ROBERT L. MCCORMICK, PETITIONER V. UNITED STATES OF AMERICA No. 89-1918 In The Supreme Court Of The United States October Term, 1990 On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Fourth Circuit Brief For The United States In Opposition TABLE OF CONTENTS Questions presented Opinion below Jurisdiction Statement Argument Conclusion OPINION BELOW The opinion of the court of appeals (Pet. App. 1-22) is reported at 896 F.2d 61. JURISDICTION The judgment of the court of appeals was entered on February 12, 1990. A petition for rehearing was denied on March 7, 1990. The petition for a writ of certiorari was filed on June 5, 1990. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). QUESTIONS PRESENTED 1. Whether the evidence was sufficient to show that petitioner, an elected public official, committed extortion under color of official right. 2. Whether the court of appeals used an impermissibly vague standard in distinguishing between bona fide campaign contributions and unlawful payoffs to public officials. 3. Whether the evidence was sufficient to support petitioner's conviction for filing a false personal income tax return. STATEMENT After a jury trial in the Southern District of West Virginia, petitioner, a state legislator, was convicted of extortion under color of official right, in violation of the Hobbs Act, 18 U.S.C. 1951; and of filing a false income tax return, in violation of 26 U.S.C. 7206(1). He was sentenced to three years' probation, fined $50,000, and ordered to pay restitution of $900 and prosecution costs of $1,647.50. The court of appeals affirmed. 1. In 1984, petitioner was a member of the West Virginia House of Delegates. He represented an economically depressed coal mining region that has long suffered from a shortage of medical personnel. To help alleviate the problem, West Virginia legislation had for some time allowed foreign medical school graduates who had not met the State's medical licensing requirements to practice medicine under a "temporary permit" while studying to pass the state licensing examinations. Some temporary-permit doctors had repeatedly failed the examinations. Petitioner was a supporter of the temporary-permit system. Pet. App. 3-4. During the 1980s there was a movement in the House of Delegates to end the temporary-permit system. A number of temporary-permit doctors formed the Coalfield Health Care Association to lobby for favorable legislation. Dr. Ernesto Manual was the leader of the Association. The Association hired a lobbyist, John Vandergrift, to represent the doctors' interests in the state capital. Pet. App. 4-5. In the course of the 1984 West Virginia legislative session, petitioner sponsored legislation urged by the Association to extend the temporary-permit system for one year. That legislation passed on the last day of the regular session of the legislature. Shortly thereafter, petitioner agreed with Vandergrift to sponsor additional legislation, to be introduced during the 1985 session, which would grant permanent medical licenses to the temporary-permit doctors. Pet. App. 5. During his 1984 reelection campaign, petitioner complained to Vandergrift that the campaign was expensive, that he had not "heard from" the doctors, and that he wanted to know what Vandergrift was going to do about it. Pet. App. 6, 35; Tr. 167-168. Vandergrift testified that petitioner was unfriendly and used a "very rough" tone of voice during their conversation. Pet. App. 36; Tr. 168, 282. In response to petitioner's question, Vandergrift said he would get in touch with Dr. Manual "and see what I could do." Tr. 168. Vandergrift testified that he decided petitioner's request should be accommodated because he "wanted (petitioner's) continued support for the legislation that was coming up next year," Tr. 276, and "would not take the risk to not give it to him." Pet. App. 36; Tr. 281. Vandergrift conveyed petitioner's request for money to the doctors. On June 1, 1984, Manual gave Vandergrift an envelope for petitioner containing nine $100 bills, which petitioner accepted at his business office. Petitioner's receipt of the $900 provided the basis for the Hobbs Act count on which he was convicted. Pet. App. 6. The government's evidence showed that following the primary election, the unlicensed physicians made three more cash payments to petitioner. Id. at 6-7. Petitioner sponsored the favorable licensing legislation in the spring of 1985 and spoke at length in support of it during floor debates. The bill passed the House of Delegates and ultimately became law. /1/ Pet. App. 7. Two weeks after the bill was enacted, according to the government's evidence, petitioner received the last of the series of cash payments from Dr. Manual. Ibid. In spite of the enactment of the licensing bill, several of the doctors, including Dr. Manual, were denied licenses by the Medical Licensing Board. Vandergrift subsequently contacted petitioner and said petitioner would have to make an appearance at the next board meeting, and "in order to get the board to change their mind and back up on the decision, he would have to intimidate the hell out of them." Tr. 185. Petitioner appeared at the hearing and made a presentation; as a result of the hearing, Dr. Manual and several of the other unlicensed doctors obtained permanent licenses. Tr. 185-187. The following year, Vandergrift asked petitioner whether another politician should solicit funds from the formerly unlicensed physicians. Vandergrift testified that petitioner responded by saying that "the doctors had taken good care of him and the debt was paid." Tr. 189. Neither the doctors nor petitioner treated the $900 payoff as a campaign contribution. Petitioner did not report it on his campaign books. The Association kept a record of the payments it made to petitioner, but the Association's records did not identify those payments as campaign contributions, and the Association used a code to disguise the fact that petitioner was the recipient. Pet. App. 7-8. 2. In September 1988, a federal grand jury returned an indictment charging that petitioner had extorted payments under color of official right and that he had failed to report the payments he had received on his income tax return. Pet. App. 8. The defense theory at trial was that the payments were campaign contributions. Although the payments were concededly not made in accordance with the provisions of West Virginia law governing campaign contributions, petitioner argued that that did not change their character as campaign contributions rather than payoffs made in response to pressure from petitioner. Tr. 1134-1135. The jury was thoroughly and carefully instructed respecting the elements of extortion under color of official right. Pet. App. 49-54. The instructions focused on the requirements that the public official be proved to have made "wrongful use of his office to obtain money not due to him or his office" and that the public official know when receiving the money that the improper objective was motivating the benefactor to make the payment. Id. at 50-54. The district court explained that the mere solicitation of political contributions from individuals who have a special interest in pending legislation is not unlawful. Pet. App. 53. In particular, the court instructed the jury that political contributions do not constitute unlawful payments simply because the contributions are made by persons who, as the official knows, "are motivated by a general gratitude toward him because of his position on certain issues important to them, or even in the hope that the good will generated by such contributions will make the official more receptive to their cause." Id. at 54. The solicitation or receipt of such contributions violates the federal extortion law "only when the payment is wrongfully induced under color of official right," id. at 53, that is, when the public official accepts the payment knowing that it is made with the expectation that the payment will affect the public official's conduct in a particular way. As the district court explained, ibid., (i)n order to find (petitioner) guilty of extortion, you must first be convinced beyond a reasonable doubt that the payment alleged in a given count in the indictment was made by or on behalf of the doctors with the expectation that such payment would influence (petitioner's) official conduct, and with the knowledge on the part of (petitioner) that they were paid to him with that expectation by virtue of the office he held. It was not necessary, the court instructed, for the government to prove that the defendant misused his public office by granting some actual benefit or advantage to the persons who paid him the money. Even if the unlicensed doctors got "no more than their due in the defendant's performance of his official duties," his receipt of money "for the performance of such acts" would be unlawful. Pet. App. 54. The court explained that (w)hen a public official accepts the payment for an implicit promise of fair treatment, if any such promise there were, there is an inherent threat that without the payment, the public official would exercise his discretion in an adverse manner. A claim that a public official's actions would have been the same whether or not he received the alleged payments is, for this purpose, irrelevant and is no defense to the charges contained in * * * the indictment. Ibid. For that reason, the court stated, "it is not necessary that the government prove that the defendant committed or promised to commit a quid pro quo, that is, consideration in the nature of official action in return for the payment of money not lawfully owed." Ibid. 3. The court of appeals affirmed. It held that "(i)f the payments were 'induced under color of official right' and paid to preserve (petitioner's) support of (the licensing bill), then the money violated the Hobbs Act." Pet. App. 11. On the other hand, "(i)f the money was a voluntary campaign contribution, then (petitioner) is guilty only of violating state election laws." Ibid. Quoting United States v. Dozier, 672 F.2d 531, 537 (5th Cir.), cert. denied, 459 U.S. 943 (1982), the court of appeals noted that "a public official may not demand payment as inducement for the promise to perform (or not to perform) an official act." Pet. App. 14. The court observed that such quid pro quo exchanges are "persuasive evidence that the money was extorted in violation of the Hobbs Act." Id. at 16. In addition, however, the court noted (ibid.) that if (the) payments to elected officials are not treated as legitimate campaign contributions by either the payor or the official, then a jury may reasonably infer that these payments are also induced by the official's office in violation of the Hobbs Act. Otherwise, the court explained, "unless there was an explicit quid pro quo promise, elected officials could avoid the Hobbs Act merely by calling the money 'campaign contributions.' In this situation, the actual intent of the parties is the key determining factor." Ibid. The court held that in the circumstances of this case, "a reasonable jury could find that (petitioner) was extorting money from the doctors for his continued support of the 1985 legislation. Further, the evidence supports the conclusion that the money was never intended by any of the parties to be a campaign contribution." Pet. App. 20. Because petitioner's only defense to the offense of filing a false income tax return was his claim that the money was not personal income but rather was a contribution to his reelection campaign, the court likewise affirmed the tax fraud conviction. Id. at 20-21. ARGUMENT 1. Petitioner asserts that the $900 payment he received from the unlicensed doctors was merely a campaign contribution. From that premise, he argues that his Hobbs Act conviction must be overturned because the jury was not instructed that it had to find that there was a quid pro quo agreement that he would perform particular services in exchange for the money. Pet. 22-39. As the court of appeals held, the jury was properly instructed on the elements of the Hobbs Act, and the evidence was sufficient to justify the jury's conclusion that petitioner was "extorting money from the doctors for his continued support of the 1985 legislation." Pet. App. 20. While the jury was told that it did not have to find an explicit quid pro quo agreement on petitioner's part to perform particular services in exchange for the money, no such explicit quid pro quo was necessary; it was enough that petitioner induced the payment to be made by exploiting the fears of the foreign doctors that absent the payment petitioner might not continue to support the licensing legislation. Thus, as the district court put the point in the jury instructions (id. at 54), (t)hough the unlicensed doctors may have gotten no more than their due in the defendant's performance of his official duties, the defendant's receipt of money, if you find that to have occurred, for the performance of such acts is a misuse of office. The court of appeals was correct in rejecting petitioner's claim that the payment was a bona fide campaign contribution and therefore was not subject to the Hobbs Act. The manner in which the payment was solicited and paid, and the manner in which both parties concealed and failed to report the payment as a campaign contribution strongly suggests that neither the doctors nor petitioner regarded the payment as a bona fide campaign contribution, rather than a payoff for a particular anticipated service. Pet. App. 18, 19. That fact was underscored by the timing of the last payment in the series, which was made long after the election, and only two weeks after the licensing legislation was passed. /2/ Finally, petitioner's after-the-fact comment about the payments is revealing with respect to the claim that the $900 payment was simply a campaign contribution: he commented that "the doctors had taken good care of him and the debt was paid." Tr. 189. In sum, it is true that the payment may have been used to support petitioner's campaign or at least reimburse him for his own campaign expenditures. But that does not render it a bona fide campaign contribution; a bribe or payoff does not become a bona fide campaign contribution simply because the recipient decides to use the funds to defray campaign expenses. Petitioner's inducement of the payment as consideration for his assistance on the licensing legislation was sufficient to render the payment unlawful even if it was made for the purpose of offsetting petitioner's campaign expenses. Contrary to petitioner's assertion, the court of appeals did not uphold petitioner's conviction simply on the theory that the motivation for the payment focused on petitioner's office. Rather, the court of appeals found that the evidence was sufficient to show that petitioner "was extorting money from the doctors for his continued support of the 1985 legislation." Pet. App. 20. In light of the jury instruction requiring a finding that the defendant received money "for the performance of" his official duties, id. at 54, it is clear that the jury convicted, and the court of appeals affirmed, on the theory that petitioner did more than simply accept money paid to him because of his official position. At minimum, petitioner induced the doctors to pay him money by making an implicit promise of fair treatment, a promise that carried with it the "inherent threat that without the payment, (petitioner) would exercise his discretion in an adverse manner." Ibid. And that form of coercion constitutes extortion under color of official right under any test. To be sure, the district court instructed the jury that it was "not necessary that the government prove that the defendant committed or promised to commit a quid pro quo, that is, consideration in the nature of official action in return for the payment of money not lawfully owed." Pet. App. 54. In context, however, that instruction simply meant that it was unnecessary for the government to prove an express promise by petitioner to continue to support the licensing legislation in exchange for a payment from the doctors. In light of the court's other instructions, see id. at 53, 54, the jury could not have understood the "quid pro quo" instruction as relieving the government of its burden of showing that petitioner received the money "for the performance of" his official duties. Petitioner claims (Pet. 24-36) that the decision in this case conflicts with decisions from other circuits. He cites cases from the Sixth and Eleventh Circuits that contain language suggesting that in order to avoid criminalizing political contributions, the government must show a quid pro quo exchange in Hobbs Act cases involving elected public officials. See United States v. Bibby, 752 F.2d 1116, 1127 n.1 (6th Cir. 1985), cert. denied, 475 U.S. 1010 (1986); United States v. Haimowitz, 725 F.2d 1561, 1573 (11th Cir.), cert. denied, 469 U.S. 1072 (1984). In this case, however, the evidence did show a quid pro quo, as the court of appeals observed: the evidence showed that petitioner had extorted the $900 payment from the unlicensed doctors "for his continued support of the 1985 legislation." Pet. App. 20. Even if the statements in Bibby and Haimowitz were read to require a quid pro quo in all Hobbs Act prosecutions of elected public officials, this case would satisfy that requirement. In any event, it is clear that the quid pro quo requirement is applicable, at most, to payments that can fairly be characterized as bona fide campaign contributions. The Bibby court referred to the need to prove a quid pro quo in the context of political contributions, see 752 F.2d at 1127 n.1, and the Haimowitz court expressly premised its discussion of the quid pro quo requirement on the fact that a campaign contribution was involved. Thus, while the court in Haimowitz reversed the defendant's conviction on one count because it involved the solicitation of a campaign contribution, the court affirmed another Hobbs Act conviction for receiving a personal payoff without referring to the requirement of proof of a specific quid pro quo. 725 F.2d at 1572-1573, 1576-1577. In this case, as the court of appeals observed, the $900 payment "was never intended by any of the parties to be a campaign contribution." Pet. App. 20. The language from Bibby and Haimowitz pertaining to the treatment of bona fide campaign contributions is therefore inapposite here. /3/ The other cases cited by petitioner (Pet. 34-35) each involved a quid pro quo, but they do not stand for the proposition that proof of a quid pro quo is required in all cases, and they certainly do not conflict with the decision in this case, in which the court of appeals found more than simply the passive receipt of money paid because of the official's public office. 2. Petitioner claims (Pet. 40-46) that the court of appeals articulated an impermissibly vague standard for differentiating between bona fide campaign contributions and personal payoffs that merely purport to be campaign contributions. The court of appeals' discussion of this issue, however, was entirely appropriate. The court made the point that whether a payment is a campaign contribution or simply a payoff dressed up to look like a campaign contribution is essentially a question of the intent of the parties; that intent, in turn, can be discerned by consulting various factors, such as the form and method by which the parties make the payment, the way they treat it in their accounts, and whether the payment is linked to some form of official action on the public's part. The multi-factor test that the court of appeals offered as guidance to determining intent is neither vague nor objectionable. In any event, the factors that the court set forth are not a formula to be applied rigidly in every case, but simply a collection of common-sense guides to making a factual determination on the ultimate question of intent. 3. Petitioner also contends (Pet. 47-51) that the court of appeals employed an erroneous standard for determining when a campaign contribution is converted to personal use for income tax reporting purposes. The jury was instructed (Pet. App. 57) that petitioner did not have to report as taxable income the payments from the unlicensed doctors if it concluded that the money was either a gift made without expectation of benefit, or a voluntary political contribution. The jury verdict of guilty constituted a finding that the payments were neither a gift nor a voluntary political contribution, but the products of extortion. Petitioner argues that because the evidence did not show that the money he received from the doctors was diverted from campaign activities to personal uses, it does not constitute taxable income. That argument, however, is premised on the assumption that the payments were bona fide political contributions in the first place. Money that is obtained in some other fashion, such as through extortion, does not lose its character as taxable income simply because it is used to pay campaign expenses (or, as applied to this case, because the government is unable to prove that it was not used for campaign purposes). Accordingly, the jury's finding that the money petitioner received from the unlicensed doctors was the product of extortion disposes of petitioner's argument that it was error for the jury to find petitioner guilty of filing a false tax return for failing to report that payment as income. CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted. KENNETH W. STARR Solicitor General EDWARD S.G. DENNIS,JR. Assistant Attorney General RICHARD A. FRIEDMAN Attorney AUGUST 1990 /1/ The government's evidence showed that petitioner received a second cash delivery of $2,000 from the doctors on June 1, 1984, and four more cash payments on November 1, November 12, December 19, 1984, and May 15, 1985. Pet. App. 6-7. Each of those payments except the November 12 payment was separately charged as a Hobbs Act violation, but the jury was unable to reach a verdict on those counts. Id. at 8. /2/ Although the jury was unable to reach a verdict on the counts relating to the payments made in November and December 1984 and May 1985, the evidence relating to those payments may be considered in determining the understanding of the parties as to the nature of the payments. /3/ The Ninth Circuit's decision in United States v. Egan, 860 F.2d 904 (1988), is also unhelpful to petitioner. The court in that case held that "to be guilty of extortion, rather than mere acceptance of a bribe, the public official must do something beyond merely accepting an unsolicited payment. * * * He must communicate to members of the public that favors are for sale." 860 F.2d at 907. That is an accurate description of what happened in this case, as the court of appeals analyzed the evidence. Petitioner did not "merely accept() an unsolicited payment," but solicited funds in exchange for his continued support of legislation of great importance to the unlicensed doctors.