Sunday, Jan. 18, 2009 | Former San Diego City Councilmen Ralph Inzunza and Michael Zucchet were expecting rulings from the 9th U.S. Circuit Court of Appeals at anytime.
But they got a confusing message recently that apparently prolongs the agony.
A one-sentence order on Jan. 8 from the three-judge panel that heard arguments in June puts the cases on hold until the appeal in the parallel Las Vegas case is decided. That appeal, by former Las Vegas politician Mary Kincaid-Chauncey, was argued first, almost a year ago.
The order gave no explanations. Lawyers connected to the corruption cases speculate the appeals have a common issue that, once resolved in the Las Vegas case, would be binding in the San Diego case: It’s the controversial “honest services” fraud law.
The statute, used against all the politicians and strip club associates in both corruption cases and in a number of other recent high-profile San Diego cases, is being challenged in dozens of appellate cases in most — if not all — of the nation’s 11 appeals circuits.
Legal observers believe it has a better-than-average chance of being taken up by the U.S. Supreme Court soon because it is at the center of debate in courts around the country. The high court takes only about 75 cases of the 8,000 petitions it receives each session.
“In many ways it would be good for all of us if the Supreme Court would rule on this issue,” said a Justice Department lawyer who asked not to be identified because of a connection to pending honest-services appeals.
Congress enacted the law in 1988. It’s a short one, just 28 words, and leaves much to the imagination: “For the purposes of this chapter, the term `scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.”
Honest-services fraud may be the most frequently used statute to prosecute public corruption — used even more often than extortion or bribery, which are generally harder to prove because they have very specific definitions.
Prosecutors like the honest-services law for the same reasons that defense attorneys dislike it: The language in the statute is so vague that it can be applied to conduct that doesn’t fit into those narrow parameters. It also gives the federal government jurisdiction to prosecute local and state officials, not just federal officials.
Defense attorneys say it is an ill-defined statute that is subject to a jury’s subjective interpretation. It is a way, they say, for prosecutors to criminalize almost any kind of behavior, even everyday political maneuvering — or, as defense attorneys have termed it, “politics as usual.”
Inzunza and Zucchet are just two high-profile defendants charged with honest-services fraud in recent years in San Diego. Others include Rep. Randy “Duke” Cunningham and his fellow conspirators, Brent Wilkes and Kyle “Dusty” Foggo; plus Peregrine executives, former city of San Diego pension officials and a handful of San Diego judges.
Elsewhere, ex-Orange County Sheriff Mike Carona was acquitted of honest services charges Friday. Influential Washington lobbyist Jack Abramoff was charged with it, as was Illinois Gov. Rod R. Blagojevich, who is accused of trying to sell President-elect Barack Obama’s Senate seat to the highest bidder.
Inzunza and Zucchet were indicted on extortion and honest-services wire-fraud charges in 2003, along with strip club owner Michael Galardi and his associates. They were accused of scheming to deprive citizens of honest services by trading efforts to repeal a law banning touching between strippers and patrons for campaign contributions. In the Las Vegas case, most of the money Galardi gave politicians was in the form of cash and gifts in exchange for favorable treatment for his adult cabarets there.
Unlike the honest services law, the extortion and bribery statutes are described in much greater detail. Extortion is obtaining something one is not entitled to because of official position. Bribery is promising to do something in exchange for a thing of value. Both require proof of an explicit quid-pro-quo agreement.
To prove bribery of a public official, the jury must find that the defendant gave, offered or promised something of value to a public official with the intent to influence an official act; to prove receiving a bribe by a public official, the jury must find the public official solicited, received or agreed to receive something of value for being influenced in the performance of an official act, according to 9th Circuit model jury instructions.
To prove Hobbs Act extortion, the government must show the defendant knowingly obtained property to which he was not entitled by using his official position.
The San Diego defendants were convicted by a jury. U.S. District Judge Jeffrey T. Miller made a stunning move and acquitted Zucchet of most of the charges and granted a new trial on the others. The government appealed; Inzunza appealed. Arguments took place June 3.
Among the issues in the San Diego and Las Vegas appeals: The honest services statute and the instructions given to the jury.
Courts around the country have grappled with the interpretation of the statute, and how juries should be instructed. As a result, each District Court judge, and each circuit, has had to write their own rules. The Supreme Court could clarify all that.
At both the Las Vegas and San Diego appeal hearings, judges grilled prosecutors and defense attorneys about the honest services statute and what instructions should or should not have been given to the jury.
In both cases, essentially the arguments centered on whether the jury should have been required to find an explicit quid pro quo, or merely an implicit something-for-something arrangement — and whether there was enough evidence to prove either situation.
When the appellate court does rule in the Las Vegas case, it may be the first decision in the 9the Circuit on whether a quid pro quo should be an element of honest-services fraud.
As it stands now in the 9th Circuit, which includes California and Nevada, to prove honest services wire or mail fraud, the government must show that the defendants planned to deprive citizens of honest services, it must show intent, and it must show that defendants used or caused someone else to use the mail or a wire communication — such as a telephone — to carry out the plan, according to a book of standard jury instructions.
In the San Diego appeal, Inzunza’s lawyer, Ben Coleman, argued that the law is unconstitutionally vague, and Judge Miller should have required the government to prove Inzunza had corrupt intentions, that his actions were material to the larger scheme, that he broke a state law, and that he benefitted personally from the alleged crime. Coleman said the government would have fallen short.
“A lot of times these things happen with winks and nods,” said the government’s lawyer in the San Diego case, Demetra Lambros, in arguing there was evidence of a quid pro quo agreement between the councilmen and Galardi. “People don’t say, OK, I’m bribing you now.”
In the San Diego lower court case, before the jury was instructed by the judge and deliberations began, prosecutors and defense lawyers had agreed that quid pro quo, a Latin term meaning “one thing in return for another,” is an element of the crime of extortion. But they clashed on whether it should be an element of honest-services wire fraud.
Judge Miller raised the bar for prosecutors and required the jury to find a quid-pro-quo agreement to convict on all counts of honest-services wire fraud and conspiracy, not just the extortion counts. The decision was seen as an advantage for the defense. But the councilmen were convicted despite the quid-pro-quo hurdle.
Inzunza’s attorney said Judge Miller didn’t go far enough with his jury instructions; the government has said that Miller went too far by giving the quid-pro-quo instruction.
In his acquittal of Zucchet, Miller in essence concluded there was insufficient evidence of a quid-pro-quo agreement and indicated that the statute was wrongly applied to Zucchet. In his ruling, he noted that “the record amply shows that Zucchet engaged in deceitful conduct,” but the judge questioned whether a crime was committed.
Unlike in San Diego, the Las Vegas judge did not require the jury to find an explicit quid-pro-quo agreement to convict on the wire fraud counts.
In the Las Vegas appeal, Federal Public Defender Franny Forsman said politician Kincaid-Chauncey had no corrupt intentions when she accepted ski-school tuition for her grandson from strip club owner Galardi. The jury should have been required to find Kincaid-Chauncey made a specific promise to vote a certain way on a certain issue for Galardi.
The Las Vegas prosecutor, Dan Schiess, contended the statute does not require a finding of a specific quid-pro-quo agreement, but merely an intent to be corruptly influenced.
Forsman countered that it’s hard to know and prove what was in the politician’s head at the time.
One of the judges, Alex Kozinski, remarked to the defense attorney: “What’s difficult about that? You took money and in exchange for it you were there ready to do a favor. It’s like calling the Godfather — one day we will call you.”
The Las Vegas outcome will likely have an impact on the San Diego appeal, based on the recent order.
The case being watched closely as first in line for Supreme Court consideration is that of Robert Sorich, an aide to Chicago Mayor Richard Daly, who was convicted of honest services fraud in July 2006 for covering up the role of political patronage in city hiring. He lost his appeal in the 7th Circuit and is seeking Supreme Court review.
In the federal case against city of San Diego pension officials, defendants are charged with conspiring to deprive the city and pensioners of their right to honest services by illegally obtaining enhanced retirement benefits for themselves in exchange for allowing the financially strapped city to underfund the pension system.
The judge in the case, Roger T. Benitez, has expressed doubt about the government’s theory of the case, and legal observers said that’s why prosecutors recently obtained a superseding indictment that charged regular fraud, ostensibly to assuage the judge’s doubts. That trial is scheduled for September.
Kelly Thornton is a San Diego-based freelance writer. Please contact her directly at kellythornton7407@yahoo.com with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.