, then it seems to me the finding is clearly erroneous, frankly.

I just can't see how you can under... construe these payments otherwise.

But maybe it requires something more, and if it requires something more, just what is it?

Mr. Sharp: I think implicit in the "as compensation for" language is... is the notion that the payor is intending something that would create a conflict of interest, some impropriety.

It simply cannot mean the confluence of events of government service in the receipt of moneys.

And if it... if it meant that only, then every severance payment would be outlawed.

And if you don't read some--

Unknown Speaker: Well, but if that only it would cover the case of say, well, we'll keep your salary going while you are in Washington.

They clearly can't do that.

Mr. Sharp: --They clearly cannot do that.

Unknown Speaker: But that would cover it even though it was totally benign in motive.

Say he isn't going to do any work at all on Boeing matters and never coming back to work, but we just think this is a decent individual who ought to be given the equivalent of the kind of award that Justice Scalia describes.

That still--

Mr. Sharp: Well, under those circumstances certainly the employee would be acting at a time he was receiving discretionary--

Unknown Speaker: --Right.

Mr. Sharp: --funds--

Unknown Speaker: The statute plainly--

Mr. Sharp: --which could tempt him, could influence him, in a way that pre-employment severance payments could not.

Unknown Speaker: --Well--

Mr. Sharp: The second issue that we wish to cover briefly has to do with the court of appeals' determining that although there was no conflict of interest, that an appearance of a conflict of interest was both sufficient to violate the statute and sufficient toward injury for the United States to recover.

We believe this conclusion is both wrong as a matter of law and insufficient... excuse me, wrong as a matter of fact and insufficient as a matter of law.

The appearance of conflict of interest standard is dangerously imprecise.

It has been in the past--

Unknown Speaker: --Does this depend on the statutory construction, Mr. Sharp, or does this go to the measure of recovery or the nature of the common law tort?

Mr. Sharp: --I think it goes to the statutory construction and to the issue of whether there has been--

Unknown Speaker: But of course the statute doesn't say conflict of interest at all.

Mr. Sharp: --That's correct.

Unknown Speaker: So, when you say the... to say there was no conflict of interest, how does that cut one way or the other with respect to the statutory construction?

Mr. Sharp: Again, simply that the construction of a conflict of interest statute ought to be such to give some meaning to the evil which Congress sought to prevent.

If there was no conflict of interest, an overbroad reading would seem unwarranted.

In this case the court of appeals held that an appearance of conflict of interest is sufficient injury in tort for the United States to recover.

We would suggest that it is not sufficient injury for a tort recovery and that really what the court of appeals is saying here is that where there is no proof of a conflict of interest, if there is a bad appearance to the court it is sufficient injury and is sufficient to violate the statute.

We think in part that that is a dangerous precedent, because if there is no... if there is insufficient evidence to prove a conflict of interest, it makes little sense to claim that although there is some probability that conflict occurred, but not proven, that we would nonetheless, as an appellate court, find... find an appearance was sufficient to predicate liability and damages.

In other situations, courts have used conflict of interest also, or appearance of conflict of interest, to describe those situations where there was a clear and irreducible conflict of interest.

And in those circumstances, as in the Kenealy case cited in all the briefs, I would suggest that an appearance of conflict of interest is either surplusage, in that all actual conflicts would appear to be conflicts, or it's a misnomer in that there is a good deal more than appearance of conflict of interest in, for example, a failed bribe or a self... economic self-dealing situation that are proscribed by statutes 201 and 208.

In this case we have found no other case where liability was predicated or injury was found based on the appearance of conflict of interest.

It seems to us where the court of appeals holds that there is in fact no conflict of interest, the appearance is insufficient on which to predicate liability.

If there are no further questions--

Unknown Speaker: Thank you, Mr. Sharp.

Mr. Kneedler.

Argument of Edwin S. Kneedler

Mr. Kneedler: Thank you, Mr. Chief Justice, and may it please the Court:

The payments made by Boeing to the individual Petitioners in this case go to the very core of the purposes underlying the prohibition in Section 209 against the private supplementation of the salaries of federal employees.

Those purposes are... it is not just an appearance statute as Mr. Sharp said, the statute defines the existence of dual compensation as a conflict of interest, and it establishes a prophylactic prohibition against the temptations that might arise from the receipt of compensation.

As--

Unknown Speaker: Mr. Kneedler, although this was a civil case, I guess it is based on a criminal statute.

Is the... is the statute to be construed the same way as if it were a criminal proceeding?

Mr. Kneedler: --The statute itself, yes.

Unknown Speaker: Yes.

Mr. Kneedler: In terms of its scope, yes.

Unknown Speaker: So, presumably the rule of lenity would have some application?

Mr. Kneedler: Yes, in terms of construing the scope, in terms of the showing of intent required, we don't think that that would be... that that would be necessary.

But in terms of, for example, the scope of the coverage of the statute to pre-employment payments, yes, we believe that it would.

Unknown Speaker: Mr. Kneedler, is... is it correct, as Mr. Lacovara said, that you concede that the two paragraphs of 209(a) are coextensive?

That is to say that no one can be liable for making the payment under the second paragraph... put it the other way.

No one can be liable for receiving the payment under the first paragraph unless the person making the payment would also be liable under the second paragraph.

Mr. Kneedler: Yes.

But the interpretation of the first paragraph... the first paragraph is the... is the essential definition of the... of the conduct being covered and informs the interpretation of the second.

Unknown Speaker: I understand that.

Mr. Kneedler: I think Mr. Lacovara had it backwards in terms of which, which provision of the statute you look to first.

Unknown Speaker: Well, but the first... the first is at least ambiguous, and the second doesn't seem to be ambiguous, because it says whoever pays or makes any contribution to or in any way supplements the salary of any such officer or employee.

Mr. Kneedler: Right, but it... it... there are several aspects of that that we think are significant.

One is, it says in any way supplements, which suggests an intent to establish an all encompassing prohibition.

Unknown Speaker: Fine.

Mr. Kneedler: And it's referring to, it's referring to someone who, who is/was an employee.

But in terms of the purpose of the payment, all that is required is it in any way supplement the salary of an employee.

And the first... the first paragraph is written in all-encompassing terms with no exceptions at all.

It says whoever; it doesn't say whoever, as the predecessor did, whoever being a government official or employee.

It says whoever receives any salary or any supplementation of salary.

Both the all-encompassing term whoever and the all-encompassing term any suggests an intent to be all encompassing.

And in fact, with respect to the precise issue here, payments received from prior employers, it is significant that the second subsection of Section 209, 209(b), specifically provides for the receipt of certain payments from prior employers, permitting continued participation and severance and other employee benefit plans while the person's in government.

So, just looking at the text of Section 209, it seems to us that there is no exclusion for lump sum payments.

It says supplementations in any way.

And this is consistent with the purposes of Section 209, which is to prevent the divided loyalty.

If a person receives, just as... if a person receives a bribe before he goes into government service, the assumption would be that that bribe might continue to influence his performance while he is in government.

Unknown Speaker: But Congress, nonetheless, felt it necessary in the sections dealing with bribery to say explicitly that it covered payments made before you were actually in service.

Mr. Kneedler: Well--

Unknown Speaker: It says it, very explicitly.

Why doesn't it say it explicitly here?

Mr. Kneedler: --Because it is unnecessary to do so, because the... because the language--

Unknown Speaker: You think it is that clear?

Mr. Kneedler: --Pardon me?

Unknown Speaker: The language is that clear.

Mr. Kneedler: It seems to me it is all encompassing.

Whoever... I mean, it seems to me--

Unknown Speaker: Well, the legislative history of the change, though, does not reflect that they intended to broaden the scope, does it?

Mr. Kneedler: --Well, I have several responses to that, Justice O'Connor.

First of all, as we point out at pages 26 to 27 of our brief, the Justice Department had in fact taken the position before the amendment of the statute in 1962 and the provision in the memo quoted in the Roswell Perkins Law Review article, that the... that the statute did apply to severance payments made prior to the entry onto government... government service.

And the reason for that is understandable.

If you look at the... turn your attention, respectfully, to page 2(a) of the appendix to our brief, where the prior statute is reproduced.

And the second paragraph... the first paragraph of Section 1914 did contain the phrase, after the word whoever, saying being a government official or employee.

The second paragraph, however, had no such limitation.

It says or in any way supplements the salary of a government employee.

So... and one of the problems with the statute as it read prior to the 1962 amendments was there was an absence of correlation between the first and second paragraphs.

And so there was substantial support for the proposition that the... that the statute, particularly the second paragraph, even prior to the passage of 1962, covered such payments, and in fact the report of the Association of the Bar of the City of New York, which was one of the two studies that gave rise to the 1962 amendment, specifically noted this ambiguity but said the statute should be clarified to make sure that it covers payments whenever received.

Unknown Speaker: Well, Mr. Kneedler, this is a criminal statute.

Do you think that the contours of the civil recovery are defined precisely by the terms of this statute?

Mr. Kneedler: I'm sorry.

Unknown Speaker: Just because there is a criminal statute, does that automatically give the government the right to a civil damages action for its violation?

Mr. Kneedler: Well, as Mr. Lacovara conceded, it is well established that the government has a... has a cause of action to recover payments made to its employees in violation of fiduciary duties.

Unknown Speaker: Right, but that, that common law cause of action presumably would encompass whether there's disclosure, whether there were secret profits taken, or something of that sort.

Mr. Kneedler: No, I think the cause of action would extend to violations of the fiduciary duty, however that fiduciary duty is defined.

This statute defines the fiduciary duty with respect to the receipt of payments for government employment that contains no limitation that the... that the profits be secret.

Unknown Speaker: How do you know it is a fiduciary duty that the statute defines, or... ordinarily an employee does not have a fiduciary duty to his employer, does he, just in the normal course of events?

Mr. Kneedler: Well, or a principal agency relationship.

But, defining... defining a relationship of an agent to his principal as a fiduciary in this sense, and--

Unknown Speaker: Well, why... you know, when you say there is a violation of a fiduciary duty that suggests some extraordinarily high duty, to me, that you don't find among ordinary relationships.

Mr. Kneedler: --Well--

Unknown Speaker: Why is this a fiduciary duty?

Mr. Kneedler: --Well, the specific fiduciary duty at issue here is the duty of undivided loyalty to the employer, which is a fiduciary duty.

There may be aspects of the performance of the job that are ministerial, but with respect to the basic demand of loyalty that an employer has a right to insist upon from his employees--

Unknown Speaker: And can't... well then, he can insist upon that without regard to statute?

Every employer can insist upon that as a fiduciary obligation from every employee?

Mr. Kneedler: --Well, as I say, the contours of the employer/employee relationship would be defined by whatever contract or whatever statute defines that relationship.

Here we had a statute that precisely defines the scope of the relationship.

And the common law--

Unknown Speaker: Well, what is the--

Mr. Kneedler: --would enforce the contract between the parties.

Unknown Speaker: --Where does it define the scope of the relationship?

Mr. Kneedler: Well, it... specifically, Section 209 says that a person, an employee or... a person cannot receive any compensation, any supplementation of his salary for his services as a government employee.

Unknown Speaker: But how does that define the relationship of employer to employee?

Mr. Kneedler: It defines the duty of loyalty that the employee... that the agent owes to the principal.

Unknown Speaker: Well, it is a prophylactic rule to prevent disloyalty.

It really doesn't define the loyalty.

In any event, you don't claim that there is a cause of action under this statute?

Mr. Kneedler: No, we say that there is... well, the statute doesn't expressly provide a civil cause of action.

But it is well established that the Attorney General may bring a suit on behalf of the United States to protect the rights of the United States in contracts and in employment relationships and its property.

Unknown Speaker: Well, why... so it is a civil cause of action under the common law?

Mr. Kneedler: To enforce a... a duty defined or a prohibition defined by this statute.

So it... the cause of action could be characterized as a common law--

Unknown Speaker: Then why do you say the... why do you say the disclosure element of the common law doesn't apply here?

Mr. Kneedler: --Because the... the particular duty being enforced here is defined by the statute, and the statute does not make the secrecy of the payments an element of the... of the prohibition.

Just as, in the Mississippi Valley case, which dealt with a conflict of interest on the part of a government employee who had outside financial interests, the argument there was made, in fact, that the superior's knowledge of the fact that he had this outside financial interest eliminated any conflict, and that the contract was therefore enforceable.

And this Court said no, the statute contains no provision for waiver.

Unknown Speaker: And you say because it doesn't say it, disclosure doesn't... won't help any.

Mr. Kneedler: That is exactly right.

The statute contains no provision for waiver.

Unknown Speaker: How about the common law action you bring, except for the statute, you say disclosure would have cured the common law--

Mr. Kneedler: Well, I think that isn't clear.

And in fact, in the Carter case--

Unknown Speaker: --Well, suppose it was.

Mr. Kneedler: --Well, I think--

Unknown Speaker: I would think... I would think the statute ought to say that disclosure won't cure this crime.

Mr. Kneedler: --Well, there is... in essence it does say that because there is no exception for situations in which the... in which the employee has disclosed the matter to the government and gets a waiver.

And in fact the pertinent disclosure regulation that we cite in our brief, promulgated by the Office of Government Ethics, says that nothing in the disclosure program, either the regulations or the Ethics in Government Act, excuses an employee from complying with applicable statutes.

So this waiver argument, or this disclosure argument, is inconsistent not only with Section 209, but with the very premises of the financial disclosure program.

Unknown Speaker: But you are tacking a common law cause of action onto Section 209, and if the common law cause of action traditionally has required non-disclosure in order... as an element, it did... really the shoe is on the other foot, isn't it?

Mr. Kneedler: No, I think not.

And let me explain again why I think that is not so.

In a traditional suit of common law, if an employer brings a suit against his employee, he would be bringing a suit to enforce whatever contractual or other relationship there was between the employer and the employee, according to the terms of that contract.

That's exactly what we are saying here.

This statute, Section 209, is part of the statutes, the body of statutes, that define the relationship between one who is coming to be employed for the United States and the United States.

It is an element of that contractual relationship which, like an element of a contractual relationship between private parties, the government has a right to enforce.

Unknown Speaker: It is not a contractual relationship though.

There is a lot of law to that effect, and it seems to me, and this sort of gets back to what the Chief Justice was suggesting, Mr. Kneedler, it seems to me, are you really arguing that this has anything to do with the old common law cases dealing with fiduciary obligations?

Because I don't think this statute reflects a fiduciary obligation.

It goes well beyond fiduciary obligations to enact a prophylactic rule.

You're essentially arguing that any federal statute that forbids an act by a federal employee brings along with it a cause of action by the government if that prohibition is violated.

So, if it was a statute that no federal employee shall get his hair cut, you would be able to sue the barber that gave him a hair cut for the money that he paid the barber.

Mr. Kneedler: Well, it seems to me our submission here is a... is a lot narrower than that, and that is--

Unknown Speaker: Well, why is it?

Why?

Mr. Kneedler: --Well, it's well accepted even in common law that when an agent receives money from a third party for the performance of his duties to the principal, he has a duty to account to the principal for the profits that he has received.

That is just a straightforward principle of agency, as well as restitutionary law, that he... because he is performing that... those services for the principal, not the third party who pays him, he has a duty to account to the principal for those funds.

And that is essentially the nature of this cause of action against the individuals, we're just asking the individuals to disgorge the profits that they improperly received from Boeing for the performance of their federal duties.

And that is not an open-ended cause of action.

It is one firmly rooted in the... in the common law, and 209 in that sense is an overlay on it--

Unknown Speaker: So you assert that there is a... that a private employer, let's assume Boeing found out that somebody was leaving Boeing to go to another private employer, presumably not in aerospace, or they wouldn't make the payment, but they say, you know, this is a good job he is going to, but it is not paying very much.

He has been a good employee, let's give him a good, high severance payment in light of the low salary he will be getting for this private company.

You say that private company would have a cause of action at common law?

Mr. Kneedler: --No.

Only if the... only if the second employer had a prohibition against the receipt of the compensation.

Presume... no, in the example you are citing, yes, he... presumably he would, because--

Unknown Speaker: He would?

Mr. Kneedler: --he would have been compensated for the... but whether or not the general common law would say that--

Unknown Speaker: I think that is the position you are driven to.

You are really driven to say that is I give you a high severance payment because you are going to take a low-paying job with another private employer, that private employer can sue me and can sue the person that I make the payment for.

Mr. Kneedler: --Well, in the example you are citing, if the second employer had a specific provision in its... in its personnel manual or its contract--

Unknown Speaker: No, you say, you said this is common law.

You said it is the common law principle of fiduciary obligation.

Mr. Kneedler: --But what I am saying, the common law allows parties to enforce the agreement or the rules that govern the relationship between themselves.

It's not just a free floating body of law, but also if there are particular provisions in the contractual relationship or in the appointment relationship of federal employees that define the duties, that go beyond the common law or that give particular form to the common law, then the parties have a right to enforce the legal duties that arise between them.

Not just those defined by common law, but as they are supplemented by contract or here, by statute with respect to the relationship between government employees.

Unknown Speaker: Mr. Kneedler, do you think the statute would be violated by programs such as some universities have of, for giving student loan payments to students who go into government service?

Mr. Kneedler: If it was specifically tied to government service, yes, we do.

If there was... if it was tied to some somewhat broader range of public service that included--

Unknown Speaker: Government service and for private nonprofit organizations.

Mr. Kneedler: --At some point--

Unknown Speaker: Would that save it?

Mr. Kneedler: --At some point it would be sufficiently broad, and we're not in a position at this point to say how broad.

But at some point it would be sufficiently broad so that it was not focusing on government employment in the specific sense that we think it--

Unknown Speaker: What about a MacArthur Foundation grant to someone who has performed extraordinary service in government?

Mr. Kneedler: --Well, the Justice Department has taken the position on a number of occasions that awards made to government employees are not covered by Section 209.

Unknown Speaker: It certainly would be a supplement, though, under your--

Mr. Kneedler: It would be, but it--

Unknown Speaker: --understanding of the statute.

Mr. Kneedler: --Right, but I think it, I think it goes into the, it is tied into the phrase "as compensation for".

There has to be some sense, as Justice Scalia was saying, that the statute at least cover the situations where the government employment is the consideration for the making of the payment, the performance of the government services.

Unknown Speaker: Oh yes, at least, but is that required?

Mr. Kneedler: It may not be required in all situations, I mean, but in this situation... in this case the "as compensation for", it is clear that the federal employment was the--

Unknown Speaker: The quid pro quo?

No, it isn't clear at all.

Mr. Kneedler: --Well, it's clear... it's clear that these payments were made only because the employees planned to go into government service.

Unknown Speaker: Well, and when I get an award of $10,000 for having been a wonderful whatever it is for the federal government, after I have left federal government service, it's also clear that the reason they are giving me the $10,000 is the work I did for the government.

It is just as clear.

And yet you say the Justice Department takes the position that that is not covered.

Mr. Kneedler: Right.

And it... the language--

Unknown Speaker: How can you reconcile the two?

I don't understand it.

Mr. Kneedler: --Well, I think the language may be tied to the "as compensation for"--

Unknown Speaker: What if they give me the $10,000 in a lump sum before I go into the government.

They say Scalia, we know you are going to do a great job for the government.

Here is a $10,000 award in advance.

Mr. Kneedler: --Well, I think that would be... that would be considerably more difficult, because it is not... it is not for past accomplishment.

It is not in recognition of a past accomplishment.

I think it... that would raise the suggestion that the going into the federal government to perform in a particular way--

Unknown Speaker: It seems to me compensation is compensation, whether it is given before or whether it is given afterwards--

Mr. Kneedler: --That that's--

Unknown Speaker: --unless, unless you import a requirement of consideration, of quid pro quo.

I'll give you the money if you do the work.

Now, if you are willing to import that, I think you have a lot more to prove in this case.

Mr. Kneedler: --Well--

Unknown Speaker: Well, Mr. Kneedler, what about... don't many of the government agencies give bonuses to particularly good employees at the end of the year?

Mr. Kneedler: --Right.

What the statute does... only reaches payments from a source other than the United States.

So when the government itself pays the bonuses, the statute does not reach it.

Unknown Speaker: It does not apply.

Mr. Kneedler: No.

If I could, I would like to make one last point on the disclosure before I go back to the statutory language, and that is that even if... even if the common law rule overrode the statute or the statute did not specifically govern here, there was no disclosure here of the nature of these payments sufficient to constitute the kind of disclosure that is talked about under those cases.

There was nothing in the disclosure to, either on the disclosure forms or in the conversations with individual officials at the Defense Department, to suggest that these were payments made only because the employees were going into government service or that they were calculated in a way that were validly designed to supplement the government... the employee's services.

So there was nothing on the face of these forms to alert the persons reviewing them that they even presented a conflict of interest situation that the government could in turn waive or regard as being an affirmative disclosure.

So there is just not the factual basis in this case for the argument that is being made.

Unknown Speaker: It is crucial to the government's case here, isn't it, that the structure of the Boeing severance payment was based on future hardship rather than past performance?

Mr. Kneedler: It is crucial that it was not based on past performance.

There are two factors that we rely on in particular here.

One is that it was paid only because they were going to... into the government service, and in fact, as we point out at page 40 of our brief, only because they were going to positions that were of interest to Boeing.

But then also, that the payments were calculated on... to essentially supplement the salaries by making up the salary differential.

That makes it particularly clear that they... that the payments were for future service rather than past.

Unknown Speaker: If the employees had changed their mind and not gone to work for the government, I assume Boeing couldn't receive this back?

Mr. Kneedler: That was the understanding that the district court found, yes.

But as Mr. Little, the vice president at Boeing, testified in his deposition, the... Boeing had no reason to doubt that these employees were going to go into the government when they left.

Now, it may be that, for reasons beyond the recipient's control, the government wouldn't appoint him.

But as far as Boeing was concerned it was part of the deal, I think, that these employees would follow through with their commitment to accept the government jobs as they were offered.

Unknown Speaker: Yes, but that wouldn't be... that wouldn't be sufficient to make out a violation of the statute if they never went to work for the government, would it?

Mr. Kneedler: That, that... I think it would, if... or at least on an attempt theory.

But if the payments are made for the purpose of supplementing the salary of someone when he goes to work for the government, yes.

In this case, though--

Unknown Speaker: And if he never... if they never went to work for the government, you say the statute would have been violated?

Mr. Kneedler: --Yes, in the same way that paying a bribe to somebody in anticipation that he is going to go work for the government.

If he doesn't--

Unknown Speaker: Well, because the statute reads on that.

But you think that this, they would have... that is very interesting, I didn't realize you went that far.

[Laughter]

Mr. Kneedler: --But there is no need to reach that question here, because in fact--

Unknown Speaker: Well, there may be, because if the statute wasn't violated when they paid them, because of the possibility they might not go to work for the government, that conceivably would be a reason for your losing the case.

Mr. Kneedler: --Well, if there was a condition subsequent, such as you are suggesting, that they actually have to become employed, then that was satisfied here.

Unknown Speaker: No, it is not a condition subsequent.

It is, the fact is they were not employees at the time they received the payments.

Mr. Kneedler: That is correct, but--

Unknown Speaker: And if they never became employees, it is a little difficult for me to--

--I didn't know that it was clear that these employees had agreed to go to work for the government, if that job was offered.

Mr. Kneedler: --They had... they had planned to, and they had agreed--

Unknown Speaker: That isn't what I asked.

Had they agreed to--

Mr. Kneedler: --They hadn't entered into a formal agreement, but they... but the... as we cite in the footnote at--

Unknown Speaker: --Well, formally or otherwise, they hadn't agreed, they hadn't agreed to it.

Mr. Kneedler: --Well, they left... I think it's a, the only fair reading of the record that both sides anticipated that--

Unknown Speaker: Well, if one of them had gotten run over by a truck after this so-called understanding, do you think Boeing could have recovered the money?

Mr. Kneedler: --No, what I... what I said, if something happened for reasons beyond their control that they didn't accept it, but I think the understanding was that when they left, the plan was they were going to work for Boeing unless some other--

Unknown Speaker: So you figure if one of them had just said well, I've decided, I've got a better offer from some other company, they could have recovered the money?

Mr. Kneedler: --Perhaps not.

Unknown Speaker: Yes or no?

Mr. Kneedler: According... the district court said it was theirs to keep.

All I am saying--

Unknown Speaker: But under your view, the government could... could collect the money, couldn't it, Mr. Kneedler?

Mr. Kneedler: --Uh--

Unknown Speaker: Boeing couldn't, but the government certainly could under your view.

Mr. Kneedler: --It... it's possible that the government could, yes.

Unknown Speaker: Well, it's not... that is critical to your interpretation of the statute.

Mr. Kneedler: Well, in this, yes.

In terms of the criminal violation, for purposes of the civil recovery, all that's necessary for the court to say is that at least at the time they became federal employees they had a duty to account to the government for any payments they received for their government service prior to that time.

And that's all that is necessary to say here.

They all... all five in fact did quickly become government employees after they received these payments.

Unknown Speaker: Well, could... I take it the person who changes his mind, goes to work for the other company, he could be convicted under this statute, and so could his employer who paid him the money?

Mr. Kneedler: Yes.

Unknown Speaker: Mr. Kneedler, what if, instead of paying severance payments, Boeing had a policy of paying bonuses upon employment after government service, and paid precisely the same amounts... I don't know whether these people did go back to Boeing, but assume they had been totally severed, worked for the government for three or four years, then went to work for Boeing and received advance payments that more or less supplemented for the sacrifice they had made in the prior three years.

Mr. Kneedler: It would be the same result, and for good reason.

If a person, while in government service, has reason to anticipate that he is going to be rewarded in the same way--

Unknown Speaker: So it applies to... if a law firm hires a person out of government service and pays a higher signing bonus, in effect, to compensate for the decreased earnings while in government service, that would violate this statute, if it is an executive employee.

Mr. Kneedler: --If it... again it would depend on the purpose.

If the bonus is paid because of the presumption of the increased experience, which I think may be the basis for the signing bonuses for people coming from the government, that would be all right.

But if it was... if it was explicitly intended--

Unknown Speaker: The presumption of increased experience... in other words, would Boeing be safe if they had elaborate explanation that the purpose of their policy was because they thought these people would be back, likely come back, and they would have increased experience when they got back, and therefore be more valuable to them.

Would that be permissible?

Mr. Kneedler: --Excuse me, conceivably, yes, it would.

But, but at that point it gets very difficult to separate what--

Unknown Speaker: Well, if that is conceivable and that is permissible, then how do we know these findings are clearly erroneous?

Mr. Kneedler: --Well, if they--

Unknown Speaker: On intent.

Mr. Kneedler: --If they are being paid... if they are being paid for... if they are essentially being paid for their government work, as it seems to me these people were being paid to accept their government job, that's sufficient.

But if they are being paid because, after they leave, because of the experience they will have acquired there, that is forward looking, when they go back to the former employer.

And the statute, if you are paying somebody for what he is worth, wherever he gained that experience, the statute doesn't reach that.

I would like to go... to turn to the legislative history on the--

Unknown Speaker: Mr. Kneedler, if you could answer one short question.

I think there is a short answer, but it escapes me at the moment.

Can the government, or does the government ever rely on state law?

Suppose there was a law in the state of Washington that protected you in this instance.

Could you just sue under the Washington law?

Or is the argument that since there is no federal law, the probable intent is that you not recover?

Mr. Kneedler: --I would think that ordinarily we would... we would... because the relationship between prospective employees in the federal government is one of federal law, that we would ordinarily be limited to federal law, although conceivably federal law might borrow a state statute or principle on a particular case.

But here we are not relying on a particular aspect of state law.

I think it... with respect to the argument on the legislative history, I think it is critical to point out several important defects in what the Petitioners rely on in the legislative history in 1962.

First of all, the phrase being a government official or employee in the first paragraph of Section, then 1914, was specifically dropped from the statute at that point.

And Congress had two purposes... Congress did two things.

It both defined that phrase more precisely to be limited to executive employees only, which is the only purpose the Petitioners mentioned, but they also did something else.

They deleted it entirely and put the reference to the types of employees further down in the first paragraph, referring only to the time of the performance of the services.

They did not leave the reference to government officials in there twice.

They deleted it the first time it appeared.

That is, by the way, precisely what Congress did when it modified the former Section 281, now Section [= 203], which bars the receipt of compensation for services performed for someone outside the government while you are a government employee.

Congress also deleted the phrase "being a government official" right at the same place in the statute and moved down further in the statute the specification of the... of the precise categories of employees that are covered.

And as the legislative history shows, that was done for the specific purpose, and the staff report that we cite in our brief says this, it was done for the specific purpose of making clear that the time of the receipt of the payment did not matter.

That it was... at the time that the services were performed.

Unknown Speaker: Was that done at the same time?

Mr. Kneedler: It was done at the same time in 1962, and the precise phrase was dropped from both places.

Mr. Lacovara says that the, relies on the phrase 203 and the fact that Section 203 covers members of Congress elect.

The fact is that the predecessor statute had precisely the same coverage.

It contained the word, and this is important, it contained the phrase "to be rendered", the very phrase he relies on, and it also covered members of Congress, even before they qualified, or after they have qualified for office, even if they haven't taken it.

So it was not the phrase "to be rendered" that covered employees, persons before they became employees.

It was the deletion of the same phrase that was deleted here that resulted in the coverage of persons before they enter into government.

And in fact at page 61 of the staff report, which again formed the basis for the statute, the staff report states that this language dealing with government officials or employees was modified to conform its scope to Section 281 as the staff report proposed to revise it, which would have covered all three branches but also would have revised it to apply only when, in that case, when the services are performed, not when the payments are received.

Unknown Speaker: [inaudible]

Mr. Kneedler: The staff report of the judiciary subcommittee, which the legislative history shows was the principal basis on which the revision was... the 1962 revision was based.

Unknown Speaker: Mr. Kneedler, could you provide us with a citation to the Justice Department position that says that a government employee, after leaving government employment, can receive an award, or even during government employment--

Mr. Kneedler: I will get the opinions.

Unknown Speaker: --based upon his government service.

Mr. Kneedler: There are Justice Department opinions, and I will furnish them to the Court.

Unknown Speaker: Thank you.

Mr. Kneedler: Also, I should point out that the consistent position of the Office of Legal Counsel and of the Office of Government Ethics has been that the statute applies to payments made prior to the time that a person enters into government service, which, after all, is consistent with the position that the Justice Department had taken under the--

Unknown Speaker: When was that, when was that position first taken?

Mr. Kneedler: --The... in 1974 in the... are the first times with respect to the opinions that we cited in the Appendix to our brief.

But it goes back to 1961 in the memorandum under the prior statute.

Chief Justice Rehnquist: Thank you, Mr. Kneedler.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

McNally v. United States - Oral Argument

Fri, 09 Jan 2009 14:48:26 +0000

Case:

McNally v. United States

Media File:

86-234_19870422-argument.mp3

Related Transcript:

1986_86_234_argument.xml

Transcript:

Argument of Carter G. Phillips

Chief Justice Rehnquist: Mr. Phillips, you may proceed whenever you're ready.

Mr. Phillips: Mr. Chief Justice, and may it please the Court:

--This case involves the proper interpretation of 18 U.S.C. Section 1341, the Federal Mail Fraud Statute.

The primary issue presented is whether it is fraud within the meaning of that statute for a political party leader to fail to disclose to state officials a potential conflict of interest in his handling of the state's patronage system.

The Court of Appeals held that a conviction under this so-called intangible rights theory is proper and we urge this court to reverse.

The basic facts were as follows: The petitioners and the third individual, Howard Hunt, were politically active in the Democratic Party, in the state of Kentucky, during the 1970s.

In part because of their hard work on behalf of Governor Carroll, who was elected in 1974, petitioner Gray was appointed to a cabinet position in 1976 and Mr. Hunt was named head of the Democratic Party.

Hunt as the head of the Democratic Party was invested with substantial patronage powers by the governor, which is not an uncommon practice, I think, in any state.

What may be somewhat less common is the decades long tradition in Kentucky that certain state insurance commissions are treated as part of the patronage system.

Thus, the agent for the state in procuring insurance was asked to share commissions with other individuals holding insurance licenses.

Unknown Speaker: Why is that worse than ordinary party patronage?

I don't understand.

Mr. Phillips: I don't know that it is worse than ordinary party patronage.

I think it's just somewhat less common than any other party patronage.

Unknown Speaker: All of it is fraud as far as you're concerned?

Mr. Phillips: As far as the government's concerned.

Unknown Speaker: Right.

Mr. Phillips: Yes, I think that's correct.

Unknown Speaker: Does it include box seats to the Derby?

[Laughter]

Mr. Phillips: I suspect the government would say so.

Yes, Your Honor.

Those receiving shared commissions were not required to perform any services or to be engaged in the insurance business at the time that they received those commissions.

All that was required was that a licensed agent be available.

And it was not uncommon frankly for relatives of public officials to receive some of those commissions.

For instance, the State Insurance Commission--

Unknown Speaker: Was there no violation of state law for these people to get commissions for having done no work?

Mr. Phillips: --No, absolutely not a violation of state law to receive commissions for doing no work.

There is no obligation that you do any work.

Unknown Speaker: How about if you're not a licensed agent?

Mr. Phillips: That would be a violation of the state law.

Unknown Speaker: And that was involved here as well, wasn't it?

Mr. Phillips: No, at the time that all the commissions were received, the individuals receiving them were licensed agents, or had a licensed agent affiliated with the company involved, or the recipient of the commission.

Unknown Speaker: So, it's your position that at no time was any Kentucky state law violated here by either of your clients?

Mr. Phillips: I would say two things about that, Justice O'Connor.

First, that's correct.

No state law was violated.

Two, even if state law had been violated there was no instruction to the jury asking the jury to find that state law had been violated.

So that it's not, you know, whether there was a violation of state law in this case is simply not relevant to what the jury decided.

As I was suggesting.

It was not uncommon for public officials, or the relatives of public officials themselves to receive shared commissions under the patronage scheme.

The Insurance Commissioner himself testified that his son was receiving insurance commissions as a part of this practice.

He knew about it and never doubted that it was a lawful practice.

In this case the government has however, challenged Mr. Hunt's recommendation to the Insurance Commissioner to appoint the Wombwell Insurance Agency as the agent of the state for Worker's Compensation and his directions as to how to share those commissions.

Because the government in its brief, in this Court on the merits, has for the first time suggested that this case is not really an intangible rights case, I think that it is terribly important that the court understand clearly, precisely how the case was submitted to the jury.

The government has reproduced the relevant instructions in its brief at pages nine to ten and footnote eight.

In reading them as a whole, I submit, reveals quite clearly that the District Court told the jury, at the government's request that it could conclude that petitioners "devised such a scheme", describing the scheme in the indictment as read in relevant portion to the jury, if the jury found five facts basically.

One, that there was control over the naming of an insurance agency by Mr. Hunt.

Two, that Mr. Hunt had something to do with the selection of Wombwell.

Three, that he directed Wombwell to share those commissions in a particular way, four, that he held an ownership interest in Seton Investments.

And five, that he failed to disclose debt interest to the state government.

With respect to the petitioners then, they are charged solely with aiding and abetting that basic claim.

Our position is that however you analyze those facts as required to be found by the jury, there is no fraud in this case.

And that the jury was clearly instructed that it could find on that theory as an alternative basis for holding that the Mail Fraud Statute has been violated and that the jury, and therefore the government must justify its extension of the Mail Fraud Statute to the situation involving Hunt.

Unknown Speaker: Well, Mr. Phillips, I thought the government is now telling us that the jury was instructed that for mail fraud, the government had to prove a scheme to defraud the citizens of their right to honest performance of public business and to obtain money or property by false pretenses.

And that the jury clearly had to find both present.

Mr. Phillips: Well, the first part, the government is clearly, I mean, the government is clearly making that argument and there is a statement in re-reading--

Unknown Speaker: And there is such an instruction?

Mr. Phillips: --Well, the indictment was read to the jury and that is in the indictment.

But if you read the paragraphs before the indictment and the paragraphs after the indictment, the reliance on obtaining money or property by false pretenses is irrelevant.

It is a scheme to defraud as described at the beginning.

Unknown Speaker: So you think, the position you take is that the instructions as a whole do not bear out that argument.

Mr. Phillips: Absolutely.

Absolutely.

Couldn't say it better myself.

Because the government in it's brief on the merits in this Court has taken, excuse me, to the place the government's theory then into perspective, the Court must realize, one, the jury was not asked to find that the state of Kentucky or any of its citizens lost any money as a consequence of this scheme.

And two, the jury was not asked to find that Hunt, Gray, or McNally frankly received one cent from the patronage arrangement.

The theory is merely one of non-disclosure.

Unknown Speaker: The theory being these commissions would have been paid to somebody anyway.

Mr. Phillips: That's absolutely correct.

Unknown Speaker: So--

Mr. Phillips: The commissions, the size of the commissions were outside of the state's control.

That money went to Wombwell.

So that the government's repeated reference to this as a matter of public funds, simply inaccurate.

They were not public funds.

They were Wombwell's funds and Wombwell willingly parted with them.

Unknown Speaker: --The theory is that so much commission was going to be paid to Wombwell, what by the company or by the Kentucky government?

Mr. Phillips: It is paid by the underwriter.

Unknown Speaker: By the under--

Mr. Phillips: It's a commission paid back by the underwriter.

But the amount of money that Kentucky had to pay to--

Unknown Speaker: --When you say xxx.

Mr. Phillips: --have insurance was set.

It couldn't be modified in any way.

Unknown Speaker: When you say it's a commission paid back by the underwriter, who is the underwriter in this case?

Mr. Phillips: Well, there were two underwriters and they're just large insurance companies.

Unknown Speaker: And they're--

Mr. Phillips: xxx.

Unknown Speaker: --It's basically a discount?

Mr. Phillips: No, it's just the method of recompense for the activities of the agent and so--

Unknown Speaker: So they're paying the agent for having gotten the business?

Mr. Phillips: --Right.

Unknown Speaker: The way other insurance commissioners would.

Mr. Phillips: Absolutely.

Unknown Speaker: And they were going to pay a specified amount to Wombwell and these people's theory is if Wombwell wanted to split it up with other people that was a private arrangement.

Mr. Phillips: That is precisely our position, Mr. Chief Justice.

As far as we're concerned the term--

Unknown Speaker: Although I suppose you can say if Wombwell's willing to split it with other people, Wombwell would also be willing to charge less.

Mr. Phillips: --Might of been willing to charge less.

Unknown Speaker: Which would mean that the state would probably be able to buy its insurance for less.

Mr. Phillips: Well, except that there's--

Unknown Speaker: xxx.

Mr. Phillips: --no evidence to that effect in the record in this case.

And no effort by the government to try to prove that--

Unknown Speaker: Well, but that's common sense isn't it?

I mean, what does Wombwell care.

Wombwell's not getting the money.

They would as soon give it back to the state as give it to some third party.

Mr. Phillips: --Well, I mean, my guess is that Wombwell would prefer to share it with other insurance agents if for no other reason than to develop good will.

Unknown Speaker: That the whole reason for the scheme?

It was a patronage device wasn't it?

Mr. Phillips: Yes, it was a patronage device.

It was to generate good will both with the state of Kentucky and with other insurance agencies.

Unknown Speaker: They weren't handing anything back to the state.

Mr. Phillips: No, no one ever suggested that anything could be granted back to the state.

Unknown Speaker: That wasn't patronage to hand it back to the state.

Mr. Phillips: No, that would be sort of anti-patronage, I suppose.

Unknown Speaker: Yeah.

[Laughter]

Mr. Phillips: In light of the jury instructions in this case, it seems to us quite remarkable that the government has all, I think, but conceded that the Mail Fraud Statute as applied to a political party leader is wholly inapplicable.

It's sole defense on this issue in the brief appears in a single paragraph on page 32.

And the government tells the court, quote, it is at least clear that those individuals, referring to party leaders given the power to carry on the state's business, have a duty not to use that governmental party to criminally profit themselves or their friends.

The problem with that statement and it's the sole defense of the government's case here, is that it again ignores the jury instructions.

There was no criminal profit.

There was no profit at all, in terms of what the jury was asked to find.

The sole theory in this case involves a matter of non-disclosure.

That's what the jury was instructed on and that's what the jury found.

The fact the jury found that however is unfortunate for the government because this is not mail fraud.

It's not fraud of any sort.

Because as this Court said in Schiarella, in order for there to be fraud, there must be a duty to disclose and what is utterly missing in anything, in either the government's brief or anything at the trial in this case is any indication of where a duty to disclose exists and extends to a political party leader.

And because of that, the government's case necessarily fails as a matter of law.

Mr. Gray was a political official, but as the jury--

Unknown Speaker: You mean a state official, you mean?

Mr. Phillips: --Yes, he was a state official.

But as the jury instruction quite clearly specifies--

Unknown Speaker: He was part of the scheme?

Mr. Phillips: --He was found guilty under the government's theory of aiding and abetting Hunt.

But, not as a government official.

There's nothing in the instruction with respect to aiding and abetting that required Mr. Gray to be a government official.

And in the closing arguments--

Unknown Speaker: Did he have any duty to disclose?

Mr. Phillips: --I don't believe he would of had a duty to disclose, although the jury wasn't required to find that he would.

Unknown Speaker: But, he was a state official.

Mr. Phillips: He was a state official.

Unknown Speaker: He certainly is in a different position than Hunt.

Mr. Phillips: He would be in a different position and this case would be somewhat different if the jury had been instructed only that it had to find the Mr. Gray had violated his duties.

But that was not the way the jury was instructed.

The jury was instructed--

Unknown Speaker: Did Mr. Gray get any money?

Mr. Phillips: --I'm sorry?

Unknown Speaker: Did Mr. Gray get any money?

Mr. Phillips: No, Mr. Gray did not receive any money.

Unknown Speaker: He didn't get any benefit?

Mr. Phillips: The government attempted to prove that he may of gained some benefit, but the jury was not asked to make any findings as to whether he had gained any benefit.

And there is clearly no evidence as to receipt of any money.

Whether he gained a benefit is unclear but--

Unknown Speaker: You answered while ago that this scheme didn't involve any violation of state law.

I take it means that Mr. Gray didn't violate state law either?

Mr. Phillips: --I don't believe that Mr. Gray violated any state law as a consequence of his conduct.

Unknown Speaker: Even if he did in fact receive benefits in the form of condominium usage and vehicle usage and so forth and so on in Florida and elsewhere?

Mr. Phillips: Well, I'm not frankly completely familiar with bribery laws in the state of Kentucky, but my sense is that those benefits are so far removed from any public actions that Mr. Gray would have undertaken that I doubt seriously there would have been a violation of state law.

Unknown Speaker: Well, he was the insurance commissioner, wasn't he?

Mr. Phillips: No, no.

He wasn't the insurance commissioner.

Unknown Speaker: xxx.

Mr. Phillips: He was the Secretary of the Cabinet.

Unknown Speaker: Yeah, that's right.

And why did Mr. Hunt want him in the scheme?

Mr. Phillips: Well, I hesitate to speak on it, for Mr. Hunt, but I think the answer is they were friends and I don't think it is a scheme, frankly.

They were friends and they happened to have an inter-relationship.

But I don't know that from our perspective and given that the jury wasn't required to make any findings, I hesitate to say that he was involved in that particular scheme.

But I think the important point to remember, Justice White, is that the jury was instructed on that point in the alternative and therefore, whether or not, and I don't think the Gray theory would hold water either, but whether or not it would is irrelevant to this case.

The government still has to demonstrate that Mr. Hunt violated the law in the ways that he did and that the petitioners aided and abetted that violation.

Unknown Speaker: Who again was Mr. Hunt?

Mr. Phillips: Mr. Hunt was the head of the Democratic Party.

He was the Executive Chairman of the Democratic Party of the state of Kentucky.

Never held public office within the state of Kentucky.

Unknown Speaker: But, he was empowered by the governor to direct the receipt of these insurance commissions?

Mr. Phillips: He was placed in charge of basic patronage recommendations.

Unknown Speaker: He was given some kind of defacto duty to perform on behalf of the state.

Mr. Phillips: Well, the jury instruction didn't ask for that.

All the jury was asked to find was that he had control over those decisions and so, and the evidence was that he made recommendations and those recommendations were followed.

To say that he had defacto control in that sense strikes me as not any different than any other party leader making recommendations to his own party leaders who happened to hold public offices.

So, in a sense sure, he had defacto control, but our position is that jury instruction is so far removed from anything that would make him a public official, that there is simply no basis for creating a duty, certainly if the government has cited nothing--

Unknown Speaker: Mr.--

Mr. Phillips: --on the basis for creating that duty.

And that is a federally created duty.

It does not exist in state law.

And,--

Unknown Speaker: --Mr. Phillips, may I just be sure I understand something?

Is it your position on this the fact there are no pecuniary benefit and nothing but a violation of an alleged duty to disclose, which you deny existed?

Would you say the case would be different if he were a state official?

If Mr. Hunt were a state official?

Mr. Phillips: --Well, on that issue, just on that one issue as to whether they're might be a state law duty to disclose the issue would be different.

On the issue of whether or not there's any pecuniary gain, and whether pecuniary gain is a necessary requirement of the Mail Fraud Statute, I'd say that's a separate and open issue.

I think we would also have made some additional arguments if this case turned on Mr. Gray's status in terms of when does a duty trigger.

It is one thing to say that public officials have some duties to disclose, but it doesn't seem to me that every, that you know, in this case the government says, Mr. Gray had a duty to disclose basically because he saw some wrong doing going on.

Not that he necessarily benefitted from it.

So, it's not at all clear to me that he would of had a duty to disclose in this case.

But again, we run far afield from anything the jury was asked to decide in this particular case.

Unknown Speaker: Mr. Phillips, I don't think our cases are at common law that it was ever an element of fraud that you had to prove pecuniary gain to the defendant.

Mr. Phillips: This Court's decisions in both Fasulo and Hammerschmidt state that what is involved with respect to fraud is injury and injury defined in terms of property.

Unknown Speaker: Maybe economic injury to the victim, but never a requirement of gain to the perpetrator.

Mr. Phillips: Okay.

Oh no, that's correct.

That's correct.

Unknown Speaker: And that's what you keep arguing--

Mr. Phillips: Well,--

Unknown Speaker: --is missing.

And I just don't see that as an element at all.

Mr. Phillips: --No, Justice O'Connor, I don't mean to imply that.

Throughout our brief we argue that what's missing here is any injury, any economic injury to the victim of a fraud, which is the state of Kentucky, and what is also missing is any pecuniary gain to the defendants.

But that was only in response to Justice Stevens' question.

Unknown Speaker: That just isn't an element.

Yeah.

Mr. Phillips: You know, our position remains that injury to money or property is a condition required for mail fraud.

Unknown Speaker: Well, there's been a lot of cases haven't there in which that has not been required under this Mail Fraud Statute.

You're looking at a number of public officials in other states who have been convicted by the use of this statute.

Mr. Phillips: Well, no decisions--

Unknown Speaker: Without proof of some kind of, much more than an intangible right kind of an argument.

Mr. Phillips: --Well, none of those decisions were by this Court and the government freely concedes that this Court has never decided the validity of the intangible rights theory.

And as we indicate--

Unknown Speaker: But your position is squarely inconsistent with the Kerner case, or Isaacs case rather, isn't it?

Mr. Phillips: --I'm sorry?

Justice Stevens, I'm--

Unknown Speaker: I know it's not been decided by this Court, but the decision Governor Kerner's case, you would require that one, your position is inconsistent with the holding in that case.

Mr. Phillips: --Well, I think the evidence is slightly different in that case because there really was bribery and--

Unknown Speaker: But no injury to the--

Mr. Phillips: --and closeness, the nexus in terms of the duty and the creation of duty--

Unknown Speaker: --I don't think there was any injury, any pecuniary injury to the state of Illinois.

Mr. Phillips: --No, on that issue it's the same.

Unknown Speaker: It's the same.

Mr. Phillips: But,--

Unknown Speaker: But, then where did the duty to disclose come from there?

Cause the status of a public official, wasn't it?

Mr. Phillips: --Well, there was more to Kerner actually than simply a duty to disclose.

There were intangible rights underlying it and that's certainly a part of that case.

There was also, you know, a certain amount of--

Unknown Speaker: In other accounts, but just on the mail fraud is all I'm talking--

Mr. Phillips: --Just on the mail fraud.

But, you know, as we suggested in our reply brief, that wasn't all he was convicted of.

So that even if the Court had taken up the mail fraud issue, would not have required reversal of all the convictions against him.

Unknown Speaker: --I understand.

Mr. Phillips: Which I think--

Unknown Speaker: Well, you say that case is the same as this only insofar as your broader argument is concerned.

That is your attack on the intangible rights theory.

Mr. Phillips: --Right.

Yes, I understood that to be Justice Stevens point.

Unknown Speaker: But, even we reject that argument, you would still say that Kerner was a public official--

Mr. Phillips: Sure, he was clearly a public official.

Nobody disputes that.

And, none of the petitioners are, I mean, Hunt does not.

In sum, the government today asks this Court to sign what is basically a prosecutorial blank check to rid the mails of any political act that a United States attorney finds unacceptable.

What makes this request most dangerous we think, is the fact that even an indictment in the context of political officials or public, or it's going to be party leaders, can be devastating to their public careers.

And thus, the government is asking this Court not only to sign a blank check, but a check that is of enormous consequence.

This Court cannot sign that check.

Only Congress can because only Congress can declare conduct to be illegal.

And Congress has not declared anything that the petitioners have done in this case, as presented to the jury, to be against the law.

Now, what the government--

Unknown Speaker: --xxx the two parties here are McNally and Gray?

Mr. Phillips: --The petitioners are McNally and Gray, yes, Justice White.

Unknown Speaker: And what was Gray's offense?

Mr. Phillips: Gray's offense, under the instructions to the jury was aiding and abetting Hunt.

Unknown Speaker: And he wasn't charged as a principal?

Mr. Phillips: He was charged in the alternative as a principal.

The instruction is quite clear at footnote A, the District Court's instruction to the jury says, in order to find this scheme, you must find one of the following: Either that Hunt engaged in certain activities and was aided and abetted by the two petitioners, or that Mr. Gray engaged in certain activities and was aided and abetted by petitioner McNally.

It is clearly in the alternative and therefore, the government is obliged to justify both of those theories.

With respect, unless there are further questions on the mail fraud count, with respect to the conspiracy issue and the failure of the Court of Appeals to consider petitioner's contention that the government failed to prove the tax object of the conspiracy, we explained in both our opening brief and our reply brief, why the government's request for a rule of per se harmless error seems to us unwarranted.

In light of the government's concession; however, that if it loses on the mail fraud issue that the conspiracy count must necessarily be reversed.

I would rest on the briefs unless the Court has questions and reserve the balance of my time.

Unknown Speaker: Thank you, Mr. Phillips.

We'll hear now from you Mr. Ayer.

Argument of Donald B. Ayer

Mr. Ayer: Mr. Chief Justice, and may it please the Court:

The government agrees, I think, with one general proposition that is made by the petitioners in this case.

And that's the point that there is a substantial amount of confusion concerning this intangible rights mail fraud theory.

And we would further agree that there is in some opinions of various courts of appeals, what I would describe as extravagant language, talking in terms of standards of moral uprightness, fundamental honesty, fair play and right dealing.

But that's, I think, where our agreement ends because first of all, in terms of this case, which is before this Court, that language I think is completely irrelevant.

Also, as to the very cases in which that language appears, I think one is hard-pressed to find even one where the language itself is necessary to the holding of the case and indeed where the outcome, the decision and indeed the reasoning, if you read the opinion further, isn't well supported on a much sounder and narrower theory of the Mail Fraud Statute.

But before we get to that question of intangible rights, I want to address the first proposition made in our brief, which is the point that this intangible rights theory need not and indeed I think, should not be addressed in order to resolve this case.

Unknown Speaker: Why didn't you tell us that when we were entertaining petition for cert?

Yeah.

Mr. Ayer: If we had known it, we would have told you.

Unknown Speaker: [Laughter]

You mean if you would have thought of it.

Mr. Ayer: Well, yes.

[Laughter]

If we had focused on the jury instructions, at the time that we filed our opposition, which we file I think 700 or so a year, indeed it would have been much better had we done that for all of us, I guess, but we didn't and thus we didn't make the point.

But having discovered it when we discovered it we felt like it was only right to bring it up as soon as we figured it out.

Unknown Speaker: Surely would have been better for us and maybe better for you.

Mr. Ayer: Well, we'll find out I guess.

[Laughter]

The reason why I think that the issue is not presented comes from a simple reading of the instructions, I wouldn't represent that the instructions themselves are simple--

Unknown Speaker: What page and what document?

Mr. Ayer: The government's brief at page 11 indicates in footnote eight.

What must be proved beyond a reasonable doubt is that the defendant's knowingly and willfully devised, or intended to devise a scheme to defraud as described in instruction 11.

I don't know why the reference to instruction 11 because the precise language of instruction 11 appears in this instruction 15.

But, in any event, repeated twice is the description of the scheme.

Repeated in instruction 11 and in instruction 15.

If you look at page nine at the beginning of footnote eight back where it first indents, is the reference to the scheme to defraud the citizens of their right to have the business and it's affairs conducted honestly, etcetera.

And then immediately following, the same scheme to obtain directly and indirectly money and other things of value by means of false and fraudulent pretenses, representations and promises and the concealment of facts.

There is no instruction as is typical in situations where you have multiple ways of violating a particular statute.

There is no instruction that says the jury must agree unanimously.

I have at least one of these ways of violating the statute.

Unknown Speaker: But, Mr. Ayer, that instruction does charge that, devised a scheme or artifice to and then it's a conjunctive not a disjunctive that links one or two which suggests that the scheme or artifice embodied both (a)(1) and (2).

Mr. Ayer: That's exactly right, Your Honor.

That's exactly our point is that the jury was told that they had to find a scheme to do both, or they couldn't convict and indeed they did find a scheme to do both.

They found a scheme to obtain property by false pretenses and having done that, and we knowing that they have done that there is no occasion to go further and ask whether the theory and the evidence would support the other theory as well.

Unknown Speaker: xxx.

Mr. Ayer: I think, if both--

Unknown Speaker: I mean, the Court shouldn't have said you had to find both.

Under your theory it would be a scheme to defraud if they just found number two.

Mr. Ayer: --That's correct.

And I must say when I first--

Unknown Speaker: So, the and is really not right.

Take advantage of it, so it's exactly right.

Mr. Ayer: --Exactly right.

Yeah.

We will take advantage of it and I think it is in fact, clearly what the jury was told to do and it's got to be what the jury xxx.

Unknown Speaker: It certainly isn't clearly because the court then goes on to say to find that the defendants, or either of them, devise such a scheme, referring back to the beginning of the preceding paragraph.

A scheme or artifice too.

One and two, which you just quoted.

To find that either of them devise such a scheme you must find beyond a reasonable doubt one of the following, and then it has one or two.

Mr. Ayer: Right.

And the one or two, those are references to the roles played by Hunt and Gray.

In each of those paragraphs, you find discussion of the channeling of commissions.

That is the appropriation, the obtaining of property.

Unknown Speaker: xxx one of those, you proved the scheme described above.

Mr. Ayer: That's correct and that language plus the additional language that says you must find beyond a reasonable doubt that they knowingly devised the scheme above.

xxx.

Unknown Speaker: Well, now, wait a minute.

How do you find any obtaining of property in Number two?

Where is the, or, you know--

Mr. Ayer: Yeah, I do.

It was a matter under the supervisory authority of the Defendant Gray, a secretary of public protection of regulation or secretary of the governor's cabinet at the time that Seton Investment Inc. received commissions from that insurance policy.

And then they talk about the ownership interest that Gray had.

So, there must have been a receiving of commissions by Seton.

Unknown Speaker: --Yes, but you're still left with whatever defect in hears in that number two.

And that,--

Mr. Ayer: Well, I will address that now, Your Honor, as you brought it up.

That the first, that is paragraph one requires in order to convict Mr. Gray that he had aided and abetted Mr. Hunt.

Mr. Gray was at all times relevant either or both the Secretary to the Cabinet, or the Secretary of Public Protection in Regulation.

And in both of those positions, in the second position of protection and regulation, he directly oversaw the entire state insurance program.

And as Secretary to the Cabinet, he was one step and oversaw among others the Secretary of Regulation.

Our theory is that in order to have found one, In order to have convicted under one, and who to have convicted Gray as the jury did, they must have found that Gray aided and abetted Hunt.

And for Gray in his public position to have been essentially turn, at least turning his head to the diversion of this money in ways which in a minute I will show to have been quite improper.

That in itself constitutes the breach of a public duty.

That is his duty as a public official.

Unknown Speaker: --Oh yes, but not under one.

Because under one he's charged as an aider and abetter and for that to be wrong, the principal, namely Hunt, has to be doing something wrong.

I don't think you can rely on Gray's capacity as a public official to satisfy the paragraph one.

Mr. Ayer: Well, we think we can, Your Honor.

And the reason we do is that there is no dispute as to his occupying a public position at all times relevant.

And the public position--

Unknown Speaker: But that's not because an aider/abetter is it?

I man, as an aider and abetter, he has to be aiding Hunt to do what is charged in that paragraph.

Mr. Ayer: --Well, the fact that most have been found is that Gray aided and abetted the scheme that Hunt was carrying out.

Unknown Speaker: Right.

If it said aided or abetted, in his official capacity, yes.

But it doesn't, it just says aided or abetted.

He could have aided and abetted him as a private citizen.

Mr. Ayer: I think what might be helpful in answering this question in a slightly, maybe circuitous way, but nonetheless it may be useful to refer to the facts in the case and in order to that in a brief way, I have submitted through the clerk, copies of exhibits that were used at trial.

And what they do, I'm not going to go through them line by line, but they were indeed used in trial to demonstrate the evidence in the case in a fairly brief and concise way.

Exhibits one and two are essentially flow charts of the way the money flowed from the Commonwealth of Kentucky to, in premium payments, to two different insurance companies and then the Commission's coming back from the carriers to the Wombwell Agency.

The Wombwell agency being the broker who got the business and agreed to handle this Workman's Compensation business for $50,000 a year and then at Hunt's request agreed, take that $50,000 and I, Hunt, as head of the Democratic Party will tell you where to send the rest of the commissions that you get back.

The key part of these diagrams.

Number one covers the period of 1976, I guess '76 through the middle of '77 and then other one covers the period '77 through '79.

Is what happens with the money, the premium, I'm sorry the commission payments once hey come back to the Wombwell Agency and what these, the little boxes over on the right hand side show, are the channeling of the checks to two different places.

One is to Seton Investments.

Now Seton Investments as we've indicated in our brief is an entity which was created by Hunt and Gray.

It was set up as a real estate investment company, but in fact, transacted no real estate business except the purchase of two condominiums, which the evidence showed was for the personal use of Gray and Hunt.

It purported to be for purposes of this scheme because it had to be under state law an insurance brokerage entity.

In fact, it transacted and the evidence showed it transacted no insurance business whatsoever.

It did not have an insurance license.

It put on forms which were submitted to the Wombwell agency as proof.

Unknown Speaker: xxx receiving commissions.

Mr. Ayer: That was the business it was in, Justice White.

And that is illegal under state law.

It is illegal under the provision of state law, under Kentucky revised statute 34.9-100, which we've cited in our brief, says that it is not a proper purpose of an insurance license to have it for the purpose and solely for the purpose of enabling the licensee to receive rebates or premiums.

Unknown Speaker: Do you think they foresaw this situation?

[Laughter]

Mr. Ayer: Well, they probably foresaw situations like it, given the existence of this kind of a patronage system in Kentucky, and given the acceptability under another provision, of splitting of commissions.

They wanted to make clear that this kind of situation is not acceptable.

Unknown Speaker: Still waiting to see who's been done out of money, you know?

Mr. Ayer: Well, who has been done out of money, number one, we would dispute and there is evidence I think in the record that supports the dispute that there was simply no way for Kentucky to do anything other than pay the money that it paid and to have the premiums that were paid, I'm sorry, the commissions that were paid back to Wombwell paid in a certain amount.

It is true that there's a regional commission that is set up.

I think it's basically part of the insurance industry that studies and decides what a reasonable commission is on a certain kind of policy.

It is always possible to renegotiate something like that and indeed there is testimony in the record that there, that that is a possibility.

It was never done here--

Unknown Speaker: That certainly isn't a crime to fail to get the lowest possible price you can for the state in dealing with insurance people, or auto people, or anything else.

Mr. Ayer: --That's absolutely correct, Your Honor.

Unknown Speaker: xxx making this argument to show that the state of Kentucky lost some money?

Mr. Ayer: No, I am not.

I'm trying to answer Justice Scalia's question as to who was done out of money.

It is indeed the case that had people been public watchdogs, looking for where the money's going, it would have come out differently.

That's not the point.

That's not the reason why this is illegal.

This is illegal, what I'd like to do is--

Unknown Speaker: Here is the analogy that I'm, patronage systems were never considered illegal.

I mean, that's why we had to have a law to have the civil service.

And the theory was, somebody has to have the job, you're going to give the job to somebody, why not give it to our guys?

That was never thought unlawful, or it certainly wasn't considered fraud.

Now it seems to me, you would have to persuade me that this is something any different from that to convince me that it's fraud.

And so far, you haven't.

I don't see how anybody has been done out of any money.

Just, the money has to go to somebody.

It might as well go to our guys.

Mr. Ayer: --Okay.

Unknown Speaker: Is that fraud?

You aren't arguing the state was done out of anything?

Mr. Ayer: No.

We are not and we did not at trial.

Unknown Speaker: But I take it you are arguing that simply receiving premium payments in the mail is different from getting paid for a job that you perform.

Mr. Ayer: Well, It's different.

I am not sure how much we can make of that given the premise that we all start from that this patronage scheme is legal and therefore, it's perfectly legal for someone out dole out money to his friends.

Unknown Speaker: I thought you were arguing that it wasn't necessary at all for Kentucky to be cheated out of any money.

Mr. Ayer: That's correct.

Unknown Speaker: It's just that somebody was receiving money under false pretenses and--

Mr. Ayer: That's correct.

Unknown Speaker: --by concealment and things like that, which is mail fraud.

Mr. Ayer: That's correct.

What has been done here, what I'd like to do is start with the proposition that, hypothetically speaking, let's forget that these people are in fact, public officials.

Let's leave that out of it.

As I think we have demonstrated in our brief, what was done was a, what was shown was a complete scheme for obtaining property by false pretenses.

The false pretenses are the setting up a phony insurance brokerage outfit for the purpose of making it appear acceptable to channel this commission money to them.

Under state law it is illegal to split commissions with anyone other than an insurance broker or agency.

And so what they did was to create this entity as an independent company, disassociate themselves, that is Gray and Hunt, from it by bringing in at least at a late date, McNally, to serve as its president and act like this is an independent entity that McNally is in charge of.

And indeed at trial the argument was that McNally owns this.

This is all his, we don't own it, that is Gray and Hunt don't own it, McNally owns it.

That scheme, just leaving out the element of public official and public obligation is in and of itself, that deception to allow the channeling of money to Seton, which indeed then goes essentially to the use, as is indicated on our exhibit three, to the use of these individuals in the form of condominiums.

That is itself a complete mail fraud scheme.

A scheme for obtaining property by false pretenses and we believe that that is the first and easiest way to resolve the case.

Unknown Speaker: Doesn't the false pretense have to be a pretense to get the property?

That but for that pretense, the property would not have been given?

Mr. Ayer: Well--

Unknown Speaker: You don't say I defraud somebody if I go up and say, I'll buy your car for $500 and I give him my wrong name.

You wouldn't say that I defrauded him of the car so long as I give him the $500.

Mr. Ayer: --It wouldn't have been possible for, even if they weren't public officials, it wouldn't have been possible for either Gray or Hunt to walk up and say give me commissions.

Even if they were politically influential because they are not insurance brokers.

And they do not have the requisite license to make it legal under state law to participate in this particular form of patronage.

Unknown Speaker: So whoever would have gotten the insurance commissions were done out of them?

I mean, because these two people got them and they weren't entitled to them, whoever was paying it to them would have kept them.

Mr. Ayer: I think, well the whole idea was to take this pot full of money which amounted $850,000 over four years and spread it around.

Unknown Speaker: Someone else would have kept the money.

Someone else would have got the money xxx.

Mr. Ayer: Someone else would have gotten it, but I don't think it would have been somebody who could of claimed he had a right to it.

Unknown Speaker: Who would the somebody else be?

Mr. Ayer: Someone else would in all likelihood of been, some other insurance brokerage, I should say some insurance brokerage outfit in the state of Kentucky who had been supportive of the governor and the administration.

Unknown Speaker: And so that's the person who is economically injured?

Someone else who is waiting in line and didn't get there in time.

[Laughter]

Mr. Ayer: Well, our theory is that, well, I don't think it's just our theory.

It's very clear as to this first cut, leaving out the public official and the public intangible right element.

It's very clear that what was proven on this first level was a scheme to obtain property by false pretenses.

The false pretenses being the creation of this Seton outfit which is phony.

Never does any business and just is there to receive money and channel it to Gray and Hunt.

That, in and of itself, the obtaining of that property, forgetting about who is hurt, there is no requirement in the law that someone be harmed as a result--

Unknown Speaker: Well, you said, Justice O'Connor made the point a while ago that fraud doesn't ordinarily require that the defendant may have gained, but I had thought at least fraud required that there had been some economic injury to someone.

Mr. Ayer: --Well, the--

Unknown Speaker: You say, not only need their be no gain, but there not need be any harm.

Mr. Ayer: --I think that's correct, Your Honor.

And I think that is emphatically clear--

Unknown Speaker: Why is it prohibited?

[Laughter]

Mr. Ayer: --Well, I think it's emphatically clear on the face of the statute that that is true.

Because the statute has three different clauses.

The first one is for creating, or putting into effect a scheme to defraud, or for obtaining money or property by false pretenses.

That is exactly what was done here, was the obtaining of money or--

Unknown Speaker: xxx right it.

It really does you're telling, cover the case where I go up and buy a car for $500, give my wrong name.

Mr. Ayer: --No, I don't think so, because I think you're giving your wrong name is no part of inducing the obtaining of money or property.

He wasn't relying on the fact that you gave a wrong name.

Whereas here, they very much are relying on the fact that Seton is supposed to be, and indeed to illustrate that, the Wombwell Agency, Mr. Tabeling specifically asked more than once for assurance that Seton was in fact, a legitimate insurance agency.

And so what he was given--

Unknown Speaker: Right.

Mr. Ayer: --was the insurance license number of--

Unknown Speaker: I have to add a fact then.

Mr. Ayer: --Okay.

Unknown Speaker: This automobile dealer does not sell cars to government employees.

And I walk up and I say, you know, my name Jones and I am not a government employee.

He sells me a car for $500.

I have defrauded him.

Mr. Ayer: Well, I think that as a technical matter you may well have.

If it is material and if you have a duty not to lie to him, which I think is fair to say you do.

Unknown Speaker: If that were the only permissible interpretation of a federal criminal statute, I would think a court would be fairly loathe to reach that.

Mr. Ayer: Well, what we would suggest as a description of what must be shown, as a set of requirements under this intangible, first of all, let me say, I think it makes very little sense to conclude that somehow the mail fraud statute doesn't cover schemes to defraud of intangible rights.

If you define an intangible right as any right other than the physical possession of something.

You talk about a right to a stream of income under a contract.

Or, you talk about a right to purchase a piece of property.

You talk about almost any right in our society.

Very few people walk around with gold bars in their pocket.

Most people rely on intangible rights.

And so, as an opening proposition, we've got to be all assuming that the Mail Fraud Statute can reach some--

Unknown Speaker: xxx intangible property.

Mr. Ayer: --Intangible property.

Unknown Speaker: That's a good old concept, intangible property.

It's a little different from intangible rights in that it doesn't include the right to good government, for example.

Mr. Ayer: Well, I'm not sure I know where it begins and ends.

If I have expectations that have value, is that intangible property?

Unknown Speaker: xxx same category.

As traditional a category as rights in stock and so forth which are intangibles.

Mr. Ayer: Do I think what is?

Unknown Speaker: The right to good government is--

Mr. Ayer: Well, I think--

Unknown Speaker: --an intangible right of which one can be defrauded.

Mr. Ayer: --I think in the following, when you meet the following set of requirements the answer would be yes.

And this is what we would be suggesting as a substitute for what I referred to earlier as the extravagant language of some opinions.

Number one, that there must be the duty that you're talking about has got to be an enforceable duty of some kind.

The thing you're being defrauded out of is not just a moral aspiration.

It's got to be a real duty.

It can arise from the criminal law.

It can arise from the civil law.

It can rise from a statute, or the common law.

And we would suggest it can arise from contract.

Unknown Speaker: You don't even need standing to be able to enforce that, do you.

Mr. Ayer: No, xxx.

Unknown Speaker: I assume I have no right to sue for good government, right?

It's a right I have, but it's not a right I'm able to sue for.

Mr. Ayer: Well, I think that's correct.

I think the state in dealing with--

Unknown Speaker: But I can sue somebody for defrauding me of it?

Mr. Ayer: --Well, I think the state can sue, or can bring a criminal action for defrauding it of the right to honest services of its employees.

Or the honest services of people who have been given trusted, trusted with responsibilities.

But, that's only the first part.

That's the first step.

The second step is that there must be a causal relationship between the breach of that duty and either the appropriation or the deprivation of a thing of value.

We are not suggesting that simply the abstract non-performance of a duty is a sufficient basis to bring a criminal action.

We think that it is quite appropriate to require that the breach of the duty have some kind of a consequence and in this case the consequence, well let me skip over this case for a minute.

The third element would be an element of deception.

Which is a traditional element of the Mail Fraud Statute.

That there must be some effort to cover up the scheme to deceive, to essentially hide what's going on.

And when you put those three things together, I would submit what you have is really only another way of saying what is going on in a more traditional property oriented male fraud case.

Unknown Speaker: Do you think these instructions covered those elements insofar as this theory of deprivation is concerned.

I don't see anything in the instructions that suggest that these people had any duty to, unless you say that the Court must of thought there was a duty or they wouldn't have given this kind of an instruction about disclosure.

Mr. Ayer: We, just to repeat briefly, we think first that the case should be resolved as one for obtaining property xxx pretenses.

Unknown Speaker: Yes, I understand that.

I understand.

Mr. Ayer: Leaving that aside I think the instructions in their references to the directing of commissions and to the--

Unknown Speaker: Without disclosing?

Mr. Ayer: --Right.

And to the positions, there's two different things we have to talk about.

One is the position of Gray and whether is position and the duties that he owed were sufficient.

And we think that that can be a basis for deciding the case under either xxx.

Unknown Speaker: Wouldn't that be a jury question, whether they had the duty, or not?

Or was that legal, some instruction the court ought to give?

Mr. Ayer: Well, I think that--

Unknown Speaker: Because I don't see anything about a duty to disclose.

As far as these instructions are concerned, it wouldn't make any difference whether there was a duty to disclose, or not.

Mr. Ayer: --What, the discussion--

Unknown Speaker: There was a failure to disclose.

Mr. Ayer: --The discussion that does exist is the discussion of Gray's position as Secretary and the positions that he held.

Unknown Speaker: Yes.

Yes, but it doesn't say that he had a duty, or it doesn't ask the jury to find it.

If he didn't disclose it that was all the jury was interested in.

Mr. Ayer: Well, I think there's two different things going on here.

One is the duty to disclose.

And we would not put primary emphasis on that.

What I would suggest is that starting with the premise that there was an obtaining of property by false pretenses, how was it done?

It was done by these two individuals setting up the scheme and it happens that Hunt was imbued with official power, that is, the governor told him that he had the power to pick the insurance companies and to direct the commissions.

And secondly, Gray was in a position overseeing all of this and a lot of other activity.

What had to happen was the, by Hunt, the misuse of his position and of his authority.

He had to misuse state governmental power to direct this money to himself.

That's the first thing that had to happen.

And, Gray had to, in his position, essentially at a minimum, look the other way and happily receive the money at the other end.

And we think the use of state governmental power essentially to commit a federal mail fraud and that's going back to the first step.

That is apart from their state governmental authority, they committed a mail fraud.

The use of power to do that is a separate abuse of authority, that is, an abuse of the governmental authority.

Unknown Speaker: xxx did say that the failure to disclose, if there was a failure to disclose it had to influence, if there had been a disclosure, the conduct of other government officials would have been different.

Mr. Ayer: I don't know if that's in here, Your Honor.

I--

Unknown Speaker: Well, if there had been a--

--xxx and if Gray had an ownership interest, that he failed to disclose that interest to persons in state government whose actions or deliberations could have been affected by such action.

Mr. Ayer: --Okay.

Unknown Speaker: A jury xxx find that.

And so non-disclosure with that kind of a consequence.

Mr. Ayer, before you get through, you've given us the three parts of your theory and the first of which is the duty that's enforceable.

What, at least with regard to Hunt, what is the duty you're talking about?

Mr. Ayer: With regard to Hunt?

Unknown Speaker: Yeah.

Mr. Ayer: I think with regard to Hunt, if you have to reach that, and we submit you don't,--

Unknown Speaker: That's mainly what the Court of Appeals relied on as I remember their opinion.

Mr. Ayer: --Well, that's right.

But, it's usual I think, not to decide cases where they are not going to affect the outcome.

But the duties--

Unknown Speaker: xxx you said there's sufficient evidence as to the Hunt charge, but they didn't really reach the other, so we'd have to send it back to find out.

Mr. Ayer: --Right.

The duty was a duty not to misuse the governmental authority which was given to him to commit what is apart from his duties as a governmental official, a criminal act.

That is the scheme for obtaining property by false pretenses.

Unknown Speaker: What is the criminal act, you mean as a matter of federal law?

Mr. Ayer: Yes.

He--

Unknown Speaker: Well, this kind of xxx.

Mr. Ayer: --That the whole, as I indicated before, the whole scheme--

Unknown Speaker: The duty is a duty not to violate the Mail Fraud Statute.

Mr. Ayer: --That's right.

That he as a--

Unknown Speaker: If you prove a violation of the Mail Fraud Statute by proving you violated the xxx.

Mr. Ayer: --Well--

Unknown Speaker: I have difficulty following that.

Mr. Ayer: --Okay.

Well, what we tried to show is that the initial, the scheme to obtain property by using Seton, a phony shell company as a recipient for money.

Unknown Speaker: Of course, the jury was not required to find they were phony companies, as I read the instructions.

They were required that they had a secret interest in it, but they could have had a secret interest in a legitimate brokerage firm.

Mr. Ayer: Well, they were required to find a scheme for obtaining property by false pretenses.

Unknown Speaker: All right.

Mr. Ayer: There's got to be some false pretenses.

If there's no false pretenses then xxx--

Unknown Speaker: The false pretenses are not disclosing the ownership interest.

That's what the instruction says.

Mr. Ayer: --Well they certainly could also be the, and the bulk of the evidence in the case certainly dealt with the channeling of money to Seton.

Unknown Speaker: Right.

Mr. Ayer: That's what the case was about.

That's what the time in court was spent on was showing this money, check after check after check going to Seton.

Unknown Speaker: I understand, but you argued at some length the fact that Seton was a sort of a shell.

Mr. Ayer: Right.

Unknown Speaker: But the jury wasn't instructed to find that.

Mr. Ayer: I don't believe that there's anything in the jury instructions that says the jury had to find specifically that Seton was a shell.

They had to find a scheme to defraud by obtaining property.

Unknown Speaker: So, then don't we have to assume the case would be the same for legal purposes even if Seton were not a shell?

Cause we don't know the jury thought it was.

But there still, you're not necessarily out of, totally lost because you still then would claim the failure to disclose the ownership interest, I guess, is enough.

Maybe you don't want to go that far.

But then we're back to my just giving the wrong name.

And not even saying that I'm not a government employee.

Mr. Ayer: Well, I think what is critical is that there be a linkage between the duty that's breached, which we are arguing is--

Unknown Speaker: But you're not saying that's the duty to disclose.

That's what I'm trying to find out for--

Mr. Ayer: --Well, I--

Unknown Speaker: --The duty to this breach is the duty not to violate the Mail Fraud Statute.

Mr. Ayer: --I think there is a duty to disclose.

The only reason I am hesitant to rely primarily on that is that I frankly think the basic scheme to defraud, that is to get the money, by using Seton is a more persuasive fraud.

There is indeed a duty, on the part of a public official to disclose and I think, I would argue if we had say it to get, you know, to resolve the case which I think we don't for at least two other reasons.

That there's a duty on the part of Hunt to disclose based on his use of governmental authority.

I see my time is expired.

Thank you.

Unknown Speaker: Thank you, Mr. Ayer.

Mr. Phillips, you have eight minutes remaining.

Rebuttal of Carter G. Phillips

Mr. Phillips: Thank you Mr. Chief Justice.

I would like to make simply three points.

I hate to drag you back into the jury instructions, but I think they're fairly important in this context.

The first statement that Mr. Ayer made with respect to the instruction, I think, requires some clarification was his suggestion that Mr. Gray and his aiding and abetting must have been a public official, that the jury must have found that.

Aside from the point that I believe Justice Stevens made, which is that there was no requirement in the jury instruction that that be found.

The truth is that at the closing argument, the United States attorneys, the Assistant U.S. Attorney told the jury that the aiding and abetting was in setting up Seton.

And it is undisputed that when Seton was set up by Mr. Gray he was not a public official.

So, it's both contrary to the instruction and contrary to the facts of the case.

Second, with the respect to the false pretenses, I guess I would just like to repeat what Justice Stevens said, this whole notion of a phony business and the various ways that that may have operated is an interesting theory.

It is not the theory that was presented to the jury in this case and I take that as the best evidence that the reference to false pretenses was not regarded as somehow a separate item in this case at all, either to the court, or to the jury.

And the court made it quite clear what it thought the appropriate theory for conviction was in this case.

And that set out in the portion that describes the scheme underwritten in the indictment.

And finally, with respect to the government's eleventh hour effort to find some limiting principles for its mail fraud, I took it as quite interesting that in describing that there must first be a duty, Mr. Ayer suggests that he wouldn't put primary emphasis on that point and it's quite clear to me why he wouldn't do that in this case because wherever you look there is simply no duty.

And I think ultimately what it came down to was that the duty that exists in this case is a federal duty.

But that's not what the Mail Fraud Statute requires.

This Court made quite clear in Parr that you look to other sources to determine what is fraud, and the fraud in this case is based on a duty.

You must look to those sources to find out where that duty exists.

There are none accordingly and the petitioner's conviction should be reversed.

Chief Justice Rehnquist: Thank you, Mr. Phillips.

The case is submitted.

Unknown Speaker: The Honorable Court is now adjourned until Monday next at 10:00.

Attribution:

The OYEZ Project

Featured:

Dixson v. United States - Oral Argument

Thu, 30 Aug 2012 22:14:50 +0000

Case:

Dixson v. United States

Media File:

82-5279_19831012-argument

Related Transcript:

82-5279_19831012-argument

Transcript:

ORAL ARGUMENT OF DONALD V. MORANO, ESQ., ON BEHALF OF THE PETITIONERS, APPOINTED BY THIS COURT

Chief Justice Warren E. Burger: We will hear arguments first this morning in Dixson against the United States and the consolidated case.

Mr. Morano, you may proceed whenever you are ready.

Donald V. Morano: Mr. Chief Justice Burger, and may it please the Court, the issue before the Court is whether petitioners as employees of a community-based, non-profit corporation, United Neighborhoods, Incorporated, UNI, constituted public officials according to the bribery statute.

Since petitioners in their employment with United Neighborhood, Incorporated, were not federal employees, the only provision under which they could be subject to the bribery statute would be as

"persons acting for or on behalf of the United States or any department, agency, or branch of government thereof, in any official function, under or by the authority of any department or agency or branch of the government. "

The legislative history establishes, however, that petitioners cannot be subject to the bribery statute under this provision.

First, as employees of United Neighborhoods, Incorporated, they were not officers or persons acting on behalf of a corporation controlled by a department, agency, or branch of the federal government.

Second, petitioners did not have contracts with a department, agency, or branch of the federal government, and therefore could not serve as agents in performing the terms.

Unidentified Justice: Did their agency, the local agency have a contract with the United States government?

Donald V. Morano: The contract was between the city of Peoria and the United States government.

The contract was a community block grant, which was issued in 1978 to the city of Peoria, and petitioners were employees of a subgrantee, this non-profit corporation, United Neighborhoods, Incorporated.

Third and last, petitioners were not federal inspectors licensed or authorized by some department, agency, or branch of the federal government to certify or enforce standards established by law.

In looking at the legislative history of the bribery statute, in 1962, the last time the bribery statute was revised, Congress said that it was not making any substantive changes in the statute in regard to classes of persons subject to it, but merely was consolidating under one statute what had heretofore been 13 different statutes.

But Congress also declared that it was continuing to give the same broad interpretation of public official and public act as found in case law.

Congress, however, had been prodded by the Court in this Court's 1920 decision, United States versus Strang, to make the bribery statute applicable in piecemeal fashion to employees of government owned and controlled corporations, such as, for instance, the Homeowners Loan Corporation and the Federal Deposit Insurance Corporation.

And then, in the year 1948, Congress revised the statute and inserted

"or any department or agency thereof. "

to embrace offices or persons acting on behalf of any independent agencies or government owned or controlled corporation.

I think two good examples of government owned or controlled corporations would be the Federal Reserve Banks which are depositories for currencies held in the United States Treasury, and also fiscal and monetary agents of the United States, and another example would be the European Exchange System, which served as an instrumentality of the United States government and the Department of the Army in operating exchanges at European military posts.

Thus, what we can infer from these examples is that a necessary condition of such a government controlled corporation is that a department, agency, or branch of the federal government exercise an ongoing control, supervision, and direction of the operation of the corporation.

There is a symbiotic relationship between the corporation which is controlled and the federal government.

One of the definitions given in Webster's Third International Dictionary of the noun "control", I think, specifies rather aptly the kind of control which I am talking about:

"Application of policies and procedures for directing, regulating, and coordinating production, administration, and other business activities in a way to achieve the objectives of the enterprise. "

Accordingly, United Neighborhoods, Incorporated, was not a corporation controlled by the federal government.

Indeed, the program manager of the Department of Housing and Urban Development for western Illinois in charge of the dispersal of the community development block grants to the city of Peoria during the period of the indictment testified that he neither knew or was required to know the existence of United Neighborhoods, Incorporated, nor, for that matter, any other subgrantee.

Unidentified Justice: Mr. Morano, is this argument directed to the phrase in the statute

"a person acting for or on behalf of the United States? "

Donald V. Morano: Yes.

What I have argued, Justice Rehnquist, is that in effect there really are three rubrics under which someone could be deemed to act for and on behalf of the United States in terms of legislative history and case law which was given approbation by the Congress in its 1962 statement.

And the three rubrics are that you have an officer or employee of a government controlled corporation, or--

Unidentified Justice: But not... Let's take them one at a time.

Right after the phrase

"acting for or on behalf of the United States. "

comes

"or any department, agency, or branch of government. "

Now, wouldn't that really include the first example you have just given?

Donald V. Morano: --But, see, these are... we are talking about actual government bodies in government or any agency or branch of the government thereof, but these are--

Unidentified Justice: But--

Donald V. Morano: --This one is acting on behalf of these, you see.

Unidentified Justice: --But are we talking about them?

The statute is in the disjunctive, and you are right, in the latter part it says,

"or on behalf of any department, agency, or branch of government thereof. "

but before that it says,

"or on behalf of the United States. "

which suggests to me that that phrase must mean something over and above

"any department, agency, or branch of government. "

Do you see what I mean?

Donald V. Morano: Yes, I understand what you are saying.

I think I would put it in the... perhaps in the... I should perhaps state it in the disjunctive then, that... I can't think offhand of an example in which a person would be acting on behalf of the government unless they were some department, agency, or branch of the government involved.

I mean, it is--

Unidentified Justice: Well, I suppose the grain inspectors are an example.

They are covered by a separate statute, but that is an example, is it not, of someone acting for and on behalf of the government?

Are there other examples like the grain inspectors where some state or local agency or employee is designated by law to be an agent of the federal government?

Donald V. Morano: --But I think that the grain inspector, wouldn't the grain inspector be acting for the Agriculture Department?

I think the grain inspector is authorized or licensed by the Agriculture Department.

Anyway, I would concede that it could be understood in the disjunctive, certainly, that it could be acting on the behalf of the United States or any department, agency, or branch of the government, but still, the three rubrics would be covered by that, whether you understood it as in the disjunctive or merely suplisage.

Unidentified Justice: Mr. Morano, did the UNI do any of the work itself in any occasion, or was it always a mere conduit for the federal funds?

Donald V. Morano: It had no relationship whatsoever with the federal government save for the federal source of the funds.

Unidentified Justice: Did it ever do any of the rehabilitation work itself?

Donald V. Morano: It did all of the rehabilitation work.

Yes, Justice O'Connor.

It did all of the rehabilitation work for that area of the city.

UNI had been established in 1975 with these independent objectives as a community-based organization to improve the situation.

When the Nixon Administration in 1974 passed the community block grant in response to the turmoil and the lack of decent housing and the lack of other sources of finances to improve this condition, the UNI... they received more than $1 million, the city of Peoria received more than $1 million in grants specifically earmarked to work in that area, and then they subcontracted the work out.

All the objectives and goals were general goals of the city, but UNI was to use its own ingenuity in accomplishing them.

Unidentified Justice: Mr. Morano, may I just make sure I understand?

You said that UNI did all the rehabilitation work itself.

By that I take it you mean they let the contracts to private contractors who did the work.

They didn't do--

Donald V. Morano: Oh, I see what you mean.

I misunderstood the question.

Yes.

Unidentified Justice: --They didn't actually do any of the--

Donald V. Morano: They did have volunteers, though.

They did... in other words, a community-based organization, and so that they did have housing contracts--

Unidentified Justice: --I see.

Donald V. Morano: --but this wasn't... you see, there were volunteers, community-based volunteers, and there were other things which--

Unidentified Justice: I see.

Donald V. Morano: --UNI continued to carry on all kinds of activities.

Unidentified Justice: So they did actually some physical rehabilitation work--

Donald V. Morano: Yes.

Unidentified Justice: --with their own personnel as well as contracting work out?

I see.

Donald V. Morano: Thank you, Justice Stevens.

I didn't understand Justice O'Connor's question.

Granted the city of Peoria was required to submit annual reports to HUD, and the Secretary of HUD had the right to audit such community block grants and to adjust, reduce, or withdraw such funds if the city did not substantially comply with the terms of the application of the requirements of the Act.

But according to the Act, once the city of Peoria had received this community block grant, the entire administration of the grant was left to it, and HUD had absolutely no control over or right to interfere with its administration.

So therefore what is decisive is that the federal government had relinquished all control over the operation and administration of these community block grants once it had dispersed them to the city.

A fortiori, the city of Peoria in the five contracts it entered into in the year 1978 with UNI gave to UNI full control over the administration of this one... of these more than $1 million it had received in community block grants to rehabilitate an area of the city in which UNI had been carrying on its activities.

It retained only the right to terminate the agreements, and to seek other relief if UNI failed to comply with the municipal code, the city fair employment practices, and the terms of the contracts.

Consequently, UNI was twice removed from being a corporation controlled by the United States government or by any department, agency, or branch of the government thereof.

In all but two cases in which persons who were not federal employees or employees of a government owned or controlled corporation were still adjudged public officials under the statute, either they had a contractual relationship with some... with the United States and, I would say, with some department, agency, or branch of the federal government, in which they served as federal agents, or they served as federal inspectors.

The only exceptions are the decisions of the Seventh Circuit in the instant case and in United States versus Mosley.

Petitioners in their employment with United Neighborhoods, Incorporated, had no contract with any department, agency, or branch of the federal government or the United States of America, nor were they agents of the federal government inasmuch as they had no direct dealings with the city of Peoria, let alone with the federal government.

Unidentified Justice: Do you think the Congress could have authorized the federal agency itself in Washington to go out and do all this community rehabilitation, awarding the contracts directly through federal employees?

Could they have done it that way if Congress wanted them to?

Any constitutional objection to it?

Donald V. Morano: There might be a problem of... I mean, the... I haven't thought that through, but my guess might be that there might be a problem between of the... a dispute between the legislative and executive branches of the government that this is... this sounds a little bit maybe too socialistic for the usual way in which Congress operates.

Unidentified Justice: Well, in this instance, Congress created an agency which was authorized by Congress to make grants in the communities and allow the grantee of that community to carry out the rehabilitation of housing.

Is that correct?

Donald V. Morano: Yes.

Unidentified Justice: Well, then, wasn't everything that was being done being done on behalf of the United States?

Donald V. Morano: I think that the history of the Act shows that this would be giving too broad a scope to acting on behalf of the United States.

Certainly the United States had an interest, the United States had given funds, but if we look at the Community Development Act of 1974, which was a continuation of the federal revenue sharing programs for better communities that Nixon had initiated and the Congress had gone along with him on, Congress found critical problems facing the cities which it hoped to alleviate by enlisting the support of the local groups.

The emphasis was upon the initiative of the community to tailor a program which was suitable for it in its unique situation.

Unidentified Justice: The initiative began with the local community asking the federal government for some money, and then the federal government gave the money, so that it was entirely paid for by the federal government, was it not?

Donald V. Morano: Yes, Justice, it was entirely paid for by the federal government.

Unidentified Justice: Then on the second... on the disjunctive aspect of what Justice Rehnquist read to you, isn't all this conduct by these people being done on behalf of the United States?

Donald V. Morano: I don't think, Justice Burger, in terms of the legislative history of these words, that we should give such a broad construction--

Unidentified Justice: Well, let's forget about the legislative history and see whether the language of the statute is clear.

If it is clear, we don't need to look at the history, do we?

Donald V. Morano: --That's true, Justice.

I do not think that the... that use of language on behalf of someone suggests... is suggested by the fact that someone has an interest in the results, and that someone is paying for what is being done.

The statute says clearly that what is anticipated is the consolidated efforts of city, state, and local governmental bodies, the continuation of business investments, et cetera, so that the

"on behalf of the United States. "

if we gave this strong interpretation, any time we had federal funds... excuse me?

Unidentified Justice: Mr. Morano, suppose the UNI just took the money and bought a yacht with it?

Would there be any federal problem?

Donald V. Morano: Yes, there would, Justice Marshall.

Unidentified Justice: There would be?

Well, how would that be?

How would that come about?

Donald V. Morano: As I have tried to delineate with these government controlled corporations, UNI does not qualify as a government controlled corporation; however, audits were regularly allowed by the Secretary of HUD, and if there is a misuse of the funds, then funds can be adjusted, withdrawn, or reduced in terms of this information.

Unidentified Justice: Can anybody be put in jail for taking federal money?

Donald V. Morano: Not unless there is a criminal statute.

Unidentified Justice: Well, my hypothetical is, they took the federal money and bought a yacht with it, and I am asking you, is that legal or illegal under the federal law?

Donald V. Morano: They couldn't be prosecuted under the bribery statute, because the bribery statute doesn't cover them, because--

Unidentified Justice: Well, I didn't think the bribery statute covered buying a yacht.

That is embezzlement, isn't it?

Donald V. Morano: --I don't know what law it would or would not be covered under.

Unidentified Justice: But don't you know that it's a crime?

I mean, you say UNI is free to do whatever it wants to do.

Then it can buy a yacht.

Donald V. Morano: No, within the scope of the... they have a contract with the city of Peoria, and they were subject to an audit by the city of Peoria--

Unidentified Justice: And the federal government.

Donald V. Morano: --and if they didn't conform, they were subject to prosecution under any existing law.

The only contention--

Unidentified Justice: Weren't they subject to an audit by the federal government?

Didn't you say five minutes ago that HUD did audit it?

Donald V. Morano: --They had the right to--

Unidentified Justice: They had the right to.

Donald V. Morano: --Yes.

Unidentified Justice: Well, how did they get that right?

Donald V. Morano: It was given by the statute, the community block grant.

Unidentified Justice: Well, does anybody have the right who doesn't have the money?

Isn't the right tied to the money?

And isn't the money tied to the federal government?

Donald V. Morano: I think that we can analogize with income tax.

I mean, it seems to me that there are--

Unidentified Justice: Are you going to answer my question?

Do you agree with me?

Donald V. Morano: --I think I do.

Would you please repeat it?

I am sorry.

Unidentified Justice: I have forgotten it.

0 [Generallaughter.]

I mean, you forgot it, so I forgot it.

Donald V. Morano: Well, I think that certainly... I think the emphasis has been too much upon the federal source of the community block grants and the perduring interests of Congress in these, but when it comes to a criminal statute, if there is any ambiguity, and I maintain that there is ambiguity in what it means to act on behalf of someone else, that if we were to say that any time one handles funds that have been derived from someone else, that one is acting on behalf of that government body, well, then it seems to me that we would have an almost limited jurisdiction, and it doesn't seem to me that that would be a reasonable interpretation of what Congress had intended.

So that I think that in view of the fact that we... to understand a plain meaning, we not only have to construe the words

"acting for or on behalf of the United States in any official function. "

but we also have to look to a further restriction, and the further restriction is under or by authority of some department, agency, or branch of the government thereof.

And it seems to me that there is... it would be rather far-fetched to say that these employees who were doing day to day tasks assigned to them by their superiors in United Neighborhoods, Incorporated, are acting under or by the authority of HUD, or under or by authority of the city of Peoria, let alone HUD.

The Congress, when it drafted the statute, didn't predicate the statute in terms of the source of the funds.

In the government brief, they--

Unidentified Justice: Mr. Morano, you are now referring to the section of the statute that speaks of under or by authority of any such department, agency, or branch of government, and then you go back... if you go back earlier in the statute, within the same subparagraph, the language there,

"any department, agency, or branch of government. "

is separate from the language,

"a person acting for or on behalf of the United States. "

It is at the bottom of Page 1 of your blue brief.

I think one could make the argument that the language you are now relying on,

"under or by authority, modifies only the phrase. "

any department, agency, or branch of government, "and not" a person acting on behalf of the United States.

"Do you disagree with that"?

Donald V. Morano: --I would think so, but I wonder if it makes any difference in this case, because obviously if these people were acting on behalf of... if they were public officials, they would be so because of the connection through HUD, and so therefore it is a department of the federal government, and therefore, if they are going to be public officials, it would be under or by authority of the Department of HUD.

And this is not, it seems to me, what is the case here.

I think that the government in its brief says that it is hard to imagine how Congress could have expressed more vividly its intention to cover persons administering federal programs, and I think in the very posing of the question it answers itself, for if Congress had intended that there be federal jurisdiction under the bribery statute for all cases of alleged fraud by persons administering federally funded programs, all it would have had to have done would have been to have drafted a statute stating just that.

But it didn't do such.

It seems that the principle of lenity and the principle of federalism adds strength to this position.

The principle of lenity that in a criminal statute, if there is any ambiguity whatsoever, if there is genuine ambiguity... I shouldn't say any ambiguity whatsoever... but if there is a genuine ambiguity, the narrower construction is mandated, and it seems to me that the most one can say is that there is some doubt about Congressional intent about the language.

And therefore the narrower construction seems mandated.

In addition, since we have here not merely a criminal statute but a federal criminal statute, we also have problems of comity and federalism, that the area of criminal law is generally, absent a national or constitutional issue, left to the jurisdiction of the states.

Unidentified Justice: Have you looked at 18 United States Code recently to see all the federal criminal statutes there are?

I think you would have some hesitancy in making that statement.

You may answer if you wish.

Donald V. Morano: I am sorry.

Is my time off?

Unidentified Justice: No, you may respond to my comment.

You may respond to the question if you wish.

Donald V. Morano: Have I looked at the statute?

Unidentified Justice: I was just making the point that there are a great number of federal criminal statutes certainly.

Donald V. Morano: Yes.

Thank you.

Chief Justice Warren E. Burger: Mr. Wilkins?

ORAL ARGUMENT OF RICHARD G. WILKINS, ESQ., ON BEHALF OF THE UNITED STATES

Richard G. Wilkins: Mr. Chief Justice, and may it please the Court, the United States has just a few brief points to make.

The statutory construction question presented by this case is indeed readily resolved.

The plain language of 18 USC Section 201 as well as its legislative history and the broad public policies underlying the federal bribery statute clearly demonstrate the petitioners are public officials within the meaning of the federal bribery statute.

At the outset a few facts, I believe, are necessary to put this question in its proper perspective.

Petitioners were the executive director and housing rehabilitation coordinator of United Neighborhoods, Incorporated, a public or a non-profit public corporation that was designed to perform various functions.

One of these was the distribution of federal housing funds obtained from the federal government through the city of Peoria under the Housing and Community Development Act of 1974.

As detailed in our brief, United Neighborhoods' use of these funds and petitioners' administration of these funds was subject to a whole host of federal substantive and procedural regulations.

The federal government designed the program, set forth what activities UNI could undertake, set forth how the funds were to be managed and administered.

Indeed, although the petitioners say the federal government relinquished control over these funds, the legislative reports on the '72... on the '74 legislation state unequivocally that Congress provided extensive executive oversight

"to ensure that federal funds are being used efficiently to achieve national objectives. "

Therefore, this was not a mere local project, but rather, as UNI itself stated in its application for federal housing funds, it proposed to undertake

"a joint effort with the city of Peoria to achieve the common goals as set forth in the Housing and Community Development Act. "

Unidentified Justice: Mr. Wilkins, can you give other examples of federal grant programs that you believe should be treated like the community development program for purposes of this statute?

It is somewhat of a concern to think that any potential recipient of federal money might be subject to the statute.

Richard G. Wilkins: Certainly, it is a subject of some concern, but I think the plain terms of the statute handle that concern, Justice O'Connor.

The statute applies only to a person acting for or on behalf of the United States in an official function, so it isn't just anyone who receives some sort of federal fund or some sort of federal subsidy.

It is someone who performs an official function on behalf of the government.

For example, the Seventh Circuit case noted by petitioners in Mosley, there the defendant was charged with administering the Comprehensive Education and Training Act, CETA funds, and he had the control.

He could determine who would receive the benefit of those federal funds.

In this case, the power to determine who receives a federal housing rehabilitation contract is surely an important official function.

This isn't a case where just anyone who receives funds falls within the reach of the statute.

Unidentified Justice: Certainly in the Fortune versus Harris case, where we have to deal with the Freedom of Information Act question, the Court took a different approach and said that grants of federal funds generally don't create a partnership or joint venture with the recipient, and they don't convert the acts of the recipient from private acts to governmental acts, and so forth, and took a different approach.

Richard G. Wilkins: Certainly, that... perhaps, though... you have to look at the underlying goals of the different statutes involved also.

I think when you understand or when you consider that the underlying goal of federal bribery law is to protect the public from the evils of corruption in public service, the statute must be broad enough, must be construed broadly enough to deal with that concern, and the legislative history of this statute, as I hope to detail in a few moments--

Unidentified Justice: One last question while I have you interrupted.

Richard G. Wilkins: --Sure.

Unidentified Justice: Would Congress have needed to even pass a statute expressly covering, for example, the grain inspectors under your interpretation of this statute?

Richard G. Wilkins: No, indeed they don't.

In fact, the case involving the grain inspectors cited in our brief, the Kirby case, does not involve the statute that specifically makes grain inspectors public officials.

There are two statutes that govern grain inspectors, the Warehousemen's Act and the Grain Inspectors' Act.

The inspectors involved in Kirby were licensed under the Warehousemen Act.

That statute doesn't make them public officials.

There is no express statute.

The Court there therefore just had to analogize, or had to look at the case in terms of the statute and say, were these people acting for or on behalf of the United States.

They concluded, yes, they were.

So that case is an example clearly where someone was acting for or on behalf of the United States without any specific statute.

Unidentified Justice: Mr. Wilkins, is your argument, in a nutshell, as to why these people are acting for or on behalf of the United States that they were... they had control over who got so-called "federal funds"?

Richard G. Wilkins: They had substantial control over who would receive the benefits of a federal housing rehabilitation program.

Unidentified Justice: Well, okay.

Now, you say the benefits of a federal housing rehabilitation program.

I take it then it is a good deal less than direct control over federal funds.

Richard G. Wilkins: Well, Justice Rehnquist, they did indeed have direct control over federal funds.

They were the persons who were administering funds that were provided by the federal government.

Unidentified Justice: Yes, but how many concentric circles had the funds gone through before they got to them?

Richard G. Wilkins: Well, the funds went directly to the... the program is set up... the Housing and Community Development Act is set up in this fashion.

Funds are given directly to local governmental entities.

Unidentified Justice: Like the city of Peoria in this case?

Richard G. Wilkins: Like the city of Peoria.

Regulations... the statute then allows the city to turn to a subgrantee and allow a subgrantee to administer those funds.

Regulations promulgated by the Department of Housing and Urban Development closely circumscribed who can be a subgrantee.

It wasn't as if the city of Peoria could choose any old group it wanted to to administer these federal housing funds.

UNI had to meet specific and strict eligibility regulations and guidelines to be able to administer these funds.

Unidentified Justice: If there had been a block grant in this case, not any sort of a categorical grant, but just that the United States decided to give $500,000 to every city over $100,000, and let's assume Peoria qualified as such a city, and then Peoria in turn contracted with UNI to develop the same things UNI was doing, and some of the money that Peoria used came from the federal government in this uncategorical block grant.

Is the person working for UNI still subject to the statute?

Richard G. Wilkins: In that circumstance, it might be more questionable.

Indeed, that was the original proposal here.

In 1974, the Nixon Administration proposed just giving block grants with no strings attached, no substantial federal oversight.

Congress balked and in fact flatly rejected that.

If you look at the legislative history, they said, we want to impose these sorts of controls, regulations, we want to closely circumscribe the activities that the local governments can undertake.

We are going to closely circumscribe what activities subgrantees can undertake.

We are going to provide for audits.

We are going to provide for review.

We are going to keep our fingers in there to ensure that these funds are being used for national objectives.

Unidentified Justice: But aren't you then saying that the less authority that the person has to act independently, the more readily you would conclude that he is acting on behalf of the federal government?

Richard G. Wilkins: Exactly.

Unidentified Justice: I see, so if there were a blanket authority to make all the decisions, he would not be acting on behalf of the authority, but if there is a limited authority to make decisions, he is.

It seems--

Richard G. Wilkins: That is right, because if the federal government has limited your authority and said you can do A, B, and C, but not D, when you do A, B, and C, then you are acting on behalf of the United States.

Unidentified Justice: --But if you said, you may do A, B, C, or D, then even... it is not on behalf of--

Richard G. Wilkins: I don't know whether I follow that analogy.

Unidentified Justice: --Let me just put it a little differently.

Were the people employed by the city of Peoria acting on behalf of the United States, who let the contract to UNI?

Richard G. Wilkins: In their function as--

Unidentified Justice: In letting the contract.

Richard G. Wilkins: --determining who was going to receive the funds, they probably were acting on behalf, yes.

Unidentified Justice: So it applies to them.

And the people who acted on behalf of UNI in letting the contract to a building contractor, these people, you say, were--

Richard G. Wilkins: Yes.

Unidentified Justice: --Now, what about the building contractor letting a subcontract to an electrician?

Richard G. Wilkins: Now, that, in certain circumstances, that circumstance could be followed.

There is a case cited in our brief, the Raff case... it is rather old, I think, 20 years old... where you had an architect that was hired to build an Air Force base, and as part of his... he was bribed to hand out or to not inspect certain work by subcontractors, et cetera, and he was held liable under the bribery statute.

Unidentified Justice: But your submission to us today is that not only the employees of UNI but the employees of the general contractors with whom UNI contracted are also within the federal bribery statute?

Richard G. Wilkins: Yes.

An important thing to remember--

Unidentified Justice: And may I just ask one other question?

Richard G. Wilkins: --Yes.

Unidentified Justice: At what point in the history of this much amended statute did the language on which you rely become a part of the statute?

This was in the 19th century, I believe, wasn't it?

Richard G. Wilkins: The... Yes, it was.

I will digress for a minute and handle the legislative history at this point, because it does seem of some concern.

This statute was amended for perhaps... well, several times, but one time in 1948 Congress expressly amended the statute and kind of broadened the language even further in response to this Court's decision in United States versus Strang, which had held on the basis of familiar agency principles that an employee of a government controlled corporation did not come within the conflict of interest statute because he wasn't an agent of the United States.

Congress at that point, when it adopted this language in 1948, in the legislative report said, we mean to overcome the holding in Strang.

The growth of the federal government has been phenomenal.

We are delegating all kinds of responsibilities and governmental powers to private entities, et cetera, that wasn't foreseen in the past.

We mean to cover all persons who perform official functions on behalf of the government.

In 1962, congress looked at this again, and indeed there were proposals made to restrict the statute as petitioners would restrict it.

There were bills introduced that would have defined public official as officer, agent, or employee.

They were debated, and they were rejected.

The Committee reports state that the reason this narrow language was rejected was because they intended to include within statutory coverage all person who perform activities on behalf of the United States.

This legislative history does not in any way evidence any sort of an intent to narrow the reach of this statute.

An important fact to remember in this case, although we can hypothesize circumstances where people might... where there might be less federal control or less federal involvement, in this case, petitioners were paid 100 percent of their salaries by the federal government.

They could not perform any activity--

Unidentified Justice: May I just interrupt you right there?

Richard G. Wilkins: --Yes.

Unidentified Justice: You, I thought, acknowledged that if there had been an unrestricted block grant from which all of the salaries were paid with federal money, that would not be enough.

Richard G. Wilkins: No, that's--

Unidentified Justice: Nevertheless, you continue to rely heavily on the fact that federal money--

Richard G. Wilkins: --Well, it is one of the facts in this case.

It was all federal money, and it was heavily restricted.

Unidentified Justice: --I think the key fact under your submission is the extent of the government regulation of the distribution of the money.

Richard G. Wilkins: Exactly, but the fact--

Unidentified Justice: Now, let me ask you on that, was there a violation of any federal regulation pertaining to the distribution of this money?

Richard G. Wilkins: --There are federal regulations.

There are regulations of HUD that would proscribe the kinds of activities that were undertaken here.

The remedy provided by the regulations is withdrawal of funds or recoupment of the funds.

Unidentified Justice: Well, I am not sure you have answered me.

Was there a violation of any federal regulation controlling the distribution of this money?

Richard G. Wilkins: Yes, because there are... as I said, there are regulations that prohibit the--

Unidentified Justice: Prohibit subgrantees from taking bribes?

Richard G. Wilkins: --From taking bribes and kickbacks, but the remedy for that as provided by the regulations is recoupment of the funds or taking away of grant funds in the future.

Unidentified Justice: Mr. Wilkins, you said a moment ago that this defendant had his... these defendants had their salary paid by the federal government.

Am I to take that to mean that their salary came the same way your salary and mine does--

Richard G. Wilkins: No.

Unidentified Justice: --out of a United States Treasury check?

Richard G. Wilkins: No, it didn't.

It came through the grant... the moneys came through the funding process set up and established by the housing community development program.

Unidentified Justice: What was that chain of distribution?

Richard G. Wilkins: As I explained earlier, it went directly to the city of Peoria, and then according to federal regulations to the subgrantee.

Unidentified Justice: So the government check went to Peoria, there was a check drawn by the city of Peoria to UNI--

Richard G. Wilkins: Right.

Unidentified Justice: --and then UNI wrote these salary checks, and you say that is federal funds.

Richard G. Wilkins: But the funds were always subject to federal control and audit.

Indeed, there was an audit of these funds that was performed not according to standards set up by the city of Peoria.

The audit was performed according to the Department of Housing and Urban Development's audit standards.

The argument of how the funds arrived has been rejected by this Court in fact in the past, the old United States ex rel. Marcus v. Hess case.

It was a false claims case, but the argument was made that since the funds or the false claim was really made against a city or a municipal government, that it wasn't a claim against the United States, and this Court said the fact that moneys were channeled through a municipal--

Unidentified Justice: But how far back... or how far out in the stream of things can you go with that argument?

I mean, these people probably paid their checks for groceries and so forth.

Now, are you going to say that the grocer got federal funds?

Richard G. Wilkins: --No.

At the point federal control... federal control over these funds dissipates at the point that the money is properly paid, perhaps, to a contractor.

I mean, at the point where federal regulation of the program ceases, of course, federal control over the funds would cease.

In a vain attempt to avoid the plain language of this statute, petitioners, although it is undisputed that in the course of their administration of these funds they solicited and accepted $42,000 in return for their awarding particular contractors federal housing contracts, they argue that they were not acting in an official function or acting under or by authority of a branch of the government.

This argument, as I have already detailed to some extent, is unavailing, because in performing the function of awarding federally funded housing rehabilitation contracts for purposes contemplated by federal law, they were clearly performing an important official function.

They could only do so according to the regulations promulgated by HUD, and they were therefore acting under or by direction of that agency.

The legislative history, moreover, supports this construction.

As I went through a few moments ago, the legislative history of the statute demonstrates unequivocally that Congress intended to reach out broadly to include all persons who perform official functions on behalf of the United States.

And finally, and perhaps most importantly, the federal policies underlying federal bribery law clearly demonstrate the petitioners should fall within the definition of public official.

The purpose of a federal bribery law is, of course, to protect the public against the corruption... or the evils of corruption in public service.

The power that was used corruptly by petitioners in this case is an important governmental power.

It is critical to the success of the Housing and Community Development Act programs that the authority to determine who receives federal contracts not be corrupted by bribery.

Unidentified Justice: Mr. Wilkins, may I turn to another area that keeps running through my mind?

There are a lot of federal grant programs where money goes to state agencies and cities, and the states and the cities administer the funds themselves pursuant to federal regulations and the like.

Are the various state and local officials who administer those programs subject to federal bribery statutes?

Richard G. Wilkins: They may well indeed be subject to federal bribery statutes.

There was a case in district court out... it is a district court case out of New Mexico as cited in our brief, the Gallegos case, where the state of New Mexico hired a state employee to administer an assistance program set up by the FHA Administration to assist farmers.

He was a state employee, but his only function was to assist the implementation of this federal program, and he was held to be within the reach.

Now, again, I don't believe this raises any substantial concerns regarding an undue broad sweep for this statute because in any--

Unidentified Justice: Well, I am thinking of situations, and we recently had this Panhurst case reargued in which there was a state program for care of the mentally ill, which is partially financed by federal funds, and the grant is subject to all sorts of regulation, and the state officials were doing their normal state duties but are also carrying out a federal function.

I gather under your theory it would still be subject to this statute.

Richard G. Wilkins: --Yes.

Unidentified Justice: And it may well be correct, but I am just trying to think of--

Richard G. Wilkins: Right, if they were performing an official function, as I said.

Unidentified Justice: --Well, it's their official state function--

Richard G. Wilkins: Right.

Unidentified Justice: --just as these people are doing their UNI duties--

Richard G. Wilkins: Exactly.

Unidentified Justice: --but you say it is a kind of a mixed function, both federal and otherwise at the same time.

Richard G. Wilkins: In fiscal year 1983, the federal government has appropriated over $4 billion into the housing program that was administered by petitioners.

It is essential to the proper administration of this undeniably federal program that the federal government be able to take the steps necessary, including criminal prosecutions for bribery--

Unidentified Justice: Mr. Wilkins?

Richard G. Wilkins: --to ensure... Yes?

Unidentified Justice: Let's back up a minute.

We talked about a subcontractor--

Richard G. Wilkins: Yes.

Unidentified Justice: --like an electrician.

Richard G. Wilkins: Yes.

Unidentified Justice: Well, suppose the ABC Electric Wire Company bribes the electrician subcontractor.

Is that covered?

Richard G. Wilkins: It would--

Unidentified Justice: I mean, where does the line cut off?

Richard G. Wilkins: --The line cuts off, Justice Marshall--

Unidentified Justice: It cuts off some place before the grocery.

Richard G. Wilkins: --Yes.

It cuts off at any point that someone ceases to do an official function on behalf of the United States.

Unidentified Justice: Well, this man is furnishing electric wire to the subcontractor who is working for the contractor who you say is directly under the federal government.

Well, is he covered or not?

Richard G. Wilkins: In... if there--

Unidentified Justice: Where do you draw the line?

Richard G. Wilkins: --It would depend on some attendant facts.

For example, the Raff case cited in our brief, that involved the architect for building a large military base.

He was bribed by subcontractors not to look carefully at his work or inspect carefully his work.

That contractor was bribed.

Now, as you move further down the steps, I guess it would depend whether or not, at any given step, whether the subcontractor could be said to exercise some sort of official authority that would fall back on the federal fisc.

If the federal subcontractor, for example, could chose wire from one distributor or another, and the cost of that wire would go directly to the federal government, and he had the authority to make that determination, and he was being bribed to choose inferior wire, he may indeed fall within the reach of the contract.

Unidentified Justice: How about in Medicaid and Medicare programs?

How far do you take it there?

Richard G. Wilkins: In the Medicaid and Medicare, I am not terribly familiar with the legislative scheme or statutory scheme for those programs.

I would believe i would be handled similarly to the CETA case, the Mosely case.

If the person has direct control for the authorization or the expenditure or the distribution of federal funds, and he had the ability to make that sort of controlling decision, and the impact of that decision fell back on the federal government, on the federal taxpayers, I think you would say in that circumstance that he was exercising an official function.

Again--

Unidentified Justice: So the doctors and pharmacists and so forth are all covered?

Richard G. Wilkins: --I am not sure whether you would go clear down to the pharmacists and all sorts of lower level echelons.

In this circumstance, we are aware, or at least if you read the newspapers, you are aware that there is substantial graft and corruption in the administration of those programs.

The federal statute we, the government, submits should be interpreted broadly enough to reach anyone who has... exercises any sort of official function in the administration of that program and does so corruptly.

The language of Section 201(a), its legislative history, and the important policies underlying federal bribery law unequivocally demonstrate that the statute should not be given the restrictive reading that has been urged upon this Court by petitioners.

The United States respectfully submits that the decision of the Seventh Circuit Court of Appeals should be affirmed.

Unidentified Justice: Let me ask you just one more question, if I may, or perhaps two more.

In the civil side of this, and following... if there had been audits, and I guess there really wasn't as close supervision as this... of this particular operation as HUD might well have had, but if there were, and they wanted to get the money back, would they have a right of recovery from either the city or UNI, or is their only remedy against the individuals who were bribed?

Richard G. Wilkins: I think that the remedy is against the entity.

I am not 100 percent clear on that, but I think the remedy is against--

Unidentified Justice: And there was at all times some kind of a right to audit the operation?

Richard G. Wilkins: --Yes--

Unidentified Justice: But they just didn't happen to do it in time.

Richard G. Wilkins: --They did.

They did do this.

Unidentified Justice: I see.

Richard G. Wilkins: I mean, that... it is a misstatement in the briefs.

Unidentified Justice: Oh.

Richard G. Wilkins: As we stated in our brief, there was an audit performed here on these funds, and the audit was performed according to audit standards developed by the Department of Housing and Urban Development.

Unidentified Justice: One final question.

Perhaps I shouldn't ask, but you do have time here.

Judge Powell often sends me to the dictionary, and I notice you quoted his hypogulia.

Richard G. Wilkins: Hypogulia.

Unidentified Justice: What is--

Richard G. Wilkins: I went to the unabridged dictionary yesterday, in case someone would ask me that.

Unidentified Justice: --You quote it in your brief, so you must know what the word means.

Richard G. Wilkins: It means inability to act or decide.

Unidentified Justice: Inability to act or--

Richard G. Wilkins: They displayed no evidence of inability to act or decide.

Unidentified Justice: --I see.

And therefore they had authority to make decisions.

Richard G. Wilkins: And therefore they had authority.

Unidentified Justice: Thank you.

Richard G. Wilkins: Thank you.

Chief Justice Warren E. Burger: Thank you, gentlemen.

The case is submitted.

Featured:

Steelworkers v. Sadlowski - Oral Argument

Fri, 09 Jan 2009 14:46:58 +0000

Case:

Steelworkers v. Sadlowski

Media File:

81-395_19820331-argument.mp3

Related Transcript:

transcript.xml

Transcript:

ORAL ARGUMENT OF MICHAEL H. GOTTESMAN, ESQ. ON BEHALF OF THE PETITIONER

Chief Justice Burger: We will hear arguments first in United Steelworkers of America against Sadlowski.

Mr. Gottesman, you may proceed whenever you are ready--

Mr. Gottesman: Thank you, Mr. Chief Justice, and may it please the Court:

At the 1978 convention of the Steelworkers Union... that is its highest governing body, including several thousand delegates selected by the members of each of its locals... the Constitution of the union was amended by adopting the rule that is at issue in this case.

That rule forbids candidates and their supporters... candidates for office within the union, for high office within the union... from soliciting or accepting campaign support from persons who are not members of the union.

The purpose of the rule was to assure that those who got elected to high office in the union would be beholden only to the members of the union, and not, by virtue of the financial benefits they had received from outsiders, be beholden to those outsiders.

The analogue in the federal statutes and with respect to federal elections to the rule that the steelworkers adopted is that provision which makes it unlawful for any candidate for federal office to solicit, accept or receive any contribution from a foreign national.

The court below has held that the steelworkers rule violates Section 101(a)(2) of the Landrum-Griffin Act, a part of Title I of that statute.

We sought review, and this Court granted a writ of certiorari to review two questions: first, whether that construction of the Landrum-Griffin Act is correct; and second, if it is, whether the Landrum-Griffin Act as thus construed to deprive the union and its members of the right to insulate their elections from outsider involvement, abridges the First Amendment freedom of association of the union's members, by taking from them the power to determine the appropriate standard of participation by others in its elections.

I will talk first about the statutory construction issue.

Whenever, as here, the question is the legitimacy of a union's election rule, statutory analysis properly begins... though, of course, it doesn't end... with Title IV of the statute.

That is the title, entitled elections, which lays down election rules with respect to union elections.

In that title, Congress prescribed a number of rules to govern union elections, frequency of elections, notice of elections and the like.

And one of the subjects that Congress specifically focused on in Title IV was the subject of campaign financing.

In Title IV, Congress expressly provided that union monies and employer monies could not be donated to any candidate in a union election.

And in Title IV, Congress expressly provided that every member of the union would have the right to provide campaign support to a candidate in a union election.

Now, of course, there is a middle ground between that which Congress expressly forbad and that which Congress expressly protected.

There are non-members of the union whose capacity to contribute is not addressed on the face of Title IV.

But that does not mean that Title IV has no relevance to that question, because Congress in Title IV, having laid down and mandated for unions certain rules that they had to comply with in their elections, closed the circle; it didn't stop with it.

It said, beyond the rules that we prescribe in this title, unions will be free to choose their own election rules.

We have laid down certain minimum requirements, and beyond this we expressly provide that the choice as to any other election rules, not inconsistent with those that we, the Congress, have laid down, rests with the members of the union through their democratic processes.

That decision is reflected in two difference places in Title IV.

First, in Section 403 which provides that no labor organization shall be required by law to conduct election of officers in any different former manner than is required by its own constitution and bylaws, except as otherwise provided by this title.

And it is provided again in Section 401(e) which is one of the provisions that lays down the rules unions must obey.

And one of those rules is that the election shall be conducted in accordance with the constitution and bylaws of such organization, insofar as they are not inconsistent with the provisions of this title.

Unidentified Justice: What would be the situation, Mr. Gottesman, if, let us say, the wives of ten of the employees of the operation, either with or without signs, but including signs, vote for one of the candidates and they paraded up and down outside the plant or the operation, or merely stood there with their signs.

Would that be a violation?

Mr. Gottesman: No, it would not be a violation of the union's rule.

It would not, Your Honor.

The rule has an express exception for volunteered personal services, so that a non-member of the union is free to donate his or her personal time to supporting a candidate in a union election.

Unidentified Justice: Now, what if they held out... something like the Salvation Army... some plates and said please contribute, help elect... help keep the union clean or whatever it is they were trying to do.

Mr. Gottesman: Well, we have the same distinction here, Your Honor, that you have in the federal sector between expenditures and contributions.

If they took these contributions from others, who presumably are not members of the union, and didn't give them to a candidate, or didn't spend them in cooperation with a candidate, the steelworkers rule would not implicated because they--

Unidentified Justice: I am assuming good faith on the part of these people, that they want to get support, voting support, they want to get money to generate further support, and they want to get it from members of the union, members of the public, anywhere they can get it.

Do the union rules inhibit them?

Mr. Gottesman: --If they get the money from non-members and then give it to a candidate, or spend it with his cooperation, they would violate the rule.

If they got money from non-members in order to finance activities of their own, independent of the candidate although expressing their support for him, that would not be a violation of the union's rule.

In that sense, the distinction between expenditure and contribution in the union's rule is parallel to that in the federal statutes.

And indeed, it is I think fairly obvious when you look at the union rule and the way it is structured that those who drafted it were not oblivious to the fact that some of these same questions had been considered and addressed in the federal statute, and many of the lines are the same, including the exception for volunteered personal time.

Unidentified Justice: Mr. Gottesman, has Section 27 of the union constitution been amended at all since this action was initiated?

Mr. Gottesman: I was amended once and that amendment is referred to in the court of appeals' opinion.

The amendment does not relate to the issues that are before the Court.

Unidentified Justice: And there have been no further amendments.

Mr. Gottesman: That is correct.

There has not been another union constitution since the rulings... union convention... since the rulings below.

And the next one is scheduled for this September.

Unidentified Justice: And does this Court have to address the right to sue theory, in your view?

Mr. Gottesman: Well, if the Court agrees with us that the union rule does not violate 101(a)(2), it has to address that only because respondents have offered it as an alternative basis for invalidating the entire rule.

We did not seek review of the court of appeals' holding that the rule violates that, because implicit in that, in our view, would simply be an injunction saying don't apply your rule to litigation, which is no problem for the union because we didn't think it applied to litigation in the first place.

But if the Court agrees with us that the rule does not violate 101(a)(2), that other provision comes into play only in the sense that respondents are here saying you should use that other provision to invalidate the whole rule.

And therefore, in that sense, the Court would possibly reach that issue and have to decide it one way or the other.

Unidentified Justice: Mr. Gottesman, how common a situation is this?

Are you aware of any campaigns involving unions other than the steelworkers which... where outside funds played a prominent part?

Mr. Gottesman: The briefs for respondents recite... the record doesn't... that such outside funds were contributed substantially to the election in the mineworkers union several years ago, in which Tony Boyle was defeated.

Beyond that, I personally am not, and the record does not show... it certainly had been the experience in the steelworkers in 1977.

It was George Meany's statement at that time that it was unprecedented in the history of the AFL-CIO that any of its affiliates had suffered an experience of an organized, concerted outsider involvement such as had occurred in the 1977 steelworker election.

Unidentified Justice: Apart from this one, has there been any serious challenge to the incumbency in the steelworkers?

Mr. Gottesman: There have been, yes, three prior ones.

Unidentified Justice: With any substantial vote?

Mr. Gottesman: Yes.

No one has ever gotten less than 40 % of the vote in any presidential election in the steelworkers.

That is a strange statistics, but unquestionably a correct one.

One challenger won and defeated the incumbent, so... and he got 51 % of the vote.

The other three all got in a range of 40 % to 43 %.

Sadlowski got 43 %, the prior ones had gotten 41 % and 40 %.

The statement that appears in their briefs that he was the first serious challenger to an incumbent is, therefore, one that comes with some surprise.

Unidentified Justice: I would assume, Mr. Gottesman, that in evolving this rule, some consideration was given to what has been the usual pattern through the public area, the public sector, of requiring sworn statements identifying all the contributors.

If every candidate within the union was required to file a sworn statement, with every contribution identifying the contributor and forbidding a the process that would preclude any anonymous contributions, would that not satisfy this problem?

Mr. Gottesman: The judgment of the union was that it would not, Your Honor, and the reasons are explained in our reply brief.

The problem with simply having disclosure and no ban is that you can counter exactly what happened in the 1977 election.

There was a candidate for office in the union who was, indeed, a very popular candidate.

And who had taken a lot of outside money, and who wound up getting substantially less of a vote than people I think generally had thought he would get.

And what happened was, the voters in that union had to make a choice: they had to become one-issue voters.

They had a candidate that they would have preferred to leave the union, but the price for having him was going to be that they were going to have a candidate beholden to outsiders.

Now, it seems to me... and certainly it seemed to the union... that it is entitled to make the judgment that it is not enough, either in the way of protection or in the way of satisfying the members' interests, for people to know that one factor about a candidate is that he is potentially beholden to outsiders.

Because they can't adequately vindicate their concern about without automatically voting against him on that ground.

And beyond that, once you have some candidates doing this, it is inevitable they are all going to do it, just to equalize things, and then you are going to have a situation where the voter has no choice at all to avoid candidates beholden to outsiders, because they will be competing to see who can get more.

And the notion that incumbents are going to be less successful at getting outsider money is, I think, contrary to at least intuitive good sense.

It was not the case in this election, but it could well be the case in other union elections.

Now, the congressional scheme--

Unidentified Justice: Mr. Gottesman, does the prohibition in the Landrum-Griffin Act against contributions by employers or unions apply only to the union which is holding the election and only to an employer whose employees are represented by the union?

Mr. Gottesman: --No, Your Honor, it applies to any union and any officer of another union.

And the definition of employer, as construed by the Labor Department and enforced by the Sixth Circuit, is so broad that would encompass about 80 % of the people to whom the union's rule is addressed anyway.

The Labor Department's interpretation is that because the word "employer" is not qualified by "interested" employer, as it is in a different provision of the statute, it was Congress' intent that anybody who is an employer within the meaning... in interstate commerce, within the meaning of the statute, even though he has no involvement with this union, this union does not represent his employees, he doesn't do business with this union in any commercial sense... anybody who meets the statutory definition of an employer cannot contribute.

And that includes any managing person cannot make personal contributions.

So that a partner in a law firm, a dentist who employs two assistants, the person who owns the neighborhood bar, all of those people under the Labor Department's regulation and the Sixth Circuit decision are, in any event, precluded from contributing.

Unidentified Justice: The term employer then is defined independently of the National Labor Relations Act, as to whether they would be subject to the National Labor Relations Act and their--

Mr. Gottesman: Yes.

The term employer, as I recall it, is defined in the statute as anyone who is an employer under any other federal labor relations statute.

So that it picks up Railway Labor, National Labor Relations Act, and indeed, many people who aren't covered either because they are too small but are covered by the Fair Labor Standards Act.

So it is anybody, in essence, who employs one or more employees can't make either an institutional or a personal contribution.

And that much is imposed by law.

And the Sixth Circuit, the decision that I referred to, is Marshall versus Local 20.

It is 611 Fed 2d, 645.

The Sixth Circuit explained, this is what Congress intended.

It wanted these unions to be for their members and it wanted all of these people.

That case involved a personal friend of the candidate who employed two people; he was a dentist.

And the court said that his contribution was a violation of the statute.

So that what the union is doing is filling a space that Congress in Title IV left open, but not such a broad space as perhaps is suggested by the briefs of the respondent.

Now, in that Title IV scheme there is clear evidence as to why it is that Congress not only laid down certain rules but also laid down the additional provision that beyond these rules, the union shall be free to adopt their own and make their own choices with respect to election rules.

And what the legislation shows is that Congress was struggling with two objectives.

On the one hand, the McClellan hearings had shown without doubt that there were some undemocratic unions, and that there were, in fact, certain statutory necessities that were going to be required if those unions were going to be made democratic and put back in the hands of their union officers.

And so, Congress said we are going to lay down and mandate by federal law those rules that we have determined are essential to the achievement of union democracy, and those we have done in Title IV.

But the other congressional concern is that we do not intrude too far on union autonomy.

This was, after all, the first time that Congress had ever legislated with respect to internal union affairs, and the legislative reports are replete with statements... we are dealing here with private associations.

We, by enacting this statute, are tinkering with the mechanisms by which the leadership of private associations are selected, and in doing so, we want to act as limitedly as we can.

We have defined certain evils; we will mandate the correction of those evils.

Beyond that we will not go.

And more, beyond that, we will make clear that the choice will be for the union members of what their rules will be beyond this.

More than that, the whole point of this statute was to return the governance of unions to their members, so the legislative history is replete with statements... we shouldn't go too far in legislating rules of the unions, not only because we violate their autonomy, but because we are unfaithful to the very purpose of this statute.

The purpose of this statute is we will create minimum standards that will be sufficient to give the union back to its members.

And certainly the record in this case shows that the steelworkers union is in the hands of its members.

Candidates for office are defeated all the time, incumbents are removed at a rate equal if not exceeding that in federal elections.

And we will let the members make choices on all the matters except those that we have specifically dictated here.

And thus, we have in Title IV the closing of the circle.

Certain rules laid down and a specific mandate that beyond that, the choice is for the union members and it cannot be dictated by any provision outside of Title IV.

Unidentified Justice: --Do you think the free speech provision is constitutional, in the sense that... what if there were a union rule that would purport to limit free speech beyond that which is guaranteed with a statute?

Do you think that--

Mr. Gottesman: Oh, it would clearly--

Unidentified Justice: --Why would that be constitutional and this... I know your bottom line, at least one of your bottom lines is that if construed this way, this provision at issue here would be unconstitutional.

Mr. Gottesman: --Right.

Well, what we have got... I mean, the constitutional issue in any case is this is... private association, it has private decision-making mechanisms,--

Unidentified Justice: Well why couldn't the union then just limit free speech beyond that which the statute purports to guarantee?

Mr. Gottesman: --At every stage the question is whether there is a sufficient government justification for the intrusion that it is making on the union autonomy.

And I think there is a distinction in measuring that between a rule whose function it is, and which is directly aimed at providing the decisionmaking in the hands of the union's members; a rule that says there must be elections, a rule that says there will be notice of elections, a rule that says you will not prevent candidates from voicing their views or other members from voicing their views.

Unidentified Justice: Do you think the union has to hold elections rather than, say, appoint its officer by some other method?

Mr. Gottesman: Well, certainly Landrum-Griffin says so, and certainly the First Amendment argument that that would be an intrusion on freedom of association I think would be a much harder one than the one we have got here, because there the governmental interest would be stated and there is a closer nexus between the governmental interest than there is here.

Unidentified Justice: Mr. Gottesman, you referred to a distinction between contributions and expenditures.

Will you elaborate on that and suggest some examples of the distinction, the way it would operate?

Mr. Gottesman: Yes.

If a non-member of the union wanted to support a candidate in the steelworkers election, and wanted to take his money and go out and buy newspaper space, wanted to go out and spend money to do various kinds of things to advertise his views on that subject, there is nothing... the union is powerless to do anything about it, but beyond that, the rule does not purport to forbid, as it cannot, a non-member from expending money directly, just as under the federal law he cannot.

Unidentified Justice: In that type of advertising or mail campaign, is it your view that the identity of the candidate could be specifically mentioned, rather than--

Mr. Gottesman: Absolutely.

As long as the limitations in the union's rules are the same as those in the federal rule.

As long as he is acting independently of the candidate.

Unidentified Justice: --That substantially weakens the basic purpose of the rule as you have annunciated it, doesn't it?

Mr. Gottesman: Well, it weakens it in the same way and to the same extent that that same distinction was said to be weakened in Buckley by some who thought, in dissent, that the court's... that the line the court drew between contributions and expenditures--

Unidentified Justice: But there is no way the union could stop it.

Mr. Gottesman: --That is right, there is no way the union could stop outside expenditures.

The union only has jurisdiction over its members.

All it can do is say to its members you will not take money from outsiders.

It cannot stop an outsider who wants to spend money and not give it to a union member; it just has not control, no jurisdiction over it.

Now turning to 101(a)(2), it has to be looked at in the context, it seems to us, of what Title IV has done.

And the question has to be... because this really is the question... did Congress, when it wrote this other title of the same statute, intend to overturn the very decision that it made in Title IV, to leave all other choices to the union members.

When you look at it, the first thing, the first right it confers is the right to meet and assemble freely with other members.

Now, that is the only place in 101(a)(2) where the associational right is addressed, and it is expressly and in terms confined to meeting with other members.

Needless to say, that is the not the provision the court below relied on.

The court below relied on the provision to express any views, arguments or opinions.

Senator McClellan and the others who proposed that explained the purpose of that provision.

It was to remedy what they found to be the case... that within unions generally, people who spoke out in criticism of officers got... suffered reprisals.

They might be beaten up, they might be disciplined, expelled, fined.

He said we can't have... we need sanctuary for the union member.

We can't have all these... we have all these wonderful structural titles in this bill like Title IV, but if members are afraid to get up and speak because they are going to be expelled if they do so, those titles aren't going to work, nor will any of other objectives work.

So we need here something that tells the union member if you speak, if you become a candidate, if you do these things, you are not going to be punished for doing so.

That was the objective of this provision.

Now, there is, to be sure, an overlap between Title IV and Title I, but it is not a redundancy.

If a member makes a campaign speech, to discipline him would violate both titles.

But in the statutory scheme, what Title IV says is that violation, the remedy will be setting aside the election.

What Title I says, and what was added by 101(a)(2) is that it is not going to be sufficient to protect the member's freedom to say that if he gets thrown out of the union, the election will be set aside.

We have got to give him personal protection.

And that is what 101(a)(2) does.

He gets a personal remedy, and that was designed to give him the sanctuary that would allow him to be free to enforce his rights and to voice his views.

Now, that is the only purpose stated, or the 101(a)(2).

And the emphasis I think is on the word "any".

This was a protection to members who express any views, even those that are disapproved by the leadership of the union.

And it is not, I think, legitimate, given what Title IV expressly says about election rules, to say that what Congress was doing over here with those words was creating a new campaign finance provision.

There is nothing in the language and nothing in the legislative history that suggests that that was Congress intention.

The sole argument on the other side is an analogy to the Constitution.

I do want to reserve some of my time.

We have dealt extensively with that supposed analogy in our briefs and shown why we think it to be flawed.

If... not the least of which is that it fails to note that the constitutional analogy that is being relied upon is one that was first articulated by this Court 17 years after this statute was enacted, and that it is not likely that Congress could have conceived, even if it was intending to legislate the First Amendment, that to do so would have carried with it those implications.

Chief Justice Burger: Very well.

Mr. Rauh?

ORAL ARGUMENT OF JOSEPH L. RAUH, JR., ESQ. ON BEHALF OF THE RESPONDENTS

Mr. Rauh: Mr. Chief Justice, and may it please the Court:

District Judge Hart found this absolute ban on contributions outrageous.

That is not my word; that is the district court's word.

And Circuit Judge McKinnon for a unanimous court said we cannot conceive of anything that would do more to inhibit union democracy than this rule.

And the American Civil Liberties Union, a long-time supporter of unionism, has fold this Court in its amicus brief that elections will be a charade if this continues.

All these of these conclusions are buttressed by a statute and a legislative history that fairly bristles with Congress' overriding purpose of union democracy.

There has only been one president ever in the history of this union that beat an incumbent, and you know what he was?

He was the Secretary Treasurer.

It was a palace revolt and every other time there has been a re-election, and usually like the last time, you don't even get a contest.

Now, we have heard a lot this morning about Title IV.

We haven't heard anything about Title I.

Title I and Title... Title I contains two provisions, both of which apply here.

One is the right to sue provision, that is 101(a)(4); the other is the right to speak provision, that is 101(a)(2).

The district court outlawed the rule under 101(a)(4) the right to sue; the court of appeals under 101(a)(2), the right to speak.

It preferred to invalidate it on that ground.

Now, Section 101(b) says you have to invalidate.

The courts have to invalidate any provision of a constitution that violates part of the Bill of Rights.

That is exactly what both courts, all four judges below, did.

Now looking first at 101(a)(2), the right to express any views, arguments or opinions without limitation.

Now, both Senator McClellan... they say something I have got a paucity of citations.

That is almost... that is pretty funny if you think that we have the man who put in the Bill of Rights, Senator McClellan, and the man for whom the bill is named in the House of Representatives, Representative Landrum... it is called the Landrum-Griffin bill... both says, both analogize this 101(a)(2) to the Constitution.

And of course, indeed, it is funny what they say.

They admit in their brief that 101(a)(2) recites the core of value of the Constitution.

Well, what is the core of the constitutional free speech?

It is the right of effective speech, not the right just to talk, without the right to solicit funds.

There can be no effective speech... I am not relying on anything I have ever said in my life; I rely on what this Court has said over and over and over again.

Buckley, Bellotti, Berkeley... and what did Shaumberg, Justice White and Bates, Justice Blackmun... they recited recently that these rules, they are not just something that came down in Bellotti and Berkeley; these rules have been here.

The solicitation of funds is part of the right to speak a speech.

Without funds... that isn't new.

That's old, and this idea that suddenly--

Unidentified Justice: Mr. Rauh, if it is old, what would you think was your strongest case before the Act was passed?

It surprises me--

Mr. Rauh: --Well, I go all the way back to Patterson, NAACP in 58, go back to Cantwell in 40 I think, Your Honor.

But I will say that I take the review that either Justice White or Justice Blackmun made in their two recent cases, suit me fine.

Unidentified Justice: --Well, those were court opinions.

Mr. Rauh: Yes, sir.

But I am saying that you made the reviews for us.

I just wanted to thank you for your courtesy of saving me a lot of time on research.

[Laughter]

Now look, this Court has said it so often that it is SOP, that the First Amendment has its fullest and most urgent applications in the context of political campaigns.

Unidentified Justice: Mr. Rauh, your argument is based on an assumption that the section incorporates the First Amendment.

Mr. Rauh: Not... it incorporates the basic core value of the First Amendment.

Unidentified Justice: Let me just ask you why the Congress wouldn't have used the language of the First Amendment if that is what they intended.

They used something different.

Mr. Rauh: That is correct, but both McClellan and Landrum said it, Your Honor.

And I guess I don't believe Congress always uses historical language.

They brought in a different provision, I believe, when the Senator said it and the man who ran the bill in the House said it.

I think that is the best evidence of the intent.

The words are very clear, if Your Honor please.

Opinion views the words are in some ways, can be as broad or broader than the First Amendment.

And there is a case in the court of appeals where they said it is broader than the First Amendment.

But there is certainly nothing that indicates it is not the First Amendment.

But going back, if Your Honor please, to your decisions of this Court, on the fullest and most urgent application is at election time, and that goes double, double for unions.

In many instances, maybe in most, the only time you ever get any discussion in a union of an issue is during an election campaign.

And let me tell you, because this is personal, following your decision in Travolidge they had an election in the mineworkers, and with concerned outside money they debated violence and corruption and ended the dictatorial rule, and that would never have been ended without concerned citizens outside.

Equally relevant is Hall against Cole.

There you said that Title I was specifically designed to protect the union member's right to seek higher office.

This interrelates, pulls it together.

Union democracy and speech.

And that was the purpose.

And then you said, oh, counsel has to be available to make speech effective.

Unidentified Justice: Mr. Rauh, how do you get democracy if you get all of your money outside, ten times what everybody else has?

Would that be democracy?

Mr. Rauh: No, sir.

Unidentified Justice: So you are not for that, are you?

Mr. Rauh: No, sir.

And it would be a simple rule to have... all you would have to do, Your Honor, is say nobody give more than $50 or $100, and that includes the staff, and you would have--

Unidentified Justice: Doesn't that affect free speech?

Mr. Rauh: --What?

Unidentified Justice: Doesn't that affect free speech?

Mr. Rauh: I... would be a reasonable rule.

What would be reasonable?

You said $1000 was reasonable for a federal election.

I am willing to go for anything that would be reasonable.

I think a lower figure for a union election than you have, but you would have to decide what... they have the initial--

Unidentified Justice: You think the union couldn't decide it for itself?

Mr. Rauh: --Yes, it would decide it, and you would have a right of review.

But let me tell you, that is not their point.

They, in the yellow brief at page 12, they let the cat out of the bag.

They are not going after big contributions; they are going after lots of little contributions.

Their complaint, under item 2 on page 12, is that we, in the Sadlowski group, solicited progressive lists, and they say very... we don't... they were not saying they refused the individual non-member contribution--

Unidentified Justice: Mr. Rauh, excuse me, I don't see a page 12.

Are we really talking about the reply brief of petitioners?

Mr. Rauh: --Yes, Justice O'Connor.

Unidentified Justice: It goes to page 10.

Mr. Rauh: There is a 10 and then there is a 12.

I am sorry.

We can hand up another copy--

Unidentified Justice: Well, there are two yellow briefs.

It is a little confusing... each of them is labeled reply brief.

Mr. Rauh: --Are you looking at the one on cert, Justice O'Connor?

Because there is also one on the merits, and that would explain it.

At page 12, what they say is, it is not huge individual ones.

What they are complaining about is small, and Justice Marshall, at the bottom of that page, what they are complaining about is small and moderate-size contributions from like-minded, non-members.

They are not complaining about big ones.

Coming back to Hall and Cole--

Unidentified Justice: I am trying to find that language on 12 that you spoke of.

Mr. Rauh: --At the bottom, sir.

Unidentified Justice: I have got the right brief now.

Mr. Rauh: Look at the bottom.

Do you see item 2, Your Honor?

Unidentified Justice: Yes.

Mr. Rauh: Under that you will see, the experience... not one of huge individual non-member contributions, but of nationwide solicitations of lists of progressives.

And then at the bottom, the aggregates of small and moderate-sized contributions.

They have let the cat out of the bag.

Here is a progressive who took lists of progressives and asked them to help him let them get money so they can get the progressive message to the membership and let the membership decide.

It couldn't be clearer what they want.

They don't want him to have enough money to put his message across.

Nobody who gives a few dollars on these lists are going to think anybody is beholden to them.

This was an effort to get the money to put the message across, which Your Honors have been the most forceful on saying one has a right to do.

Unidentified Justice: What about disclosure?

Mr. Rauh: Well, that is fine.

You could do disclosure, you can do a reasonable top.

The reason they don't want a reasonable top is that they are not complaining about big contributions.

Unidentified Justice: Well, what if the union rule had provided that no candidate shall take more than 50 % of his money from outsiders, if it put no ceiling?

Mr. Rauh: I find that a difficult question, Your Honor.

But... I don't know.

If you didn't put another thing on the staff, it won't work, because that can just stop what they get from the staff.

What you would have to do is combine that 50 % with some staff.

You can't... I could buy this.

Put 50 % on what you can get from the outsiders and 50 % on what you get from the staff and maybe you have got a rule that will recreate some union democracy.

Unidentified Justice: Your answer to my question, then, is the union couldn't do that?

Mr. Rauh: If they didn't do something about the staff, because they would then have a way of offsetting and making it difficult.

I would doubt it would reasonable.

I have never thought about that before, but I would think that you would have to put something together to make it really work.

Unidentified Justice: What about limitations on not all outside sources, but selected sources like corporations.

Mr. Rauh: Well, that is already barred, Your Honor, under the employer provision, so that is barred.

Unidentified Justice: But partnerships, or?

Mr. Rauh: Well, yes, a partnership would be an employer.

Unidentified Justice: Or political organizations that have been formed for... to influence the election?

Suppose there is a committee to influence the steelworkers' next election, and they independently raise their money and then give large sums to the candidate?

Mr. Rauh: Well, that would be the same thing as if Mr. Sadlowski sent out the letter.

If somebody sent cut the letter for him, that would be all.

But they are saying--

Unidentified Justice: So you could say they couldn't do that, either.

Mr. Rauh: --No, I say they couldn't bar you from going to vast numbers of people to get small contributions.

There is not going to be any beholden or any corruption in anything like that, Your Honor.

They use lists of people and ask for money.

So Mr. Sadlowski who is a progressive, they used a progressive list, could get his message to the membership so the membership could decide.

The membership doesn't have to vote that way.

Unidentified Justice: Does the present law bar,... without this provision, does the law bar raising any money from corporations?

Mr. Rauh: Yes, because the corporation would be an employer, Your Honor.

Unidentified Justice: You mean any employer in whatever industry?

Mr. Rauh: In whatever industry, but I think it has to mean a real employer.

I don't go nearly as far as they do that if you... a dentist has an assistant, that that makes him an employer for this purpose, but that is not before the Court, Your Honor.

Now, what they say--

Unidentified Justice: Can I ask one other question while you are paused, Mr. Rauh.

Do you agree with your opponent that if a non-member, say a relative or a friend, decided he wanted to support your client's candidacy, he could spend all the money he wanted to and there is nothing they could do about it?

Mr. Rauh: --No, sir.

And I was surprised to hear what was said here.

On page 74 of the record, in the regulation appears the following: Should a non-member attempt to support a candidate without the candidate's solicitation or cooperation, it is the candidate's obligation to immediately contact the non-member, reject that support and request that it be discontinued and take whatever action is necessary to avoid such support having an effect upon the election.

As noted above, failure to do so, will be evidence that the support was accepted.

They have done everything in their power to prevent the expenditures that they informed the Court they could permit.

The steelworkers answer... what they are really saying is you, challenger of the income, but you go get it from the rank and file.

That is what they are saying.

That comes with poor grace.

Unidentified Justice: And the staff?

And the staff of the union?

Mr. Rauh: Well, but for the... as an incumbent you are ahead of the challenger, Your Honor.

Unidentified Justice: They are free to get it from the staff.

Mr. Rauh: Yes, and we got 3 %.

They got all of theirs.

We are free.

Can sleep under the bridge, if I may put it that way, Your Honor.

[Laughter]

I would say it comes with poor grace for them to tell us to go the rank and file, and this is admitted.

They got 90 % of their funds from the staff.

And I call your attention to the Joint Appendix references, 173 where we have an affidavit saying this, and 347 and 48 where they do not challenge it in their response.

Now, if we can't... if they can't get money from the rank and file and get 90 % from their staff, how in heaven's name are we to do what they can't do?

Now, as I said, the steelworkers reply brief at page 12 does let the cat out of the bag for what they... they once used to say they were out to stop corruption, big contributions.

Now they say flatly no, we are out to stop your solicitation of like-minded concerned citizens.

I don't see how that could ever be squared with Title I, Section 101(a)(2).

This is a perfect example of where moderate and small contributions from like-minded citizens... it is a perfect example of what we did when we upset the Boyle thing after the Travolidge decision gave us a chance.

It is a perfect example of democracy in trying to get funds to get your message across.

They can still say... this is not a question like 441(e) that was referred to.

That was a wholly different thing.

That is the provision of law that prevents a non-resident alien from giving to a federal campaign.

But that works in our favor.

Resident aliens who can't vote can give.

The only reason a non-resident alien is in there is for security reasons, people that are abroad and also they haven't... a non-resident alien doesn't have the rights that a resident alien does.

But a resident alien can give, even though he can't vote.

Unidentified Justice: But wouldn't a resident alien be like a member of the staff?

That is, interested in union affairs, but I understand staff members can't vote unless they are members of the union.

Mr. Rauh: Yes, if they... they all are.

Unidentified Justice: Are they all members of the union?

Mr. Rauh: Yes.

And so is counsel members of the union.

That is how this comes up, you know.

Unidentified Justice: Well, how can you qualify as a steelworker?

Mr. Rauh: Well, you will have to ask--

Unidentified Justice: You don't have to work as a steelworker--

Mr. Rauh: --I know they are members of the union.

You will have to ask the other side how they work that our, sir.

I just don't see a clear care of your statute... here you have got the language, right to express any views, arguments or opinions.

The legislative history of the parallelism to the Constitution from the two men who would be the most important, and the pre-eminent purpose of Congress is for union democracy.

You know, sometimes I think why did they need to do this?

They have got so many advantages on the incumbent anyway, it is hard to see why they had to go ahead and put this final nail in a challenger's coffin.

But the purpose of this statute... this Court has over and over again, in dealing with Landrum-Griffin said, a lot of it was written on the floor.

The Bill of Rights was written on the floor.

Has said well, we will look at the objectives of this statute.

Well, the objective of union democracy is perfectly clear, and of course, doing this does avoid any reference to any constitutional problem.

The steelworkers rule, based on all of this, and I quote from the man who has done the most writing and work, the professor who has done the most on the whole subject of union democracy, Professor Clyde Somers.

His affidavit is in the record.

He says, this rule virtually guarantees that incumbents will be insulated from electoral challenge.

With every principle of statutory construction the other way, to knock it out, to leave it there is so clearly contrary to Congress' intent.

Unidentified Justice: --Of course, you assume that the election of the union is controlled by money.

Mr. Rauh: A certain minimum amount is necessary to get your message across, Your Honor, because you have got 1,300,000 voters, you have got a staff on one side and you have just got to have something.

I don't say... no, I do not assume it is controlled by money, Your Honor.

I am saying a minimum amount of money is necessary.

Unidentified Justice: All I am trying to do is try to warn you that you sound like it--

Mr. Rauh: Well, thank you.

Unidentified Justice: --And I know you didn't mean it.

A senator, for example, who has a constituency that large, anything in this record that would indicate what the parallel problems would be?

Mr. Rauh: Well, it would be so... many times more, but there is nothing in the record.

We did not feel that was necessary.

I don't know of anything in the record on what an ordinary senator--

Unidentified Justice: A million, three, did you say?

Mr. Rauh: --A million, three members.

I don't know how much that would mean in money, but nothing was spent by us... and we got as much as we could out of the staff.

We got as much as we could out of the staff, that was nothing.

We got as much as we could out of the rank and file; that was substantial, but we did get a lot from lists of concerned citizens, and that was the only place we could go.

It seems to me that it is clear--

Unidentified Justice: Mr. Rauh, you go so far as to suggest that there is no legitimate basis for a rule of this kind?

Mr. Rauh: --Oh, there is not in this.

Unidentified Justice: I mean, is there no union interest in not having the union leadership beholden to someone who collects large sums of money, contributed by many small contributors... but a fund raiser?

Mr. Rauh: Yes, I don't see any possibility.

All that it does is to get like-minded citizens to contribute to this man so he can put his message, like minded message, over and win or lose fairly--

Unidentified Justice: Well, what would the difference--

Mr. Rauh: --Furthermore--

Unidentified Justice: --Let me just... what is the difference between one fund raiser who might have great influence, and one very wealthy supporter of the union?

Mr. Rauh: --Well because, Mr. Sadlowski could have written this letter to the... they talk about letters that were written by... Sadlowski, they were letters that Sadlowski could have written to those lists--

Unidentified Justice: Well, I am not really directing my question at the facts of this particular election, but just as a general proposition, can you conceive of any situation in which there would be a legitimate justification for a rule of this kind?

Mr. Rauh: --I think if it wasn't so overbroad, I think you could say... certainly you can say you can't give more than $1000, and I think you can go below that.

Unidentified Justice: Would you say you can't have one solicitor collect more than $1000?

Mr. Rauh: If that were real... if that were a real danger, yes.

If that were a real danger and a real way to settle the over-breadth, yes.

But I don't think there is a real danger because the money is really being asked for in Sadlowski's name.

But if you want to say you couldn't ask for more, so Sadlowski would have to ask for it all himself, that wouldn't trouble me.

But if you could say there can't be a middleman in the fund-raising, probably that is not so terrible.

But that is not their reason.

They say flatly on page 12 of their yellow reply brief that they don't want small contributions--

Unidentified Justice: No, but they finished the paragraph on page 13 with the thought that I was just expressing.

Mr. Rauh: --Well, your thoughts, yes.

That would be all right.

This is just so broad as to--

Well, 101(a)(2) settles it, and it settle it for the court below.

But you could make an alternative decision under 101(a)(4).

Remember that this was aimed at Sadlowski and his lawyers.

They say... I could hardly believe my ears here that there was some suggestion that they hadn't intended litigation, to block litigation.

They said, oh, you can have personal service, but you can't use your secretary, you can't use your office, you can't use your supplies.

How could any lawyer represent anybody pro bono who is an insurgent and they need lawyers... God knows they have admitted you have got to have a lawyer in this fight.

How could anybody represent them, using your personal services, and not be able to use your secretary, your office and your staff?

And they bar using them, in flat terms they barred using your secretary, your staff and your office.

Of course this was aimed at stopping litigation.

Indeed, at the same time that they did this, they started a lawsuit to stop litigation.

They sued the Association for Union Democracy to stop litigation.

The case came to this Court two years ago, McBridge against Rockefeller.

This case was here, and this Court denied cert. But the case was here, you saw it.

They tried to prevent any litigation because the people, you couldn't... funds have to be raised for the expenses.

Lawyers may feel deeply enough for union democracy that they will work for nothing, but there are expenses.

And those were paid by these organizations and they brought a lawsuit to prevent that.

There is no question what the purpose of this was; it was to stop that kind of--

Unidentified Justice: But do you think that purpose survived the opinion that former Secretary Wirtz wrote that is at 454 of the Joint Appendix?

Mr. Rauh: --I sure do.

Unidentified Justice: You do?

Mr. Rauh: Because he even went further.

If you look at that, Your Honor, they say well, if the suit wasn't bona fide, why, that is then not permitted.

Of course, the Wirtz opinion clearly conflicts with the clear language of the rule, with its purpose and everything.

Unidentified Justice: Well, that is like our saying one of our decisions construing a statute conflicts with the plain language of the statute.

Mr. Rauh: No, you are not hand-picked and paid by one of the litigants, Your Honor.

You are an independent body.

When you make an opinion that is determinative, but when you are a hand-picked committee paid by one of the parties, you are a lot different.

Indeed, you said this, or the Court said this in the steel case, where you wouldn't even let the Railroad Adjustment Board, which is only a third union people, make decisions because of the fact that they were a third union controlled, and this was a union grievance by blacks against the union.

Now, there is only one... as I said, 101(a)(2) applies, 101(a)(4) applies.

The question is what would you do under 101(a)(4).

Why is it you can't rewrite the rule?

Judge Hart was right.

The court of appeals preferred to put it on another ground, but Judge Hart was right when he said that the unlawful effects of this rule have a chilling effect.

He doesn't want to rewrite it, it can't be rewritten, and I suggest it can't be rewritten, if Your Honor please.

It can't be rewritten because you have got all sorts of things that have to be dealt with.

If the statute... if you rewrite, do you say oh, it has got to be a bona fide suit, as they complained, or, it can't be intended to extract political gain, as Judge McKinnon laughed at in his opinion.

Or, what do you say about this?

They argue that you can't use the money to get the word out about the lawsuit.

Well, suppose there is a lawsuit, and suppose that lawsuit is won and suppose they had done some things that were bad.

You mean, that can't be told to the public?

You can't rewrite this rule for them.

Of course, it really doesn't matter.

If I am right on 101(a)(2), I just think it would be better for union democracy, which I am here pleading for, be better for union democracy if you knocked it out on both, because then people will realize that there is something serious.

In conclusion, Your Honors, unions are not private associations, as were made here.

Congress has given tremendous assistance to the building of American unions since the Wagner Act 47 years ago, and it has fortified unions with exclusive authority to represent and require dues from even those who do not want that representation.

In 59, Congress realized they had to do something to protect the rights of the public and to make those rights count.

So what did they do?

They set up a statute where union democracy would flourish.

All four judges below have held that both the purpose in two express provisions of this bill repel the steelworkers attack on union democracy.

I believe in exclusivity of union representatives.

I believe in the union shop.

I have worked for them.

But those things bring something else.

They bring a responsibility with them, and this provision, this stopping of the slightest help for those who would challenge an incumbent, those are not carrying out the responsibility and the favors and the held that the Congress of this country gave unions.

Chief Justice Burger: Mr. Gottesman, you have about four minutes remaining.

ORAL ARGUMENT OF MICHAEL H GOTTESMAN, ESQ. ON BEHALF OF THE PETITIONER -- Rebuttal

Mr. Gottesman: Thank you, Your Honor.

There is a certain iron in this case.

We are told that what the union did here is a terrible blow to democracy.

But what the union did here is an expression of democracy.

There is no debate about the fairness of the union's convention.

Delegates elected by the members from all over the country came, and overwhelmingly, by a ten to one margin, said we want this rule.

Now, that is democracy.

The question is whether Congress intended to stifle that democratic choice, and whether it constitutionally can do so.

Mr. Rauh has recited in the last half hour facts about union elections that so diverge from the facts in this record and the facts about--

Unidentified Justice: Well, Mr. Gottesman, on that point, we asked you about independent expenditures, and you gave me quite a different impression than I get from reading Joint Appendix, 74.

Mr. Gottesman: --Yes, I am sorry, Your Honor, I should have made that clearer, and I had forgotten that provision.

The union cannot stop outside expenditure.

The union does want the candidate to make such efforts as he can take to discourage them, and I apologize to Your Honor, because I--

Unidentified Justice: It is rather strongly worded, his duty to stop that sort of thing.

Mr. Gottesman: --Yes, but of course he can't... those who do want to do it can do it.

The union can't stop them.

And I apologize for having forgotten that.

It is important I think to remember the posture of the case, and the posture of this case is that summary judgment was granted to the respondents.

So that while Mr. Rauh recites as fact that people can't get money from the members of the union, and the staff always supports the incumbents, the evidence in this record is quite the contrary.

Indeed, there is virtually nothing supporting what he is saying, but more importantly, there is a great deal supporting the other side.

Unidentified Justice: Well, if you are talking about summary judgment, is there really any evidence in the record... I mean, in the sense that you would have after a case was tried.

Mr. Gottesman: Well, there are... it is not the same.

There are substantial affidavits that there are numerous people who have unseated incumbents in steelworker elections relying solely or almost solely on member contributions.

Unidentified Justice: Then are you saying if you win, it should go back for a trial to the district court?

Mr. Gottesman: No.

If we are right that 101(a)(2) doesn't create this right, we also moved to dismiss the complaint.

And of course, the complaint didn't allege 101(a)(2), but I think we are entitled to have it treated as amended, since that is what the court of appeals relied on.

Our position was they don't state a claim under the law.

That is our first proposition.

And if we are right about that, dismissal is the proper disposition.

But if we are wrong about that and we are down to fighting about whether the facts are what Mr. Rauh says they are, there is not a fact he recited that can be accepted in the present posture of this case.

Most of what he said has no record support; all of what he said is flatly contradicted by affidavits that show, as I say, that outsiders have defeated incumbents relying on contributions within the union; that show that Sadlowsky did not make a serious effort to raise money from the union because he did not have to, he had all the money he wanted from outsiders; that show that the staff frequently supports the opponents, sometimes unanimously supports the opponents of incumbents; that shows that the Staff are really just rank and filers, almost all of the staff are people who worked in the plant, worked their way up to local union positions, went on the staff.

They are members just like everybody else.

And they have the same rights to participate and they have contractual protection against any harm being done to them because they support whoever they choose or choose not to support.

This record shows that 64 % of the staff did not support either candidate, at least financially in the 1977 election.

It also shows that the union has 1,300,000 members, all of whom are eligible contributors: that other candidates have had no trouble with in-plant solicitation.

The people who run for top office in the union... and the record shows this... aren't some person who doesn't know anybody.

They are people who achieved some status, as this Court said in Buckley, they are incumbents of other offices.

In that capacity, whether local union, whether staff, in those capacities they have gotten to know throughout this union, they have the mechanism by which they can get fund raising within the union going.

The record also contains evidence of elections under this rule that successfully raised substantial money to oppose an incumbent.

Chief Justice Burger: Your time has expired, Mr. Gottesman.

Thank you, gentlemen, the case is submitted.

Attribution:

The OYEZ Project

Featured:

United States v. Helstoski - Oral Argument

Thu, 24 Jun 2010 02:23:51 +0000

Case:

United States v. Helstoski

Media File:

78-349_19790327-argument.mp3

Related Transcript:

78-349_19790327-argument.xml

Transcript:

Argument of Morton Stavis

Chief Justice Warren E. Burger: We'll hear arguments first this morning in Number 349, United States against Helstoski and the consolidated case.

Mr.Stavis, you may proceed whenever you're ready.

Mr. Morton Stavis: Mr.Chief Justice and may it please the Court.

There are two cases here and the 546, our petition, Number 349 of the Solicitor General's petition, the facts in both cases are quite simple.

546 which I will deal with first involve the jurisdiction of the District Court to try this indictment.

And the facts there obviously the indictment itself which charges a member of Congress with taking money and conspiring to take money by introducing bills in Congress, bills which the indictment charges were in fact introduced, and the bills as specifically identified in the indictment.

It is plain from the face of the indictment that the grand jury which found it heard, considered and relied upon proof of the performance of legislative acts.

And while it is not clear from the face of the indictment, it is established in the opinion of Judge Meanor and undisputed that's the indicting grand jury, as the grand jury which handed down this indictment received proofs of the performance of legislative act from the United States attorney not from Mr.Helstoski.

It is also clear and undisputed that while Mr.Helstoski gave legislative materials to earlier grand juries, not the indicting grand jury, he had no reason to believe at the time that he gave such materials that he was the target of the grand jury, and in fact somebody else was thereafter indicted, tried and convicted.

Justice Byron R. White: Of course it wouldn't make any difference for your theory if he had, would it?

Mr. Morton Stavis: If he was a target?

Justice Byron R. White: If he was aware that he was a --

Justice Potter Stewart: I knew he was.

Mr. Morton Stavis: It -- to our fundamental theory, it doesn't.

Justice Potter Stewart: Might have something to do with the waiver.

Mr. Morton Stavis: I don't think it has anything to do with waiver either, but I agree that if our theory is correct that this is a jurisdictional allocation then it wouldn't make any difference at all.

Chief Justice Warren E. Burger: Who was the other person under inquiry, another member of Congress?

Mr. Morton Stavis: No, no somebody who had been employed by the Congressmen some eight years previously, was not then employed and hadn't been employed for many, many years.

Now, our position in 546 is, and you put your finger right on it, that the Court had no jurisdiction to try this indictment.

And if the Court agrees with us and that of course, it doesn't have to reach the evidentiary issues which were involved in 349.

Now, I'm not going to attempt to match the eloquence of this Court and its eight opinions dealing with the Speech and the Debate Clause and review or recant the history of that clause in its meaning in England and in United States.

Justice William H. Rehnquist: Mr.Stavis, are you going to get it all to the appealability of Judge Meanor's order by the Government?

I noticed that you attacked it in the Third Circuit but neither party apparently contest it here.

It would seem to me that it is not open and shut that that was an appealable order.

Mr. Morton Stavis: Well, I -- we -- in the Third Circuit, we certainly didn't believe that it was an appealable order.

We moved to dismiss before the Third Circuit on those grounds.

The Third Circuit denied our motion.

I must confess that we did not cross-petition on that particular issue, but it may very well be appropriate for the Court to address that question on its own motion because --

Justice William H. Rehnquist: Well, we have jurisdiction of the Court of Appeals opinion -- judgment only if it was properly in the Court of Appeals.

Mr. Morton Stavis: I don't think this matter is properly in the Court of Appeals.

Candidly, I don't think the issue which the Government presented in its petition or even properly before this Court, because the entire factual foundation for the Government's petition in 349 is a series of proposed profers of proof which they asked the District Court to rule upon three times.

And the District Court refused to do so.

So there are no facts before this Court.

And 349 is a wholly and an entirely supposititious case.

And in that respect, I guess I don't have to call to your attention, the attention of the Court, the dissenting opinion by Mr.Justice Blackmun concurred in by the Chief Justice only last week in the (Inaudible) case, which you addressed the question of the proposition that this Court ought -- to be handling supposititious cases.

You get enough business handling concrete issues, and while the other seven members of the Court didn't agree that that principle applied to that case.

There's no question that this Court ordinarily tries and adjudicates only concrete cases.

Justice William J. Brennan: Well that I get -- that's a case in controversy argument, but did I understand Mr.Stavis, you're suggesting that even though you did not cross-petition on the question of the appealability of the order to the Third Circuit that it's jurisdictional and therefore that we can reach and decide it?

Mr. Morton Stavis: I accepted the suggestion of Mr.Justice Rehnquist in that respect.

Justice William J. Brennan: I just want to be clear, that's -- now the arguments you're now making is really a case of controversy, are you (Voice Overlap)?

Mr. Morton Stavis: That's correct.

Justice William J. Brennan: And that's a separate argument is it?

Mr. Morton Stavis: That's correct Your Honor.

Justice William J. Brennan: All right.

Mr. Morton Stavis: May I get back to the issues in 546 which is the jurisdiction of this Court to try -- of the District Court of an Article III Court to try this indictment.

That the Speech or Debate Clause establishes jurisdictional allocation comes all through the decisions of this Court including its latest, and there of course is the Chief Justice's opinion in Eastland against Servicemen's Union.

Chief Justice Warren E. Burger: For the Court?

Mr. Morton Stavis: I'm sorry.

Chief Justice Warren E. Burger: Opinion for the Court?

Mr. Morton Stavis: Of course, the opinion for the Court.

And what you addressed there was the fact that the Speech or Debate Clause affects the availability of judicial power.

Now, the corollary to approaching this matter from the point of view of jurisdiction or the availability of judicial power is that no one says that members of Congress are super citizens and Speech or Debate Clause isn't free license to take bribes and commit crimes and introduce bills that are paid for.

That the only question is, which is the proper courthouse?

Is it an Article III Court or is it the Congress of the United States under both the Speech or Debate Clause and the Punishment Clause and so that there is no question about it.

My client never has, does not now nor will he contest the jurisdiction of the Congress of the United States to try the charges which we're involved with here.

Because not exactly looking to be charged by any --

Chief Justice Warren E. Burger: Can they try these charges now?

Mr. Morton Stavis: I believe so.

Chief Justice Warren E. Burger: And what sanction could Congress impose?

Mr. Morton Stavis: By way of Kilbourn against Thompson that Congress has complete power to impose any sanctions it chooses including -- if I read Kilbourn against Thompson correctly, imprisonment.

That's what you said in Kilbourn.

Justice Potter Stewart: I suppose under the constitution that wouldn't be authorized to impose a cruel or unusual punishment, would it not?

Mr. Morton Stavis: Oh, I think there are constitutional limitations upon the exercise of its power.

That's Powell against McCormack.

We expect that if we act right on this by Congress, we expect to insist upon the due process hearing.

And the whole panoply of rights, that would be applied to any judicial hearing and that would be a judicial hearing.

It's just an exception to Article III jurisdiction, but --

Justice Potter Stewart: You going to insist on a jury trial?

Mr. Morton Stavis: No.

No we don't expect to, a jury trial.

Justice Potter Stewart: Although the constitution guarantees that, isn't it?

Mr. Morton Stavis: Guarantees it, an Article III trial.

I do not believe that it would be --

Justice Potter Stewart: I didn't say anything about an Article III trial, does it?

Mr. Morton Stavis: Well, I would guess however that we would accept the fact that would not be a jury trial.

If we would -- if we were entitled a jury trial, we would waive it.

I think the essence of the Punishment Clause is that the Congress itself has that power.

Justice Potter Stewart: Subject to what constitutional limitations?

Mr. Morton Stavis: Subject to due process limitations.

Justice Potter Stewart: But not a jury trial?

Mr. Morton Stavis: That's correct, subject to cruel and unusual punishment limitation.

Justice Potter Stewart: Presumption of innocence?

Mr. Morton Stavis: Presumption of innocence.

Justice Potter Stewart: Necessity of proof beyond a reasonable doubt?

Mr. Morton Stavis: I believe so, right of confrontation, right of cross-examination, right of counsel or --

Justice Potter Stewart: Mr.Stavis, is it clear that their clause applies to a former congressman?

Mr. Morton Stavis: Congress in the past has so asserted, we do not dispute that and besides as of the time that this indictment was found as to Helstoski was a member of Congress.

Justice Potter Stewart: Yes but he's not now, any punishment by a Congressman -- by Congress would be from now on.

Mr. Morton Stavis: That is correct and we do not dispute the jurisdiction of Congress but the point that I'm making is --

Justice Potter Stewart: Well, you do it here because you don't have to.

Mr. Morton Stavis: That is correct, and all -- all we have to dispute here is the jurisdiction of the Article III Court.

Justice Potter Stewart: And Courts don't have any jurisdiction.

Mr. Morton Stavis: And at the time this indictment was found, Congress clearly had jurisdiction.

Justice Thurgood Marshall: What would it -- does it -- is there a statute of limitations on this?

Mr. Morton Stavis: I don't know that there is any.

Justice William J. Brennan: Well Mr.Stavis, what took -- you said Congress has asserted authority to try after his defeat which I gather is what happened to this congressman.

Mr. Morton Stavis: That's correct.

In --

Justice William J. Brennan: Has that ever happened?

Mr. Morton Stavis: Yes it has.

Justice William J. Brennan: Against whom?

Mr. Morton Stavis: Well, Mr.Brand speaking for the speaker --

Justice William J. Brennan: Oh, I see --

Mr. Morton Stavis: -- will address that particular question.Historically, it has occurred.

I think in fact it occurred in the most famous corruption investigation by the Congress in the Crédit Mobilier transaction where Congressman Oakes Ames was charged, tried and convicted but it has -- after he was no longer sitting.

And I think there are a number of other examples of that sort.

Justice William H. Rehnquist: Mr.Stavis, would the net result of accepting your theory mean that Congress could not enact and the President sign a law making it a criminal offense for a Congressman to take a bribe?

Mr. Morton Stavis: Congress has enacted such a law, and such a law is on -- to that books and has been enforced and is valid, but not in respect to the performance of legislative acts.

In other words, the Johnson case which wasn't in fact tried under that section is a perfect example.

A Congressman takes a bribe to try to influence the Department of Justice, the normal conflict of interest situation or to take in bribe for an act which is not a legislative act in nature.

What the Speech or Debate Clause is driving at is that if you want to try a legislative act for the connection with legislative act if you want to try the legislative process that belongs in the Congress.

If you want to try just the question of bribery, not implicating the legislative process that you may do in an Article III Court.

Chief Justice Warren E. Burger: But when -- Mr.Stavis, when the charge is for taking money in exchange for a promise of a future act, hasn't the Court held that it's not necessary to show the legislative act or the legislative activity?

Mr. Morton Stavis: And of course that's your opinion in the Brewster case.

That's exactly what the Court held.

And the whole point of the Government's taking this case is that they want to get around that decision, because in that decision, you said at least eight times, we counted them, that under the Brewster indictment you could not show the actual performance of a legislative act.

Chief Justice Warren E. Burger: Well, how will we know whether the Government is going to try to prove that until the case is tried?

Mr. Morton Stavis: Well, that's what we thought accepting that the Government and that's why we don't think you would even consider this case but the Government says, “Please look at our profers of proof, this is really what we want to prove.”

We say, “Those people aren't going to testify that way let alone the fact that if they did testify it wouldn't be true.”

Where the Government is asking you to make -- asking the District Court and asking you to make rulings on advanced evidentiary proof.

Justice Thurgood Marshall: I understand you say you didn't want us to hear this case?

Mr. Morton Stavis: We want you to hear the Government's petition.

Justice Thurgood Marshall: Oh, I see.

Mr. Morton Stavis: We want you to hear the Government's petition as --

Justice Thurgood Marshall: I see, I see.

Mr. Morton Stavis: Sure, I want you to hear my petition.

Justice Thurgood Marshall: I see.

Mr. Morton Stavis: Because my petition --

Justice Thurgood Marshall: I just marvel at your fairness.

Mr. Morton Stavis: Well, I don't think it's not -- I think its not any fair but correct.

But let me get back Mr.Chief Justice to your question, because you said that in Brewster and you looked at an indictment that did not charge the performance of legislative acts.

Look at this indictment, on its face it charges the specific performance of designated and named legislative acts.

Now if this case goes to trial, and if you prove -- if the Government is permitted to prove the facts as alleged in this indictment, I'm talking about what would've happened if they came up with a Brewster indictment, but if they proved the facts alleged in this indictment that jury is going to be asked to decide questions as to the functioning of the legislative process specifically.

Chief Justice Warren E. Burger: What if the trial court excludes any evidence about the legislative acts?

Mr. Morton Stavis: Well that's what Mr.-- that's what Judge Meanor said he was going to do and that's why the Government took this case up.

They weren't unsatisfied with Judge Meanor's decision which said, “I read the Brewster opinion and I intend to enforce it and not permit the introduction of legislative acts.”

The Government took it up that's why this case have been going on now for over two and a half years without a trial.

Now, but I want to emphasize that our position is that in the light of this indictment, the issues just does not end with the fact that the Government would not be permitted to introduce that evidence at trial.

And that's what my petition is about.

I say that the grand jury released and found an indictment which on its face is beyond the jurisdiction of this Court.

And what the Government is saying is, “Well, let's fix up the indictment a little bit.”

Well, maybe they shouldn't have charged and alleged these legislative acts which they designate in that indictment.

“Well, we'll just strike it out.

Fix it up and make it like the Brewster type indictment and forget that it ever happened.”

Justice John Paul Stevens: Mr.Stavis, do you agree that if they strike the allegations of the specific overt acts describing legislative acts that the indictment would then be comparable to the indictment in the Brewster case?

Mr. Morton Stavis: Before, the morals in this specific legislative act, it's also the allegations in counts 2 (a) and 4 of the indictment which also include allegations of specific legislative acts.

Yes, the answer is if all those words were taken out then you'd have an indictment that read like the Brewster indictment.

But the trouble about doing that is that by the issuance of the indictment the executive branch of the government, the Executive Branch of the Government has implicated -- Judge (Inaudible) and the grand jury has implicated and impugned the functioning of Congress.

Now the point that we make is that when the Speech or Debate Clause is set up to protect this delicate tripartite separation of powers, it means that the --

Justice John Paul Stevens: But Mr.Stavis, would you say then that if before the defendant is put in jeopardy, the def -- the Government can come in and voluntarily dismiss the indictment, that permission to dismiss the indictment then reindict it leaving out all the references to legislative acts?

Mr. Morton Stavis: No problem about that.

Justice John Paul Stevens: Well, if they still --

Mr. Morton Stavis: The (Voice Overlap) --

Justice John Paul Stevens: -- would've done what you just said.

Mr. Morton Stavis: No, provided that now this is the difference, provided that it had not presented the legislative acts to the grand jury.

Justice John Paul Stevens: So that having presented the legislative acts to the grand jury that he have given him permanent immunity?

Mr. Morton Stavis: No, they haven't.

There's nothing in the world that says that they can't (Voice Overlap) the grand jury and present a case to another grand jury that's exactly what happened in the Long case.

In the Long case decided by this Court --

Justice John Paul Stevens: Well your position then just so I get is that having told a particular grand jury about a legislative act by a Congressman, that grand jury may never return an indictment against that Congressman?

Mr. Morton Stavis: Indictment which charges legislative acts.

Justice John Paul Stevens: Well, --

Mr. Morton Stavis: I mean -- of course they (Voice Overlap) --

Justice John Paul Stevens: I thought you said that in a moment ago if they dismissed the indictment and brought a new one would -- didn't make reference, its still be bad?

Mr. Morton Stavis: Oh no!

No, what I mean is that they can't -- I mean obviously they can indict him for bank robbery, something having -- they may be able to indict him for bank robbery having --

Justice John Paul Stevens: No, they just excised from the new indictment any reference to the legislative acts and they merely follow the pattern of the Brewster indictment.

Mr. Morton Stavis: That would be invalid because the grand jury, the grand jury has violated the Speech or Debate Clause but this is not to say that the Government cannot convene another grand jury, present the case which does not involve proof of legislative acts and come out with the Brewster type indictment.

Justice William H. Rehnquist: Well but that's like Calandra.

Once the information has been presented to the grand jury there's nothing more that can be done to salvage the Speech or Debate Clause.

The question is whether the indictment it returns is constitutional or not.

The idea that if you present a different information to another grand jury, somehow you could call it back to -- call the earlier proceedings back just isn't possible.

Mr. Morton Stavis: It is not like Calandra.

Calandra is a very different kind of a case.

In Calandra you decided that under the Fourth Amendment -- the exclusionary clause which is your making that you would allow a grand jury to hear evidence unlawfully seized by somebody else.

Justice William H. Rehnquist: And we also said in Calandra that the right of privacy protected by the Fourth Amendment had already been breached and there was nothing that --

Mr. Morton Stavis: I understand that.

But here you have an explicit provision of the speech -- in the constitution which says that speech or debate, which I wish would mean legislative acts, shall not be questioned in any other place.

In Gravel you said that includes a grand jury.

Chief Justice Warren E. Burger: Did it say he may not be questioned or he may not be required to answer?

Mr. Morton Stavis: Says he may not be questioned.

Justice William H. Rehnquist: And, he may not --

Mr. Morton Stavis: I think it says may not be questioned.

Justice William H. Rehnquist: No.

Now, did he have to respond to anything in the grand jury?

Mr. Morton Stavis: I think he did at the point when he wasn't the target.

: I read -- as I read Gravel --Well, a lot of non-targets, witnesses before a grand jury has claimed immunity from responding for various reasons, do they not?

Mr. Morton Stavis: On the Fifth Amendment ground.

Chief Justice Warren E. Burger: Yes, but there might be another reason here then, wouldn't there?

Mr. Morton Stavis: It might be but if I read the Gravel case accurately and I think I do, there is no speech or debate protection from questioning when the grand jury is investigating third party crime.

Justice Thurgood Marshall: Well Mr.Stavis, am I right that your client voluntarily gave the legislative count to the grand jury?

Mr. Morton Stavis: Has laid it to them voluntarily and --

Justice Thurgood Marshall: So is that -- do you take position that if a Congressman is up for anything and he voluntarily gives a legislative thing, he can't be indicted from then on.

Mr. Morton Stavis: --He must --

Justice Thurgood Marshall: -- he is immunized forever?

Mr. Morton Stavis: He wasn't up for anything.

Justice Thurgood Marshall: Yes, but he voluntarily didn't he, he did?

Mr. Morton Stavis: He was subpoenaed to testify.

Justice Thurgood Marshall: Did he?

But didn't he bring these bills there?

Mr. Morton Stavis: He was subpoenaed to testify --

Justice Thurgood Marshall: And didn't he bring the bills there?

Mr. Morton Stavis: That is correct.

Justice Thurgood Marshall: Didn't he bring the legislative matters there?

Mr. Morton Stavis: That is correct.

Justice Thurgood Marshall: And now he complains about bringing them there?

Mr. Morton Stavis: Because he believes --

Justice Thurgood Marshall: And now he complains about bringing them there?

Mr. Morton Stavis: He doesn't complain about bringing them there --

Justice Thurgood Marshall: Oh, what is he complaining about?

Mr. Morton Stavis: -- he thinks he was acquired to bring them there.

He doesn't complain about that at all.

What he complains about is some grand jury that he never brought them before and which turned the wheel and targeted him.

Justice Thurgood Marshall: He would be immunized and we're all going to bank in to the State of Alaska.

Mr. Morton Stavis: Your Honor, I've said exactly the contrary.

Justice Thurgood Marshall: I'm not too sure you wouldn't go so far to say he'd be immunized from robbing a bank in Great Britain.

Mr. Morton Stavis: Your Honor I said exactly the contrary.

I say that quite the contrary, he is subject to prosecution in an Article III Court by a grand jury which doesn't have this material.

He is subject to prosecution before Congress where this material may properly be the subject of inquiry by the Court which has jurisdiction.

So I do not accept the suggestion Your Honor because I think I've said exactly the contrary.

May I reserve some of my time --

Chief Justice Warren E. Burger: Does it not sometimes happen, Mr.Stavis that the prosecution fails to prove all of what is alleged in an indictment and yet a conviction nevertheless results?

Mr. Morton Stavis: Of course it -- of course that happens but that those are not cases where you're dealing with an expressed constitutional prescription --

Chief Justice Warren E. Burger: Well now this trial judge has indicated that he will in advance have the advantage of his statement that he would not admit any testimony on that score --

Mr. Morton Stavis: That he intends to comply with Brewster.

Chief Justice Warren E. Burger: Well --

Mr. Morton Stavis: -- but I just -- our position is that the indictment is already a violation of the Speech or Debate Clause.

Justice William J. Brennan: And therefore he can never be tried under this indictment.

Mr. Morton Stavis: Under this indictment.

Justice William J. Brennan: And that what -- this indictment has to be dismissed is your opinion?

Mr. Morton Stavis: That's correct.

Justice William J. Brennan: And if he's to be indicted, he has to be indicted by a new grand jury which does not hear the evidence that you say violates the Speech and Debate Clause.

Mr. Morton Stavis: And that's not any different than what you did in --

Justice William J. Brennan: Well, but that is your position?

Mr. Morton Stavis: That is correct, it's precisely this position.

Justice Thurgood Marshall: What about the statute of limitation?

Mr. Morton Stavis: I'm sorry?

Justice Thurgood Marshall: What about the statute of limitation?

Mr. Morton Stavis: I think there's an expressed provision of the statutes which provides that where an indictment is voided for some reason not having to do with the merits of the offense that the statute of limitations is told I think there's an expressed provision in the United States Code.

Justice Thurgood Marshall: Well, (Voice Overlap) where it is?

Mr. Morton Stavis: No, but I'll be glad to furnish it to --

Justice Thurgood Marshall: If you give me an idea, I can find it, can you give me an idea.

Mr. Morton Stavis: It's in the United States Code.

Justice Thurgood Marshall: Good.

Mr. Morton Stavis: But there's an expressed provision -- I'll looked that up thinking about this case and I did look it up.

Justice Thurgood Marshall: In fact you can't -- didn't remember it, makes me think it might not help you (Inaudible).

Mr. Morton Stavis: Well, it doesn't help me in the sense that in an indictment, a new indictment can be brought as I have suggested.In that sense it doesn't help me, but also makes clear that the suggestion I've made as to the potentialities of a new indictment is entirely feasible.

And I just want to say in reference to Mr.Justice Brennan's question, that of course is exactly what you do in an immunity case.

You forbid the use of immunized testimony.

You impose upon the prosecutor an obligation to establish that he didn't use immunized testimony when he got the indictment.

If he can't make it he can go to another grand jury.

He can go to another grand jury and get an indictment without the use of the immunized testimony, does that all the time.

Justice William H. Rehnquist: Is there any case from this Court saying that an indictment returned where that the Government didn't show was not based on immunized testimony is invalid?

Mr. Morton Stavis: I think Warren comes close to that.

In Warren what you said was --

Justice William H. Rehnquist: Well, I -- could you ask -- answer yes or no?

Mr. Morton Stavis: I'm not sure I could put my fingers on a case at the moment.

May I reserve some time?

Chief Justice Warren E. Burger: Very well --

Justice John Paul Stevens: May I ask you --

Chief Justice Warren E. Burger: -- Mr.Stavis.

Justice John Paul Stevens: -- one question before you do.

You mentioned the jurisdictional for former members would be covered in your colleague's argument, but as I look at his brief, he gives us some example of five former members over whom Congress say they did not have jurisdiction?

Maybe he will cover it, but I would like to be advised on that if it's incorrect.

Mr. Morton Stavis: I think he's given an example of cases in which former members of Congress were covered.

Justice John Paul Stevens: You don't happen to know such a case yourself?

Mr. Morton Stavis: Other than the Oakes Ames case which I mentioned.

Chief Justice Warren E. Burger: What was the bank in Grand City --

Justice John Paul Stevens: Could you give me that again, the --

Mr. Morton Stavis: Oakes Ames, Congressman --

Justice John Paul Stevens: Congressman Ames?

Mr. Morton Stavis: Congressman Ames involved in the Crédit Mobilier controversy around the 1870's I think.

That was the biggest scandal case in Congress at the time.

Thank you very much.

Argument of Stanley M. Brand

Chief Justice Warren E. Burger: Mr.Brand.

Mr. Stanley M. Brand: Mr.Chief Justice, and may it please the Court.

I'm here representing the Honorable Thomas P.O'Neil, Speaker, the Honorable Frank Thompson, Chairman and the Honorable William Dickenson, ranking minority member Committee on House Administration of the U.S. House of Representatives as amici curiae.T

he interest of the speaker and his colleagues in this case is apparent.

It presents serious questions in our minds as to the continued viability of the Speech or Debate Clause.

At the outset, I would like to make one point clear.

The Congress has read Johnson and Brewster and that Congress accepts Johnson and Brewster.

When we saw the Solicitor's petition however, and what we viewed as an attempt to relitigate Brewster, we were concerned, and that's why we are here.

To paraphrase Thomas Jefferson's characterization of the clause which he wrote shortly after the adoption of the constitution, “The clause is intended to protect the substance rather than the shadow of representative government, and for that reason it states for any speech or debate they shall not be questioned in any other place.”

We believe that this clause operates as an institutional protection as well as a personalized privilege.

And to affect this high principle of an unfettered legislative branch, the framers concluded that a jurisdictional allocation was necessary.

And we read this jurisdictional allocation from the Speech or Debate Clause read together with the Punishment Clause.

Like other jurisdictional requirements, the trial of legislative acts must occur in a proper forum.

It is not subject to waiver, Congressman Helstoski cannot waive himself into an Article III Court for the trial of legislative acts.

Justice William J. Brennan: That is even if he had voluntarily submitted all this material --

Mr. Stanley M. Brand: That's right.

Justice William J. Brennan: -- regarding his legislative act.

Mr. Stanley M. Brand: That's our position.

Justice William J. Brennan: And even that --

Justice Potter Stewart: Even if he admit an unequivocal explicit waiver, knowing waiver voluntarily?

Justice William J. Brennan: Yes, any more than two --

Justice Potter Stewart: He was just --

Justice William J. Brennan: -- any more than two litigants --

Justice Potter Stewart: -- not empowered to waive.

Mr. Stanley M. Brand: -- any more than two litigants could present themselves to an Article III Court --

Justice Potter Stewart: And (Voice Overlap) --

Mr. Stanley M. Brand: -- without a case of controversy and say, “We would like the Court nevertheless to try this case.”

Chief Justice Warren E. Burger: In other words, the Speech or Debate Clause doesn't belong to an individual, it belongs to an institution, is that your point?

Mr. Stanley M. Brand: Yes.

Justice Thurgood Marshall: Well couldn't --

Justice Byron R. White: Well if it does, why can't that institution provide for its waiver?

Mr. Stanley M. Brand: Because the clause is a protection for the member as well even as against --

Justice Byron R. White: So it's both?

Mr. Stanley M. Brand: -- a hostile Congress.

Justice Byron R. White: So it's both?

Mr. Stanley M. Brand: That's correct.

Justice Byron R. White: Neither one can waiver --

Mr. Stanley M. Brand: It protects unpopular members as well as popular members --

Justice Byron R. White: So that --

Mr. Stanley M. Brand: -- Democrats as well as Republicans.

Justice Byron R. White: So Congress cannot by however narrow a piece of legislation --

Mr. Stanley M. Brand: That's right.

Justice Byron R. White: -- provide for the --

Mr. Stanley M. Brand: Any --

Justice Byron R. White: -- for the executive prosecution of a legislative act.

Mr. Stanley M. Brand: That's right, any more than we could delegate impeachment for instance.

Justice Thurgood Marshall: Mr.Brand, Congress I assume could amend the 201 and the other bribery statute and say, “They do not apply to Congressmen.”

Mr. Stanley M. Brand: They could do that.

Our position would be --

Justice Thurgood Marshall: Well, aren't you now doing that?

Mr. Stanley M. Brand: No sir, we don't believe we are.

Justice Thurgood Marshall: Well, aren't you trying to get us to do that?

Mr. Stanley M. Brand: I don't think so.

What we're saying is as you said in Brewster, these cases can go forward without impugning legislative acts, and that's what we are saying here.

The residuent --

Justice William J. Brennan: Do you challenge the indictments Mr.Brand or just the evidentiary problem?

Mr. Stanley M. Brand: We do.

Justice William J. Brennan: You agree with Mr.Stavis --

Mr. Stanley M. Brand: We do in this case.

Justice William J. Brennan: Yes.

Mr. Stanley M. Brand: Although we agree also that there is nothing to prevent the U.S. attorney from taking the non-legislative material presenting it to a new grand jury and indicting and going forward to trial.

Justice Potter Stewart: Except maybe the statute of limitations.

Mr. Stanley M. Brand: If that in fact is a problem.

Justice Byron R. White: But you would -- in that new indictment or in those new grand jury proceedings or in the subsequent trial, the evidence the Government now proposes to use you would say would be unusable?

Mr. Stanley M. Brand: Correct.

Chief Justice Warren E. Burger: Hasn't Congress or didn't Congress take quite a long step in relation to the Speech or Debate Clause when they enacted these provisions?

Mr. Stanley M. Brand: I don't think so Your Honor, 201 like a plethora of other statutes regulating non-legislative behavior has been passed by Congress in that context.

We have statutes for instance, 18 U.S.C. 431 says that a member may not enter into a contract in which the United States is a party.

That's not a legislative act, we regulate that by statute.

We regulate campaign financing, because we say that when a member takes a political contribution or campaigns for office, he is not engaging in the legislative process and we regulate that through the United States Code.

I don't believe you can read 201 in the context of the U.S. Code in the other ways in which we regulate members Congress -- conduct as the one example where we have attempted to put into Article III Courts the trial of legislative acts.

I don't believe that's consistent with the design of the Code at this time.

At this point we come to the question of the indictment.

We would say that there having been neither a waiver nor a delegation under 201.

The indictment at issue here which charges legislative acts on the basis of what the grand jury heard is fatally defective.

And we say this for several reasons.

This is not Calandra and the Fourth Amendment.

This is not Costello and the Fifth Amendment.

This is the Speech or Debate Clause which is part of the constitution, which the framers placed in the constitution to protect questioning at the earliest possible juncture, not after indictment when the death blow has been dealt as in this case.

Justice Potter Stewart: Well, to prevent question anywhere in any other place?

Mr. Stanley M. Brand: Correct.

Justice William H. Rehnquist: But why wouldn't your interest be served by according to Congressman a right to assert before the grand jury the privilege that you're talking about now?

Mr. Stanley M. Brand: Our position would not -- denying that.

The --

Justice William H. Rehnquist: But --

Mr. Stanley M. Brand: -- grand jury which indicted him --

Justice William H. Rehnquist: Why wouldn't it be fully served and if he chooses not to assert it, then there is some form of waiver.

Mr. Stanley M. Brand: Well, if it's never asserted it never becomes an issue, but in this case the grand jury which ultimately indicted him was one which there could be no waiver because he never appeared before that grand jury.

What we're saying on the indictment issue is that the indictment is defective because the design of the Speech or Debate Clause is to present -- prevent questioning.

If the questioning has already occurred and you are willing to say that we will only at trial put on some evidentiary prescriptions then you have not remedied the potential abuse which exists.

Justice William H. Rehnquist: But what was the questioning before the grand jury which violated the Speech and Debate Clause?

Mr. Stanley M. Brand: The legislative acts.

It --

Justice William H. Rehnquist: To whom were the questions addressed?

Mr. Stanley M. Brand: I believe they were directed to the defendant.

Justice William H. Rehnquist: Well, but why couldn't he then assert the speech and debate privilege and fully vindicate it by asserting it at that point, and not having done so, he has waived it.

Mr. Stanley M. Brand: Well, under Mr.Stavis' formulation and I think we would agree with most of that.

A member must answer as to third party crime before a grand jury.

Chief Justice Warren E. Burger: But as soon as it reached him, is it not implied in both Johnson and the Brewster case that he not only need not answer, he may assert the proposition that he cannot be questioned.

To give an example, if he were sued in a complaint in a civil case for a libel and the complaint alleged that the libel was committed on the floor of the House, could not the member of Congress simply informally tell the Court by letter or any other way, that he was not going to answer because the Speech or Debate Clause protected him.

And he was not going to appear and that any judgment entered on the basis of that complaint would be a nullity under the Speech or Debate Clause?

Mr. Stanley M. Brand: Well as I --

Chief Justice Warren E. Burger: So that he -- it is more than a quite matter of not being questioned or not answering, he can't even be questioned, isn't that so?

Mr. Stanley M. Brand: That's correct.

Chief Justice Warren E. Burger: Well, but he then submitted to the questioning here.

Mr. Stanley M. Brand: Well, wouldn't he be -- would the same situation occur where he never appeared and the U.S. attorney went to the Library of Congress and took the legislative material out off there, is that a questioning?

He would never have appeared to assert the privilege yet we would assert that that's prohibited.

Justice William J. Brennan: Well, indeed you look --

Mr. Stanley M. Brand: That the grand jury can't hear --

Justice William J. Brennan: I thought you would assert that even if he appeared and answered freely, nevertheless.

Mr. Stanley M. Brand: That's correct, he as a claimant in a Article III Court could come in and claim that he should get a remedy from the Court.

Justice Byron R. White: Well Mr.Brand, he certainly don't need to -- I know you say that he -- the evidence should never have even been presented to the grand jury, but even if there was -- even if it was properly presented or even if it could be said that he waived in some matter the presentation of the evidence, you still say that he never consented to be indicted.

Never consented to be threatened with indictment and that would of course solve a lot of your problems if you win on that.

Mr. Stanley M. Brand: Well again, I believe that the heart of the clause is protection of the Congress from coordinate branches.

Justice William J. Brennan: And I gather -- I thought your position was so far does that principle go that nothing that he does before the grand jury can support an indictment.

Mr. Stanley M. Brand: Correct.

Justice William J. Brennan: Nothing, isn't that true?

Justice John Paul Stevens: Well Mr.Brand, he --

Justice Potter Stewart: But can he support a waiver?

Justice John Paul Stevens: -- he didn't testify before this grand jury, did he?

Mr. Stanley M. Brand: The one that he was indicted by?

Justice John Paul Stevens: Yes.

Mr. Stanley M. Brand: No, he did not.

Justice John Paul Stevens: He didn't testify before that grand jury.

Mr. Stanley M. Brand: He did not.

Justice John Paul Stevens: So your position has to be that evidence of legislative acts is inadmissible before the grand jury even though the man itself is --

Mr. Stanley M. Brand: Yes.

Justice John Paul Stevens: But the clause doesn't read that way.

It says that the Congressman shall not be questioned in any other place, it doesn't say the evidence of legislative act shall not be admissible before a grand jury.

Mr. Stanley M. Brand: Of course the --

Justice John Paul Stevens: That if he -- mentioned even acknowledged with third party crime evidence of legislative act shall be --

Mr. Stanley M. Brand: Well of course the Court -- the clause doesn't say either that, it is merely that evidence shall not be presented.

We would read “shall not be questioned” to include the questioning of his legislative acts whether or not he is the authoror or not.

Justice Thurgood Marshall: Well, he wasn't questioned in the grand jury, was he?

Mr. Stanley M. Brand: That at time and the grand jury he was not.

Justice William J. Brennan: But at the time and grand jury is conducting its investigation, it presumably doesn't have its mind made up what its going to do at the end of the inquiry.

Does it have to stop every time somebody propose and introduced in the -- before it a legislative act and decide whether or not it can be received based on what its ultimately going to decide with respect to whom it may indict?

Mr. Stanley M. Brand: But in this case there was the -- a mechanism for calling out the legislative acts by presenting -- the U.S. attorney by presenting them to the -- by not presenting them to the indicting grand jury.

There was a mechanism but it wasn't used.

Justice John Paul Stevens: May I ask you one other question?

Is it your view that the Congress retains jurisdiction to punish former members?

Mr. Stanley M. Brand: Yes.

Justice John Paul Stevens: And what is your authority for that?

Mr. Stanley M. Brand: Well, our authority would be the residual -- the inherent power of the body is punished, contempts committed by its members at the time they were members for conduct which occurred when they were members.

Justice John Paul Stevens: Has the Congress -- is it not true that your brief recites an example of three members or it did not have former members of whom did not have jurisdiction.

Mr. Stanley M. Brand: Well, that report raised doubts as to whether there was jurisdiction and those cases against those former members were dropped for other reasons.

Justice Potter Stewart: The military once asserted jurisdiction to punish its foreign members too, but it got a negative answer from this Court, didn't it?

Mr. Stanley M. Brand: I believe it did.

We're talking again about what we would say is the inherent power of the body to punish members not as private citizens but for conduct which occurred in the body when they were --

Justice Potter Stewart: When they were members.

Mr. Stanley M. Brand: -- when they were members.

Justice Potter Stewart: And that was the military's theory too.

Chief Justice Warren E. Burger: Mr.Stavis indicated that you were going to tell us about the number of Congressmen, former Congressmen punished by the House or the Senate.

Justice Potter Stewart: Yes.

The House has doubted its authority, it's true as this Court cited in Powell v. McCormack, its authority to expel a member for conduct which occurred before he became a member of Congress.

But it has not doubted its power to punish conduct occurring in a prior Congress.

As was indicated by Mr.Stavis, Oakes Ames --

Justice Byron R. White: By a man who is no longer a member?

Mr. Stanley M. Brand: No, in that case he was a member of the 42nd Congress, although --

Justice Byron R. White: So did you say that -- has Congress doubted its power to punish conduct occurring in a former Congress by a man who is no longer a member?

Mr. Stanley M. Brand: I'm not sure if there's ever expressed any view on that.Our view of the self disciplinary process as it is evolving at this stage would be that we would have the power to --

Justice William J. Brennan: Well Mr.Brand is there any instance of a former Congressman tried by the Congress or the House or Senate for a conduct (Voice Overlap) --

Mr. Stanley M. Brand: There is none that I can get to.

Justice William J. Brennan: There are some?

Mr. Stanley M. Brand: See that -- I can cite to none.

Justice Byron R. White: Well, what about -- I thought Mr.Stavis indicated there was an instance, is that right or not?

Mr. Stanley M. Brand: Well he talked about the Crédit Mobilierscandal.

Justice Byron R. White: Well, what about that?

Mr. Stanley M. Brand: And that was disciplined in the 42nd Congress for what occurred in the 40th.

Justice William J. Brennan: Of an incumbent Congressman.

Mr. Stanley M. Brand: Of an -- sitting member of Congress.

Justice Byron R. White: I see.

Mr. Stanley M. Brand: I see that my time is up.

If the Chief Justice would indulge me for one minute I would simply state --

Chief Justice Warren E. Burger: You may.

Mr. Stanley M. Brand: -- that the self-disciplinary process is an evolving process.

To say that the legislative acts will go unpunished is not correct.

Legislative misbehavior and misconduct is not immunized.

The House has taken cognizance of acts committed by its members which impugn the integrity of a process.

It's an evolving process.

It is not static.

We are currently considering proposals for instance, to impanel grand juries of members on a random basis.

We are proceeding a pace with a self disciplinary process.

Justice William J. Brennan: Does the record, Mr.Brand, tell us whether the Congress has given any consideration to whether any action should be taken against former congressman Helstoski?

Mr. Stanley M. Brand: No sir.

And I would leave with this thought that the Solicitor has indicated in his brief that the Congress can't do both, they can't discipline appropriately and also legislate.

I believe the record is clear that we can discipline with justice through law that we can do it with due process that we can do it with the full panoply of protections and shields that apply in a criminal case, witness the material we've submitted for the record on that.

Thank you.

Argument of Wade H. McCree

Chief Justice Warren E. Burger: Very well Mr.Brand.

Mr.Solicitor General.

Mr. Wade H. McCree: Mr.Chief Justice, and may it please the Court.

In June 1976, respondent was indicted in the United States District Court for the District of New Jersey on several charges arising out of grand jury investigations into alleged corruption in connection with private immigration legislation.

Count one charged him as a member of Congress with conspiracy to violate the official bribery statute, that's 18 U.S.C. Section 201 (c) (1), by acting with Albert Defalco, his former administrative aid and others, to solicit and to receive bribes in return for being influenced to introduce private bills in the House of Representatives.

13 overt acts in furtherance to the conspiracy were alleged.

These overt acts consisted of charges that respondent and his administrative aid met with attorneys who specialize in immigration litigation and from whom they received cash payments in return for being influenced to introduce private bills for named aliens.

The other three overt acts with which we're concerned here, 2, 3 and 4 also allege the actual introduction of such bills.

Chief Justice Warren E. Burger: In your view Mr.Solicitor General, for the Government to sustain a case needn't prove anymore than that the money was taken and the promise to do a future act was made?

Mr. Wade H. McCree: That's --

Chief Justice Warren E. Burger: Does -- in other words, does it need to prove that the bargain was fulfilled?

Mr. Wade H. McCree: That's precisely the Government's position, if the Court please.

The offense was to solicit bribes to perform an official act and the offense is complete once the bribe is solicited and it is unnecessary to show that an official act was in fact done in response to it.

Chief Justice Warren E. Burger: Would the crime be consummated if the solicitation were shown but no payment were shown?

Suppose the person solicited refused to pay.

Mr. Wade H. McCree: The act, if the Court please, it would be under 201 (c) the act is in fact completed when the solicitation is made for the purpose of being influenced.

Justice William J. Brennan: But Mr.Solicitor General, I gather -- Judge Meanor said you could not be -- use the evidence of bills, private bills actually being introduced, did he not?

Mr. Wade H. McCree: That's exactly that --

Justice William J. Brennan: And you disagree, don't you?

Mr. Wade H. McCree: I do not -- we do not disagree with Judge Meanor if a waiver took place.

We agree that Judge Meanor is correct that we could not show the introduction of the bills which is the showing of legislative acts unless a valid waiver occurred.

But we contend --

Justice William J. Brennan: Heard when and how?

Mr. Wade H. McCree: We submit that a valid waiver occurred when Mr.Helstoski voluntarily presented voluminous correspondents including copies of the very bills that he introduced after he was told that he needn't -- that he was not required to do that.

And he did it voluntarily and as Judge Meanor found, he knew of his speech or debate privilege when he did it.

Although it was not called directly to his attention, he had raised this privilege in other litigation involving the alleged abuse of the franking privilege.

And in fact in his penultimate appearance before the grand jury, he also invoked the Speech or Debate privilege, and so Judge Meanor's finding that he knew it is amply supported and the U.S. attorney told him that he did not have to submit these matters.

Justice Byron R. White: Well, the -- but -- just so I had it clear, but absent the waiver you agree that under Brewster in irrelevant cases and under the clause, you could not introduce the evidence that you proposed to introduce?

Mr. Wade H. McCree: We do.

We concede this.

As a matter of fact the -- I'd like to move perhaps right on to the nature of the evidence that is involved here.

We think that this evidence falls into three categories.

First, the bills themselves which as I've just responded are clearly legislative acts, evidence of legislative acts and absent a waiver, we agree that we could not introduce those.

There's a second category of evidence and this consists of correspondence between Helstoski, Defalco, some of the attorneys who represented some of the aliens and some of the aliens themselves.

Now we submit that these evidence has to be examined by the District Court on an item by item basis to see whether it --

Justice William J. Brennan: I suppose it refers --

Justice Byron R. White: Pardon me?

Justice William J. Brennan: -- it corresponds -- suppose -- as I read some of this, some of these correspondents says, “I did this” or “I didn't do that” in connection with the given private bill.

Rebuttal of Stanley M. Brand

Mr. Stanley M. Brand: Well,

Justice William J. Brennan: Would that be within this category?

Rebuttal of Wade H. McCree

Mr. Wade H. McCree: No, we believe that that is not barred from evidence because --

Justice William J. Brennan: Even though it refers to something he did or didn't do --

Mr. Wade H. McCree: Even though it refers --

Justice William J. Brennan: -- that could be --

Mr. Wade H. McCree: -- to something he did or didn't do because --

Justice William J. Brennan: Even though while he says he did or didn't do would've been a legislative act.

Mr. Wade H. McCree: Exactly, but he may not have done it.

If there's a letter saying, “If you give me a certain sum of money, I will cause a private bill to be introduced for you.”

This is clearly not a legislative act.

Justice Byron R. White: So you say that under -- that Brewster it would not require exclusion of a promise to introduce a bill in return for money?

Mr. Wade H. McCree: As I read Brewster, Brewster would not require its exclusion because it relates --

Justice William J. Brennan: Well what if -- Mr.Solicitor General, the exclusion, I introduced the private bill on your behalf on such and such a date?

Mr. Wade H. McCree: Well, I assume that as -- let us assume that that's a false statement that he did not in fact introduce a private bill, but he said this for the purpose of eliciting a payment.

Justice William J. Brennan: And suppose he did though?

Justice Potter Stewart: Suppose he didn't --

Mr. Wade H. McCree: Well, --

Justice Potter Stewart: -- introduce the --

Justice John Paul Stevens: If it were introduced for the purpose of showing that he did in fact introduce the bill, I would agree with the Court.

Justice William J. Brennan: Well, --

Justice John Paul Stevens: Could that --

Justice William J. Brennan: Will be excluded then but --

Unknown Speaker: No, but suppose --

Mr. Wade H. McCree: I would agree that they would be excluded, yes.

Justice Byron R. White: Suppose was introduced to prove the case that he took money for doing -- for a legislative act or for an official act?

Mr. Wade H. McCree: We submit that it's admissible that the Court should find that it's admissible for that purpose because soliciting a bribe is clearly and concededly not in a legislative act.

And whatever inducement he may employ for the purpose of soliciting the bribe can not therefore a legislative act and that that is not forbidden by the Speech or Debate Clause.

Justice John Paul Stevens: But Mr.Solicitor General it isn't forbidden by the District Court order either is it, if it's a future -- if you're talking about the future?

Mr. Wade H. McCree: If the Court please, that is the way I read that and we would suggest that the past-future dichotomy is not a valid one.

We submit that the Court is -- the District Court was too restrictive because under the old Hillman case for example, a statement of a present intention to do something in the future can be the basis for a finding that it was in fact done.

And so we think logically, the Court should've -- should not even have made the past-future dichotomy and should've said that in both instances, evidence would be admissible.

Justice John Paul Stevens: But as I understood your comment a moment ago you said a letter assumed by the Congressman he wrote to someone said, “If you give me X dollars, I will introduce such and such a bill.”

And you said, “That would be reference to a future act that may or may not ever be performed.”

Mr. Wade H. McCree: Exactly.

Justice John Paul Stevens: And would therefore be admissible or should be admissible and as I understand it, that's admissible under the District Court's --

Mr. Wade H. McCree: This is also my understanding and --

Justice John Paul Stevens: And --

Mr. Wade H. McCree: -- but the district judge --

Justice John Paul Stevens: But then you said --

Mr. Wade H. McCree: -- said that the reference to the past --

Justice John Paul Stevens: Right, that a question is --

Mr. Wade H. McCree: -- is not.

Justice John Paul Stevens: Could such a letter be admissible if it said, “You will recall that two months ago you gave me $500.00 and I introduced such and such a bill in exchange for that.”

Now would that --

Mr. Wade H. McCree: If --

Justice John Paul Stevens: -- letter be admissible?

Mr. Wade H. McCree: We submit that it would because that statement might be false, and if he said that for the purpose of eliciting a further payment and he had not in fact introduced a bill, he wouldn't be (Voice Overlap) --

Justice John Paul Stevens: I see, do not offer -- or the truth of the matter asserted in the letter?

Mr. Wade H. McCree: Exactly.

Justice William H. Rehnquist: General McCree, I suggest you that my earlier colloquy with Mr.Stavis is not entirely irrelevant to some of the questions that my Brother have been asking you.

This is a very hypothetical situation we're presented with and I take it you agree that the jurisdiction of this Court exist by virtue of 28 U.S.C. 1254 that the case was in the Court of Appeals and we therefore have jurisdiction to review it.

Mr. Wade H. McCree: We do and we concede however that unless the Court of Appeals had jurisdiction that this Court does not have jurisdiction.

Justice William H. Rehnquist: And the only way the Court of Appeals had jurisdiction was pursuant to 18 U.S.C.3731?

Mr. Wade H. McCree: Exactly and we contend that this is an order suppressing evidence under 3731, and as such it's appealable if the appeal were taken before the defendant was placed in jeopardy.

And we submit that the provision itself admonishes us to give it a liberal construction to effectuate its purposes that is to allow the Government to have a ruling before a defendant is placed in jeopardy.

Justice William H. Rehnquist: Do you think the Government could come in and on its own without the defendant making any motion to say, “This is the evidence we're going to present at trial, we'd like the trial court to rule on whether it will be admissible or not.”

And the trial court divides it into categories and said, “This will be admissible, this isn't.”

And the Government can then appeal, say that Court's determination that certain evidence is hearsay and were therefore be inadmissible?

Mr. Wade H. McCree: That's a difficult question, if the Court please.

An order in (Inaudible) which is really what it is, indicating what evidence might or might not be introduce is admissible under some systems or procedure.

Now whether the federal rules or criminal procedure permit it, I can't direct the Court's attention to a specific provision.

But in this case the Court did and the Court had the matter properly before it on the -- on Mr.Helstoski's motion to dismiss.

Then Mr.Helstoski raised several questions about the evidence and the Court in its ruling, in fact in its first ruling, its our ruling, it said that we would have to redact the indictment.

But in a subsequent written opinion it indicated that we didn't have to redact the indictment but that as the Court has already pointed out, we could show evidence of promises to perform future legislative acts, but not past ones.

And so we submit that the Court did in fact suppress evidence, and we suggest that although this Court hasn't decided the question, there are a number of decisions in the Courts of Appeals which have done exactly this.

One case that I recall is Batiste versus the United States, in which the Sixth Circuit decided that.

And another one in which the -- this Court denied certiorari, that's United States versus Craig from the Seventh Circuit.

We suggest that the Speech or Debate Clause creates immunity for a Congressman from civil or criminal liability for his legislative acts and we concede that it shouldn't be construed as narrowly as just a speech or a debate in the Congress, but that it's the kind of act that's generally done in furtherance of a legislative process which certainly doesn't include soliciting a bribe.

And so we say that there is an immunity for prosecution for a legislative act.

We further submit that the Court has developed an evidentiary privilege, an implementation of this immunity.

And as the Court has done with the other privileges, evidentiary privileges that it has created, that we suggest that the shield should not be any roader than is necessary to protect the interest for which it was established.

Justice William J. Brennan: And all was waivable I gather?

Mr. Wade H. McCree: I beg your pardon?

Justice William J. Brennan: All was waivable?

Mr. Wade H. McCree: And we suggest too that it is waivable.

And in this respect of course there isn't any question but that Mr.Helstoski made a gesture before the grand jury of a clean breast of everything.

“I want the grand jury to know that I have nothing to hide” and he brought in all of these materials although he was told that he was not required to do this.

And to permit him to do this and then to assert a privilege would be to make a mockery our off the privilege because he would just have it one way and not both ways.

And the Court does not permit that in other matters and we see no reason why it should in this matter.

We'd also like to suggest that there's another reason why the district -- why this indictment is good and why the District Court's restriction on evidence should be reversed.

We advanced the theory in Brewster that was suggested in Johnson that if there were a narrowly statute, narrowly drawn to achieve the end of regulating the conduct of its business, that the Congress could then involve the executive branch and the judicial branch in it's -- in the discipline of its members.

And we suggest that in Section 201 the Congress has done exactly that in its definition of who is an official.

For the purpose of Section 201, it specifically provides that a member of the Congress is, and then it specifically sets forth the offenses which the defined officials cannot -- I'm -- may, of which they may be found guilty.

So clearly, this is a statute narrowly drawn to achieve the end of regulating the conduct of its members.

And we suggest that there's a good reason for it too.

And my brother who was arguing here a few moments ago suggested or stated in response to a question from the Court that a jury wouldn't be available if a member of the Congress was called on for trial.

The Congress has decided that for this purpose with the third branch involvement there will be a jury, there can be confrontation, right of counsel.

Chief Justice Warren E. Burger: Not only that there can, there must be.

Mr. Wade H. McCree: There must be, I thank the Court for the correction.

There must be.

And we submit that the Congress has indeed done this with a carefully drawn statute which distinguishes it from Johnson.

This Court didn't address this question in Brewster although the Government briefed it.

But we suggest that this is another basis for arriving at the result that we request.

Justice William J. Brennan: Mr.Solicitor General, may I be sure I understand your -- you're suggesting in substance, as I understand it that Congress can waive the privilege in certain limited areas, is that right?

Mr. Wade H. McCree: We do.

Justice William J. Brennan: Could they pass a statute that says members may be questioned about banking legislation or members may be questioned about legislation dealing with any other specific subject in which perhaps a minority of the Congress might be vitally interested and the majority might not be interested?

Mr. Wade H. McCree: I think these are clearly legislative acts and I would have difficulty with that, my --

Justice William J. Brennan: If they can't waive in that situation how can they waive here?

Mr. Wade H. McCree: Well there -- what they are doing is asserting that members may be tried for non-legislative acts, which is what we have here, the soliciting of a bribe.

Justice William J. Brennan: Then if you -- they'd have a non-legislative act, you don't need the waiver, as I understand --

Mr. Wade H. McCree: Well this is really in response to the argument that the Congress has exclusive jurisdiction of the disciplining of its members.

And we don't think that we have to labor that because we think if the Court is to agree with his argument there, it would have to reverse Brewster.

Justice Byron R. White: Well, --(Voice Overlap) --

Mr. Wade H. McCree: -- we don't understand --

Justice Byron R. White: I thought your position was that with a narrowly drawn statute, Congress could authorize the prosecution of Congressman for the performance of legislative acts.

Mr. Wade H. McCree: No.

If the Court please, I did not mean to give that impression, if I did I stand corrected.

Justice Byron R. White: Well, then what relevance is your argument in this case then --

Mr. Wade H. McCree: Well, this is just --

Justice Byron R. White: -- at this point.

Mr. Wade H. McCree: -- this is just a second argument why the Congress with a narrowly drawn statute could involve the executive branch and the judicial branch in the disciplining of its members.

In addition to the argument that prevailed in Brewster, identifying the act is a non-legislative act, the taking of the bribes.

Justice Byron R. White: So you're just saying that Congress with a narrowly drawn statute could authorize the executive to end -- to punish a Congressman for conduct falling outside the Speech or Debate Clause?

Mr. Wade H. McCree: Exactly.

Justice Byron R. White: That's as far as you --

Mr. Wade H. McCree: That is as far as that argument goes.

Justice Byron R. White: And this argument -- and it also -- so that this argument doesn't affect whether or not this evidence is admissible?

Mr. Wade H. McCree: Only in this sense that since this is a non-legislative act, evidence --

Justice Byron R. White: Well, --

Mr. Wade H. McCree: -- soliciting a bribe, evidence can be introduced in support of it.

Justice Byron R. White: Yes, as long as if you're right on that, if you're right on that maybe.

But if the Court thought that this involved evidence or conduct protected by Speech or Debate Clause, your argument then would fall by the wayside?

Mr. Wade H. McCree: We would have to go to our waiver argument.

It would fall by the wayside and only a waiver would permit a prosecution for that.

Justice Byron R. White: And so you at least say then that the privilege or the immunity belongs to the member individually?

Mr. Wade H. McCree: On in -- it was referred -- with respect to the waiver we do.

And we suggest that we it would be --

Justice Byron R. White: Yes but it also is -- it's something that Congress can't waive for him?

Mr. Wade H. McCree: We suggest -- that the entire Congress?

Justice Byron R. White: Yes.

Mr. Wade H. McCree: Well, superficial --

Justice Byron R. White: I just asked you if Congress could by a narrowly drawn statute authorize the prosecution for a legislative act, and you said no.

Mr. Wade H. McCree: Yes, that's correct and I will not retreat from that position.

Justice Byron R. White: So that the --

Mr. Wade H. McCree: And I'm suggesting that --

Justice Byron R. White: -- privilege does belong to the individual.

Mr. Wade H. McCree: It belongs to the individual.

Justice Byron R. White: Yes.

Mr. Wade H. McCree: It does indeed.

And I suggest that to allow an individual to have it both ways is contrary to our whole system of jurisprudence that if he doesn't claim, if he does expressly waive, clearly we think he can be prosecuted.

Justice Byron R. White: But he -- but in this case, I don't see -- is there some evidence that he consented to be prosecuted for a legislative act?

Mr. Wade H. McCree: No he did not expressly waive, but we have this --

Justice Byron R. White: Not, no did he ever consent to be prosecuted for a legislative act?

Mr. Wade H. McCree: He did not consent to be prosecuted for a legislative act.

Chief Justice Warren E. Burger: Do we need to decide in this case whether Congress could by a very statute more narrowly drawn perhaps than Section 201 submit to the trial for a legislative acts, do we need to decide that here?

Mr. Wade H. McCree: We need not because the act here, soliciting for a bribe is clearly and concededly not a legislative act.

Chief Justice Warren E. Burger: But the case could be decided narrowly on the basis of Brewster and Johnson?

Mr. Wade H. McCree: We believe that it can, but we believe that --

Chief Justice Warren E. Burger: Either way apparently, if I -- you listen to the other side.

Mr. Wade H. McCree: Well, we believe however that Judge -- that the Court of Appeals was too restrictive and that Judge Meanor was too restricted -- restrictive and this Court should reverse that decision of the Third Circuit to --

Chief Justice Warren E. Burger: Well, there's another alternative, isn't there and that is to let them go their way and see what happens?

Mr. Wade H. McCree: That is another course that's available to the Court too.

But we think that the district judge could benefit from the guidance of this Court in indicating what was referred to in Brewster as Acts relating to legislative acts and not legislative acts themselves.

Justice William J. Brennan: Well I gather Mr.Solicitor General that the Government thinks it has a case even without the materials that Judge Meanor sought that it would exclude it.

Mr. Wade H. McCree: We believe that --

Justice William J. Brennan: (Voice Overlap) enough to get to the jury.

Mr. Wade H. McCree: We believe the Government has such a case and we have filed with the Court a sealed appendix that I think contains sufficient evidence to go to the jury, but we would like to take the strongest case we can.

My Brother didn't speak about his mandamus action and at least that aspect of it there was a basis for the Court of Appeals denial of his petition and we think that the Court of Appeals was clearly right there.

And unless the Court has any questions about that, I would not discuss that in argument here.

If the Court please, then that concludes the argument of the Government in this manner.

Rebuttal of Morton Stavis

Chief Justice Warren E. Burger: Thank you Mr.Solicitor General.Do you have anything further Mr.Stavis?

Mr. Morton Stavis: Yes I do.

Chief Justice Warren E. Burger: You have about three minutes left.

Mr. Morton Stavis: Alright, thank you very much.

Picking up the colloquy between the -- Mr.Justice White and Solicitor General, it seems now to be conceded that the Congress cannot waive into an Article III Court trial of a legislative act.

Chief Justice Warren E. Burger: Well, I didn't -- it could --

Mr. Morton Stavis: I cannot believe --

Chief Justice Warren E. Burger: If you understood it that way, I didn't.

Mr. Morton Stavis: I think that was what the Solicitor General --

Chief Justice Warren E. Burger: He -- I thought he has said Congress has not done that up to now.

Mr. Morton Stavis: I thought he went further.

Justice Byron R. White: I asked him that, whatever is -- that you have to -- that was my question anyway whether if --

Mr. Morton Stavis: I thought --

Justice Byron R. White: -- his answer was that it's another matter.

Chief Justice Warren E. Burger: Do we need to decide whether what Congress could do in the future?

Mr. Morton Stavis: I understand that.

I understand that you don't have to decide this question, but I thought I heard the Solicitor General conceding that.

If I'm wrong, I'd respectfully request to be excused for this error, but if I am right then what the Solicitor General is saying is that while the whole body of Congress can't waive into an Article III Court one member can.

And it just seems to me that that falls of its own way.

Chief Justice Warren E. Burger: Could there --

Unknown Speaker: Why didn't (Voice Overlap) --

Chief Justice Warren E. Burger: -- (Voice Overlap) anything that Congress could not do to waive your rights or my rights which you or I individually might well do.

Mr. Morton Stavis: But not when the rights relate to the jurisdiction of a Court.

I can't waive myself into this Court, that's one of the points that Mr.Justice Rehnquist suggested.

We can't, by the fact that I may not even cross-petition.

I can't waive the objection to the jurisdiction of the Third Circuit.

And if this is jurisdictional then the waiver argument doesn't apply either with respect to Congress as a whole or with respect to an individual member of the Congress.

Now, I would like if I may to approach for a moment --

Justice John Paul Stevens: Well, then let's test that Mr. Stavis.

Mr. Morton Stavis: Sir.

Justice John Paul Stevens: Supposing the Congressman is called before a grand jury.

He's alone in the grand jury room and a bunch of questions are asked of him, but that all of which pertain to legislative acts, he could answer those couldn't he?

Mr. Morton Stavis: He not only could answer them, but if he is not the target I believe he is required to answer.

Justice John Paul Stevens: Assume he's the target?

Mr. Morton Stavis: Well, if he's --

Justice John Paul Stevens: He still could answer them if he decides I think I'll answer these questions.

Mr. Morton Stavis: If he is the target and if he answers then he is probably subject to discipline by the House.

But he of course, he can --

Justice John Paul Stevens: I mean, for waiving his cons -- his privilege, you say, that (Voice Overlap) --

Mr. Morton Stavis: I respectfully suggest to you that you look at Jefferson's manual which is recorded in our brief in which he says, “Yes, he may not waive that privilege of the House of speech or debate.

But even if the House should overlook that and he has waived it then he has testified -- he has testified.

The next question is, what's the consequence of that testimony?

Does that waive him into an Article III Court when the constitution says the Article III Court has no jurisdiction?

I've never been able to go to a courthouse and say, “Please take this case even though you don't have jurisdiction.”

Justice Thurgood Marshall: But isn't the grand jury in an Article III Court?

Mr. Morton Stavis: The grand jury is partially in an Article III Court that --

Justice Thurgood Marshall: Partially?

Mr. Morton Stavis: Partially, as it's also I think something else too.

I think it's an honor of the executive.

Justice Byron R. White: Well Mr.Stavis, there's no evidence here that --

Mr. Morton Stavis: I've been lit up but if I --

Justice Byron R. White: Yes.

Mr. Morton Stavis: -- I'd like to add (Voice Overlap) --

Justice Byron R. White: There's no evidence here that he -- that even if a Congressman appear before the grand jury and freely talked about legislative acts, made no objection whatsoever, if he didn't go on and say, “I also waive my immunity from prosecution for a legislative act”, he wouldn't have waived his immunity from prosecution.

Mr. Morton Stavis: Of course not, and he never even said --

Justice Byron R. White: There isn't any evidence like that here.

Mr. Morton Stavis: Not in the slightest, not in the slightest.

May I have 30 seconds?

And then he --

Chief Justice Warren E. Burger: We'll give you 60.

Mr. Morton Stavis: Thank you very much Your Honor.

I want to focus on my case in just a moment and that is the indictment.

And particularly on what may be attractive to some of the members of the Court which is, “Well let's just fix up this indictment.”

And I simply want to say that the consequence of that is that you remove the effective operation of the Speech and Debate Clause at the point where it's most important namely where it is accusatory.

Now in Kilbourn against Thompson that used the meaning of the term questioning was not Mr.Justice Stevens' in terms of do you ask a question.

It is rather, may you make a charge.And I respectfully refer you to Mr.Justice Miller's opinion in which he equates the Speech or Debate Clause the term questioning to the language of the Massachusetts constitution which refers to accusation.

If you take that concept and then move over to Mr.Justice Rehnquist's question and say, “Is there any case where you set aside an indictment because there's something that happened in the grand jury?”

And I say that that's exactly what you do in the immunity type case where a grand jury heard testimony that was barred from him, they shouldn't have heard him.

And you say to that prosecutor, “Well if you did it, we cancel that indictment.

If you want to go ahead and not use that prohibited testimony, you're free to do so.”

And that's all we've ever said here, and if the prosecutor should decide not to do that, in any event we said that the Congress has jurisdiction.

And I'm very grateful to you, Your Honor, for indulging me to that extent.

Chief Justice Warren E. Burger: Thank you gentlemen.

The case is submitted.

Featured:

United States v. Bornstein - Oral Argument

Thu, 23 Aug 2012 18:29:39 +0000

Case:

United States v. Bornstein

Media File:

74-712_19751008-argument.mp3

Related Transcript:

74-712_19751008-argument

Transcript:

Argument of Jones

Chief Justice Warren E. Burger: We will hear arguments next in 74-712, United States against Bornstein.

Mr. Jones, you may proceed whenever you are ready.

Mr. Jones: Mr. Chief Justice and may it please the Court.

This case under the False Claims Act, raises out of respondent’s fraudulent supply of non-conforming electron tubes for use in army radio communications kits.

The facts were as follows; in 1962, the signal supply agency, acting on behalf of the Department of the Army, entered into a contract with a private company, Model Engineering and Manufacturing Corporation, for the supply of radio kit sets.

Each set was to contain a transmitter, a receiver, a power supply, transformer, and radio accessory kit.

A radio accessory kits operated with 4X150G electron tubes, the Contract required that these be “JAN” branded.

“JAN”, J-A-N is an acronym standing for Joint Army Navy.

The manufacturer is authorized to use the JAN designation, only after its manufacturing process has passed certain Government test for quality control and the tubes themselves pass certain Government inspection tests.

Thus by calling for JAN tubes in the contract, the contract in effect require the furnishing of tubes that were certified as having met certain Government standards as to both manufacture and performance.

The requirement of JAN tubes in the contract can therefore be seen to be more than a mere technical formality, although the record is silent on this point, it may reasonably be inferred that the radio sets, which as I have indicated, included both receiver and transmitter will be used for the Army for field communications, and that a tube failure can impair the military operations that might be dependent upon such communications.

The rigid quality control and performance standards, represented by JAN branding, is therefore served to minimize the risk of such a tube failure.

This consideration I believe, indicates the practical importance of the contractual requirement that the tubes to be supplied would be JAN tubes, and it also underlines the seriousness of the respondents’ fraud, which I will now describe.

The respondents who are the owners and operators of a corporation, United National Labs, that entered into a contract with the prime contractor, Model Engineering for the supply of the JAN tubes called for by the contract.

It is undisputed in this case that the respondents caused and are responsible for all the acts of their corporation, United National Labs, and therefore it is appropriate in further describing the facts in this case to raise the corporate veil and talk solely in terms of the respondents’ individual acts, attributing the acts of the corporation to the respondents as well.

The respondents were dealers in electron tubes and they entered into the subcontract with Model Engineering, knowing that the tubes to be furnished there under were to be used in the military procurement contract.

At the time, they entered into this subcontract, the prevailing market price for JAN tubes of the type specified in the contract was approximately $40.00 per tube.

Instead of buying and supplying these kinds of tubes, the respondents instead bought cheaper tubes at prices ranging from $15.00 to $18.00 and they falsely stamped each tube with a JAN designation.

As we have here a case of fraud, pure and simple, committed solely for the purpose of making a dishonest profit.

The respondents made three shipments of a total of 397 falsely branded tubes, the tubes were packaged in 21 separate boxes, and each box was accompanied by a packing list to which the respondents have fixed a false government inspection stamp.

The respondents billed Model Engineering, the prime contractor for the tubes, on three separate invoices.

In turn Model Engineering incorporated these tubes into the radio kit sets that it supplied to the Army, and it billed the Army for the tubes on 35 separate invoices or claims for payment.

Each of these claims for payment represented falsely because of the respondents’ fraud, that the electron tubes furnished in the radio kit sets were Government inspected JAN tubes.

The Government paid these 35 claims for payment.

When respondents’ fraud was subsequently discovered after some negotiation, Model Engineering, the prime contractor, paid the Government a total of a little bit more than $16,000.00 for the breach of contract that had been occasioned by the respondents’ fraud.

Justice Harry A. Blackmun: Did Model paid it or did they, was it withheld from the Government payment to Model?

Mr. Jones: Well I think that the Government owed Model monies in connection with some other contract and that the $16,000.00 odd here was withheld from that other payment.

Justice Harry A. Blackmun: In this connection, is, are the respondents responsible, liable to Model?

And if so, has Model ever instituted suit against them.

Mr. Jones: Well, that raises two questions, one of contract law that I cannot answer because these respondents are individuals and I do not know whether they would be liable in contact to Model Engineering, it was their corporation, United National Labs that actually was in the privative contract relation with Model.

The second question is a factual one and I simply do not know the answer to it, and I do not think it is in the record.

Unknown Speaker: Well certainly there is incipient liability, is there a possibility of a fraud--

Mr. Jones: Yes there is and that is the basis for the Government’s concession that it would be appropriate in determining double damages to allow a certain credit for the payment that Model Engineering made, I will get to that aspect of the case in a moment.

Justice William H. Rehnquist: Well if they defrauded the Government the defrauded Model too.

Mr. Jones: That is correct.

Justice William H. Rehnquist: So it would not have to be based on contract well is suppose?

Mr. Jones: The respondents is individuals themselves might be liable in tort, perhaps that is so Mr. Justice Rehnquist.

At any rate, under the theory that they will be liable in one form or another, we have not pressed the full double damages liability but rather have indicated that some kind of allowance may be appropriate on account Model’s payment to the Government.

Unknown Speaker: Like in the full amount --

Mr. Jones: Like in the full now but only as against the double damages that had to be competed--

Unknown Speaker: --expect that amount in view?

Mr. Jones: No we do not expect, that is correct.

Unknown Speaker: Substantially doubled.

Mr. Jones: Well, I will get to the double-damages aspect to the case in a moment.

Now first I would like to layout the rest of the facts in the--

Unknown Speaker: If there is liability there, then I suppose your suggestion, I think there was one in the brief of the respondents’ profiting by the fraud may well evaporate.

Mr. Jones: Well, I certainly hope so.

A trial in the case, the District Court determined that the Government’s actual injury from the breach of contract was approximately the same that Model had paid to the government that are $39.70 more.

The District Court further determined that respondents acts in supplying the falsely stamped tubes thereby causing a submission of false claims to the Government violated the False Claims Act, and the respondents have not contested that determination either in the Court of Appeals or in this Court.

The issues in this case pertain to the consequences that flowed from the District Courts finding of a violation of the False Claims Act.

There are two issues; one concerns the question of whether there are multiple forfeitures that maybe imposed against respondents for their violation.

The Government takes the position that the respondents here are subject to a total of 35 $2,000.00 forfeitures under the Act.

One for each of the 35 false claims for payment that where madders has resulted to their fraud.

The respondents’ assert that they are subject to only one forfeiture payment because they say their fraud affected only one subcontract, and that is how they would measure the number of forfeitures under the Act, and the Court of Appeals sustained the respondents’ position.

Chief Justice Warren E. Burger: Is it Government practice from the accounting side to require a separate voucher for each shipment?

Mr. Jones: In this case there were actually 8 Government vouchers of payment, Model submitted 35 invoices for payment.

Chief Justice Warren E. Burger: They accumulate them and then pay in groups, apparently.

Mr. Jones: Yes, that is apparently what took place in this case and I do not know over what course of time the various claims and payments were made.

The other issue in the case is, we have already talk about a little bit, is the question of the proper measurement of double-damages.

Both Courts below sustained the respondents’ contention that the Government’s single damages under the Act for purposes of computing double-damages, is limited to the amount of the Government’s injury less its recoveries from the prime contractor.

Accordingly, the Courts below determined single damages of $39.70, and double damages of $79.40.

Our position on this issue is that for determining single damages you look to the Government’s actual injury at the time of the discovery of the fraud, to get double-damages, you double that amount.

The Government’s injury was $16,000.00, to double that you get $32,000.00, but we have further submitted that the respondent should be allowed a credit against that $32,000.00 double-damages liability in the amount of the recoveries from the prime contractor.

Now before turning to an analysis of these two separate issues, I would like to point out to the Court the combined effect of the Court of Appeals decisions on these issues taken as a whole, and that effect we feel is to eviscerate the False Claims Act as the deterrent to subcontractor fraud.

The Court imposed upon the respondents in this case a poultry penalty of only $2,079.40, and that penalty -- penalty imposed by the Court of Appeals permits the respondents to retain over three-quarters of the illegal gain that they made on by supplying the Government with cheap tubes rather than the JAN tubes required by the contract.

And we submit that the puny threat of such disproportionately small penalty is unlikely to deter any subcontractor from attempting to defraud the Government.

If the fraud goes undetected, the subcontractor reaps a dishonest profit and pays no penalty whatsoever.

If on the other hand, as in this case the fraud is discovered, the subcontractor nevertheless pays back to the Government only a small of fraction of the dishonest profit on the illegal gain.

Justice Byron R. White: But is he not subject to criminal prosecution and is it not their deterrence on the criminal side?

Mr. Jones: There is some deterrents on the criminal side, it was not terribly effective in this case.

Justice Byron R. White: Well, you have just said that if fraud is not discovered there is no deterrence, this is true crime also is it not?

Mr. Jones: Yes, but what we are now talking about is placing at least a substantial deterrence once there is a discovery.

I would further point out that although these respondents were prosecuted and convicted of a conspiracy, apparently, there is no criminal statute, which by its terms would prohibit the substantive act of causing a false claim to be made.

If you look at 18 U.S.C 287, it punishes the making of false claims.

What we are concerned with in this case with regard to contractors is causing a third party to make false claims.

Unknown Speaker: [Inaudible]

Mr. Jones: Well, I do not know if you can be an aider and abettor, if there is no substantive crime by another person, and there would be no substantive crime by the prime contractor because he unknowingly made a submission of false claims.

Not saying there is no possible criminal punishment other than under a conspiracy clause, but I am just pointing out that the criminal and the civil statutes are not coterminous, that is by no means positive that you can always punish criminally the kinds of act that we are now trying to impose a civil penalty on.

To summarize the Court of Appeals decision, the Court of Appeals has in our view converted the False Claims Act into little than an inexpensive license to defraud the Government.

License moreover, so I have just indicated, that must be paid for only if the fraud is discovered, and we believe congress could not and did not intend that result.

Indeed as I know, hope to show, Congress intended a very different result indeed.

I begin for purposes of convenience of exposition, with the question of double damages, because I have one important thought to add to what we said in our brief on that issue, and I would like to address at the outset.

Respondents’ contention here is that the prime contractors payment to the government of a single contract damages, in effect absolves the respondents from any liability under the False Claims Act double-damages provision.

And this contention can fairly be tested I think, by asking what would the consequences have been, if the single contract damage as payment have been made not by the prime contractor but by the respondents themselves.

Could respondents have insulated themselves from any liability for double-damages, by coming forward after the discovery of the fraud, merely with the payment of single damages?

Justice William H. Rehnquist: What if before the discovery of the fraud, what if the day after they sent the stuff, they simply had a change of heart, and before the Government ever discovered the fraud they sent single damages.

Mr. Jones: Well I would think that from a purely, trialling logical reading of the Act, that double-damages would have in fact been -- the liability for double damages would in fact have been incurred as of the date of the fraud.

But there might be a question of whether had there been a payment the next day, that had actually been an injury to the Government.

Justice William H. Rehnquist: But you say the liability for double-damages becomes fixed when they cause to be submitted to the Government, the false--

Mr. Jones: Well that is, well, the violation of the Act has become complete at that point.

Justice Byron R. White: Or otherwise I suppose anytime the—prime contractor or anybody else defrauds the Government, seems to have defraud the Government, he could reduce his liability to single damages by paying.

Mr. Jones: Well that is exactly our point.

The respondents seem to think that-that they or the prime contractor can come in after the fraud has been discovered and after the injury has already been sustained and reduced their liability under the double-damages provision of the Act, from double-damages to single damages merely by coming forward voluntarily with the payment.

But that is clearly not the case, respondents could not have escaped their own liability for double damages simply by offering single damages.

Justice William H. Rehnquist: Yet if Model had discovered the fraud and refused to submit the invoices to the Government, then although the respondents’ fraud was complete they never would have been become liable to the Government.

Mr. Jones: Well in that case, there might not have even been a violation of the False Claims Act.

Justice Byron R. White: It would not have caused anybody --

Mr. Jones: It would not have caused the submission of a false a claim and there would have been no injury to the Government for purposes of the double-damages provision either.

Well, we believe that this analysis that I have just gone through, which I am sorry to say was not set forward with any clarity on our brief, is dispositive of respondents double-damages claim in this case.

I would recommend to the Court the reading of our brief for further arguments on this point, but I would like to turn for the remainder of my argument to the question of multiple forfeitures.

The first clause of the False Claims Act, which is the relevant clause in this case, provides, and I quote with some deletions, none of which I hope change the substance.

Any person who shall make or cause to be made any claim upon the United States or any department or officer thereof, knowing such claim to be false, shall forfeit and pay to the United States the sum of $2,000.00.

As well, as established as to prime contractors, this language imposes a separate $2,000.00 forfeiture for each False Claim for payment.

Since the Act imposes a forfeiture on any false claim the statutory volition is complete upon the presentation of the first false claim, and a forfeiture arises on account of that violation.

Each additional false claim constitutes a separate and complete violation of the Act that gives rise to an additional forfeiture.

As a prime contractor, who for example knowingly submitted 35 false claims for payment to the Government, unquestionably would be liable for 35 separate forfeitures.

We believe that the same reading of the Act before supplies to subcontractor fraud.

In the first place, it was established by this Court’s opinion in United States exrel. Marcus against Hess, that a subcontractor violates the Act when its fraud causes the prime contractor to submit a false claim for payment to the Government.

The subcontractor’s violation is complete when the prime contractor submits its first false claim and a forfeiture arises at that time.

Every additional submission of a false claim is a separate and complete violation of the Act that gives rise to an additional forfeiture.

In short, the plain language of the Act requires the number of forfeitures to be determined in the same fashion, whether the fraud originates with the prime contractor, or as in this case, the subcontractor.

This we believe to be as sensible and natural result, because after all the Government’s injury is the same whether the fraud originates with the contractor or the subcontractor, the need for deterrence is the same, whether the fraud originates with the contractor or the subcontractor, and there is no reason to distinguish between these two cases.

The respondents’ argument moreover, which is that you measure the subcontractor’s forfeitures by the number of subcontracts, has utterly no basis in this statutory text, which has nothing in the language of the Act that produces that result.

And not only is our results supported by the statutory text, serves the twin purposes of deterrence and restitution that underlie the Act.

As we have pointed out in the brief, and I would not repeat those arguments here, there will be a mockery of the legislative intent to lump, as respondents would have this Court do, all the subcontractors fraudulent practices and their elections into a single statutory violation.

Now, this more or less furnishes the Court with our affirmative presentation on this issue, I will address what seemed to me to be the two threads of argument that the respondents present here.

One appears to be that the False Claims Act should be narrowly construed in the manner of criminal statute.

Well, I am not sure what kind of narrow construction they would intend since there is no apparent basis in the language of the Act for their result anyway.

But I would point out that the Court has already rejected the principle of construction upon which they rely.

In the United States ex rel.

Marcus against Hess, the Court held that the forfeiture provisions of the Act imposes civil not a criminal sanction, and perhaps more to the point in United States against Neifert-White Co. the Court stated, and I quote, in the various context in which questions of the proper construction of the Act have been presented.

The Court has consistently refused to accept a rigid restrictive reading, even in the time when the statute imposed criminal sanctions as well as civil.

The statute no longer imposes any criminal sanctions.

It is a wholly civil statute that should be liberally construed in a manner that will effectuate its underlying purposes of deterrence and restitution.

Respondents’ argument appears to be that although 35 false claims for payment were presented to the Government in this case, they nevertheless have committed only a single causative act, a single act of causation deserving of a penalty.

It is difficult to know what basis the respondents’ have for making that suggestion.

In the first place it is clear that they have committed many separate fraudulent acts, they falsely stamped each of 397 electron tubes, they falsely have fixed government-- false government inspection stamps to each of 21 packing list.

They have submitted 3 false invoices to the prime contractor and they made false oral representations to the contractor as well.

Justice Byron R. White: Could the Government take the position that there are 190 in effect false claims, 199 false claims, affected by the respondents?

Mr. Jones: Well I think the suggestion is that the Government could take the position that there were 397 violations of the Act as a consequence of the false stamping of each of the 397 tubes.

The Court of Appeals seems to assume that the stamping of the tubes would constitute a violation of the Act and of the second clause of the Act.

I think that it is arguable whether the Government would be able to prevail the cause, the categories of documents with respect to which false entries are punished under the second clause of the Act, would not appear to include the tubes --

Justice Byron R. White: You have all kinds of numbers, you have 199--

Mr. Jones: Well the 199 is a number of the respondents’ drew out of the hat, and I think they arrived at because there were 397 false tubes and they said well, each radio kit set contains two tubes and therefore a 198 kit sets would include false tubes.

No one on the government side has ever suggested that the figure 199.

The only figures that I can run through them are 35 false claims under the first clause of the Act.

397 falsely stamped tubes under the second clause of the Act, but I question whether you could find a violation with regard to that.

21 falsely stamped package list, and that probably is a violation, causing the Government to issue--

Under 2?

Mr. Jones: Under 2, but we are--

Unknown Speaker: Which is not involved.

Mr. Jones: Which is not involved, none of these other numbers are involved.

8 false vouchers issued by the Government, also under the second clause, and 1 conspiracy, and 3 false invoices issued to the prime contractor.

But we are just the taking the position here that the false claim submitted in violation of the first clause without regard to any of the other clauses of the Act, constitute a basis for the forfeitures.

We would say that the respondents’ course of fraudulent conduct, whether it is conceived of consisting of one act or many, nevertheless cause the submission of the 35 false claims, and it is the number of false claims that is determinative of the number of forfeitures under the Act.

Justice Lewis F. Powell: You take that position even though there is no indication, as I understand it that the subcontractor had any control over the number of invoices--

Mr. Jones: That is correct, Mr. Justice Powell.

Justice Lewis F. Powell: But if he filed 500, would your position be the same?

Mr. Jones: Well we might not have seek to impose 500 penalties but as a reading of the Act--

Justice Lewis F. Powell: At a principle under your theory you would take that position.

Mr. Jones: That is correct, we take the position that respondents could reasonably have anticipated that the prime contractor might submit more than one false claim for payment as a result of their fraud.

More generally, our position is that when a subcontractor seeks to defraud the Government, he does so at its peril and at the anticipatable risk that the prime contractor will submit multiple false claims as a result of the fraud.

There were 35 such false claims filed here, we think 35 forfeitures should be imposed.

I would like reserve--

Chief Justice Warren E. Burger: One of the reasons for submitting frequent claims is to get the money back into the capital of the performing contractors, is that not so?

Mr. Jones: Yes, I think--

Unknown Speaker: If they do not want to wait a year or year and a half--

Mr. Jones: I assume that is right when you have a contract that extends over a long period of time, you have payments during that time.

I would like to reserve the balance of my time.

Unknown Speaker: Very well.

Mr. Rossmoore.

Argument of William Rossmoore

Mr. William Rossmoore: Yes Sir, may I—Mr. Chief Justice and may it please the Court.

I represent the respondent Gerald Page in this matter.

I do not think there is any dispute as to the facts, with one exception, that is Mr. Jones’ statement that the repayment by Model to the Government was made in the form of a deduction from other contractor -- from other contracts between Model and the Government.

I think the documents which are included in the Government’s appendix make it quite clear that the deduction was from payments due under this very same contract.

I pointed out the numbers involved in my brief on pages 17 to 18, and I think if you will look at that you will see it is perfectly clear that it comes under this same contract.

Well, addressing myself first to the question of the number of forfeitures, Mr. Jones here dealt with a different numbers that might be used, and as a matter of fact, the Government’s position from the beginning of this litigation has not been at all consistent.

As Judge Gibbons pointed out in the decision in the Court of Appeals, originally the Government based its claims for forfeitures, not at all on vouchers submitted by Model to the Government but on its claim that the respondents submitted 30 invoices to Model and it asserted 30 forfeitures on that basis.

The shift came when I think it found out that there were only three invoices and then this theory came in that the respondents were now liable for the one forfeiture for each of 35 invoices submitted by Model to the Government, plus one forfeiture each for the joint act of misbranding the tubes, one forfeiture for the combined acts of submitting 21 packing lists, and one forfeiture for the combined acts of submitting 21 certificates, a total of 38, I take it that at this point they are now asking only for 35.

I think that what this demonstrates is that in fact the Act as the Government reads it is not all clear.

I submit however, that if properly read the Act is clear and I note that Mr. Jones in reading the Act to this Court persisted in reading from the codification in 31 U.S Section 231.

As I have pointed out in my brief that is not the correct wording of the Act, this Court has so recognized that in the U.S. ex rel. Marcus against Hess case, the Neifert-White, the Rainwater case, and other cases.

If you read the Act as it is actually written, I think that you will find --

Justice William H. Rehnquist: Where in your brief is that?

Mr. William Rossmoore: That is on pages four and five of my brief, Sir.

The Act does not say that anyone who submits a false claim or causes the -- pages four and five, Mr. Justice Brennan.

Anyone who -- does not say that anyone who causes the submission of a false claim shall forfeit $2,000.00.

It says that anyone who commits any of the Acts prohibited by the prior criminal section, that was Section 5438, shall forfeit $2,000.00.

Now one of the Acts prohibited by Section 5438 is the causing to be made of a false claim.

But the forfeiture is imposed by the statute on the Act committed by the respondent or the defendant in the Trial Court.

It is not impose on the submission of one or more false claims, as long as the respondent caused the submission of a false claim he then becomes for that Act liable for one $2,000.00 forfeiture.

And I think that whether or not this is now solely a civil statute, the criminal statute having been absorbed elsewhere.

It was written as a criminal statute originally and the language which was quite clear that forfeitures were to be only to be imposed for Acts committed by the person charged with the forfeiture.

And I think it is for that reason that I have stressed the correct reading of the statute, the correct language as it actually exists on the statute books.

Chief Justice Warren E. Burger: Well as applied to this case, do you think that operates as much of a deterrence for this kind of corrupt conduct on the part of the contractors?

Mr. William Rossmoore: Well, the deterrent effect as it works out in this case may, certainly is not as great as if you impose 35 forfeitures.

The deterrent affect comes from the criminal statute and I think the record here shows that these, both of these respondents were charged criminally, did plead guilty and were sentenced.

Now, the fact that they were not deterred previously, that is true of both any deterrent statute and any criminal statute.

They could have gone to jail for a long period of time and they could have been fined, I think it is $10,000.00, this being a first offense, those penalties were not visited upon them.

But I think the threat of the criminal, the criminal process, the threat of the jail term would certainly be a much greater deterrent than the possibility of fortuitous imposition of fines.

Chief Justice Warren E. Burger: There is nothing uncommon about having civil penalties in a situation like this be a vastly more of them criminal in terms of--

Mr. William Rossmoore: Nothing at all, and in many cases it so works out.

And some of the -- I guess even in the Hess case, the criminal penalty is actually imposed were greater than -- would have been imposed have the defendant there been prosecuted criminally.

But the purpose of the statute, and I think this Court has recognized it in the Hess case, is to provide restitution for the Government.

Unknown Speaker: Is that all, just restitution?

Mr. William Rossmoore: I believe that is all.

And I think that that is the language of the Court in the Hess case so states.

We think that the chief purpose of the statute here was to provide restitution to the Government of money taken from it by fraud, and that the device of double damages plus a specific sum was chosen to make sure that the Government would be made completely whole.

Now, it may also incidentally have a deterrent effect and somebody who is starting out to commit a fraud might examine, sit down and say, well gee, if do this, it is going to cost me seventy thousand dollars or a hundred-thousand dollars, I do not give a damn about the criminal penalty but I am not going to subject myself to that.

I do not think that is the way people get into this kind of situation, I think as the record shows here, these respondents actually backed into it.

They entered into a contract which they could not fulfill and then they have found out that the way they could fulfill it was committing the fraud, and they were involved not in considering the penalties at all, they certainly were not considering the number of forfeitures.

They certainly committed illegal acts, they certainly were subject to the criminal penalties and they are subject to the civil penalties that this statute provides.

Justice William H. Rehnquist: Well, they certainly caused to be presented a claim to the Government, under the RS 5438 that you have set forth at pages four and five of your brief, did you not?

Mr. William Rossmoore: Yes, there is no question about that, but the question is are they to be charged with a $2,000.00 forfeiture for each act then committed by somebody else over which they had no control.

Justice William H. Rehnquist: But would the language caused to be presented? --

Mr. William Rossmoore: Yes, but the witness statute says as anyone who commits an act shall be fined $2,000.00, the Act is causing to be presented a claim or claims.

Justice William H. Rehnquist: Well, I do not read 5438, if you look at the top of page five perhaps, I have missed something that you have seen, look at the top of page five of your brief, any claim upon or against the Government of the United States or any Department or Officer there of knowing such claim to be false, fictitious or fraudulent.

Now that just says claim, it does not say --

Mr. William Rossmoore: That is right Mr. Justice, but if the Section 3490 says that the forfeiture should be visited upon the act committed by the respondent not by the --not upon the claims submitted.

The Act causes the claim, yes, but the punishment or the penalty or the forfeiture goes against the act committed.

Justice William H. Rehnquist: But the Act prohibited is causing to be submitted a claim.

Mr. William Rossmoore: That is right, Sir.

But one act can cause the submission of one claim or a hundred claims or 400 or 397 claims in this particular case.

And perhaps it can be made clear that Government’s argument is that somehow the subcontractor gets off easier than the contractor in this case, because if the contractor himself were committing the fraud he submitted 35 claims.

Well that is true, but the contractor had the power each time that he submitted a claim and let us assume he knew he were submitting a false claim to say gee, you know I have talked to my lawyer and I realized I am going to be in trouble, I am not going to submit anymore of these, I may be stuck with what I have submitted but I am not going to submit anymore.

The subcontractor does not have that option, he is done, he did his -- he committed his fraud, he submitted the false goods and then he is subjected to the multiplication of claims by acts over which he has neither knowledge nor control.

And that is why I say that the act -- that the impact of Section 3490 is on the act committed by the respondent not on the subsequent acts committed by the contractor, even though that is one of those subsequent acts, this is a necessary change, it is the claim submitted.

Unknown Speaker: [Inaudible]

Mr. William Rossmoore: Yes, the act that the respondent here committed was causing a claim to be submitted, it was not submitting one or 35 or 397 claims.

I suppose the problem with the statute and the problem that this Court and many of the lower courts have wrestled with is that it does find its impact in such a great variety of situations and there has not been no broad statement as to what the rule is.

It has been applied on a case-by-case basis and the Courts of Appeals has come to different conclusions although most of them I think, except for the Court in the Ueber case agree with the position that we take in this case.

And at the risk of being presumptuous, I would like to state what I think might be a formulation of a rule for consideration by this Court which would operate fairly, and which would be in accordance with the language of the statute.

And that is that a forfeiture should be imposed for each act or series of acts or cause of conduct by the defendants in the case involved, which result in the payment of a false claim or claims by the United States.

This formulation puts the emphasis where it belongs on the acts committed by the person charged with the forfeiture.

So much for the forfeiture question, I would want the touch briefly on just two thoughts with respect to the double-damages issue.

One is, and I think it is clear, in again in Mr. Justice Black’s opinion in the Marcus against Hess case, that the double-damages provision originally came in to this statute because of the key term provision, the informers’ provision, whereby it was thought that most of these actions at that time would be brought by informers, the informer would get half of the recovery and the Government would then be made whole by its half of the recovery.

Obviously if that was the intent, if the Government had already been paid or reimbursed as it was in this case by a credit in the same contract, no informer would consider bringing a suit, there would be nothing to sue for, the Government had not been damaged.

Chief Justice Warren E. Burger: What about other related statutes like 18 U.S Code 2001, was there ever informant fee involved under that?

Mr. William Rossmoore: That is the criminal statute is it not?

I think there were informant fees but it did not relate to the question of damages, there are many statues where there are informant fees.

I think the Public Contracts Act, the situation has worked out pretty much as we contend here that any payment by the Government is first deducted before the doubling of damages.

The informer feature still remains in our statutes although in a much modified form in the 31 U.S.C Section 232, which is the successor to the revised statutes 3493.

At present though, and it is only under limited circumstances, the informer can get up to one-fourth of the recovery but it is still there.

One final thought, in the Hess case itself or in the Trial Court in U.S. ex rel. Marcus against Hess, there were a number of instances where the Government discovered the fraud before it made payment.

The defendants’ argued that since the fraud had been discovered, there were no damages and therefore there should be no forfeitures.

And the District Court decision which was eventually affirmed in this Court held that true there were no damages to be doubled but there was still a claim for forfeitures.

This was pointed out again in this Court in the Rextrailer case on page 153 footnote five.

And I think that in at least in part answers the question of whether the Government can first double the damages and then deduct any credit.

I think the answer is that it cannot and should not both because of the history of the way this statute was put together in the key term actions and because of the interpretations that have been placed upon it.

I will yield the rest of my time to Mr. Ballan for further comments, he represent Mr. Bornstein.

Chief Justice Warren E. Burger: Mr. Ballan.

Argument of Jack Ballan

Mr. Jack Ballan: Mr. Chief Justice and may it please the Court.

I do not wish to be repetitive.

I hope you will bear with me if I am.

I would like to just emphasize a few points that perhaps have also been mentioned before.

One is that this statute ambiguous, and indeed the last paragraph of the Circuit Court’s opinion indicates, when it cries out for interpretation or revision and perhaps that is why we are here.

And I raise this because I think that the Court’s have been struggling with this ambiguity and these ambiguities and these overlapping sections, and have come up with reasonable guidelines, not sufficient admittedly but reasonable guidelines to date.

And may I say that in each case that I have read I can find no exception.

There has been a minimization of claims from the subcontractor through the contractor.

In other words, this is the only case that I know off and I stand to be corrected if I am wrong, where the acts of the subcontractor have been maximized rather than reversed.

Even in the Ueber case, which is very heavily relied upon by the Government, there were 442 false invoices submitted to the general contractor -- by the two general contractors by the subcontractor, they were reduced to 54.

And it makes it clear in this case that there was a pass through that these invoices that were ultimately submitted arouse out of truly arouse out of it and truly were caused by the acts of the subcontractor.

In this case, I think it is fair to say that we did not truly cause the 35 claims to be filed.

We did cause claims to be filed but not 35, and as I think Mr. Justice Powell indicated the Government could have got to 500 in this instances, if it wished to, it could look for all types of false documents and include them in their false claims.

But this would be a gross injustice, I think and it would be a misreading of the statue which admittedly has some problems.

Now, I think it is fair then to say that the subcontractor here should be charged with his acts, and not the fortuitous acts of the general contractor, which are as has been said before, totally beyond his control.

Now Mr. Chief Justice, you have indicated some concern about deterrence as we are and we are not here to defend or prove certainly of what was done, but the deterrence does in fact take place with the criminal sanction, which was imposed and can always be imposed by the statute here and that these two gentleman received a two-year jail sentence which are in stipulations, which was suspended, and as businessmen certainly that is quite a serious deterrent.

Chief Justice Warren E. Burger: Does Congress’ numerous statutes provided these kinds of deterrent civil penalties in very large amounts?

Mr. Jack Ballan: I think you are right, Sir.

To my knowledge very--

Chief Justice Warren E. Burger: Very well, from the civil penalty being much-much greater than the criminal penalty.

Mr. Jack Ballan: Well, we are dealing with this statute and how it has been interpreted, the Government -- the petitioner has relied heavily on Marcus and Hess, which is the only Supreme Court decision to deal with the question of multiple forfeitures.

And in that case also, there was a reduction, a minimization of-of claims and of penalties or forfeitures because the Court’s have been struggling with this ambiguous statutes and have been in each instance reducing them to a reasonable level and a reasonable standard.

With respect to the double-damages, may I just say that in this instance, the statute says double-damages sustained are to be charged against the subcontractor, these two individuals, and may I suggest that there were no damages at all in this case.

That when the restitution was made, when the payment was made by Model, the contractor, who never went after the respondents herein, although he might have or it might have.

When that payment was made of $18,000.00 to the Government, the Government was rendered whole financially and economically--

Justice William H. Rehnquist: Well supposing, I am hurt in an automobile accident and I incurred $2,000.00 hospital bills, and as approximate result of the negligence of the driver at the other car.

Now, if I have hospital insurance that pays me offer that right away, you would not say that none of that—I never would sustained those damages would you, in dealing with the tortfeasor?

Mr. Jack Ballan: No, I would not say that, I would agree with the implication of your question.

However this is a question of fraud and I do think that when we are dealing with a tort action or a negligence action that the approximate causes are certainly the responsibility of the original tortfeasor.

But in this instance, with a fraudulent claim, with fraud being charged the response I think they should be charged only and I think the statutes and the cases indicate with their acts of fraud.

Justice William H. Rehnquist: Well as a matter of principle, I would think you would extend proximate cause further when you are dealing with someone who defrauds than with someone who is merely negligent.

Mr. Jack Ballan: Well Sir, Mr. Justice Rehnquist, in this case our problem is that the upper limits of that are totally beyond our control and do result in very unfair consequences.

For example, this contract with which we were subcontractors was a two-million dollar contract.

There were, as the Government pointed out, about five or six component parts and these sets that were sent out, we provided a small part of one of those five or six parts, namely two tubes for each unit.

Now, the total of that we have received was approximately about $13,000.00 or $16,000.00 I believe was what we received in payment.

Now, we are unable to control the ultimate or the subsequent subdivision or multiplication by the general contractor when he submits his invoices--

Justice William H. Rehnquist: Okay, that is an argument on the forfeitures point, but you are making an argument on the double-damages point.

Mr. Jack Ballan: Well on that, I making a statutory argument, Sir, and I am referring to the rationale of the client case, which is the only Circuit Court decision on this matter, and in that case, they read the statute, which does not provide for when the doubling takes place.

And they felt that a rationale approach would be to fix the amount lost if there is restitution made, as it was in this case, to then subtract the difference and then double and they came up with a figure indicating that there was really no loss to the government, it was miniscule.

If Model had not made restitution, had not paid $18,000, then we certainly would have been held accountable for a doubling of a loss of 16,000 to 18,000 or namely 32,000 to 36,000.

But the payment was made.

There was no law sustained by the government except in its subsequent prosecution of this matter.

I believe that the rest has been stated by my colleague and I will probably repeat anything unless there are any questions.

Thank You.

Chief Justice Warren E. Burger: Mr. Jones.

Rebuttal of Jones

Mr. Jones: Thank you, Mr. Chief Justice, I just wanted to address myself to the argument that there is some difference between the revised statutes and the False Claims Act, as codified in the 31 USC.

It seems to me that there is no difference whatsoever in the language of practical effect.

In either case you look to determine that whether there was a false claim.

If so you ask, did the subcontractor cause it?

If so there was a violation, then in this case you look to the second false claim, did the subcontractor cause it?

Yes he did by his fraud.

That is th second violation.

Justice William H. Rehnquist: What if you should just look though to the act of the subcontractors as your opponents are suggesting, and say that what is forbidden by RS 3490 is the doing or committing of the act, the subcontractor's act is single in submitting the thing to the prime.

Mr. Jones: The reason I think that that is inappropriate analysis is that the doing or committing such act refers to the act described in 5438, and the acts described in the 5438 are the causing of false claim to be submitted.

Justice William H. Rehnquist: Okay, how many times do the subcontractor in this case cause a false claim to be submitted?

Mr. Jones: 35.

Justice William H. Rehnquist: I would think you could argue equally well that it did it once.

Mr. Jones: Well, he argues that his fraudulent course of the conduct constituted a single causative act or that is that essence as I take it of that argument.

It seems me that that is wrong for two reasons which inter-relate.

One is that we have here multiple acts if you are focusing upon the acts of the respondent we have isolated some 400 odd different fraudulent acts.

On the other hand if you are concerned with the act as defined in the statute, that act is to cause the false claim and then it seems to me you have to look to determine whether a false claim was submitted and if so whether there was act or acts of the respondent that caused that submission and in this case, each one of the false claim was-- the submission jof each one of the false claim was caused by the respondent within the intendment I take it of Section 5438.

Thank You.

Chief Justice Warren E. Burger: Thank you gentlemen.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Pipefitters v. United States - Oral Argument

Thu, 23 Aug 2012 18:19:08 +0000

Case:

Pipefitters v. United States

Media File:

70-74_19720111-argument.mp3

Related Transcript:

70-74_19720111-argument

Transcript:

Argument of Morris A. Shenker

Chief Justice Warren E. Burger: We will hear arguments next in Number 70-74, Pipefitters Local Union against the United States.

Mr. Shenker you may proceed whenever you are ready.

Mr. Morris A. Shenker: Mr. Chief Justice and may it please the Court.

This case involves an indictment that was returned in the City of St. Louis charging a labor union, Local 562 -- Pipefitters Union Local Number 562 and three individuals that conspire to make unlawful -- to make political contributions from that Local.

The indictment in the case alleged that a political fund was established from which fund contributions would be made and the indictment stated that this fund was the fund of the Local Union.

There was no allegation in the indictment that the contributions were made involuntary by the members of the union and non-members of the Union who worked under the jurisdiction of the Union, who made these contributions.

And the indictment alleges that as part of that scheme or artifacts that the funds were collected by officers, stewards, members, and employees of the fund -- that is of the union and they were also collecting that the members and the officers of the Union were collecting for the fund.

Pre-trial motions were filed and in the pre-trial motions, it was alleged that the indictment was attacked on the ground that it was not charged that the contributions were made involuntarily on the ground that it was not alleged in the indictment that the payments were union dues and that the gist of the pre-trial motion was -- and the gist was that this was really a parallel political fund that was set up by the Union and that for purpose of receiving and making political expenditures.

Receiving political contributions or making political expenditures and we contended that there was no violation shown on the face of the indictment.

A bill of particulars was requested but instead of the bill of particulars, the government merely filed a court memorandum and in that memorandum, the government stated that it was not necessary that it was no necessity to prove that the funds were not volunteered.

That voluntariness was not an essence of the crime that was charged.

The government's theory of the case at the trial was that they submitted an instruction and that instruction which was set up in appellants and petitioners’ brief in pages 12 and 13 lists a number of grounds.

The original 10 grounds which are listed on page 12 were submitted by the government and that the request of the defendants’ additional grounds were at it and that basis, the Court instructed the jury and gave that as the task that those are the matters which the jury could consider whether the fund was in fact a fund of the Union or rather that was a voluntary political fund.

That was established by the union.

The defendants’ requested instructions where in it would specifically state as to that making voluntary payments as a defense and the Court said in the instruction however, the mere fact that the payments into the fund may have been made voluntary by some or even all of the contributors thereto does not of itself.

The Court said it means that the monies that were paid into the fund was not union money and it is on that theory on which the case was tried.

The defendants also submitted two instructions which I will refer to later.

They submitted many instructions, but two particular instructions which we thought set up specifically the law that should be governed in accordance with the prior decisions of this Court.

But the Court refused all of the requested instructions from the defendants and the only ones that the Court incorporated were those which are set out in the footnote on page 20.

Now the facts were as follows.

But first let me say this, let me say this.

The jury found the defendants guilty and the individuals as well as the union?

The union was fined $5,000.00 and each defendant was sentenced to one year in jail and a punishment, an additional fine of $1,000.00.

The history of the fund is this.

In 1949, a political fund was established by this, a voluntary political fund was established by this union and it was administered independently openly and notoriously and they made contributions of hundreds of thousands of dollars from 1949 on until the date of the conviction.

But there was one change that took place in this fund in 1963.

The union negotiated a contract with the employers who provided for a check off system and when they provided for the check off system, they consulted with their lawyer, a very prominent labor lawyer in the St. Louis who has devoted most of his lifetime to labor law, Mr. Harry Craig whose name is mentioned and who was a witness in the case.

And Mr. Craig at that time suggested, in view of a decision that was in the law that prevailed that the Eastern District of Missouri.

It was a case wherein the Teamsters were prosecuted at Local 688 was prosecuted for making contributions from the union to which the judge sustained a motion to dismiss after the evidence was in on the ground that this was -- that the money came in voluntarily to the Union.

Mr. Craig first suggested that there should be a check off of the political contributions that is the voluntary political contributions in the same manner as they checked off the other monies that was collected by the Union but it would be paid specifically to the voluntary political fund.

After a while, Mr. Craig changed his mind and provided a form which was to be filled out by each of the members that wanted to contribute to the political fund and that is where in they provided and stated in the form that they are willing to make voluntary contributions.

They are willing to contribute so much per day’s work and that they can cancel that whenever they desire.

They can discontinue giving that money and that they understood it is voluntary and that they understood specifically that this money is being given for political and other purposes to be administered by this independent fund.

After that was done, then it was decided to continue to collect the money in the same manner which they did before.

That is the foreman or the stewards on the job continued to collect the money and send it in to this political organization, that is to this voluntary of political, charitable, and educational fund.

Chief Justice Warren E. Burger: Mr. Shenker?

Mr. Morris A. Shenker: Yes.

Chief Justice Warren E. Burger: Could any of the contributors specify the candidates they wanted to contribute to or the particular political party?

Mr. Morris A. Shenker: No sir, this was a complete fund -- a fund that was all put in together of all the people that contributed and then those people and then they have political meetings often and would endorse candidates and they had an administrator of the fund who could act as he sought it and that which have brought powers to act.

But an answer to that question, I might tell you, that it so happens that most of the contributors that does –- Well, I put it like this, all the witnesses that testified were testified that they were democrats and they contributed to the democratic party and then one person that testified, he said he was a republican and that he did not contribute to the fund.

That was one of the witnesses that testified so that -- that question would answer your question directly.

They did not specify.

Well, they could stop contributing anytime they wanted.

Of the evidence that was offered, the government introduced 12 stewards and foreman who collected the money.

Some of those, at least one foreman as I recall, it is in the record testified that even though he collected contributions, he himself never contributed.

They also testified that in many of these other government witnesses.

They also testified that in many instances, when some people did not contribute that he called and asked the director or other people who were in charge of the fund and they told him there is nothing to be done that is strictly voluntary.

And that that went on two years.

And additionally, 77 witnesses testified before the defendant and there out of those 77, 32 testified that they either never contributed to the voluntary political fund either contributed that sometimes and not contributed at other times or contributed whenever they felt like it as many times they did not contribute.

The testimony also shows that while there was a complete record kept of the money that was received that there was no way from the records to determine if anyone paid often full or continuously paid or whether there was a way of finding out from the records if a person was delinquent and did not pay.

The evidence also showed that no effort was ever made to get people to pay off anything that may have been delinquent or that they may not have paid in accordance with their written instrument wherein they agreed to contribute to the voluntary fund.

Unknown Speaker: Mr. Shenker, does the record show what percentage of the union members signed the contribution agreements?

Mr. Morris A. Shenker: I do not recall that.

It does not show, Your Honor.

But for the sake of discussion, I think while the record does not show I would have to say that a large number of the people of the members of the union as well as the people that worked under the jurisdiction of that union did sign that agreement.

It was a fund that was administered, that had separate bank accounts.

They have a separate name.

They made payments out of that fund by check.

It was audited.

There was -- No discrepancies were found.

The government agents had the (Inaudible) over a period or year, in fact that it turned them to us just before the trial and they testified they could find no shortages of any kind.

Unknown Speaker: Was any of the money used for other than political purposes?

Mr. Morris A. Shenker: Yes, it was sometimes in connection with the charitable contributions.

Substantial amounts were used in connection with charitable contributions. On one occasion, there was a contribution made towards some payment on behalf of some people that were benefits.

It was not in the union benefits.

It was made as a contribution.

They also invested some money in buying a place in Clarksville, Missouri which is about approximately 60 miles from the city where the main office is which place -- that it were going to have recreation facilities where it could also hold political meetings and --

Unknown Speaker: Was that a union facility?

Mr. Morris A. Shenker: No sir.

No sir, it was a facility belonging to a voluntary fund.

Voluntary political --

Unknown Speaker: But the fund was used for -- I mean the union would use it for recreation?

Mr. Morris A. Shenker: No sir, the people that paid into the fund would use it.

Unknown Speaker: I see.

Mr. Morris A. Shenker: And then it was next to -- it was next to another facility that was helped by the welfare fund of the said --

Unknown Speaker: Well then I take it that Mr. Shenker, the issue here in this case is not the question of the constitutionality of the statute insofar as it prohibits the union from using membership dues normally paid in and checked off for political purposes?

Mr. Morris A. Shenker: Well, we say that that is not an issue, that we say that this was money that was given specifically for that purpose.

Unknown Speaker: Well, you are not challenging the law insofar as it would apply the use of membership dues?

Mr. Morris A. Shenker: Well, we are not challenging it that way unless, unless this Court were to hold -- unless this Court were to hold that we are not permitted to do what we did, that of course, we would challenge.

But basically --

Unknown Speaker: Well, do you --

Mr. Morris A. Shenker: Let us put it like this --

Unknown Speaker: Do you or did you in the lower court challenged though?

Mr. Morris A. Shenker: We challenged the constitutionality of the law.

Unknown Speaker: Right across the board?

Mr. Morris A. Shenker: Not in so many words.

We did not challenge it because we do not consider that dues and we never did consider that dues.

In other words, the question is this?

We did not consider that dues.

So therefore, we did not challenge the law on that manner.

Unknown Speaker: Well, you did not ask for a dismissal of the indictment on the basis of the law in its entirety was unconstitutional, did you?

Mr. Morris A. Shenker: I do not think so.

We did not.

Unknown Speaker: And you have never claimed that in this case?

Mr. Morris A. Shenker: We asked that this was vague and indefinite and uncertain.

We did contend that that the law was vague and we will point out to you particularly that it is vague insofar in the manner in which it was construed by the lower court that the law is --

Unknown Speaker: Mr. Shenker, the statute meets its contributions by any labor organization?

Mr. Morris A. Shenker: Right.

Unknown Speaker: In your position, there is no contribution here by any labor organization?

Mr. Morris A. Shenker: Yes.

Unknown Speaker: Is that the basis of --

Mr. Morris A. Shenker: That is exactly our contention, that this is not a contribution by a labor organization.

But we say that if it is being held unconstitutional -- if it is being held unconstitutional, in other words if the interpretation that was given to the lower court, we say it is unconstitutional as applied here.

But we are not challenging it at this point because we are really not concerned.

Unknown Speaker: Well, I gather if any labor organization makes a contribution.

It is immaterial whether the fund from which the contribution is made, union dues or some other funds of use, right?

Mr. Morris A. Shenker: Well, that seems to be the understanding accepting in our District, and if I may just say the cause of good faith as for as we are concerned, that is important in this case and that is why I am going to say that because we do not have to advise of counsel all the way on it.

And that is just that we did have a case where a union.

The Teamsters Union Local 5688 made a contribution and they tried them and the Court sustained a Motion for Judgment of acquittal and the Government did not appeal but what happened there was this where they did as the following that members were able to designate to the union that a part, a certain part of their dues shall be used for political purposes.

In other words, in the --

Unknown Speaker: There I gather the charge of the cause is the labor organization with the team --

Mr. Morris A. Shenker: That is right.

Unknown Speaker: -- who made the contributions?

Mr. Morris A. Shenker: That is correct.

Unknown Speaker: And your position here is that no labor organization is involved and the contribution is made by an organization separate from the labor law?

Mr. Morris A. Shenker: That is correct.

A parallel organization that was established by Local 562 --

Unknown Speaker: And you are also claiming that the Union, the labor organization did not compel members to make the contribution to the separate organization?

Mr. Morris A. Shenker: That is correct.

You brought me right to the very important question that we have here.

The Court instructed on the question about that it was not necessary that a contribution be voluntary.

In other words, we say that it did not make any difference whether the contribution was voluntary or not voluntary but at a trial below in the District Court somehow the government just did not get around to ever say that it was perfectly proper to have a parallel organization which could make political contribution as long as those contributions are voluntarily received and that it was perfectly alright for the officers and the agents of the union and the employees of the union to participate in it.

Now, on appeal, for the first time, the government and they agreed says that it is proper to have such an organization as long as the contributions are voluntary.

Now we submit that the least we should have that is that question determined -- be submitted to the jury to determine whether the contributions were or were not voluntary.

Unknown Speaker: Well, except as Mr. Justice Brennan has suggested what the statute prohibits is the making of the contribution by a labor organization and if the contribution was by the labor organization, there is a violation of the statute regardless of where those funds and the labor organizations came from.

Now if I gave your union $50,000.00 as a present last Christmas, right to the union, it would be a violation of the statute to make a political contribution with that $50,000.00 even though my gift was wholly voluntary?

Mr. Morris A. Shenker: That is correct.

With this exception and as I say you do not have to reach that.

You do not have to reach that because we contend that this was not a contribution by a labor union.

Unknown Speaker: I understand that.

Mr. Morris A. Shenker: But I want you to keep in mind the Teamsters case and say look which was the law in our district at that time, which law could be liable where it said that if it is a voluntary contribution -- that is a voluntary contribution to the union that the union could pass that money on.

But we do not have to reach that right now.

We are not concerned with that because we contend that this was not a contribution of the union.

Justice Thurgood Marshall: Mr. Shenker.

Mr. Morris A. Shenker: Yes sir.

Justice Thurgood Marshall: On your parallel lines, you remember way back if you look at the distance they get together, how parallel would the line be?

Mr. Morris A. Shenker: Well, the --

Justice Thurgood Marshall: Where did the –- Did you have an office?

Mr. Morris A. Shenker: We have an office next door, right across the hall from the union.

In other words it is a large building occupied --

Justice Thurgood Marshall: Members or non-members of the union?

Mr. Morris A. Shenker: Yes sir and here is who they were.

They were Local 562 had jurisdiction of certain large jobs.

Now there are small unions in the areas of the outside of Missouri who are not equipped to handle large jobs.

So Local 562 would have jurisdiction of large jobs and those instances some of the employees that were members of the other locals would come and work on these jobs.

Now under the Lehman Griffith (ph) originally they used to pay $8.00 a month as a contribution to the Union.

Under the Lehman Griffin (ph) Law, Mr. Craig, the union attorney said that it would be some question that if they are permitted to pay the $8.00 per month that therefore they would have to be permitted to join later the union and which would make this Local entirely too big and they would not be justified that expenditure rose that way.

So for that reason, they abandoned the $8.00 completely, but the people that worked on those jobs some of them did contribute to the political fund.

Justice Thurgood Marshall: $8.00?

Mr. Morris A. Shenker: Not all, they receive more than that.

They contribute as much as $2.00 a day.

In other words, they contributed and started off at a dollar a day and it finally went to $2.00 a day.

But it was all voluntary and the evidence showed that many of them testified that they did not -- many of them did not contribute at all as they did not affect their job.

Chief Justice Warren E. Burger: Mr. Shenker, I thought this case had been tried in District Courts entirely on the theory that this whole thing was a scheme and a plan and subterfuge to have this committee act like an independent committee when it was in fact the union functioning under another name.

Now, was that not the government theory?

Mr. Morris A. Shenker: That is where you finally wind up being tried.

We did not know what was being tried to be perfectly frank about it.

But we finally wound up that that is what was being tried.

That was tried that this was a shame in the scheme to put a union to make political contributions.

Now the reason that was voluntariness was important because if the people made the contributions voluntarily, why would they make that contribution if the union was to put him on pressure unless it was voluntarily.

Chief Justice Warren E. Burger: Well, was not the theory of the case much like the theory of the cases where the government or some other litigant tries to pierce the corporate veil and show that what pretends and purports to be one thing is really something else.

Was that not the whole idea of this case?

Mr. Morris A. Shenker: I think that is correct.

That was an attempt made to do it in that way.

Chief Justice Warren E. Burger: I think that is the thrust of the instructions to the jury?

Mr. Morris A. Shenker: That is being thrust that the instructions to the jury and if you will look at pages 72 and 73 of the defendants’ briefs and which were the instructions that we requested, there are many others but two of them particular there and if I could just take one second to read of them at least where that is on page 72 where we said, the Court instructs the jury that the law permits labor union members to set up a fund or organization for the collection of money to be used for making contributions to candidates for federal political office.

The law merely prohibits labor union money from being used for such purpose.

Therefore, if you find that contributions made to the political, educational, legislative, charity and defense fund were made by members of Local 562 voluntarily and did not constitute the payment of union dues or labor union money, you must find the defendants not guilty.

Now the Court refused, they gave these instructions in various ways and the Court refused this particular instruction in every way.

Now, it was not --

Unknown Speaker: Mr. Shenker, do I understand you to have answered Mr. Justice White earlier, that if we agreed that indeed this voluntary fund was simply an alter ego of the union?

Mr. Morris A. Shenker: Yes.

Unknown Speaker: And that you attack the face of the statute --

Mr. Morris A. Shenker: Yes.

Unknown Speaker: -- as unconstitutional because you say what, the -- prohibits Congress to enact or enacting a law prohibiting labor unions for making contributions?

Mr. Morris A. Shenker: If those contributions are made voluntary.

Unknown Speaker: Only if made voluntary?

Mr. Morris A. Shenker: Only if they are made voluntary.

In other words, and secondly we would say that it is vague that it does not spell out just what you can and what you cannot do.

And that it is restrictive as far as the First Amendment is concerned.

But now the point that we pointed out, that was a complete like getting back --

Unknown Speaker: Are you saying that, just to carry it on.

Let us assume that a union collects regular dues from its members but it also has them donate voluntarily pay other money, and with the consent, for the union to use it for political purposes?

Mr. Morris A. Shenker: Yes sir.

Unknown Speaker: And it would be -- they would be union funds.

There is no separate fund or anything else and the union uses that extra money for political purposes presumably that the statute forbids that?

Mr. Morris A. Shenker: I would say certainly the way they handled the Teamsters case in St. Louis that it does permit it.

In other words, it would automatically --

Unknown Speaker: The statute permits it?

Mr. Morris A. Shenker: Now, I would say it does.

It would automatically become a special fund.

Unknown Speaker: Well, but if it did not permit -- if it did not permit it you would say the statute was at least to that extent unconstitutional?

Mr. Morris A. Shenker: Yes sir.

In other words, all the legislative history shows.

It says that it should not be union money but if money is given for a special purpose, you could have a trust fund set up for political purposes.

You can do anything else.

I am sure the Court is permitted with the legislative history.

We set it out at great length in our brief.

Unknown Speaker: So you say the crucial thing in this case has to be whether or not the members voluntarily make contributions for political purposes and really if they are relevant, would they make it to a separate fund under the union?

Mr. Morris A. Shenker: No, no, quite a little bit far than that, a little far than that.

I would say this, that the crucial thing is here, that these people adopted to do anything and everything the legislative history, the lawyers and as well as three judges of the Court of Appeals said was that adequate to set up a parallel fund.

Unknown Speaker: So you were taking more precautions then --

Mr. Morris A. Shenker: That is right.

That is right.

We did not go all the way as the Teamsters are doing there.

We took precautions.

The thing that -- the thing that is really is so glad out here, as this case goes, there is not anything that these people did that was a violation of law.

You could take all the acts which -- normally they give all the instructions and there are all things which are set out that you can do by setting up a parallel organization that you can have the business agent to be active in it.

You can have the stewards.

You can have the foreman.

You can have everyone else be active in it and still they go on, turn this on and attempt to make this a violation, make this a violation under the conspiracy.

Now, I see that I only have a few minutes left and I would like to have permission to have some time for rebuttal.

Chief Justice Warren E. Burger: Very well Mr. Shenker.

Mr. Wallace.

Argument of Wallace

Mr. Wallace: Mr. Chief Justice and may it please the Court.

Since 1907, Congress has prohibited corporations and national banks from making contributions to certain political campaigns.

This legislation has been changed over the years in the history has recounted in previous opinions of this Court between the Auto Workers case in Volume 353 U.S. In 1943, Congress first extended the same prohibitions to labor unions on a temporary wartime basis and then 25 years ago in 1947, this prohibition against unions and against corporations, the same prohibition was made permanent in the statute under which the present prosecution was brought.

The legislative history of these provisions which has also been recounted in previous opinions shows a dual congressional purpose (a) to protect the electoral process from undue influence which in some instances Congress believed threatened the very integrity and the representative character of the elections and (b) to protect the individual stockholders and individual union members from having their funds used to support political causes they might disagree with or that they might prefer not to support financially.

And it seems to us not to be coincidental that the extension of these prohibitions to unions followed upon the protective legislation of the preceding decade such as the National Labor Relations Act, Norris-LaGuardia Act.

The result of that legislation like corporations, unions that became aggregations of economic power fostered an important way by government through the granting of special legal status and special prerogatives, legal powers which might induce individuals to pull their economic resources in these organizations.

And the Congressional concern that is manifested through the legislative history was the payments made by individuals to these organizations for reasons other than a desire to support particular candidates for public office might be diverted to that use.

Congress sought to assure through this legislation that when individuals join together for the purpose of supporting political campaigns, it will be done truly of their own volition.

It will be a matter of their own deliberate choice and not something that results from the power of organizations being applied to them.

Now in the present case, unlike the preceding ones in which this Court has considered the statute, disbursements from the Pipefitters Fund were made directly to Federal Political candidates.

So that is true in the sum of almost $100,000.00 in the 1964 Election and almost $50,000.00 in the 1966 Election which are the only two Federal Elections during the indictment period.

The indictment was in the Spring of 1968.

And there is no question about what these are contributions or expenditures within the meaning of the Act.

The entire issue is whether these contributions or expenditures were made by the union for purposes of applying the statute.

Unknown Speaker: You state the issue on page 24 of your brief.

So the issue in this case present as whether Congress did and may validly prohibit labor unions from using regular unions funds to make direct monetary contributions for political purposes to candidate in Federal elections and of course that is not the issue at all from the point of view of your opponents on the other side.

They said that issue is not here.

This is -- basically here, the issues are factual issues and that is whether or not these were union funds.

But even the issue as you stated.

Mr. Wallace, I am intrigued by that word “regular.”

That does not appear in the statute, why did you feel the need to put that adjective in there?

Mr. Wallace: Well, I do not think the statute requires that.

I think that the facts here permitted the word to be put in at the issue involved in this case shown by the evidence in this case.

Unknown Speaker: My brother White gave -- asked the question involving hypothetical case of voluntary contribution, truly voluntary contributions by labor union members to the union and ear-marked for further contributions to political cause of the candidates and those would be union funds but they would not be regular union funds, are you trying to carve up that case without adjective?

Mr. Wallace: Well, we felt that need not in this case take on that case and we are not arguing in this case that the union could never be the conduit for if you want to call them voluntary contributions that are made through a truly voluntary association.

I mean much of the difficulty in the discussion here and in the argument is because the word voluntary is such an imprecise word.

We mentioned this in our brief.

There is a great difference between consenting, doing what you are told to do without protest.

That kind of voluntariness and what we think Congress was trying to assure would be the freedom of choice that individuals would have in choosing to associate together politically and make contributions to political campaign which would be more element of their own free deliberate choice that this is what they desire to do rather than merely the kind of consent that we think the evidence in this case pointed to in a repeated testimony of many individuals that their contributions were voluntary.

Unknown Speaker: Well Mr. Wallace in that respect, what about the request to instruct that the jury could not convict unless the contributions were involuntary?

That was refused was it not?

Mr. Wallace: Well, that was refused.

I think it was properly refused considering the way the term voluntary had been used throughout that file.

Unknown Speaker: You mean the statute would permit conviction even though the contributions were voluntary?

Mr. Wallace: Under the statute, mere consent of the kind involved here that the use of the word “voluntary” implied throughout this trial is not a defense to be used by a corporation of its monies for political campaigns in the use by union of its money.

Justice William J. Brennan: I take it then you are willing to defend the instructions as given here and not rely on the failure to object to the instructions to the trial?

Mr. Wallace: Do you think the instructions were entirely proper?

We also think that the Court of Appeals acted properly in holding that a deliberate choice had been made on appeal not to preserve objections of the instructions and that it was within the priority of the Court of Appeals to refuse to pass on that issue?

Justice William J. Brennan: And you rely on that down here?

Mr. Wallace: Well, I believe that this Court sitting as a Court, should uphold the Court of Appeals judgment on that but we also stand out in the instructions.

We think that there was nothing wrong with these instructions in the context of this case and whether defending on both grounds Mr. Justice Brennan.

Justice Thurgood Marshall: Mr. Wallace, upon this very Union, with all the force that you can imagine, what each one of its members insisted that they contributed to the democratic party of St. Louis would violate the statute, will it or would it not?

Mr. Wallace: Now this statute is about contributions by the union of the union funds that that is what Congress sought to reach here.

Well, that is why I was trying to get to that?

Just where does the union contribute to funds here?

Mr. Wallace: Well that we believe was the question put to the jury.

As with any statute of this type, the question is whether the fact show what the statute makes unlawful happen here and --

Chief Justice Warren E. Burger: Like how many employees contributed to the fund in all?

I think these are not too clear to me I see a figure 2063 and another thing you have 2064 but was it some such number as that?

Mr. Wallace: I do not see that the record really establishes exactly how many contributed to the fund.

There are indications in the record that the parties were acting as if the great majority practically all of them contributed to the fund.

Chief Justice Warren E. Burger: Let me put these questions here that I put to Mr. Shenker.

I read this record on the opinion on the Court of Appeals and the instruction of the Trial Judge to see a case in which the government was alleging that this committee was just upfront that was in the same building on the same floor.

It was run by the officers of the union and that they call the contributions among themselves assessments and that that with a lot of other bits and pieces of facts added up the proposition that this committee really was in fact the union even though in name it had another name now.

Is that the theory that the government is standing on?

Mr. Wallace: That was the theory of our case throughout.

I think it was set forth very clearly in the indictment.

It is on page 14 of the appendix paragraph 10 of the indictment presents the case under that theory.

Chief Justice Warren E. Burger: Because if you can --

Mr. Wallace: This was the device being used by the union to make contributions of the union funds to political campaign.

Chief Justice Warren E. Burger: If this verdict cannot be read as a verdict by the jury that this committee was a front for the union and was in fact the union, the conviction could not stand, did it?

Mr. Wallace: I do not believe so.

That is exactly the issue that was put to the jury.

We have reproduced the pertinent portion of the instructions to the jury in our brief and if Your Honors want to turn to page 17 of our brief, the paragraph in the middle of that page put that precise issue to the jury.

It seems to me that that is what the jury was asked to decide and if you do not mind, I will just very quickly read through that paragraph.

In this case the evidence was offered by the government to the effect that funds were contributed to or on behalf of candidates for federal office and that such funds were paid out upon checks drawn upon Pipefitters Fund, I will call it.

It is necessary therefore that the evidence established that the Pipefitters Fund was in fact a union fund that the money there in was union money and that the real contributor to the candidates was the union.

As to this issue, the defendants contend that the fund in question was a bona fide entity separate and apart from the union established by the Voluntary Good Faith Act of members of Pipefitters Local 562 and others from which contributions to candidates were made on behalf of the persons who created the fund and not on behalf of the union.

On the other hand, the government contend that the fund was a mere artificer device set up by the defendants and others as a part of the alleged conspiracy to give the outward appearance of being an independent and separate entity but in fact constituting a part of union funds.

And much should be --

Justice Thurgood Marshall: Mr. Wallace, is there any bigger instruction explaining that?

Mr. Wallace: Not explaining that one, with that 19 factors listed which the jury should take into account in answering the question.

But the question is put; I think most succinctly in this paragraph and much of the argument in the briefs on the other side and in the oral argument on the other side seems to be based on the premise that the jury decided this issue of fact in favor of the defendants.

But of course, the verdict indicates that the factual issue was decided in support of the government’s theory of the case, that the fund was an artificer device through which the union was making contributions of the union money.

And we think there is ample evidence in the case to support this factual determination by the jury.

I would like to briefly recount some of that evidence to the Court.

In the first place, Local 562 had jurisdiction over all the major jobs in more than half of the State of Missouri and contractors in this area had to get their Pipefitters for major jobs from Local 562 during this period even though there were three other locals located in the area whose members regularly worked on jobs under 562’s jurisdiction.

Those jobs paid more than the jobs under the jurisdiction of the other local and the principle operating revenues of this local came from assessments imposed as fixed sums per day worked on each member of this local or each out of town.

They are working under the local’s jurisdiction in the pre-indictment period and smaller monthly dues were paid by the members which were passed through the international and large part.

The fund involved here, the Pipefitters fund was began in 1949 and at first, the assessments for the fund and for the union dues were made to gather and exactly the same way and applied and exactly the same way to both the members of the local and the out-of-towner.

The first 25 cents per day was paid by each man as a union assessment and 25 cents per day to the fund.

Later it was 50 cents per day to each and starting in January 1963, which is the indictment period, the Local stopped collecting assessments from the non-members but a pattern was established whereby each of these non-members would contribute to the fund at the same rate as the total of the daily contribution of a member of the Local to the fund and added to his assessment to the union.

And these were still being treated for all practical purposes collected in a manner that they have previously been collected as assessments.

Chief Justice Warren E. Burger: Was there any evidence of coercion or reprisal against employees who did not contribute?

Mr. Wallace: Well, there was evidence that they did not question about the contribution with an obligation that they had to the union.

There were some individual testimony that after failing to contribute, the man was not hired after that week again.

Chief Justice Warren E. Burger: These were the out-of-towners?

Mr. Wallace: These were out-of-towners.

But we do not rely on that testimony alone because most of the evidence, it seems to us indicates that both the union leadership and the members and the out-of-towners considered this just part of their regular obligations to the union that would be regularly paid and indeed were regularly paid.

And at one point, the union’s executive board conveyed this impression of the membership quite clearly.

This is recounted at page 11 of our brief.

In the middle of page 11, at the time that there was a 50 cent increase in the assessment, the daily assessment of union members.

The Executive Board minutes distributed to the members explicitly tied this to a 50 cent decrease in the contributions of the fund that would then be expected of the members of the Local.

And the quotation from the minutes distributed to the members was we believe when the details are explained to all of you.

All will agree as we do on this matter because this will not be one extra penny cost to members of Local Union 562.

The whole assumption is that every member pays the prescribed contribution to the fund. And therefore because the union treasury needed more money and adjustment would be made, 50 cents more to the treasury, 50 cents less to the fund for internal bookkeeping purposes.

It would not affect the financial obligations of the members at all.

Unknown Speaker: The difficulty is of course or one of the many difficulties in this case is that the jury -- the members of the jury were instructed that they could return a verdict to guilty in this case even if they found that every contribution to the fund was voluntary.

Now that is correct, is it not?

Mr. Wallace: That is correct.

But that instruction was given in the context of the entire instruction here --

Unknown Speaker: You are asking us to second guess the jury and if they will they could have not done that that reasonable man must have found all the contributions were involuntary and that is what you are asking us to do in this face of your argument?

Mr. Wallace: Well, what we are really saying is that the basic question put to the jury was were this really union monies that have been collected in the manner that union monies are collected or paid in as union monies?

Unknown Speaker: Well, if the union was just a conduit for voluntary contribution, I gather that you implicitly handed at least at the outset of your argument that those might not be regular union fund?

So if these were all voluntary --

Mr. Wallace: We think that is not the case.

Unknown Speaker: All are voluntary contributions and even then though this was simply an alter ego of the union, if they were all voluntary contributions made for political purposes by the contributors?

Mr. Wallace: Well, now that is -- you see that is where I stopped.

Unknown Speaker: No, but the jury --

Mr. Wallace: If the contribution was not made for political purposes, the instructions were even if these were voluntary contributions if they were union monies, they were being used illegally under the statute.

Unknown Speaker: Regular union monies.

Mr. Wallace: That is right.

And not political money, not funds that were voluntarily being contributed for the purpose of supporting political causes but assessments that were being made as part of their obligations to the union.

What Congress was concerned about was that the economic power of the organization would be brought to bear to get money with people who are really giving for other reasons.

And use that money -- and that money would be used by the organization for political purposes.

The issue put to the jury was, was this really money being given by these individuals to the union for union purposes because they wanted to support the union or thought that they were obligated to support the union even though they were voluntarily doing it in the sense they consented to make the payments that were asked of them.

Nonetheless, the question of the jury decided was that these union monies were not separate monies for a political purposes that were intended to --

Unknown Speaker: Well, we know, we may have -- the jury may have decided that every single one of these contributions of the voluntary contribution under the instructions.

Mr. Wallace: Voluntary.

Justice, the assessments are voluntarily paid when you are asked to pay your union assessment, you pay it.

Unknown Speaker: The difficulty as you rightly pointed out in your brief is that the adverb voluntary is a difficult one to define and no attempt was made to define that at the trial of this case, is that not correct?

Mr. Wallace: That is right.

But it was used over and over again in the testimony by people who said that they paid what they were asked to voluntarily.

And this portion of the instructions starts off a great deal of evidence has been introduced and whether the payments were voluntary and this is relevant but not the total answer of the question the judge said.

Unknown Speaker: Well I suppose, it is not even consistent for somebody to give something to a union for political purposes and also be able to say that after it is given, the money is union money.

I mean it belongs to union.

They just are going to use it for political purposes, is that not true?

Now, you say it is inconceivable under these instructions that the jury could have found that there were -- that these monies were union monies even though voluntarily given for political purpose?

Mr. Wallace: I think the instruction was clear on that.

I see the whole trial is based on the question of whether this was a bona fide political fund where people were making contributions for political purposes.

Or whether, they were really paying obligations that they thought they had to pay to the union because of the union’s economic power.

This was the whole theory of the case and much of the testimony looked in this direction.

I would like if may to refer Your Honors to the testimony of one man who was an out-of-towner working in this jurisdiction which is in Volume 2 of the record on page 757.

The cross-examination begins, sir, your testimony is that you got from $30.00 to $40.00 more per week when you are working on a St. Louis job?

Answer: Yes, approximately.

The question is, that is why you are willing to pay this $10.00 a week into the fund?

Answer: Yes.

And then after some intervening questioning on page 759, the witness says it is to my interest to pay the voluntary donation because the wages are better under the St. Louis scale than they are in the case of Gerardo’s scale.

Question: Yes sir and it is a good deal for you to pay $10.00 a week in order to get $30.00 to $40.00 more pay a week out of that job?

The answer, yes.

That is the type of deal that you are saying is better for you?

Yes.

And then the question and except for that you would not be voluntarily paying anything would you?

Answer: No.

Now, in the context of a trial in which voluntary payments was used in that manner that this instruction was made and I think if you read it as part of the entire instruction, the theory of the case follows through from the indictment right through the instructions and it seems to us implements this longstanding congressional purpose.

Justice Thurgood Marshall: Mr. Wallace, nothing in the record has said that this money was used for “union purposes?”

Mr. Wallace: The record does indicate that strike benefits were paid and that the money was also used to purchase this retirement or recreation center.

It was also a time when the gift fund for petitioner Callanan was now deceased, was substituted for the political fund.

Justice Thurgood Marshall: At which time, as I understand is called mingled with the regular union fund, when they made those payments.

Mr. Wallace: The payments?

Yes sir.

Unknown Speaker: Well, anyway Mr. Wallace --

Mr. Wallace: All we have is a record and accountant’s record of disbursement from the fund, there is not much in the way of indication of how the funds were handled.

Unknown Speaker: Well, in any event that -- and (Inaudible) that even though payments were made with political purpose or political purposes or union purposes, not the individual contributors?

Mr. Wallace: Disbursements from the fund?

Unknown Speaker: The $100,000.00 whatever it was in one instance $50,000.00?

That those were paid for union purposes to serve union end not to serve the individuals whose contributions made up the fund?

Mr. Wallace: But what the jury decided was that those were payments really made by the Union and that is what the statute prevails.

Unknown Speaker: One had to rely on pension on that strike benefit and all that if you rush?

Mr. Wallace: Well, it is just an indication that the leadership of the union treated this money as available to them not merely for political expenditures but for any union purposes.

Unknown Speaker: Including political expenditures?

Mr. Wallace: Including political expenditures.

Unknown Speaker: Mr. Wallace, how often (Inaudible) as a matter of fact, that follows through with the contributions to a union and still not have the union merely as a conduit for those things, if the union itself (Inaudible)

Mr. Wallace: Quite so, Your Honor.

I did not mean to say that the statute would permit the Union to make political contributions in a situation where voluntary contributions were being made to the union.

I do think --

Unknown Speaker: Even though they were voluntarily made for political purposes?

Mr. Wallace: Even though they were voluntarily made for political purposes.

It will be a different case from this one and I think a more difficult case.

Well, we believe that in light of the instructions given and the testimony before the verdict here, properly applied the statute to these facts.

It was a complicated factor determination that that does not mean that the statute is unconstitutionally vague.

It was the kind of actual determination that often has to be made in cases under the Sherman Act or in Criminal Fraud cases involving complex business transactions where factual judgment has to be made as to the substance of the transaction that was placed before the jury.

Your Honor, in light of the purposes, Congress had in mind, does the statute reach too broadly here, because I think the evidence in this case shows quite persuasively, that it was a reasonable judgment for Congress to make that no lesser measure would adequately protect individual members from having the economic power of these organizations brought to bear upon them in ways that would cause their funds to exactly to support political causes when their preference might really be not to support those cause or any cause.

Chief Justice Warren E. Burger: Thank you Mr. Wallace.

Mr. Shenker you have one minute left.

Rebuttal of Morris A. Shenker

Mr. Morris A. Shenker: One minute.

Mr. Chief Justice and may it please the Court.

Just two things.

One, there was no co-mingling of funds and two, that the political fund was given, the name of it was -- the full name was Political, Educational, Legislative, Charity and Defense Fund.

And there was not co-mingling.

I invite you to please which I knew you will read the instructions particularly those that are given in our brief from page 72 and 73 where we specifically asked the instructions which would have fitted in in line with the position that they have taken -- the Government has taken now.

I want to call the Court’s attention that the Government did not take this position at the trial and they would not -- did not take the position that they did not question that a union has a right to establish a political organization for the purpose of receiving ear-marked political monies directly for voluntary contributions.

Chief Justice Warren E. Burger: Mr. Shenker, what was the legislative purpose of this fund?

What were they going to do with the money for legislative purposes?

Mr. Morris A. Shenker: Well, that was such a thing.

I think that they would be authorized to hire a person to attend the sessions of the legislature and to keep advised on the manner on which the legislature of Missouri as well as in other states where in their people may be doing work with that.

They would --

Chief Justice Warren E. Burger: But laws related unions?

Mr. Morris A. Shenker: Laws related -- Relating to all matters.

In other words, they contributed substantial amount in excess, I believe during that period -- in excess of a $100,000.00 to charity during that period and kind of --

Chief Justice Warren E. Burger: What kind of things?

Mr. Morris A. Shenker: One of the things that contribute to the United Funds for instance as I recall I do not remember all the charities that contributed to various hospitals as I recall, I do not know if it was on the same years that contributed substantial sums to the (Inaudible) Foundation.

They contributed money --

Chief Justice Warren E. Burger: Some of it went to retired members of the union?

Mr. Morris A. Shenker: No, no, these which I mentioned did not.

All these charities which I mentioned have nothing to do with the union.

Chief Justice Warren E. Burger: Not from the charity fund but from the fund generally was it?

Mr. Morris A. Shenker: No, that was only one instance as I recall wherein there was a certain contribution made towards helping, some of the retirees and that was, I do not recall now but it was $10,000.00 out of some practically million dollars.

There was no co-mingling of funds at all.

Chief Justice Warren E. Burger: Going back to this legislative fund, were they interested in supporting a legislation that affected the union or was it an activity like the League of Women’s Voters that is for everybody’s benefit?

Mr. Morris A. Shenker: I would say that it was for everybody’s benefit but naturally they were laboring people and undoubtedly they were interested in liberal legislation, legislation which would be good not necessarily for their union but for labor generally.

They were constantly supporting liberal candidates, candidates with liberal backgrounds and the same thing on legislation.

Chief Justice Warren E. Burger: Thank you Mr. Shenker.

Thank you Mr. Wallace.

The case is submitted.

Featured:

United States v. Brewster - Oral Argument

Thu, 23 Aug 2012 18:18:09 +0000

Case:

United States v. Brewster

Media File:

70-45_19711018-argument.mp3

Related Transcript:

70-45_19711018-argument

Transcript:

Argument of Griswold

Chief Justice Warren E. Burger: United States against Brewster.

The -- excuse me Mr. Solicitor General the orders have been duly filed and certified as you know and will not otherwise be announced.

Mr. Solicitor General you may proceed.

Mr. Griswold: Mr. Chief Justice and may it please the Court.

This is a direct appeal from a decision of the United States District Court for the District of Columbia which has held that an act of Congress, generally applicable throughout the United States is unconstitutional as applied to the offense charged in the criminal indictment before it.

The offense, to put it simply, is bribery and the defendant against whom the charge is made was a United States Senator at the time charged is now a former United States Senator.

The facts are simple.

There is virtually nothing before the Court except the indictment, found by the grand jury and a motion to dismiss the indictment which was granted.

The indictment contains a number of counts.

The odd numbered counts relate to the defendant, the alleged bribee.

The even number counts relate to the parties who are charged with having offered or given the bribe, or the briber.

And the underlying facts appear on page 1 of the appendix in the -- as alleged in the indictment, that at all times, Daniel Brewster was a public official of the United States, a member of the Senate of the United States from the State of Maryland.

And then the gist of the charge appears on page 2 of the appendix with respect to count 1 and I repeat, the odd numbered count relates to Senator Brewster and are all essentially the same as far as the issue now before the Court is concerned and the charge is that he corruptly asked, solicited, sought, accepted, received and agreed to receive the sum of $5,000.00 for himself and for an entity, that is the DC Committee from Maryland Education, from Cyrus T Anderson and Spiegel Inc. in return for being influenced in his performance of official acts in respect of his action, vote and decision on postage rate legislation which might at any time be pending before him in his official capacity.

Now, the motion which was filed on behalf of the defendant appears on page 8 of the appendix.

There is also another motion on page 9 which relates to vagueness and things to that sort which was not dealt with in any way by the District Court and an appeal under the Criminal Appeals Act brings to this Court only the issue which was dealt with, excuse me, this is not the Criminal Appeals Act, this is the Act allowing direct appeals in cases where an act to Congress has been held unconstitutional and such an appeal brings here only the issue which was decided below.

And the motion to dismiss on page 8 of the appendix, the defendant moves to dismiss the odd numbered counts and ground is that counts 1, 3, 5, and 7 of the indictment charged this defendant with violations of 18 U.S.C. 201 (c) (1) and in each such count this defendant is charged with being influenced in his performance of official acts in his capacity as a United States Senator.

And there is of course not the slightest doubt that that is what the indictment charge is, that he was influenced in his official acts, in his capacity as a United States Senator.

Now, the question of jurisdiction of this Court was postponed until the hearing on the merits and here I find I have made a mistake.

This is an appeal under the Criminal Appeals Act.

It might possibly have been brought under the other statutes, but it is an appeal under the Criminal Appeals Act.

The statute involved is the former form of Section 3731 of Title XVIII and known as the Criminal Appeals Act.

The amendment to this provision which was enacted last January is not applicable since the case was began by indictment on December 1, 1969, more than a year before the enactment of the amendment.

The relevant provisions of the Criminal Appeals Act are quoted on page 5 of the appellee’s motion to dismiss or affirm and on page 9 of the appellee’s brief and to refresh the Court’s recollection, I will read the two provisions involved which are at least verbally, relevantly, relatively simple.

Appeal lies to this Court under that statute from a decision or judgment setting aside or dismissing any indictment or information on any count thereof where such decision or judgment is based upon the invalidity or construction of the statute upon which the indictment or information is founded.

And the other statute relating to appeals on acts that -- decisions holding act of Congress unconstitutional is not applicable because it applies only to civil cases.

And this is a criminal case and the second head of jurisdiction under the old Criminal Appeals Act is from the decision or judgment sustaining a motion in bar when the defendant has not been put in jeopardy.

And we contend that there is jurisdiction under this case under either or both of those two provisions of the former Criminal Appeals Act.

In the first place, it is entirely clear that the defendant has not been put in jeopardy.

No jury was empaneled nor was the case in any way submitted to the judge as a trier of the facts with the judge sitting in place of a jury.

There was simply the indictment and the motion to dismiss, the traditional way to raise a legal question with respect to a criminal indictment and thus the case comes within the language of Justice Harlan in the Sisson case, where in distinguishing this Court’s decision in United States against Covington.

Justice Harlan noted that the dismissal in Covington was “before trial without any evidentiary hearing” and that is printed in the italics in the report itself.

That of course is exactly the situation here.

This was before trial and without any evidentiary hearing.

And similarly the situation comes clearly within the language used in the Court’s opinion in the Jorn case last term where it was said that in enacting the Criminal Appeals Act, Congress wished “to avoid subjecting the defendant to a second trial, where the first had terminated in a manner favorable to the defendant either because of a jury verdict or because of judicial action.”

Here there has never been a first trial.

There has been a motion to dismiss entirely on the face of the pleadings.

There has been a decision on that motion to dismiss, but that is not in the sense of the Criminal Appeals Act or the sense of double jeopardy, a trial.

In this case there was no stipulation of facts of any sort.

There was nothing that could even be regarded as a Bill of Particulars or anything like that.

There were no concessions by the Government of any sort, nor any factual assertions by the Government beyond what is stated in the indictment.

The entire proceedings before Judge Hart are printed in the appendix.

I believe that what I have said with respect to them is fully supported by the record.

There is nothing in it to support a contention that Judge Hart made any sort of a factual determination or adjudication.

What he decided is that on the facts alleged in the indictment, the statute cannot be constitutionally applied.

And Mr. Ramsey quite properly points to language which was used by Judge Hart in expressing his opinion and this appears on page 33 of the appendix.

And Judge Hart did say right at the middle of the page, gentlemen, “based on the facts of this case, which sounds bad from my point of view, it is admitted by the Government, which sounds bad from my point of view, that the five counts of the indictment which charged Senator Brewster relate to the acceptance of bribes in connection with performance of a legislative function by a Senator of the United States.”

But from an examination of the transcript, it is readily apparent that the facts to which Judge Hart was referring were those stated in the indictment not anything that was conceded by the Government or asserted by the Government or offered by way of affidavit, deposition in any other way in terms of facts, above and beyond the effects alleged in the indictment.

And it is also clear that nothing was admitted in a factual sense by counsel, by -- for the Government, before Judge Hart.

Insofar as counsel admitted anything there, it was that the facts charged in the indictment are those which are -- they are alleged, namely that the defendant was at all relevant times a United States Senator and that he is charged with seeking and receiving a bribe under the circumstances stated in the indictment.

Thus there is clearly a case in which the Court below has held that an act of Congress is unconstitutional as applied to the facts alleged in this indictment.

This seems to come squarely within this Court’s decision in the Knox case in 396 U.S.which upheld the jurisdiction of this Court under the Criminal Appeals Act, where the statute has been held unconstitutional as applied to the facts alleged in the indictment, although not generally unconstitutional.

It is also our view that there is jurisdiction under the other clause of Section 3731, the one relating to a motion in bar.

We contend that the assertion made in the motion to dismiss in this case, namely that, this defendant is charged with being influenced in his performance of official acts in his capacity as a United Sated Senator and that the indictment for this reason violates the provision of Article 1, Section 6 of the United States constitution is a motion in bar.

Sometimes a motion in bar is referred to as a confession in avoidance and Mr. Ramsey says that the defendant has not confessed.

I think though that the problem comes from too broader use of the word confession.

When a person raises the statute on limitations or a pardon, this is clearly within the motion in bar provision, yet in such a case the defendant need not to confess.

He says in the effect, whether I did it or not or even if I did do it, you cannot prosecute me because of the statute of limitations or the pardon as the case may be.

And this is exactly what Senator Brewster’s counsel have said here, whether I did it or not or even if I did do it, you cannot prosecute me because of the speech or debate clause.

This seems to me to be what is meant by motion in bar as used in this statute or by the term special plea in bar, which was used in its original form.

It is for example the kind of motion that would have been made by a member of the House of Commons in the 18th century.

If there were a charge against him which he cannot allege, he came within parliamentary privilege.

What the defendant is saying is that even if I admitted all of the facts, I have a special defense that I suggest is a motion in bar and brings this case within the jurisdictional statute.

Now, let me turn to the merits of the case which is of course a natural sequel to the Court’s decision in the Johnson case in 383 U.S. decided little over five years ago.

Understandably enough, the appellee relies on the Johnson decision and it is incumbent on me to show that the facts there make that case distinguishable from those which are alleged in this indictment and I repeat we have nothing here except the facts alleged in the indictment.

It is perfectly possible, it seems to me for this trial to be conducted under this indictment in a way which might infringe the Johnson case and if that were done, there would be another issue, but that is not the problem here.

The problem here is whether the trial can be conducted in such a way as not to infringe the Johnson case and I submit that it can.

Justice Potter Stewart: The Johnson case came here after a conviction?

Mr. Griswold: The Johnson case came here after a verdict of guilty by a jury in a full trial.

Justice Potter Stewart: On a full transcript for the evidence?

Mr. Griswold: Full transcript of the evidence and reversal by the Court of Appeals and that reversal was upheld by this Court and indeed with the benefit of hindsight, it seems apparent that the Johnson case was an unfortunate one to bring here from the Government’s point of view.

In the first, the charge there, the issue there related to a charge under the conspiracy statute which is I suppose the most general of all criminal statutes, the one most subject to undue extension by a wide ranging prosecutor.

In the second place, the prosecution of Congressman Johnson largely turned on a speech which he made on the floor of Congress, that is the prosecution with respect to this, there was also another count of a conflict of interest which related to his appearances in the Department of Justice, but the conspiracy charge related to a speech he had made in the floor of Congress relating to building and loan associations.

Although the record was a long one and had many things in it, 50 pages of the transcript related to the speech in the case presented by the Government and there was much more about the speech in the presentation of the defense.

The Government indeed introduced a copy of the speech in evidence.

The conspiracy charge was that the speech was not made for any legislative purpose, but was made by Congressman Johnson for fee in order to that might reprinted and distributed to prospective depositors so as to encourage them to make deposits in Maryland’s Savings and Loan associations.

It is also relevant I think that the indictment contained a substantial allegation about the speech and this was reproduced in this Court’s opinion at page 184, at paragraph 15, I read from the opinion.

It was a part of said conspiracy that it said, Thomas F. Johnson should render services for compensation to with the making of a speech, defending the operations of Maryland’s independent savings and loan associations, the financial stability insolvency thereof and the reliability and integrity of the commercial insurance on investments made by said independent savings and loan associations on the floor of the House of Representatives.

Thus, that was a central part of the actual charge in that case.

It should be observed too that the Court’s opinion is narrowly guarded.

On page 184 of the opinion, Justice Harlan said near the top of the page, whatever room the constitution may allow for such factors in the context of a different kind of prosecution and here we clearly have a different kind of prosecution and then on page 185, Justice Harlan said we emphasize that our holding is limited to prosecutions involving circumstances such as those presented in the case before us which involved extensive utilization of the central factor in the prosecution of the making of a speech.

And the Court said we expressly leave open for consideration when the cases arises, a prosecution which though possibly entailing inquiring into legislative acts or motivations is founded on a narrowly drawn statute passed by Congress in the exercise of its legislative part to regulate the conduct of its members.

Justice William J. Brennan: Are you suggesting Solicitor General that if the form of statute we have here had been the form of statute involved in the Johnson case, it was open in the other way?

Mr. Griswold: Mr. Justice Brennan, I think very likely not because of the extensive use of the speech.

It is a little hard for me to answer it because the very fact that it was a conspiracy charge and that you would then been had to allege the extensive activities to support the conspiracy is part of what brought up the problem and I would agree that if this case went to trial and we ended up with a record like that in the Johnson case that we might will have a very serious problem.

It will not be my responsibility to try the case.

Justice William J. Brennan: Suppose we have had a provision of this very statute that we dealing with now, another Section which had said it was a criminal offense to accept a bribe from making a speech on the floor of the House.

Oh! That were the (Voice Overlap) that we have dealt with.

Mr. Griswold: Mr. Justice I would be prepared to defend that.

Under the Johnson decision it is a more difficult case than we have here, though not a great deal more difficult because this one refers to both.

Justice Byron R. White: Not in here.

In the Johnson case it was plaintiff speaking as a -- speaking as thinking of voting in terms reaching the cause?

Mr. Griswold: No Mr. Justice.

I think the Court has at times equated speeches.

Justice Byron R. White: Even if there is no argument to the speech (Inaudible)?

Mr. Griswold: Mr. Justice I am not quite going to accept that in all its impact.

After all, the speech and debate clause refers only to speech and debate.

And --

Justice Byron R. White: So you are just not arguing it?

Mr. Griswold: I am just not arguing it.

I recognize that it is closely related, but some of the talk to the effect that some of the references in the opinions to the effect that it applies to both says well.

It seems to me to be an example of that well-known circumstance that we are always dealing with of the tendency of principles to expand themselves to the limit of their logic.

And all that I need to say here is that the Johnson case involving extensive use of the speech which is precisely what the constitution refers to, speech or debate.

For example, there are other extensions of the speech or debate clause made so far in Mr. Ramsey’s brief that it applies to any activity conducted by a Senator or Congressman in connection with his legislative work and I think that is far to extensive.

Now, I agree that the line between vote and the speech is pretty small, but the constitution refers only to speech and I think that language in the opinion in Johnson case to which I just referred, indicates that if there is reference to a vote, but it is incidental and then sure is not be the essence of the charge that the constitutional provision does not make it impossible for Congress to allocate the determination of the factual matters involved with respect to bribery of a Congress or Senator to the Courts.

Chief Justice Warren E. Burger: Does the conjunction of the terms of speech and debate in the constitution indicate that it is speeches in the Congress on the floor, the debates in the Congress on the floor that is being talked about or is it broader than that?

Mr. Griswold: Mr. Chief Justice it is speech or debate rather than speech and debate.

I do not think that in this context makes any difference.

I would suppose that if they had wanted to say vote, it might have occurred to somebody before any speech, debate or vote in either House, if the vote is expressly left out.

If the Court feels that the speech or debate clause makes it impossible for Congress to make it a crime for a Congressman to accept a bribe then this appeal must fail.

I do not think that the Johnson case decided that.

I do not think that the speech or debate clause requires that conclusion.

I think that the Johnson case itself expressly left this question open and indicated that under a properly drawn statute the mere fact that was some reference to a vote was not fatal.

Justice William J. Brennan: Well, I have to be clear about this Mr. Solicitor.

You are not however contending that the speech and debate clause protects only speech, are you?

Mr. Griswold: I am walking right up to that Mr. Justice.

I agree that the Court has said several times in somewhat sweeping ways that it goes beyond speech or debate.

However, as I read the constitution, what the constitution says is speech or debate and I still find some difficulty in seeing how it is appropriate to construe it to apply to other things than speech or debate and I know of no case where the Court has so decided.

Justice William J. Brennan: But, what is troubling me of course is what is in your footnote at the bottom of page 11, where you say whatever the precise limits of Johnson, we do not contend --

Mr. Griswold: Well.

Justice William J. Brennan: -- that the clause protects only speech?

Mr. Griswold: I recall that and it is there and that I am not contending that it is limited to speech or literally to speech.

I am perfectly aware of the fact that the words have to be construed in a broader significance, but what I am trying to maintain is that the mere fact that there is a reference in this indictment to a vote, it does not mean that the statute is unconstitutional as applied to this -- the charge of this indictment and I am suggesting that the Court has never so decided.

Chief Justice Warren E. Burger: Would you think that speech or debate reach speaking and utterance in a committee hearing?

Mr. Griswold: Well, I would think not myself, but -- well, let me modify that.

I think of course that a Congressman or Senator should be protected against suit for libel, from things said in committee hearing, but the constitutional provision is for any speech or debate in either House.

We do not have that issue here.

I repeat I think that some of the language in some of the cases has been very broad and that there are no decisions on such matters even with respect to what is said in committee hearing, but it is not -- there is nothing about a committee hearing in this case, it is not necessary to decide that.

I would like in the brief time remaining to refer to the legislative history of this statute because as it is now stands it is in some what broad language.

This is the statute which is quoted on pages 2 and 3 of our brief.

It refers to public official who does these things and then public official is defined to include member of Congress.

This is not brought out in our brief and I would like an opportunity very briefly to present it.

The history of the statutory provision is that in 1853, Congress enacted a statute which was specifically applicable to members of Congress who take bribes and to take bribes with intent to influence his vote or decision on any question.

From on 1853 on, Congress has specifically provided that it was a crime for a Congressman or the Senator to take a bribe intended to influence his vote.

That was continued in the revised statutes of 1874 and 1878.

It was continued in the criminal code of 1908 and it was in effect in 1962, when Congress passed the present statute, but it is entirely clear that in enacting the present statute the motivation to consolidate a lot of separate bribery provisions dealing with public officials generally came from Congress, not from the Executive.

There was a report by a staff of subcommittee number 5 of the committee on judiciary of the House of Representatives in 1958, which recommended the consolidation of these provisions.

At page 71 of that report it is recommended that the provisions prohibiting the bribery of federal employees, members of Congress and judges and judicial officers including jurors be combined in a single statute and then that is carried forward in the committee reports, senate report of number 2213 in the 87th Congress.

The current bribery laws consist of separate sections applicable to various categories or persons, Government employees, members of Congress, judges and others.

Section 201 would bring all these categories within the purview of one section and make uniform the prescribed act of bribery as well as the intent or purpose involved.

And there is a similar provision in the House Committee report which is House report number 748 in the 87th Congress.

Now, whether at that time as you may recall a considerable development of thought about conflict of interest, a Bill with respect to conflict and interest came before Congress and it was at the initiative of the Senate Judiciary, of the House Judiciary committee that these provisions with respect to bribery or consolidated and introduced in the same Bill.

And I think it is perfectly fair to say that this statute should be construed in the light of its clear and long continued history as one which in part at least is focused by a Congress on the actions of Congressmen and Senators and amounts to a clear declaration by Congress that this sort of conduct should be tried in the Courts with the procedural safeguards and provisions which are applicable to criminal prosecutions before the judiciary.

Justice Potter Stewart: When was this statute at the present form enacted, I did not --

Mr. Griswold: In 1962.

Justice Potter Stewart: In 1962.

Mr. Griswold: It was 1958 that the House Committee recommended that they be consolidated.

When the conflict of interest statute came along, that was put in as a part of it and it was in 1962 that all the various bribery provisions were brought together into a single statute which looks quite broad as it is now, but which in the light of its historical background is it seems to me quite narrowly focused in this application on bribery of Congressmen and Senators.

Chief Justice Warren E. Burger: Thank you Mr. Solicitor General.

Before you proceed Mr. Ramsey, let me correct one impression for those who are defending on the order list.

The order list this week will come down on Tuesday, tomorrow and not today.

Mr. Ramsey, we will enlarge your time by 5 minutes which will give the Solicitor General a few moments, few minutes rebuttal time.

Argument of Norman P. Ramsey

Mr. Norman P. Ramsey: Perfectly grateful sir.

Chief Justice Warren E. Burger: (Voice Overlap) five minutes.

Mr. Norman P. Ramsey: Mr. Chief Justice and may it please the Court.

I would like to address myself first if I may to what I believe is a misconception on the part of the Solicitor --Mr. Solicitor General as respect the factual background of this case which was before Judge Hart at the time he decided the issue which brings the case here.

At page 12 of the appendix, there appears colloquy between counsel and the Court and I am quoting from my own remarks to Judge Hart, if the Court please.

I made the statement at the foot of page 12 and at the top of page 13.

Now, in this regard the papers which have been filed in the case and the data which had been supplied as respects to the claims made against the defendant Brewster make it perfectly clear that what is being attacked by this indictment are Senator Brewster’s votes in Committee and his votes on the floor and his activities in connection with what the Supreme Court has described as things generally done in a session of the House by its members.

The Assistant United States Attorney who was arguing the case came back to this point at page 28 of the appendix, in colloquy again with Judge Hart.

Judge Hart and I am spiking into the middle of a Court’s question at about midway down, page 28 of the appendix, if the Court please.

“Well, tell me this? Does the indictment in any ways allege that Brewster did anything not related to his purely legislative functions.

Mr. Barret: We are not contending that what is being charged here, that is the activity by Brewster, was anything other than a legislative act.

We are not ducking the question.

It is squarely presented.

They are legislative acts.

We are not going to quibble over that.”

Now this is against the background if the Court please of there having been supplied on a confidential basis to the Court, a memorandum or fact which replaced a statement in connection with a motion for particulars which outlines the very acts which were addressed to the particular counts and what the assistant was telling Judge Hart was, Your Honor, we do not contend their were any activities, not legislative in nature and that is fully supportive in the record, in this case.

Unknown Speaker: Do we --

Justice William J. Brennan: Your argument Mr. Ramsey is this was really summary judgment not dismissed (Inaudible)

Mr. Norman P. Ramsey: That is correct, and we would say --

Justice William J. Brennan: Where is that memorandum, is not part of record before us?

Mr. Norman P. Ramsey: It is --

Justice William J. Brennan: I had never seen it in the record?

Mr. Norman P. Ramsey: It is -- it is a confidential memorandum in the record.

I simply put in context Justice Brennan.

Justice William J. Brennan: But how are we to treat this summary judgment, if we do not have a basis upon which you make that argument?

Mr. Norman P. Ramsey: I would say Mr. Justice that our approach that is that the assistant did make a concession of fact.

That is to say that it was a stipulation which was made by the assistant as respect to what the facts of the case were, put before the District Judge and the District Judge was entitled to rely upon that as negating the need for additional proof in this particular record, although the confidential memo does exist in the records of the District Court.

But he need -- he saw no need to an effect say, we will put on the record the full confidential memorandum which has been heretofore filed and obviously what was -- this concern of counsel and the Court at that point in time, that this case was approaching trial.

We were in the antecedent stage of coming to trial and there was plenty of publicity as it was.

There was no need to have further newspaper publicity over what might be called the detailed particulars of the count, but Judge Hart did not need to put it on the record where the assistant said flatly, on behalf of United States --

Justice Thurgood Marshall: Mr. Ramsey, did he give a stipulation or did he give his interpretation of what the indictment said?

Mr. Norman P. Ramsey: Mr. Justice, the approach was that the Government supplied a memorandum of alleged --

Justice Thurgood Marshall: Well, so far as I am concerned, if the memorandum is not in this record, I am not interested in it, at least for this question?

Mr. Norman P. Ramsey: Well, all I -- the only answer I give to that Mr. Justice Marshall is --

Justice Thurgood Marshall: Well, he did not mention a memorandum in that statement, did he?

Mr. Norman P. Ramsey: That is the essence of the memorandum, but nothing except legislative acts are concerned, sir.

Justice Thurgood Marshall: And what you read us, he did not mention the memorandum, did he?

Mr. Norman P. Ramsey: He did not mention the memorandum, yes sir.

Justice Thurgood Marshall: Well, was he not merely stating what his opinion was of what was in the indictment?

Mr. Norman P. Ramsey: No, Your Honor, I must disagree with that.

What he was saying was what record in fact disclosed, that is to say --

Justice Thurgood Marshall: Well, what record?

Mr. Norman P. Ramsey: The record which the assistant knew about, the Court knew about.

Justice Thurgood Marshall: You are talking about this record?

Mr. Norman P. Ramsey: The record in the case before Judge Hart sir.

Justice Thurgood Marshall: Is it here?

Mr. Norman P. Ramsey: It is not, except in the form of the concession by the assistant.

Justice William O. Douglas: Well the -- Judge Hart in the first paragraph of his opinion speaks of the facts of this case.

Mr. Norman P. Ramsey: Yes Mr. Justice and it was on that basis that I was trying to put in context all that was said before the Court was that the Court was relying on facts which he knew to be concessions in the record by United States openly conceded by the assistant that he was testing legislative acts pure and simple.

Chief Justice Warren E. Burger: But Mr. Ramsey, I am looking at page 2 of the appendix now of the indictment, just above the middle of page, the indictment charges in return for being influenced in his performance of official act in respect to his action, vote and decision on postage rate legislation which might at any time be pending before him in his official capacity.

Now --

Mr. Norman P. Ramsey: Yes, Your Honor.

Chief Justice Warren E. Burger: -- how would any details of this so called Bill of Particulars be basically different from that except to pinpoint the particular day or hour or what not?

Mr. Norman P. Ramsey: That is precisely the way in which the particulars -- the particulars simply addressed themselves to the allegation of the indictment which was, that it was official action that is to say legislative action and that is precisely what it did.

On the given day at a given time in a given committee hearing, in a given both on the floor there was a certain step taken by the Senator which is alleged to show that his action, vote and decision was inferentially at least premised upon antecedent conduct for relations with Spiegel and/or Anderson.

Chief Justice Warren E. Burger: I have difficulty seeing how the power or the day actually enlarges what is already said in the indictment so far as the constitutional provision is concerned or the jurisdiction of the Court?

Mr. Norman P. Ramsey: I think Mr. Chief Justice that so far as the jurisdiction and so far as the constitutional point are concerned it cannot be -- it cannot be addressed purely on the basis of the structure of the indictment.

I believe however in fairness to the Court that all of these items which appear throughout this record in which the Solicitor General had not caught the copy items in that context, do clearly indicate that the Government never contended it was anything but legislative action which was under attack here.

Therefore we are not up against the miasma of claims that he may have acted with the executive for example, in the Burton type situation where a U.S. Senator or the Johnson type is substantive counts where a Congressman works into the Executive side of the Government and may indeed be subjected to criminal prosecution as was Congressman Johnson in connection with his activities before the Attorney General of the United States in the Executive side.

Now, this is the provision which we have taken right along that is to say that, basically you may approach the entirety of the problem plus the constitutional matter and of the jurisdictional matter on the basis of the indictment before the Court and our motion to dismiss because we view our motion to dismiss, if the Court please in this posture, under the earlier teachings of the Court in cases which have dealt with the speech or debate clause that is, that has become before this Court, it has taken on a significance which is to the effect that not only does the clause give protection to the accused Senator or Congressman from the accusation itself, but freeze him indeed from the obligation to defend himself.

This of course, Mr. Chief Justice, you will recall within that aspect of the Powell case in the Lower Court opinion, the Circuit Court opinion written while you were on the bench here in DC and it also was the teaching of the Dombrowski case and ultimately of the Powell case before this Court when it came up here.

That there was a freedom not only from the charge itself, but in addition, it was intended to free the particular public servant of the obligation of defending himself which is an even more subtle concept in the sense that it does not quite come to the same form of immunity that we normally think of.

It has stepped in ahead and what we had done by our motion to dismiss in this case was invite the District Court’s attention to the operative events which lead to our being in a position where we could say to the Court, we ought to be protected against the obligation even to defend ourselves because --

Justice Potter Stewart: Defend himself from what?

Mr. Norman P. Ramsey: Defend himself from that, the liability --Mr. Justice, the -- it speaks in terms of being questioned in any other place --

Justice Potter Stewart: Or any speech or a debate?

Mr. Norman P. Ramsey: That is correct sir.

Justice Potter Stewart: But now let us assume that the defendant in this case never made a speech, never engaged in debate, never cast a vote in committee or on the floor, but nonetheless took a bribe in return for his promise to do one of those things, but either he had never got around to it or he broke his promise, then what would the posture of the case to be?

Mr. Norman P. Ramsey: I think Mr. Justice Stewart, the problem we are up against there is whether this -- his motivation maybe questioned, that is to say (Voice Overlap)

Justice Potter Stewart: What was the bribe?

Mr. Norman P. Ramsey: -- in taking -- what is this money, motive for accepting the money is really what you are asking me sir and to that extent, you see, you go to motivation and the Kilbourn case and all of the other cases have addressed themselves not only to acts and conduct, but anything which inquired into motive for the vote.

Justice Potter Stewart: Well, my -- in my hypothetical case there was no vote.

He took a bribe in return for his promise to vote in a certain way or make a certain speech, but either he broke his promise or else he never got around to it before he was indicted then what role, if any, would the speech or debate clause have?

Mr. Norman P. Ramsey: It seems to me that the speech and debate clause again.

Keep him from being questioned at any other place other than the House of which he was a member.

We do not contend that the Senator or a Congressman go scoot free.

Justice Potter Stewart: Questioned for what in any other place?

He is now just simply being charged with talking a bribe?

Mr. Norman P. Ramsey: Yes, but in order to prove the bribe up --

Justice Potter Stewart: And he has never done anything in the House or in the Senate?

Mr. Norman P. Ramsey: That is correct.

Justice Potter Stewart: In response to the bribe?

Mr. Norman P. Ramsey: Yes Your Honor, if I may address myself to the point.

Mr. Justice the way I see it, it is -- the situation is this.

At the time he accepted the money in order to prove up the bribery case, simply let us say to prove that he undertook to do a certain thing, that is to say that he was to be motivated in connection with official conduct otherwise you have proven no bribes.

It is precisely that which the constitutional clause would interdict and stopping for pariente.

Justice Potter Stewart: It does not say so, does it not, constitutional clause simply does not say so?

Mr. Norman P. Ramsey: I think sir that constitutional clause has taken on the gloss (ph) of the cases which have interpreted it all away down.

Justice Potter Stewart: Well, what case interpreted in way to support your answer to my question?

Mr. Norman P. Ramsey: It seems to the me the Kilbourn case does sir in connection with motive, inquiry into motive in any place other than the House of Representatives (Voice Overlap)

Justice Potter Stewart: Motive for doing what?

Making a speech or a debate or vote?

Here under my question there was no speech, there was no debate and there was no vote.

It was merely the taking of bribe.

Mr. Norman P. Ramsey: I understand the proposition which the Court puts to me, but I trust it is not thought to be this situation sir, because this was alleged to be for a vote for various conduct --

Justice Potter Stewart: In return for the promise to vote in a certain way, is there an allegation that there was any such vote in the indictment?

Mr. Norman P. Ramsey: Yes sir.

Justice Potter Stewart: In all of the counts?

Mr. Norman P. Ramsey: One, well, initial counts, the first counts, all deal with the pending or to be pending before him.

The last count, sir, does the 201 (g), which has to do with past conduct as distinct from anticipatory conduct.

So he is alleged to have received in connection with his vote and his action and his official conduct in connection with either anticipate it or coming legislation, legislation pending in the Congress and in the last count, with legislation which had been in an earlier context.

Justice Potter Stewart: It is seems to me that at least some of the counts of this indictment pretty well fit under my hypothetical case?

Mr. Norman P. Ramsey: No problem.

This is why I say it to the Court that the concession by the assistant that what is talked about is to vote and what is talked about is legislative conduct, pure and simple.

Justice Potter Stewart: What he has talked about in the indictment is taking a bribe, is it not?

Mr. Norman P. Ramsey: That is correct, in return for being influenced and in respect to his action, vote and decision.

Chief Justice Warren E. Burger: Mr. Ramsey.

Mr. Norman P. Ramsey: Yes, Mr. Justice.

Chief Justice Warren E. Burger: Would your answer or your position be essentially the same if the bribe had been given to a number -- for the explicit comments not to vote and not to make a speech.

That is, suppose he were an opponent to the legislation and the money were paid with a negative, instead of the positive --

Mr. Norman P. Ramsey: To stay away and it stains --

Chief Justice Warren E. Burger: To stay away, to absent --

Mr. Norman P. Ramsey: I would sir.

I would think that in that instance again you would be inquiring into the motive of a legislature -- legislator and I believe sir that speech or debate clause would protect against inquiry.

Now as I --

Justice Potter Stewart: Then if he stayed away, if in inquiry into he is staying away.

Mr. Norman P. Ramsey: That is correct sir, that is absolutely correct.

Justice Potter Stewart: Right.

Mr. Norman P. Ramsey: But one has got -- one is a necessary quantum of proof in order to proof up the other.

As the Court pointed out in the Johnson case, Mr. Justice Stewart, you have got a number of aspects to the speech or debate clause.

One maybe the exclusion of evidence at the trial for example because if this case had gone to trial and a testimony had been elicited or sought to be elicited which had to do with motive for his acceptance of particular money, immediately you would have had confronting the Court, the problem of to what extent as an evidentiary matter, assuming that we do not meet it as a jurisdictional matter, this problem was raised also in the Powell case, does speech or debate address itself to jurisdiction of the Court.

In one phase of our brief, we have suggested that it is does in the sense that this is a power, delegated constitutionally to one branch of Government and should not intruded upon by another.

In another portion of the brief, we have suggested that the Congress jointly cannot do what the constitution gives to each of the Houses respectively.

The power to punish its own members, so that there still is in the background of this problem, the question of is it jurisdictional.

Now, if it is not jurisdictional and we do suggest at one point that it maybe.

It certainly, under the Johnson case and I think under any rule or reason, it has the application in the problems of admissibility of evidence at trial where you run into constitutional interdiction, if you try to elicit the Johnson type testimony, did you vote, why you did you?

Justice Thurgood Marshall: Mr. Ramsey.

Mr. Norman P. Ramsey: Yes sir.

Justice Thurgood Marshall: Suppose a Senator or Congressman accepts $5,000.00 of pay to speak and vote for a piece of legislation and another 5,000 would be to speak against and vote against the piece of legislation and goes fishing.

Do you think its bribery?

Mr. Norman P. Ramsey: I would certainly say, sir, that both of those actions of his would be subject to discipline in his House.

I am simply addressing myself in this instance to saying that they should not be questioned in any other place, which is what the speech and debate says.

Justice Thurgood Marshall: What would he be disciplined in the House, for going fishing?

Mr. Norman P. Ramsey: For improper conduct, no, for improper conduct in connection with holding out that he would be willing to be influenced in his vote.

That is -- that they hold, I hopefully a possible story is [Laughter] equality of bribing both ways and you ought to get a fair result, but [Laughter] the fishing aspect of it, I do not think would be a subject to discipline, Mr. Justice Marshall.

I come into the --

Justice William J. Brennan: I understand you Mr. Ramsey, your position is that the speech and debate clause go so far as to preclude except in the House of which he is a member, any kind of discipline against a Senator or a Congressman where one official, but is done as in connection with the -- his function as a Senator or Congressman, do you go that far?

Mr. Norman P. Ramsey: I do sir.

The legislative, if the -- Mr. Justice, your characterization of legislative conduct, yes sir, I do.

Justice William J. Brennan: That is why that -- when I said, it was connected with his official responsibilities.

Mr. Norman P. Ramsey: Yes sir, I do.

Justice William J. Brennan: Now and you say that the only discipline to which he maybe subject is any that maybe imposed by his own House, which would take what form?

Mr. Norman P. Ramsey: It could take the form as it had in the past illustrations which are found throughout the various studies of the Congress.

It can -- expulsion for example, suspension from the House, even imprisonment and disciplined by fine maybe imposed within the framework of the House’s ability -- House of Congress’s ability to discipline their own members.

Justice William J. Brennan: But what -- what the House of Senate might do in disciplining a member is nothing that the Congress may say shall be turned over to the Courts to do for them?

Mr. Norman P. Ramsey: That is one portion of our brief, Mr. Justice Brennan, we address ourself to that and suggest that where the Congress allocates to each House, that is not delegated to the Congress as a whole for the purpose of legislating concern, now I think sir, we have eliminated or admitted only one and that is a major thing to a politician and that is the people at the polls.

They have the absolute right to turn him out and this of course is one of the political realities of the whole situation which ultimately must be faced by everybody who must run for office and it is one of the real justifications for giving a political judgment as respect to proper punishment to a political forum as distinct from a judicial forum.

It permits the testing of the conduct of the members.

As the Solicitor General argues, he says get it out of the political forum, put into the Courts where the dispassionate grand jury, the dispassionate judges may hear it.

We say on the other hand that every reasonable practicality having to deal with men who must pick up, be elected to office, to men who must seek campaign contribution, to a men who necessarily must confer with, consult with and be influenced by their constituents day after day, in order to avoid an interest being drawn in a grand jury by an overactive (Voice Overlap).

Justice William J. Brennan: Mr. Ramsey, is there is anything in the framer's consideration of the speech and debate clause that supports that position?

Mr. Norman P. Ramsey: I believe sir that you will find that this philosophy, that is to say, the philosophy of the right to a political philosophy is for example covered by Mr. Kirby in his study for the Bar of the City of New York as respect to matter.

It is covered by a Harvard Law Review Article (Voice Overlap)

Justice William J. Brennan: (Voice Overlap) you can get that whether there were any -- any minutes, any kind of records of what it was the framers recorded as what they had in mind, when they adopted the speech and debate clause, not in its present form?

Mr. Norman P. Ramsey: I do not believe sir that I can falsely represent that there is a specific statement made by one of the framers of the constitution as respect to that.

But certainly, shortly after it is was put into effect as a constitutional provision, it was -- it has been interpreted in effect to retain this right within the political body, if the Court please.

Justice William J. Brennan: But at least we have a history I gather that goes back to 1853 of Congress enacting this form of statute, that relate to the conduct of a --

Mr. Norman P. Ramsey: You do have such the history here, Mr. Justice Brennan, but I would submit that you also have coincident with it.

You have running along side of the 1853 statutes, you have repeated assertions by the Congress or the Houses of the Congress of their right to seek out the alleged bribe taker, the Oath's aims type case, all of which are fully discussed in the historical footnotes in our brief and in 1873, there into the (Inaudible) scandal in depth for the alleged bribery in the Congress, for the Executive not attempting to use the 1853 statute for any prosecution.

You have the repeated assertion of Congress’ right to fulfill its constitutional obligation to discipline its own members sir.

Now, in connection with the 1853 statute, I believe sir that this should be kept in mind. Certainly the 1853 statute was designed to cover situations such as the case, U.S. against Burton, such as the case of U.S. versus Johnson, where the whole thrust forward of the case was on the basis that Johnson had been bought, he was bribed -- he was a bribed Congressman.

That conspiracy element was admittedly the textual basis for the case.

But it was a claimed bribery and the Government advanced many of the same arguments there that are advanced here and they analogized to and reasoned from bribery statutes, including the one which is before us now.

Justice William J. Brennan: Well, but as I recall it, Justice Harlan’s opinion for the Court did reserve this very question?

Mr. Norman P. Ramsey: Justice Harlan certainly did sir and it is (Voice Overlap)

Justice William J. Brennan: Well, I gather that suggests that maybe Johnson did not answer this question.

Mr. Norman P. Ramsey: Well, I am not sure that Justice Harlan by reserving it suggested necessarily that this Court would -- would when it came up, still considered an adequate case.

Justice William J. Brennan: (Voice Overlap) ordinarily we would reserve this question.

I think you try to get over the message that they we are not deciding that question in the (Voice Overlap).

Mr. Norman P. Ramsey: Precisely, and if you have not decided it sir and I submit you can decide yes or you might decide no as the case maybe.

Chief Justice Warren E. Burger: Mr. Ramsey.

Mr. Norman P. Ramsey: Yes sir.

Chief Justice Warren E. Burger: I do not know where this analogy would be helpful or not, but let me try it.

Suppose a Senator or a member of either House was charged, not with receiving a bribe in relation to his official conduct, but with paying a bribe to another member not in the House, but downtown at a hotel or in a restaurant, would you say that he was immune to prosecution?

Mr. Norman P. Ramsey: I think, Mr. Chief Justice, that you are addressing yourself precisely to the set of facts that existed in Oakes Ames case in 1873 when the Congress tried to issue out themselves and the Courts did not intercede, that was the distribution of stock in connection with the Credit Mobilier is set up where 8, 10 or 12 that is spread throughout the Congress as a practical matter and up and down the line, I would say this.

It is seems to me that the House is capable of handling that problem on its own.

It seems to us that the constitution commits that problem to the House of which the man is a member and it seems to us that the constitution interdicts the intercession of the Executive, because the basic situation as we see is this.

To rule or hold otherwise would give such powerful control in the Executive to harass, investigate and generally badger anybody who makes a politically unpopular decision and improper to the Executive, possibly acceptable to the legislative side and always you have in the political forum, you have the concurrence of a need to get elected, the occurrence of campaign funds, the concurrence of visits from constituents, the likelihood that a Congressman's votes will indeed represent him as a silver block senator, as a foreign block senator, as a fishing block senator, all having received campaign contributions from those particular elements of their constituents.

Once you have an affirmative vote and a contribution, we come then to the question of may you put that before a grand jury and say now, we are not suggesting it to you, but you might certainly draw an inference that there is cause and effect.

The threat, the overpowering threat to the freedom of the Congressman which is opposed by that type of a rule, would it seems to us go a long way to destroy the basic fabric of our tripartite form of Government.

Chief Justice Warren E. Burger: But you do not suggest that there is -- that the element of official conduct or conduct within the scope of his office is involved when he is a disperser of the money rather than a receiver, do you?

Mr. Norman P. Ramsey: He would in that instance, it is seems to me, fall within the -- the Solicitor General, excuse me sir, described that the briber not to bribee is the postulate which you are putting to me Mr. Chief Justice as I understand it.

And it seems to me that what you certainly have in that case is probably the ability to get him his principal first degree, no matter which side of the coin he is on, if he occupies his official position.

Though I am not sure that -- I am not sure that which side he is on would make much difference in my professional judgment as respect to possible freedom from or subjection to discipline or a trial as a result of his conduct sir.

I would like to address myself just for a moment if I may to one further aspect of this point with respect to the breadth of a privilege.

I think it is perfectly clear and I think Mr. Justice Brennan’s question to the Solicitor General makes it clear and the concession at page 11 of the Government’s brief that what is covered by the speech or debate clause or committee report’s resolutions and the act of voting “as or things generally done in the session of the House by one of its members in relation to the business before it” and I am taking that quote directly out of this Court’s opinion in the Powell case and it of course carries forward a series of other decisions which are antecedent, going all the way back to some of the landmark decisions in the early days, shortly after the constitution was adopted and at a time when it may reasonably be thought that the judges who were writing about it had reason to know basically what was in the mind of the framers.

Insofar as the 1853 Act is concerned, we say this.

Very simply, the 1853 Act could constitute a perfectly proper exercise of Congressional authority without coming into conflict of speech or debate, if it is limited in its impact to situations where a Senator may or did receive moneys in connection with executive conduct or conduct relating to the judiciary, but not in connection with legislation.

And it is there, again, coming back Mr.Chief Justice to the question which you put to me sir, it is there that we come back to say that is within the ambit of the House of which he is a member, it is without the ambit of the judiciary and the executive.

And looking at the 1853 Act and looking at the 1962 revision of it, we most respectfully urge that in each of those instances, this can be given constitutional validity in its broad range to protect against bribery, but that the executive and judiciary should withhold their hands where they intrude in to what might be called the basic defensive mechanism given by the constitution to the members of the Congress of the United States.

Chief Justice Warren E. Burger: How far would you carry these terms or other comments, Mr. Ramsey?

You remember historically years ago more or less some members of the Congress struck each other, challenged each other to duels, actually shot each other, is there immunity from constitution there across the board?

Mr. Norman P. Ramsey: As a practical matter, all of those you will recall are in the House of Senate proceedings and they were frequently had called the task particularly at about the time of civil war.

They were called to task for challenging to duels where fist to cuts on the floors of the various Houses of Congress and basically I would say that that is not covered by speech or debate or by this Court's interpretation a speech or debate.

Now, again on the other side of that, it is clearly within the House's power to punish unseemly behavior on the floor of its legislative hall.

Chief Justice Warren E. Burger: The question is, is it beyond the power of the executive?

Mr. Norman P. Ramsey: I would think sir, it would probably in most instances fall outside the scope which I contend for the speech or debate clause as interpreted by this Court which --

Justice William J. Brennan: Let us say then Mr. Ramsey that if there were a statute in which punishing assault by one Congressman upon another and provided that the punishment should be by the judiciary in the form of a prosecution, you would say that that would be constitutional?

Mr. Norman P. Ramsey: I would think that it would sir because I think it would fall outside the definition of things ordinarily done in the session of the Houses of which they are a member.

In other words, I simply cannot read bodily assault into it.

Now, I would say contrary was Mr. Justice Brennan, that what would occur would be that the house itself to take immediate steps and there will be a little need for the judiciary or the executive ever to concern itself with that type of a situation.

Justice William J. Brennan: We would take rather outlandish hypothetical.

One wanted to vote a Congressman, a Senator wanted to vote in a certain way and for some reason or the other (Inaudible) a fellow senator who was on (Inaudible).

Is the recording of that (Inaudible) his announcement of it, so he got a gun and shot the senator standing in his way.

Mr. Norman P. Ramsey: I have no doubt this Court within the due course find that that is perfectly appropriate case of criminal proceeding.

Justice William J. Brennan: That was not the -- you know what was involved, there was an attempted interference with his vote, you would say that would not cover those people?

Mr. Norman P. Ramsey: I would say and I think that is correct sir because I think that this is an extreme mean used to rectify an error made which could otherwise be rectified without the need for physical violence and I think as a practical matter Mr. Justice Brennan, we may be debating something which possibly we do not even have to debate in that it may well be that because it occurred on federal property, you might reasonably be able to apply 1018 to a murder for example which occurred under circumstances Mr. Justice had outlined, a general criminal statute, that this not being within the ambient a speech or debate hence permissible.

Justice Byron R. White: I take it to your position is that immunity of Congressman and Senators is defined by the speech or debate clause and there is no separate doctrine aside from that of legislative immunity?

Mr. Norman P. Ramsey: I am directing my attention Justice White to only speech or debate as interpreted by this Court as sufficient to cover this particular case.

I am not arguing a general legislative community as substance.

Justice Byron R. White: Would you read the Dombrowski against Eastland as suggesting that there is a doctrine of legislative immunity aside from the speech or debate clause?

Mr. Norman P. Ramsey: Well, I suppose on Dombrowski against Eastland can be read for that.

It was focused more on the right of the staff members to, shall we say, have the benefit of.

Justice Byron R. White: Yes, but there was a question of the immunity of the Senator?

Mr. Norman P. Ramsey: Yes sir.

There was.

There definitely was.

Justice Byron R. White: Generally speaking, the doctrine of legislate immunity is one that is applicable to immunize a defendant in a civil action, is it not that correct?

Mr. Norman P. Ramsey: That was Dombrowski of course sir --

Justice Byron R. White: (Voice Overlap) it is not generally been considered to be a doctrine applicable --

Mr. Norman P. Ramsey: No, of course although --

Justice Byron R. White: (Voice Overlap) criminal law?

Mr. Norman P. Ramsey: Civil as distinct from criminal.

So in both of those instances you were talking, I think we invariably find in the opinions Mr. Justice White, you invariably find discussions which tend to talk in terms of legislative immunity of a short hand form of referring to what is given or the protection accorded under given a set of circumstances and we most frequently see them in the context of liable suits in which we frequently see them in the context.

Justice Byron R. White: Did legislative, I mean the speech or debate clause that protects the Congressman or Senator against Civil liability as well as criminal.

As a matter of fact I suppose protection against liable was a major function as indeed (Voice Overlap)

Mr. Norman P. Ramsey: I would expect so sir.

Yes.

It may not be questioned in any other place as I say it is not a word really which is one of the terms we are accustomed to and as the Chief Justice said in lower Court opinion in Powell in connection with that, it may not be questioned has implicit in it, it need not answer.

This is -- it is a word.

It has more meaning really than our standard words which go to privilege.

It speaks in terms of or speech or debate, he may not be questioned in any other place and the historical antecedents of it very clearly indicate that they were talking about Courts in the older days, they were talking about Courts in our early charter provisions and our early State Constitutions, that is exactly what they had in mind.

Justice Byron R. White: Well, let us take the Powell case which is probably as broader statement of a speech or debate clause covers as any.

Mr. Norman P. Ramsey: Yes sir.

Justice Byron R. White: At least that picked up prior cases, you said.

Mr. Norman P. Ramsey: That is correct sir.

Justice Byron R. White: And that the clause arose in that case, the context of the claim against Congressman in the civil context.

Mr. Norman P. Ramsey: That is correct.

Of course that were was the exclusion of the Congressman from the Congress, question of the liability of it whether is in the house for their conduct in that connection sir.

Justice Byron R. White: You think the speech or debate clause should have the same construction in civil and criminal context?

Mr. Norman P. Ramsey: I think it is a practical matter Mr. Justice White, it has an even a broader application in the criminal context because of its antecedents.

If parliamentary antecedents with the fears of torture, the fears of commitment to the power, the fears of imprisonment which were used to dominate the members of parliament, we brought that forward into our structure as it came into our articles confederation and that is into our constitution, largely to keep the executive from dominating the legislator.

Therefore, to me speech or debate, the crux of its historical antecedent has even greater application in the criminal field because that was one of the major things which the framers were attempting to protect the legislator against was intimidation by threat of grand jury, by threat of even a baseless indictment which been read a political being.

Chief Justice Warren E. Burger: I think it just to pursue that one hypothetical that you have conceded that if one member arranged to kidnap or otherwise coerce a member from going to the floor to vote, he did this downtown that that would be subject to ordinary prosecutions, criminal prosecutions, conduct the House, but that if he hands in an envelope with a lot of money in it to do the same thing that somehow then becomes connected with official duty?

Mr. Norman P. Ramsey: I think Mr. Chief Justice, the point which I make as respect to that is this.

One has to do with conduct, physical conduct if the Court please, the other has to do with attempting to motivate.

Chief Justice Warren E. Burger: Let us just make it a threat then, a threat of physical violence, not the actual physical violence?

Mr. Norman P. Ramsey: Well, I am unclear in the hypothetical which the Court puts to me.

Who would be the subject matter of the indictment, the man who made the threat?

Chief Justice Warren E. Burger: The threatenor and the bribor, the man who was threatening or giving the bribe not the receiver?

Mr. Norman P. Ramsey: Not the receiver.

In that connection, I would take the position that the threatenor should be subject to and I am sure it would be subject to criminal prosecution.

If you were attempting to inquire into why the man who got the bribe voted, a motivation of being the question which you would be posing in order to prove the bribe, I would think that you would have a interdiction of a speech or debate clause as against inquiry into the acceptor’s motivations sir.

Now, contrary why the man who gives the bribe, you are not inquiring into his motive as respect they vote.

You are inquiring into his attempting to motivate another and somewhere between those two explains would lie the line of determination where I believe this Court would say no as to the recipient, if you are trying to prove his motive and yes as to the bribe giver if you are attempting to prove that he was instituting conduct which would motivate another.

Justice Byron R. White: Mr. Ramsey.

Mr. Norman P. Ramsey: Yes Mr. Justice White?

Justice Byron R. White: Let us assume there an instance like involved in this case takes place and the Congress then by the particular house involved by resolution unanimously passed as we waive any right to punish the member and let authority proceeding against him under the criminal laws?

Mr. Norman P. Ramsey: I would say Mr. Justice White the answer to that has got to be in the basic for the clause.

Assume that the House may give up its prerogative so to speak, but I think the Court must look deeper.

The prerogative is not there only to protect that House.

They put there to protect the persons who elected the members of that house as well as the members.

Justice Byron R. White: Well, the House could not do that could not that a fortiori, could not do what it has done here?

Mr. Norman P. Ramsey: There are some harping at Judge Hart's colloquy in the Government's brief, but Judge Hart put a similar posture in the colloquy before the Court, the lower Court and I think that this is the reasoning which the lower Court was using, if they cannot do it, how they can combine with another House which has no power over their members and give up this right which frankly as bottomed on the right of the people's representative to be protected in freedom of speech, freedom of debate and as that clause has been interpreted by this Court through the years.

Thank you.

Chief Justice Warren E. Burger: Thank you Mr. Ramsey.

Mr. Solicitor General you have about three minutes.

Rebuttal of Griswold

Mr. Griswold: Thank you, Mr. Chief Justice.

Unless this Court is prepared to hold that Congress has no constitutional power to make it a crime for a congressman or senator to accept a bribe for any sort of conduct with respect to his legislative responsibilities, I believe that this judgment should be reversed.

Justice Byron R. White: Well, they did not make it a crime Mr. Solicitor General that provides for the trial of the member in the House or the Senate?

Mr. Griswold: When I said make it a crime, I meant a crime in the traditional sense by indictment by a grand jury and prosecution in Court.

There is not any doubt that either House has the power to subject to penalty or to expel a member who does anything which the House thinks warrants that.

There is a further problem which is been referred to in the cases which is as far as the House of Representatives is concerned, imprisonment can extend only until the termination of that session of the House and that if the bribery was not found until in the old days that is 2nd of March, you have to hold the trial and he would be release on the 04th of March whenever the Congress expires.

Moreover, it is perfectly clear that the practical problems with respect to trial of these matters before the House or the Senate are difficult.

A fair trial of one of these matters might be complicated, might take the time for a month of the Congressman and the Senators and I repeat, if Congress chooses to allocate that to the regular Courts, unless the Court is prepared to hold that Congress cannot constitutionally do that, this judgment should be reversed.

I would repeat --

Justice Byron R. White: The Congress here is not only allocated the job that it ask of actual trial, but the decision of whether to proceed --

Mr. Griswold: Yes, Mr. Justice that.

Justice Byron R. White: -- to the executive branch of the Government.

Mr. Griswold: That is true and that point is made that with respect to the contempt of a witness that it does require a resolution of the House on recommendation from the committee before it goes to the executive for proper action --

Justice Harry A. Blackmun: But that is not required in this instance?

Mr. Griswold: And that is not required in this instance.

Justice Harry A. Blackmun: Well, Mr. Solicitor General may I ask you now.

I take it that goes as far as I suppose the Senate unanimously have adopted a resolution that we do not wish to call a Senator Brewster into account for misconduct, nevertheless I gather the that the executive (Inaudible)

Mr. Griswold: It would be our position that the executive could go ahead under this statute and I repeat our position is that unless the Court is prepared to hold, that Congress has no constitutional power to make it a crime for a congressman or senator to accept a bribe for a legislative conduct, this judgment should be reversed.

Let me refer to the fact that the statute in this case as it now stands makes no reference whatever to vote.

It simply says, if before him in his official capacity and though I do not need to go so far, I think that a conviction could be sustained under this indictment without any showing as to how a senator Brewster voted on any matter or indeed without any evidence that he voted at all.

Finally, I would call attention to the fact that there was a concurring opinion in the Johnson case by Chief Justice Warren and in which justices Brennan and Douglas concurred, which proceeded on the narrow ground of the extensive use of the speech in that case, thus there is nothing there decided beyond that by anything except a four to three decision and our position is that the problem of this case was not only expressly left open, but a considerable intimation that the Court did not think that it should go as far in construing this rather simple language of the speech and debate clause as to make it impossible for Congress by statute to make it a crime for a congressman or senator to accept the bribe.

Chief Justice Warren E. Burger: Thank you Mr. Solicitor General.

Thank you Mr. Ramsey.

The case is submitted.

Featured:

United States v. Brewster - Oral Reargument

Thu, 23 Aug 2012 18:18:11 +0000

Case:

United States v. Brewster

Media File:

70-45_19720320-reargument.mp3

Related Transcript:

70-45_19720320-reargument

Transcript:

Argument of Erwin Griswold

Chief Justice Warren E. Burger: We’ll hear arguments next in number 70-45, United States against Brewster.

Mr. Solicitor General.

Mr. Erwin Griswold: May it please the Court.

This case is here on reargument.

It is a direct appeal from a decision of the United States District Court for the District of Columbia dismissing an indictment on constitutional grounds.

The indictment appears beginning on page 1 of the appendix.

It consists of nine counts or ten counts.

The odd numbered ones of which relate to the defendant former Senator Brewster.

The even numbered counts are not before the Court at all and the first count may be taken as for the purposes of this appeal as typical of the rest raising the question which was decided.

The first allegation in the account is that at all times here after mentioned in this indictment, Daniel B. Brewster was a public official that is a member of the Senate of the Untied States from the State of Maryland.

And then over on page 2 of the indictment are the principal allegation of the first count is that Daniel B. Brewster being a public official, acting for and on behalf thereof directly and indirectly corruptly as solicited, sought, accepted, received and agreed to receive the sum of $5,000.00 for himself and for an entity in return for being influenced in his performance of official acts in respect to his action, route and decision on postage rate legislation which might at any time be pending before him in his official capacity and in his place of trust and profit in violation of Section 201 (c) (1) and 2, Title 18, United States Code.

After the indictment was found, defendant through his counsel filed a motion to dismiss the indictment.

In fact two motions dismissed, but the only one that’s here is the one which appears on page 8 of the appendix.

And the motion to dismiss, the odd numbered counts of the indictment was on the ground that in each such count, the defendant is charged with being influenced in his performance of official acts in his capacity as a United States Senator.

And then finally the third reason of the motion to dismiss each count of the indictment as charged against this defendant violates the provision of Article 1, Section 6 of the United States Constitution which is the Speech and Debate Clause which it will be remembered, said in in rather simple terms that for any speech or debate in either House Senators or Representatives shall not be questioned in any other place.

The language, the important language here is, in a speech or debate in either House.

And then the order of the Court from which this appeal is taken appears on page 34 of the appendix ordered that the defendant's motion be granted and the indictment be and hereby is dismissed as to the defendant Brewster for the reason stated orally by the Court at the hearing on October 9, 1970.

And those reasons appear on the preceding page, page 33 where the Court said, “Gentleman, based on the facts of this case, it is admitted by the Government that the five counts of the indictment which charge Senator Brewster relate to the acceptance of bribes in connection with the performance of a legislative function by a Senator of the United States.”

Now I suggest that that’s simply a paraphrase of exactly what the indictment says.

And then it is the opinion of the Court that the immunity under the Speech and Debate Clause of the constitution, particularly in view of the interpretation given that clause by the Supreme Court in Johnson’s shields Senator Brewster, constitutionally shields him from any prosecution for alleged bribery to perform a legislative act.

The question of the jurisdiction of this appeal has been deferred to the hearing of the merits of -- I find it myself somewhat difficult to see that there is doubt as to the jurisdiction of the appeal.

This arises under the old version of the Criminal Appeal’s Act, since the indictment was found here before January 1971 and it seems to us that this appeal comes under two of the clauses of that statute.

There is a suggestion in Mr. Ramsey’s brief that for some reason the statute is not applicable because of a reference to a conference memorandum which was said to be before the judge.

It is not in the appendix.

I have never seen it.

I would like to suggest that with respect to it that there is no procedure for summary judgment in the rules of criminal procedure.

I think that there is a sort of spillover here because we're familiar with the summary judgment and the rules of civil procedure that this is in some way a decision on a summary judgment, but I know of no procedure and the rules of criminal procedure for summary judgment.

And then I would like to suggest and Mr. Ramsey says that this was the equivalent of an acquittal.

I would like to point out that no jury had been impaneled, no trial had been commenced, and I would like to suggest that as far as anything that I have heard of in the law of criminal procedure, so far there cannot be an acquittal, except at a trial that is until a jury has been impaneled.

Now, this becomes a little complicated in the case of a trial without jury, but I still suggest that there cannot be an acquittal without a trial that is that the commencement of trial without a jury is a rather formal act, likely impaneling of a jury and requires among other things that the right to trial by jury has been waived.

There was no such waiver here and there was no trial.

There cannot be double jeopardy until there has been jeopardy.

I hear no jury had been empanelled and jeopardy had not attached.

I would like--in closing the jurisdictional part of my argument to refer to decisions of this Court, which are not cited in my brief.

One of them, the first of them is cited in an early brief of Mr. Ramsey, though for another point.

That is the case of United States against Fruehauf in 365 U.S.

Where the situation is almost exactly parallel to that here.

There had been memoranda before the District Court.

There was a direct appeal to this Court under the Criminal Appeals Act.

If the position taken now by Mr. Ramsey is correct, even assuming that the conference memorandum to which he refers is a part of the record here that appeal should have been dismissed on the ground that there had been a decision under summary judgment or an acquittal.

That the decision -- not only that appeal, not only was not dismissed, but the case was sent back to the District Court for trial.

And then another case which is not cited in our brief, but it is so closely parallel that I think it is appropriate to mention in here, United States against Halseth, that is 342 U.S. 277, where it appeared that there had been stipulation in the District Court.

And there again, if the decision of the Court with respect to that stipulation had amounted to an acquittal or a decision on a summary judgment, the appeal should have been dismissed, but the appeal was not dismissed.

Both of these cases are discussed in Mr. Justice Harlan’s opinion in the United States against Sisson in 399 U.S.

But I would point out that the Sisson case is clearly inapplicable here because there had been a full trial and the judges’ decision which amounted to the entry of a judgment, not withstanding the verdict was based on facts which appeared at the trial.

Thus, jeopardy had attached and the basis for an appeal was removed as was held in the Simmons case itself.

Now, turning to the merits here, the case is of course the step beyond the Court’s decision in United States against Johnson which was decided some six years ago.

The appellee relies on the Johnson decision, but I think that it is by its own terms inapplicable here.

With the benefit of hindsight, one can say that the Johnson case was an unfortunate case to bring before the Court.

The charge there was under the conspiracy statute which is a very general statute.

While the charge here is under a bribery statute, one which with respect to Congressmen and Senators has a continuous history going back to 1853, 119 years during which time Congress has expressly said that when a Congressman or a Senator accepts a bribe, he should be subject to prosecution through the regular procedures of the criminal courts.

But in the Johnson case as well, not much concern was given about the Speech or Debate Clause in initiating the prosecution or in carrying it out.

In that case, the indictment contained a specific reference to the Speech and Debate Clause which was quoted at some length in the Court’s opinion.

This is on page 184 and paragraph 15 of the indictment said it was party said conspiracy that the said Thomas F. Johnson should render services for compensation to whip the making of a speech defending the operations of Maryland Saving Loan Associations and so on.

Chief Justice Warren E. Burger: Mr. Solicitor General, do you recall whether in the Johnson case, there was a motion in the Trial Court challenging the indictment on that specific ground?

Mr. Erwin Griswold: I do not recall Mr. Chief Justice.

I do not believe that it appears anywhere in the opinion of this Court.

I have not searched through the record as to what was done in the District Court.

Not only was this in the indictment, but at the trial itself, some 50 pages of the transcript related to the speech in the case presented by the Government and having been so opened up by the Government, there was much more about the speech in the presentation of the defense.

The government introduced a copy of the speech in evidence and devoted substantial argument to the preposition that the nature of the conspiracy was that the speech should be delivered in order that it could be reprinted and distributed among appropriate persons in Maryland.

Now, with respect to the Johnson case.

It is very significant that the opinion was narrowly guarded on page 184 of the opinion.

The Court said, "Whatever room the constitution may allow for such factors in the context of a different kind of prosecution."

And this of course is a bribery prosecution, not a conspiracy prosecution.

And then on page 185, the Court said, "We emphasize that our holding is limited to prosecutions involving circumstances as those presented in the case before us.

We expressly leave open for consideration when the case arises a prosecution which though possibly entailing inquiry in the legislative acts on motivations is founded upon a nearly drawn statute passed by Congress in the exercise of its legislative power to regulate the conduct of its members."

Then I think it’s not irrelevant to point out those three members of the Court, Chief Justice Warren and Justices Douglas and Brennan concurred only in the limited holding of the Court that the use of the Congressman speech during this particular trial within examination into its authorship, motivation and content, it was violative of the speech or debate clause.

Two members of the Court took no part in the case, so that there were only four Justices who concurred in anything broader than the limited holding referred to in Chief Justice Warren’s opinion.

Now, there’s nothing like this in this case.

There is no speech at all.

Indeed as I’ve indicated, there’s no evidence before the Court, there was no examination into the authorship, motivation and content of any speech.

There is a reference in each count to the effect that Senator Brewster is charged with taking a bribe and I quote “In return for being influenced in his performance of official acts in respect of to his action, vote and decision on postage rate legislation.”

Chief Justice Warren E. Burger: Mr. Solicitor General, supposed under this indictment case were tried and the defendant established that he voted not at all absented himself or abstained or voted contrary to the agreement charge with that -- if never the less a bribe had been paid would that undermine the case, the Government’s case?

Mr. Erwin Griswold: I think not Mr. Chief Justice if the defendant was the one who brought that out.

I am a little concerned if the prosecution relies on a vote.

Chief Justice Warren E. Burger: I am assuming the defendant would be the one who --

Mr. Erwin Griswold: If the defendant brings it out, I assume he can waive –- well I don’t know, it says, shall not be questioned unless he relies on it.

I find it hard to see how he can complain that he is being questioned.

I would think certainly under the Johnson case, it is clear that the Government cannot maintain the prosecution if it relies directly on the giving of a speech.

There is some reference in the opinion to tangential use.

I do not quite know just what tangential use means.

I would think that it might perhaps be within that language if it were shown that there was a speech, but if the text of the speech was not relied on and if the motivation and authorship of the speech were not gone into.

But I would suggest Mr. Chief Justice that this indictment at this stage can be sustained without answering these questions.

I don’t know just where the line is.

I know that the constitution says speech or debate in either House and I don’t think that is broad enough or ought to be held to be broad enough to cover things which occur outside of sessions of the house which might be construed to include sessions of committees.

Committee may be for this purpose is something done in the house.

It doesn’t say both, but I am troubled about vote and there are opinions of the Court which have indicated, though I do not think actually decided that vote may be enough.

But this indictment charges him of receiving a bribe for being influenced in his performance of official acts.

In respect to his action, vote and decision, on postage rate legislation or I suppose we strikeout votes, supposed we say that can’t be referred to, I don’t conceded that, but let’s strike it out.

There is still plenty in this indictment and the evidence of the trial may show nothing relating to a vote.

There is no charge with respect to his speech which is the only thing to which the Johnson case applies.

And unless the Court is prepared to hold that nothing that a senator does as a senator can be questioned in any other place under the speech and debate clause, a result prior beyond anything that has ever yet been decided.

It seems to me that there is no basis for holding that this indictment of itself without any evidence is in violation of the Speech and Debate clause.

Our position --

Justice Thurgood Marshall: Mr. Solicitor General, the difference in those speech involved in act and wouldn’t it be true that if the Senator took the $5,000.00 and the next day the bill was withdrawn from Congress, he couldn’t have voted or done anything on.

He would still be getting [Voice Overlap]

Mr. Erwin Griswold: Yes, Mr. Justice Marshall.

It would be our position that the crime is committed when the bribe is either solicited or received.

He doesn’t have to receive it with the requisite intent and that it is not necessary to prove that there was in fact any legislative act of any kind.

And, I think that becomes quite clear when you consider the solicitation language in the statute ask, demands, seeks, solicits any bribe it would not be possible to prosecute the solicitation of a bribe if the other construction of the statute is taken until you waited to see whether he did something.

And as I have tried to develop in the supplemental brief which we have filed, I think that a prosecution under this statute can be maintained and that the indictment is sufficient without the showing of any speech or debate of any kind, without the showing of any action.

If there is evidence which can show that at the time he solicited or received the bribe, he intended to take legislative action in accordance with the bribes request.

Chief Justice Warren E. Burger: Mr. Ramsey.

Argument of Norman P. Ramsey

Mr. Norman P. Ramsey: Mr. Chief Justice and may it please the Court.

I should like to address myself first to the suggestion made by the Solicitor General in his closing comments.

First, I would request to the Court that attention be given to the five particular subject matter which is now asserted by the Solicitor General was never argued below.

It was not the textural aspect of the case when it was before the District Judge.

What was before the District Judge was perfectly clearly set forth in connection with the debate in colloquy and in connection with the record of the case as it there existed.

Government counsel there said that under this indictment and I am quoting from page 28 of the record extract.

We are not contending that what is being charged here, that is the activity by Brewster was anything other than a legislative act.

We are not ducking the question, it is squarely presented.

They are legislative acts.

We are not going to quibble over that.

Now, the important point to this case as we see it is this, this case does not test the outer limits of speech or debate.

This case falls squarely within the hard core of speech or debate.

In the earlier arguments and in the brief that the Government which is earlier submitted in this case, the Government conceded that while the precise limits of Johnson may be a little vague, “we do not contend that the clause for text only speech.”

And then they went back to two formal holdings of this Court in the Powell case and in the Kilbourn case, committee reports, resolutions, any act of voting are equally covered as are “things generally done in a session of the House by one of its members in relation to the business before it.”

That has never been a doubted proposition.

It was against the text of that and this Court’s clause as it’s imposed it on the Speech or Debate Clause.

The District Judge Hart made his decision against the background of that he plays an indictment which followed as the Solicitor General has candidly conceded to the Court and into question, official conduct in the nature of action, vote and decision.

Now this illusive memorandum of conferences was known to trial counsel below and certainly appellate counsel are charged with knowledge of what trial counsel did know.

All we put that before the Court before in the first instance was to make the Court aware that this case was not decided in a vacuum.

That there was justification for the comment by Judge Hart “based on the facts of this case” that this was not decided in the abstract.

As one of the Justices --

Chief Justice Warren E. Burger: You’re saying it was not decided on the indictment?

Mr. Norman P. Ramsey: It was not decided in the abstract.

Chief Justice Warren E. Burger: On the indictment?

Mr. Norman P. Ramsey: Well, I am coming to that sir.

As one of the justices, Mr. Chief Justice inquired before, I think it was Justice Stewart.

Did not the indictment say action, vote or decision?

And it did sir, but that was simply clarified and in that regard, our position in that matter is this, basically when a Congressman using, of course that is general phraseology, when a Congressman is accused of improper conduct, improper motivation, then there must come at some point in the preceding when either before the Grand Jury action is brought to stop improper intrusion into areas covered by speech or debate or if after indictment when a Trial Court has occasion to have access to the precise facts upon which the application of speech or debate is made apparent.

We say that that is what happened in this particular case.

It was not challenged at the Grand Jury level as this true in another case currently pending and as to which I will make no detailed comment, but it was challenged by a 12 (b) (1) motion as soon as it could be.

That is to say, we put before the Court and the Government cooperated in putting before the Court that what was being questioned in this case was legislative conduct, not the postulated absence of legislative conduct.

Justice Thurgood Marshall: But what phase of legislative conduct is the taking of a bribe?

Mr. Norman P. Ramsey: It is, Mr. Justice Marshall, my answer to that would not be a direct when it would be this sir.

You would be testing motivation if you say that a given phase of legislative conduct whether it be committee discussion, whether it be a report written by a given Congressman was motivated in one way or by one set of circumstances.

You then fall within the ambit of speech or debate.

Justice Thurgood Marshall: But what has speech and debate got to do with taking a bribe?

Mr. Norman P. Ramsey: The taking of the bribe is in the concept of an indictment like that before this Court sir.

Justice Thurgood Marshall: Well, is speech or debate mentioned in the indictment?

Mr. Norman P. Ramsey: Oh!

No, it’s not.

You are asking me sir whether it is said in indictment that a particular speech was made as a --

Justice Thurgood Marshall: No, does the word speech or debate or anything closely resembling it in the indictment which is the one thing that we have before us?

Mr. Norman P. Ramsey: Now, I will have to answer that directly sir, that is not in the indictment.

Justice Thurgood Marshall: And that’s all we have [Voice Overlap] is that he took a bribe, even if he never made a speech about anything.

Mr. Norman P. Ramsey: Well, I respectfully submit Mr. Justice Marshall.

Justice Thurgood Marshall: As in understand, your position when the member of Congress takes a bribe of any amount of money and then makes a speech, he is in a different category from anybody else in the United States?

Mr. Norman P. Ramsey: No, he is in the same category as any other Congressman who does the same thing that’s subject to penalty in his own House, which has the right to question him.

But he is to be questioned in no other place if the language is keen to debates sir.

Justice Thurgood Marshall: Can he raise that if he doesn’t make a speech?

Mr. Norman P. Ramsey: If he does not make a speech, then we are back to the inquiry of the breadth of speech or debate, are we strictly talking speech or debate?

And we say since Kilbourn in 1881 (Voice Overlap)

Justice Thurgood Marshall: So far as I am concerned, my ambit of speech and debate at least stops at the bribe.[Laughter]

Mr. Norman P. Ramsey: Let me put it this way Mr. Justice Marshall --

Justice Thurgood Marshall: This is like a freedom of speech case.

A man has a right of freedom of speech but that doesn't give him the right to act illegally.

And this is the act solely, the act of taking a bribe.

That’s the only thing involved in this case.

And don’t you agree that that point was left opened in Johnson?

Mr. Norman P. Ramsey: No, I would say, what was left opened in Johnson, Mr. Justice Marshall was the issue of whether there was an outer perameter where this Court, will say that speech or debate does not protect.

But in this instant case, speech or debate has an applicable principle was conceded before the lower court.

Now, the practical matter, the issue is posed in this fashion in the lower court.

They say, we say it was legislative activity.

They would motivate it in his legislative conduct by the acceptance of improper sums of money.

We say, and this is the trust in lower court and also in the government’s original brief in this Court, that this however falls out of that heartland of speech or debate and is within the exclusion which this Court reserved when Johnson was decided.

We say to the contrary that on that issue as posed before the lower court that what was done in this case and the facts that alleged in this case falls squarely within what was covered by Johnson and do not fall with any exclusion.

We do not say that it is not possible to postulate a situation which will take it to the outer limit or speech or debate and beyond the outer limit of speech or debate, so that there may be an indictable crime.

But as was said in the Johnson case, it is our position that speech or debate extends at least so far as, and that is the language of this court in our opinion.

And we say it does clearly extends so far as to protect against inquiry as respects legislative acts under the circumstances of this case, and that is the way in which this whole issue came up.

These assumptions, these hypotheses, these hypothetical illustrations were never part of the case when it was before Judge Hart.

And there is no doubt in my mind that this Court can and will, on some occasion, take the Speech or Debate Clause, analyze and find it without application to certain sets of conducts as for example in Burton and as in Johnson, where the conduct is not related to legislative act but it is related to executive.

We agree that that is the fast ruling of this Court --

Chief Justice Warren E. Burger: But is it not a routine function of Congressman to advocate propositions and to importune officers of the Executive Branch to do one thing or another for their constituents?

Mr. Norman P. Ramsey: I suggest sir that Senator Burton would have love to have Chief Justice express similar opinions back at the time of this case, but I think that decided, I think that the executive --

Chief Justice Warren E. Burger: I’m speaking of the factual matter, isn’t that--?

Mr. Norman P. Ramsey: But it is not a legislative conduct as (Inaudible).

The legislative process, turning as it does necessarily to the absorption of the representative, by of his various constituents’ wishes and desires of the need to represent them in connection with subject matter which come before for political judgments and for judgments as respect to policy, he must be free and he is indeed free.

And this is a significant aspect and the significant posture of a senator or a congressman in this regard.

He must always be open to suggestion, to pressure.

He must always be open to the possibility that an executive desiring to penalized someone who has voted against the executive, may wish to posture him against his voting record, with his list of contributors, with an inference to follow, if unfriendly Grand Jury chooses to draw it, that there is a necessary connection between the assemblage of the money necessary to win a campaign and the favorable votes be it on fishing, be it on oil, be it on what may it be.

Chief Justice Warren E. Burger: Now you spoke, Mr. Ramsey, of some of these hypothetical situations not being before the Court, the District Court, which is of course true, but that’s because, in part, no evidence was taken.

The case never reached that point, is that not so?

Mr. Norman P. Ramsey: It is because, if you please Mr. Chief Justice, it is because the government postured its case before the District Judge and said, we expect to prove this case by proving legislative acts of Senator Brewster and the judge took their representation if this was so, it became a concession of record and it was a concession predicated on known facts, known to the judge, known to counsel, and his opinion expressly stated based on that facts of this case, so that it was not simply a case of taking up hypotheticals.

The Government had not postured either its indictment or it is a presentation on the hypothetical ability to reach outside and find some circumstance which we permit the drawing of a claim that it was outside speech or debate.

It had challenged the lower court by bringing in any indictment squarely designed to fall within speech or debate as Johnson defined it and put the issue to the District Judge to say that this was a narrowly drawn statute.

That’s exactly the way they attend to the posture it, sir.

Now under those circumstances, it was clean and clear that they post the issue to the Trial Court, are you now willing to say that if we take a statute which we deemed to be a precise narrowly drawn statute that you will say that speech or debate must surrender to it.

And that was the way it was before the Court and the facts were before the Court at what was being challenged with legislative conduct of the senator.

Justice William H. Rehnquist: Mr. Ramsey --

Mr. Norman P. Ramsey: Yes, sir.

Justice William H. Rehnquist: Isn’t the logical import vote of Judge Hart’s ruling below and of your argument here that Congress cannot, under any circumstances, provide with the a judicial prosecution of the taking of a bribe by a member of Congress?

Mr. Norman P. Ramsey: Mr. Justice Rehnquist, I do not believe that that is a necessary corollary.

I think, by the reservation which was made by the Court in Johnson, it was indicated that there might be an area where such a bribe could be penalized.

We argue as you are aware sir, in our brief, that it being a power granted to each of the houses, to inquire into motivation of members and not granted to the Houses as Houses of Congress to legislate on generally, that they cannot take away the power which the people gave or the protection that people gave their representative.

But coming pass that point, I would say sir that, in for example, the bribed Congressman’s immunity from prosecution which is common in all private law review fights extensively and is one the leading works dealing with the subject matter.

Now, the suggestion made that a properly drawn statute might be structured which could permit it.

We are somewhat ambivalent on that, since we argue that there is no constitutional power to delegate that right, the Section 5 right, over to the Courts for inquiry.

But basically I would say, yes there may be a chance, Mr. Justice Rehnquist where it could be done.

Justice William H. Rehnquist: What sort of a situation would that be consistent with your own position?

Mr. Norman P. Ramsey: Well, as a practical matter, I would think that some of the -- in the first argument in this case we have a series of hypothetical questions to counsel for the appellee and it was an attempt really to move away from the heartland of speech or debate, and outward.

Mr. Justice Marshall poses a somewhat similar problem.

Are we at the outer limits of speech or debate, where a bribe is a accepted and agreed to where there is no need to introduce any evidence concerning official action taken, any official vote given, any official resolution granted, any official speech given, are we going to reach the point where that the Court will now say, you are sufficiently away from inquiry and the legislative acts that we should sustain the prosecution?

Justice William H. Rehnquist: Well, do you mean that there would be a permission for the government to prove an agreement of the nature you’ve just described so long as there’s no need to any inquiry whether it was performed or not?

Mr. Norman P. Ramsey: Well, I would say that, I understood your question to be sir, if I could postulate a circumstance.

I am not saying that it is only circumstance.

I would suggest this to you sir, that if the indictment was premised on a set of facts which would permit proof, that a given man had agreed to take a given bribe and then he did nothing that you might possibly be able to sustain the indictment because the agreement itself constituted the bribe.

But, where you have, on the other end of the edge line, that is to say that he was alleged to have taking a bribe to be motivated to vote for and did vote for, then you open up inquiry and to the very area of his conduct which is proscribed by speech or debate.

Justice William H. Rehnquist: Well, take your first case where you say he took a bribe and did nothing, certainly bribes aren’t given without some contractual understanding of a performance.

Even in your first case where he did nothing, there would have to be in an agreement by him to do something and it would not be a bribe as one commonly understands.

Mr. Norman P. Ramsey: Well, this is why the outer limits of the problem as I say.

We focus our attention on them as wholly by virtue of hypotheticals from various Justices of the last hearing.

We think that focuses on the wrong issue in the case that is not this case as we can see.

This case is differently postured.

Justice William H. Rehnquist: But we got to apply some sort of a rational standard that is capable of being applied not just to this case but to other cases too in order to reach a result, don’t we?

Mr. Norman P. Ramsey: I quite agree that the Court is correct in trying to test the outer reach of any decision which it makes.

But I remind you sir that this case is before the Court under the Criminal Appeals Act on the facts of this case.

Justice Thurgood Marshall: On the facts of this case is an allegation in the indictment that he did vote that way?

No?

It’s nothing in there that says -- am I right?

Mr. Norman P. Ramsey: That there is something in the record of this.

\Not in the indictment sir.

I have never been in that provision.

Justice Thurgood Marshall: Unless it’s before us.

Is the indictment was before us.

Mr. Norman P. Ramsey: I am sorry sir?

Justice Thurgood Marshall: The indictment is all we have?

Mr. Norman P. Ramsey: No, I do not believe that the indictment is all we have Mr. Justice Marshall that has been our point.

The indictment clearly does cover action, vote, and decision.

In other words, the indictment says--

Justice Thurgood Marshall: I thought the indictment covered what he said he was going to do.

The indictment did not say he did it.

Mr. Norman P. Ramsey: The indictment covers his action (Voice Overlap)

Justice Thurgood Marshall: Well, suppose the Senator had taken money, $5,000.00 from each side, would he be covered?

Mr. Norman P. Ramsey: You postulated the same hypothetical to me at the last theory and again I would have to give you, Mr. Justice Marshall, the same answer which I gave.

It depends on whether this indictment which is challenged and which is before the Court would require proof as respects to his legislative conduct thereafter.

If that be so, then we say (Voice overlap)

Justice Thurgood Marshall: Couldn’t’ it be that under Johnson, all that government had to prove was that he took a bribe for the expressed promise of doing something and that was the crime.

Regardless of what he did thereat.

Mr. Norman P. Ramsey: I do not, sir, read Johnson if, Mr. Justice, you are stating out as a whole in Johnson.

Justice Thurgood Marshall: No, I said that was left open in Johnson.

Mr. Norman P. Ramsey: No, I do not believe sir that is what was left open in Johnson.

What was left open in Johnson was, as this Court put in an opinion, “We live for another day.”

Justice Thurgood Marshall: But what is the crime he is being charged with?

Mr. Norman P. Ramsey: He is being charged with, under this indictment?

Justice Thurgood Marshall: Yes, sir.

Mr. Norman P. Ramsey: In this case sir, he is being charged with bribery and with aiding or abetting.

It is under 182 which is the aid or abet provision under 201 (c) or (g).

Justice Thurgood Marshall: Well, how about the bribery?

Mr. Norman P. Ramsey: 201 (c), sir.

Justice Thurgood Marshall: And what did the Government have to show us then that he took the money for the purpose of promises to do so?

What else has the government have to prove?

Mr. Norman P. Ramsey: The government alleges, in this indictment, that --

Justice Thurgood Marshall: What else that the Government have to prove?

Mr. Norman P. Ramsey: I would suggest, sir that the Government must necessarily prove that it was to influence him in the performance of an official act.

Justice Thurgood Marshall: It was for that purpose?

Mr. Norman P. Ramsey: That is correct and that is the allegation.

Justice Thurgood Marshall: And that’s all the Government has to prove?

Mr. Norman P. Ramsey: And that act would say --

Justice Thurgood Marshall: And the only speech that government has to show is that Senator Jones' speech was, "Give me $5,000.00 and I’ll vote the way you want me to vote."

That is not the time speech I think is covered.

Mr. Norman P. Ramsey: I am suggesting to you sir that what was done in this case was that the legislative conduct has alleged in his action, vote and decision, or what they intended to prove and that is the very area of inquiry which is foreclosed by speech or debate.

Now, I am not suggesting that the way that is foreclosed by speech or debate is the conversation having to do with whether or not a bribe would or would not be paid.

I am saying that government said, in this case, we intend to show the receipt of campaign contributions because the first in count, which the Solicitor General selected as typical, and which I will use as typical if the Court will keep in mind that count nine has a slight variant and it refers backward to the receipt of moneys there for as distinct or action taken there for to as distinct from anticipated action.

It is alleged in this indictment that the defendant sought, accepted, received and agreed to received the sum of $5,000.00 for himself and for an entity the DC Committee for Maryland Education.

A political fund in other words, it is what is alleged to be involved.

Then we go on to say and we intend to show that this was in return for being influenced in the performance of his official act.

In respect to his action, vote and decision and it was to that subject matter that Assistant United States Attorney addressed himself, when asked by the Court as to whether the act which were challenged were legislative in nature and he said, "Yes sir, they are," and that was in accord with the understanding of everybody concerned, that there were legislative acts.

And that being the case, it is perfectly clear that this was an attempt to precisely stage this case for that decision.

It was so decided and not all square in Johnson.

Chief Justice Warren E. Burger: But we’ll never know what the Government would rest its case on unless there is a trial, will we?

Mr. Norman P. Ramsey: Well, I suspect sir that very many times the great confident Trial judges aren’t perfectly willing and indeed need to rely on an open concession such as was made by the Assistant of United States Attorney in this case that it was legislative conduct which was challenged.

And that against the background of a fully known revelation to the trial judge of precisely what factual data that government intended to prove which they supplied as they say is pre-handed fashion to the defendant but did not put into the record because of the very good chance of pretrial, prejudicial publicity in a case for trial then pending shortly after the hearing date of the motions which were then before the Court.

And it was, as I suggest to the Court, a perfectly useful, desirable, and necessary proposition that courts proceed on this particularly areas whereas the Court said in Powell.

The Congressman should be relieved of the obligation to defend himself.

There is, under the decision of this Court, no constitutional basis for making a crime out of conduct where you must necessarily go to motivation for legislative conduct in order to prove that a given sum of money was received or had by a particular man in question by reason of a specific motivation on his part.

Chief Justice Warren E. Burger: Mr. Ramsey, you may continue.

Mr. Norman P. Ramsey: Thank you Mr. Chief Justice and may it please the Court.

In order to put our position in this case in proper context, I think I return to the basic principle from which we rely may be help.

First of all, we premise our argument on the announced concept as laid down by this Court, that one of the functions of Speech and Debate Clause is to relieve the senator of a duty of expanding itself.

That is announced in several of the recent expositions as respect to meaning of speech or debate.

We further would state to the Court that this imposes a duty on a trial of such cases or one before in such case comes to inquire into the case which is intended to be made by the prosecutor against the defendant on the particular facts of that case.

Now keep in mind, if you will please that our opposition is that if there is an interrogation which is violative of speech or debate, and an indictment has already been returned or has been at least one violation of speech or debate in the very inquiry which was the underlying, critical for the indictment which is returned.

Therefore, the rules of the District Judge before such a case comes, to look to the facts of the case, to look to the indictment, and to see whether what has been done, is a set of circumstances which leads to application of speech or debate and which are properly to cause him to enter into the case for the purpose of dismissing it because he has an obligation to honor the senator’s right, not to be called upon to defend, if the case is violative of speech or debate.

Justice William H. Rehnquist: Mr. Ramsey?

Mr. Norman P. Ramsey: Yes ,sir.

Justice William H. Rehnquist: Why could it not that be treated simply as a matter of privilege that is forbid the inquiry if one seeks to make the inquiry during the trial rather than throw out the whole case?

Mr. Norman P. Ramsey: As a practical matter, Mr. Justice Rehnquist, the way we see it and what we premise our argument on is a direct quote out of the Johnson case and in that case this Court said, "Speaking thereof conspiring to give a speech in return for a compensation from private sources."

However reprehensible, we believe that the Speech or Debate Clause extends at least so far as to prevent it from being made the basis of a criminal charge. Speaking backward through the quality of that as it sufficiently indictable basis.

And I think the policy considerations sir, which is behind that is simply this, the clause is designed to prevent harassment of the legislator by either an unfriendly executive or by an unfriendly judiciary if that be the case.

But in the first instance, the Grand Jury investigation.

It is to shield him from being hailed in before the Grand Jury, queried as respects to his motives.

Now, if I may postulate a case which is illustrative, I think it would run this way, if the court does not vindicate speech or debate as stopping Grand Jury inquiry, is it not perfectly possible for an unfriendly prosecutor to hail in any member of the Congress, put before that Grand Jury a list of the contributors who contributed to his last campaign and within the frame or reference to the bribery statute, then put against that testimony that a given Senator and/or Congressman voted, in a particular way, favorable to the very interest who had contributed so heavily to his campaign funding at the time when he ran?

Now, from that, it would be postulated that you may draw the inference that the vote favorable to whatever interest it may be, could be said to be or an inference could be drawn that it was predicated upon the earlier contribution of money to his campaign.

It is this peculiar aspect of the elective process the need of the representative to get himself elected which sets apart the legislative from all the balance of government with the exception of, of course the president and vice president who are in a position where they necessarily are participants in political campaigns in order to become elected representatives of the people.

But basically, we think the policy is cleanly stated and we think the policy a wise one in that, the essence of the charge again is this Court said in Johnson, and speaking there to the Johnson charge, in this context, is that the congressman’s conduct was improperly motivated and as well appear that is precisely what the Speech or Debate Clause generally forecloses from executive and judicial inquiry.

Now, coming back to my original view of the matter, I would say, sir, that we approached it this way, the Court owes an obligation because of the prayer, the Court I am talking now the Court hearing such a case, owes was an obligation to examine the facts.

In this case, it was conceded by the government and found by the court that a necessary root of the case was inquiry into legislative conduct.

And it was at that stage that Judge Hart granted the motion.

Now, the price of the prosecution to this sort is, that it would seek to have a finder of fact, usually a jury but not necessary so, to draw inferences between the campaign funds on the one hand and positions taken politically.

Judgment calls by a man who makes policy, by a man who does indeed address himself to consideration which are based upon the well being of those whom he represents.

Chief Justice Warren E. Burger: Now, Mr. Ramsey, that language that you just alluded to or paraphrased from the Johnson opinion, wherein the context of a discussion of an alleged payment for making a speech on the floor of the House that has quite a bit to do with it, does it not?

Mr. Norman P. Ramsey: Well, I would say sir that while you are corrected, of course Mr. Chief Justice, that they were in a case which dealt with that subject matter.

Chief Justice Warren E. Burger: And in those particular remarks, I think were addressed to that general problem, were they not?

Mr. Norman P. Ramsey: I think, I purported [Voice overlap] Your Honor, I may have been paraphrasing, but however reprehensible and I had interspersed conspiring to give a speech in return for payment by private individuals.

Maybe we believe the Speech or Debate Clause extends at least so far, that was of course in the aspect of the case where they were discussing a speech which was given by Congressman Johnson.

And I believe that was the Court’s inquiry to me and the answer is yes sir that is correct.

Chief Justice Warren E. Burger: And this Court did not want to try to make the evaluation, the fact evaluation of whether the speech on floor of the house had influence the verdict as distinguished from other things that Congressman Johnson had done, isn’t that correct?

Mr. Norman P. Ramsey: Well, I think Mr. Chief Justice, this Court sent the case back and said that if he could be purged of elements offensive to speech or debate, there was no reason why that could not be a proceeding which would go to the other aspects of the case.

But the speech was so thoroughly intertwined into the governmental evidence in the original case.

It was impossible to sort it out at that point and simply went back in the trials.

Chief Justice Warren E. Burger: And he was trialed and convicted?

Mr. Norman P. Ramsey: On such substantive accounts which in no way involve the speech and which frankly spoke only to those aspects of the matter which had to do with his having interceded in connection with executive affairs as distinct from performing legislative function.

Thank you very much.

Chief Justice Warren E. Burger: Thank you Mr. Ramsey.

Mr. Solicitor General, you have seven minutes left.

Rebuttal of Erwin Griswold

Mr. Erwin Griswold: Mr. Chief Justice and may it please the Court.

It seems to me that Mr. Ramsey unduly treats legislative act as synonymous with and absolutely the equivalent of speech or debate.

There is nothing in the constitution which relates and which refers in anyway to legislative acts and we submit that there are many acts which a legislator may do and may properly do as a legislator which are appropriate for a congressman or senator to do which are customarily done by congressman or senators which are not speech or debate and which are not within the protection of the Speech or Debate Clause.

If the Court should reach the conclusion that the Speech or Debate Clause protects a congressman or senator with respect to anything that he does after he takes the oath of office, our case would be difficult.

Although, as Mr. Justice Marshall has suggested, it is very hard to accept the conclusion that taking a bribe is a legislative act even within a very broad definition of that term.

As we see in this case, the case can be proved without bringing in to question any legislative act, any speech or debate, the only word in the indictment which gives me any pause at all is the word “vote.”

If the word vote were not there, if we now excise it, we make no use of it, I can find that nothing in the indictment which is in anyway in conflict with the Speech or Debate Clause.

It is suggested, turning to another matter, that the matter of punishing a Senator who takes the bribe is by the constitution committed solely to that House of Congress and that Congress has a legislative body, has no power to deal with that.

I should think that that was adequately disposed off by this Court’s decision in the Burton Case, some 60 years ago, where a congressman was convicted under a statute for taking fees in connection with appearances before the Executive Branch of the Government.

And more recently in Powell against McCormick where a similar argument has made, that the power of Congress of the House or the Senate to exclude was exclusive and that prevented the Court from giving a declaratory judgment on the matter.

Both of those cases seem to me to dispose of that contention.

And then finally, as has been suggested in the argument, it seems to me that the -- or our position is here, that the offense was committed when the bribe was solicited or taken with the requisite intent.

It is immaterial thereafter, whether any action including even any legislative action that short of speech or debate was done.

The argument is that rather similar to that which was rejected in the case in the Second Circuit involving Judge Matten, or a part of the defense was--it's a different statute, the case is not controlling but the analogy is close.

Part of the defense was that though we took the bribe, it didn’t influences decisions that all of the cases were decided right and a part of the charge which was sought to be submitted to the jury there was, that if the case where decided right, and then he could not be convicted.

That was--the argument that was rejected by Court of Appeals which Mr. Justice Sutherland sat and that the decision was that the taking in the bribe completed the offense and it was not necessary to show that the promised action was carried out.

Similarly here, the taking of the bribe, at least for the record was an intent, is the essence and the substance of the offense and as we see it, it is not necessary to prove certainly any speech or debate in order to maintain the prosecution accordingly.

We think the judgment below should be reversed.

Chief Justice Warren E. Burger: Thank you Mr. Solicitor General.

Thank you, Mr. Ramsey.

The case is submitted.

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