OPINIONS BELOW

The March 20, 1998, decision of the United States Court of Appeals for the District of Columbia Circuit invalidating the conviction of Sun-Diamond Growers of California under the unlawful gratuity statute, 18 U.S.C. § 201(c)(1)(A), is reported at 138 F.3d 961 (D.C. Cir. 1998), and is included as Appendix A. The June 18, 1998 orders of the District of Columbia Circuit denying the United States’ timely petition for rehearing and suggestion for rehearing en banc (Wald, J., concurring) are included as Appendix B. The District Court’s decision denying Sun-Diamond’s pretrial motion to dismiss the unlawful gratuity counts is reported at 941 F. Supp. 1262 (D.D.C. 1996), and is included as Appendix C.

JURISDICTION

This Court’s jurisdiction to review the final judgment of the United States Court of Appeals for the District of Columbia Circuit is invoked pursuant to 28 U.S.C. § 1254(1). The District of Columbia Circuit issued its decision on March 20, 1998, and denied the United States’ timely petition for rehearing and suggestion for rehearing en banc on June 18, 1998. This petition has been filed within ninety days of the Circuit’s denial of rehearing as required by Supreme Court Rule 13.1.

STATUTORY PROVISIONS INVOLVED

The unlawful gratuity statute, 18 U.S.C. § 201(c)(1)(A), provides in relevant part as follows:

Whoever . . . otherwise than as provided by law for the proper discharge of official duty . . . directly or indirectly gives, offers, or promises anything of value to any public official . . . for or because of any official act performed or to be performed by such public official . . . shall be fined under this title or imprisoned for not more than two years, or both.

"Official act" is defined as

any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.

18 U.S.C. § 201(a)(3)

STATEMENT

The decision below raises serious, unresolved questions about an important federal anti-corruption statute, causing one Circuit Judge to write:

I find the interpretation of 18 U.S.C. § 201(c)(1)(A) (1994) so as not to cover any gifts or gratuities made by a regulated company to high officials of the regulating agency troubling. Given the choice, I would have construed the statutory prohibition as the Fifth Circuit has done. However, I have concluded that calling for a vote on the en banc petition would be futile in this case. The current circuit split calls for Supreme Court attention.

(Wald, J., concurring in the denial of suggestion for rehearing en banc) App. 34. (internal citations omitted).

1. Independent Counsel Donald C. Smaltz, representing the United States, is responsible for investigating allegations of unlawful activity by former Secretary of Agriculture Alphonso Michael Espy. Sun-Diamond Growers of California is a large agricultural cooperative owned by several individual member cooperatives. As a result of the Government’s investigation, Sun-Diamond was charged with giving unlawful gratuities to Secretary Espy, committing wire fraud, and making illegal campaign contributions. App. 2.

Linking Sun-Diamond and Secretary Espy was Richard Douglas. As Sun-Diamond’s vice president for corporate affairs, Douglas was responsible for (among other things) representing the interests of the corporation and its member cooperatives in Washington. Given Sun-Diamond’s business, the Department of Agriculture ("USDA") was naturally part of his bailiwick. According to performance evaluations signed by Sun-Diamond’s president, Douglas was a diligent and able representative. Douglas once described his approach to lobbying by paraphrasing Lord Palmerston: "We have no permanent friends or permanent enemies, only a permanent interest in Sun-Diamond Growers of California." Permanent friends aside, he had a long-time friend in Secretary Espy — the two had gone to college together. App. 2. At trial, Sun-Diamond’s principal defense to the unlawful gratuity charges was that the gifts provided to Espy fell outside the scope of § 201(c) because they were given out of friendship. Sun-Diamond, of course, as a corporation and the actual defendant in this case, could make no claim to "personal friendship" with Secretary Espy.

Count I of the indictment charged Sun-Diamond with giving Secretary Espy approximately $5,900 in unlawful gratuities: tickets to the 1993 U.S. Open Tennis Tournament worth $2,295, luggage worth $2,427, meals worth $665, and a framed print and crystal bowl worth $524. The indictment further alleged that Sun-Diamond treated the costs of these gifts to Secretary Espy as business expenses. App. 4. Count II charged Sun-Diamond with paying $3,100 for Secretary Espy’s girlfriend to accompany him to the International Nut Conference in Athens, Greece. App. 4 n.1; id. at 36.

The indictment detailed two specific issues on which Sun-Diamond had a clear interest in obtaining favorable action from Secretary Espy. App. 3. The first was the market promotion program ("MPP"), a grant fund administered by USDA and designed to promote U.S. agricultural exports. The Secretary of Agriculture was authorized to allocate MPP money to trade organizations like Sun-Diamond, that would in turn use it to defray overseas marketing expenses. Between 1990 and 1995, the Sun-Diamond member cooperatives received $23.9 million from MPP. In August 1993, Congress enacted budget legislation requiring the Secretary to give preference to "small-sized entities" in disbursing MPP funds. Sun-Diamond and its members were hardly mom-and-pop organizations — they reported net sales of $648 million for fiscal year 1993 — but many of their constituent growers were quite modest in size. Sun-Diamond therefore wanted the Secretary to adopt a regulatory definition of "small-sized entities" that would include cooperatives such as its members. App. 3-4.

Sun-Diamond also took an interest in federal regulation of methyl bromide, a pesticide used by some of the growers who belonged to Sun-Diamond’s member cooperatives. In late 1992, the Environmental Protection Agency began review of a proposal to phase out the use of the chemical in the United States because of its potential to contribute to ozone depletion. The evidence presented at trial showed that Sun-Diamond wanted Secretary Espy to help persuade the EPA to delay or reject the proposed phase-out. App. 4.

2. Sun-Diamond moved to dismiss the unlawful gratuity counts in the indictment on several grounds. See App. 37-53. Pertinent to this petition, Sun-Diamond argued that the indictment was defective because it failed to allege a nexus between the gratuities given to Secretary Espy and specific official acts the Secretary performed. App 38-39. The District Court rejected Sun-Diamond’s argument, declaring that "[t]his District Court and the various federal courts of appeal that have addressed this precise issue have concluded that the gratuity statute does not require such nexus . . ." App 42. Instead, the District Court concluded that an indictment is sufficient if it alleges that the giver of the gratuity has matters "within the purview of the official receiving the gratuity" and the gratuity was given because of the official’s position. Id. The District Court further opined that its reading of the statute was consistent with D.C. Circuit precedent and the decisions of other circuits that "have similarly given Section 201(c) a broad interpretation." App 45.

Following a trial, the District Court extensively instructed the jury regarding the unlawful gratuity counts under § 201(c)(1)(A). See App. 67-90. The instructions in several places repeated verbatim the statutory language that, in order to convict, the gratuities must have been given to Secretary Espy by Sun-Diamond "for or because of official acts" that the Secretary either had performed or might perform in the future. App. 82-89. The instructions also stated in several places that, if the jury found that Sun-Diamond was motivated to give the gratuities to Secretary Espy because of his official position as the Secretary of Agriculture, then it could convict under § 201(c)(1)(A). App. 82-89. The complete § 201(c)(1)(A) jury instructions are set forth as Appendix D. With respect to the unlawful gratuity charges, the jury convicted Sun-Diamond on Count I (gratuities given directly to Secretary Espy), but acquitted on Count II (payment for the Secretary’s girlfriend to travel with him).

3. On appeal, Sun-Diamond challenged its conviction on Count I, renewing its argument that the unlawful gratuity statute requires the government to prove a nexus between each unauthorized gift and some specifically identified official act — performed or hoped to be performed — for which the payment or gift was given. Because the indictment failed to allege any such one-to-one relationship, Sun-Diamond contended, the district court erred in denying Sun-Diamond’s motion to dismiss Count I. App 4. In a narrower variation on that argument, Sun-Diamond also challenged the jury instructions on Count I, arguing that the instructions impermissibly allowed the jury to convict if it found that Sun-Diamond gave Secretary Espy things of value merely in recognition of his official position, regardless of official acts that might have supplied the motivation. App 5. The D.C. Circuit purported to reject Sun-Diamond’s broader challenge to the indictment but agreed with Sun-Diamond’s challenge to the jury instructions. Id.

In the D.C. Circuit’s view, the district court charged the jury in full accord with the theory that gifts motivated by an official’s status or position run afoul of the unlawful gratuity statute, regardless of whether the donor had any intent to affect or reward official conduct. Id. Quoting selectively from the jury instructions, the Court of Appeals emphasized those instructions that focused on or mentioned the gratuity recipient’s official status. App 5-7. The Court opined that the language of the jury charge was far broader than that of the statute. App 7. According to the D.C. Circuit, to satisfy the criminal intent requirement embodied in the phrase "for or because of any official act," the giver must intend either to reward some past concrete official act or acts, or to enhance the likelihood of some specific, favorable future act or acts. Id. Relying on its prior decision in United States v. Brewster, 506 F.2d 62, 72 (D.C. Cir. 1974), the Court distinguished the crime of bribery from the crime of giving an unlawful gratuity as follows:

The bribery section makes necessary an explicit quid pro quo which need not exist if only an illegal gratuity is involved; the briber is the mover or producer of the official act, but the official act for which the gratuity is given might have been done without the gratuity, although the gratuity was produced because of the official act.

App. 7-8. The Court opined that,

As [Brewster] makes tolerably clear, to say that the gratuity provision lacks a quid pro quo requirement is not to read the "official act" language out of the statute. It is only to say that, in contrast to bribery, the gratuity and the official act need not each motivate the other. But the gratuity statute by its terms does still require at least a unidirectional relationship--the gift must be "for or because of" the act.

App. 8. The Court then observed that

The relation may be simply one of reward. * * * Even in such a case, the giver presumably hopes that his gratuity will affect the recipient’s future conduct — and this was undoubtedly the concern that motivated Congress to bring rewards for past acts within the coverage of the statute. But, in contrast to bribery, it is enough under the gratuity statute if the defendant gives an unpromised benefit for a past governmental favor. 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.

Id.

The Court of Appeals acknowledged that its decision in Brewster was perhaps distinguishable, because it involved campaign contributions to a Senator and, therefore, implicated the First Amendment. App 9. The Court also acknowledged that in a footnote in Brewster it left open the question of what standard would be appropriate when applying the unlawful gratuity provision to appointed officials, an issue it later addressed in United States v. Campbell, 684 F.2d 141 (D.C. Cir. 1982). App. 9. The Court, however, read its decision in Campbell — which involved free moving services given to a superior court judge by a company that he had treated remarkably leniently with respect to its more than 1,000 traffic tickets — to require proof that the defendant’s intent was more than some vague hope of inducing warm feelings toward the donor. Id. Thus, the D.C. Circuit concluded that if Sun-Diamond "furnished Espy with gifts merely to win his generalized sympathy for Sun-Diamond, those gifts would not be illegal gratuities, unless the jury could find that [Sun-Diamond through] Douglas sought this generalized sympathy to influence Espy to perform one or more official acts sometime in the future." App. 10.

The Court of Appeals acknowledged that its reading of § 201(c)(1)(A) is in conflict with the prevailing interpretation in the Circuits, which is that payments or gifts motivated by the recipient’s official position, at least when the official is in a position to make decisions affecting the giver, may be unlawful gratuities. App 11-12 (citing United States v. Evans, 572 F.2d 455, 480 (5th Cir. 1978); United States v. Standefer, 610 F.2d 1076, 1080 (3d Cir. 1979) (en banc); United States v. Umans, 368 F.2d 725, 730 (2d Cir. 1966); United States v. Bustamante, 45 F.3d 933, 940 (5th Cir. 1995); United States v. Alessio, 528 F.2d 1079, 1082 (9th Cir. 1976)). The Court summarily rejected that interpretation, observing simply that

[t]hese decisions appear to leap from the gratuity statute’s lack of a reciprocal quid pro quo requirement to an assumption that it has dispensed with any need to show intent focused on an official act or acts. * * * Any such leap disregards the explicit language of the statute and contradicts Brewster and Campbell.

App. 11-12.

 

Following its rejection of the prevailing interpretation, the D.C. Circuit concluded that

the jury instructions [in this case] invited the jury to convict on materially less evidence than the statute demands — evidence of gifts driven simply by Espy’s official position. The difference may not seem very great, for whenever a donor has matters actually or potentially pending before his donee, gifts motivated by the latter’s position will usually also be motivated by a desire to reward or elicit favorable official action. But the terms of the statute require a finding that the gifts were motivated by more than merely the giver’s desire to ingratiate himself with the official generally, or to celebrate the latter’s status.

App. 12-13. The Court rejected any argument that the jury instructions as a whole accurately reflected the "for or because of any official act performed or to be performed" language of the statute even though numerous times the instructions repeated that language verbatim, finding that such

recitations could not possibly, however, have overcome the broader message. Thus the charge failed to give the jury an adequate understanding of the issues, and the error cannot be called technical or harmless.

App. 13 (internal citations omitted).

Finally, the D.C. Circuit purported to reject Sun-Diamond’s argument that the Government is required to prove a nexus between a gratuity and a specific past or future official act in order to sustain a conviction under § 201(c)(1)(A). App 13-14. The Court concluded that a similar argument had been made in United States v. Campbell but was rejected there. In the D.C. Circuit’s words, the Government is not required to prove a nexus between specific official acts and the gratuity, only "the requisite intent to reward past favorable acts or to make future ones more likely." Id.

4. On June 18, 1998, the panel denied the Government’s petition for rehearing.

App. 32. On the same date, the Circuit denied the suggestion for rehearing en banc. App. 33. As noted previously, Judge Wald (not a member of the panel deciding this case) issued an opinion concurring in the denial of the suggestion for rehearing en banc precisely to highlight the circuit split and the need for Supreme Court review:

I find the interpretation of 18 U.S.C. 201(c)(1) (A) (1994) so as not to cover any gifts or gratuities made by a regulated company to high officials of the regulating agency troubling. Given the choice, I would have construed the statutory prohibition as the Fifth Circuit has done. However, I have concluded that calling for a vote on the en banc petition would be futile in this case. The current circuit split calls for Supreme Court attention.

App. 34 (internal citations omitted). According to Judge Wald,

[t]he ephemeral distinction between bestowing gifts and gratuities on a high government official who has regulatory jurisdiction over the giver solely because of that official’s ‘position,’ rather than in the hopes of obtaining a favorable attitude in any future regulatory act, may commend itself to lawyers and judges, but I suspect it would not pass the ‘snicker test’ with laymen.

Id. Judge Wald then candidly "admit[ted] that the main distinction the panel draws between gifts motivated by an official’s ‘position’ and gifts motivated by an official’s ‘acts’ eludes me altogether," id., concluding instead that "inherent in an official’s ‘position’ is his capacity to perform regulatory acts which will affect the gift-giver." Id.

I. The District Of Columbia Circuit’s Interpretation Of 18 U.S.C. § 201(c)(1)(A), A Statute That Prohibits The Giving Of Unlawful Gratuities To Federal Officials, Creates An Acknowledged And Irreconcilable Split Of Authority In The Federal Courts Of Appeal

The District of Columbia Circuit rejected the interpretation of the unlawful gratuity statute that prevails in the Circuits, that the statute prohibits gratuities paid to federal officials who are in a position to take official action that could benefit the giver. Instead, the D.C. Circuit requires something more — specifically, proof that ties the gratuity to past or future official acts of the federal official. In other words, the D.C. Circuit rejected an interpretation of the statute that would prohibit the giving of gratuities to gain the generalized goodwill of a federal official before whom the gift giver had matters pending. See App. 10 ("if Douglas furnished Espy with gifts merely to win his generalized sympathy for Sun-Diamond, those gifts would not be illegal gratuities, unless the jury found that Douglas sought this generalized sympathy to influence Espy to perform one or more official acts sometime in the future"). Although the Court insisted that it was not requiring the Government to prove a nexus between a specific official act and the gratuity, it is not clear how else, under the standard the Court adopted, the Government can prove that a gratuity was unlawful under § 201(c)(1)(A).

As the D.C. Circuit expressly acknowledged, its restrictive view of the statute’s scope creates an irreconcilable split of authority in the federal courts of appeal. App. 11-12. This conflict pits the D.C. Circuit — the seat of the federal government — against several other circuits, including at least the Second, Third, Fifth and Ninth Circuits. In fact, it appears that in most circuits other than the District of Columbia, Sun-Diamond’s § 201(c)(1)(A) unlawful gratuity conviction in this case would be sustained. Astonishing as it may seem, the D.C. Circuit’s decision in this case means that a gratuity that would be a federal crime if given to a minor federal official in the Second, Third, Fifth or Ninth Circuits might be considered perfectly legal if given to a Cabinet Secretary in Washington, D.C. In light of the extreme public importance of the gratuity statute in maintaining governmental integrity and the sharp split of authority in the circuits, this case warrants the Court’s immediate attention.

A. The D.C. Circuit’s Decision In This Case Creates A Significant Split Of Authority On An Important Issue Of Federal Law

1. The D.C. Circuit candidly acknowledged that its interpretation of § 201(c)(1)(A) creates a significant circuit split on the scope of the unlawful gratuity statute. App. 11-12; see also App. 34 (Wald, J., concurring in the denial of suggestion for rehearing en banc) ("The current circuit split calls for Supreme Court attention"). Indeed, the D.C. Circuit itself pointed to decisions from four other circuits that conflict with its decision in this case. See App. 11. The D.C. Circuit flatly rejected the interpretations of § 201(c)(1)(A) that those and other circuits have expressly adopted.

Relying on the "for or because of any official act performed or to be performed" language of the statute, the D.C. Circuit simply observed that:

These decisions appear to leap from the gratuity statute’s lack of a reciprocal quid pro quo requirement to an assumption that it has dispensed with any need to show intent focused on an official act or acts. Thus, the court in Bustamante says "Generally, no proof of a quid pro quo is required: it is sufficient for the government to show that the defendant was given the gratuity simply because he held public office." Any such leap disregards the explicit language of the statute and contradicts Brewster and Campbell.

App. 11-12 (internal citation omitted).

2. Even a brief review of § 201 unlawful gratuity decisions from other circuits confirms that the D.C. Circuit’s decision in this case distances it from the prevailing interpretation. Some circuits have adopted the interpretation of the statute that the district court in this case endorsed: that the statute applies if the giver of the gratuity has matters "within the purview of the official receiving the gratuity" and the gratuity was given because of the official’s position. See App. 42. These decisions recognize, as Judge Wald did in this case, see App. 34, the realities of the motivations of a regulated entity bestowing favors on its regulator.

For instance, in United States v. Niederberger, 580 F.2d 63 (3d Cir. 1978), the Third Circuit rejected any attempt to impose a requirement that the Government prove a nexus between a gratuity and particular official acts.

The defendant in Niederberger was an Internal Revenue Service ("IRS") agent who was prosecuted for accepting free golf trips from an official of a company the IRS agent was responsible for auditing. The defendant argued that the Government was required to prove that he accepted the gratuities in exchange for specific official acts, but the Third Circuit rejected that proposition in no uncertain terms:

Thus, we find it unnecessary for the Government to allege in an indictment charging [an unlawful gratuity] offense that a gratuity received by a public official was, in any way, generated by some specific, identifiable act performed or to be performed by the official. A quid pro quo is simply foreign to the elements of a [gratuity] offense. What is proscribed, simply put, is a public official’s receipt of a gratuity, to which he was not legally entitled, given to him in the course of his everyday duties, for or because of any official act performed or to be performed by such public official, and he was in a position to use his authority in a manner which could affect the gift-giver.

580 F.2d at 68-69 (emphasis added).

In United States v. Alessio, 528 F.2d 1079, 1082 (9th Cir. 1976), the Ninth Circuit endorsed a reading of § 201 that prohibits the giving of gratuities to a federal official who the defendant knows is in a position to use that authority to benefit the giver, even if there is no proof of specific — or indeed any — such acts actually ever performed. The defendant in Alessio paid vacation expenses of the administrator of a federal prison camp in which the defendant’s father was incarcerated. The defendant argued that the Government had failed to prove that such gratuities were linked to any official acts of the camp administrator, but the Ninth Circuit held that no such proof was required. Instead, the court upheld the conviction because the "jury could properly conclude from the testimony at trial that [the defendant] knew [the camp administrator] was in a position to use his authority in a manner which would affect the conditions of confinement of [the defendant’s] father." 528 F.2d at 1082 (emphasis added). See also United States v. Strand, 574 F.2d 993, 995 n.2 (9th Cir. 1978) (affirming bribery conviction of Customs Service official who accepted $800 to permit person he believed to be carrying illegal drugs to cross Canadian border into U.S., and observing that bribery is different from an unlawful gratuity in that the latter "require[s] only that the thing of value be given or accepted ‘otherwise than as provided by law for the proper discharge of official duty’").

Similarly, in United States v. Evans, 572 F.2d 455, 481 (5th Cir. 1978), the Fifth Circuit emphasized that it is the giving or acceptance of gratuities because of the official’s position that is prohibited by § 201. In Evans, the defendant was a bank officer who accepted a position in the Department of Health, Education and Welfare. Prior to even officially starting as a federal employee, he received gratuities from persons who were interested in maintaining business relationships with him and possibly obtaining certain federal government contracts with HEW. The defendant argued that the Government had failed to prove that the gratuities were tied to any specific acts and, moreover, that at the time he received them (and afterward) he lacked the authority to perform some official act to benefit the givers.

In affirming his unlawful gratuity convictions, the Fifth Circuit observed that the statute prohibits

the acceptance by a government official of any extraneous compensation or thing of value for official conduct. More specifically, it is not necessary that the official actually engage in identifiable conduct or misconduct nor that any specific quid pro quo be contemplated by the parties nor even that the official actually be capable of providing some official act as quid pro quo at the time.

572 F.2d at 479. Rather, the Fifth Circuit emphasized that

[e]ven if corruption is not intended by either the donor or the donee, there is still a tendency in such a situation to provide conscious or unconscious preferential treatment of the donor by the donee, or the inefficient management of public affairs.

Id. at 480. After reviewing the statute’s language and purposes, and considering some of its legislative history, the Fifth Circuit concluded that under the unlawful gratuity subsection "all that need be proven is that the official accepted, because of his position, a thing of value ‘otherwise than as provided by law for the proper discharge of official duty.’" Id. (emphasis added).

Similar to these Circuits, the Sixth Circuit has held that the

purpose of Section 201(g) [receipt of unlawful gratuities] is to reach all situations in which a government agent’s judgment concerning his official duties may be clouded by the receipt of an item of value given to him by reason of his position.

United States v. Gorman, 807 F.2d 1299, 1304 (6th Cir. 1986) (citing United States v. Evans, 572 F.2d 455 (5th Cir. 1978)). In Gorman, the primary issue was whether certain loans an Assistant United States Attorney had received (and later repaid) were "things of value" under § 201. The defendant argued that the loans were not "gratuities" in a conventional sense, but the Sixth Circuit flatly rejected the argument, observing that "[c]ontrary to the appellant’s argument, there is no authority for the proposition that the items received must be ‘gratuities’ as that term is commonly understood." 807 F.2d at 1304. Instead, the Sixth Circuit concluded that, "[i]n order to put the underlying policy of the statute into effect," terms such as "‘thing of value’ must be broadly construed." Id.

The Second Circuit also has interpreted the statute similarly to the Circuits previously discussed. For example, in United States v. Umans, 368 F.2d 725, 730 (2d Cir. 1966), a certified public accountant made surreptitious cash payments to IRS agents who were auditing the income tax returns of the accountant’s clients. The accountant was prosecuted for and convicted of numerous federal crimes, including bribery and giving unlawful gratuities under § 201. On appeal, the Second Circuit affirmed all of the convictions except the unlawful gratuity counts, finding that they were lesser included offenses of the bribery counts. The court declared that the unlawful gratuity statute "only requires proof that payment was made to an agent in a situation where no payment was necessary." 368 F.2d at 728. The Second Circuit further declared that the unlawful gratuity statute "makes it criminal to pay an official a sum which he is not entitled to receive regardless of the intent of either payor or payee with respect to the payment." Id. at 730. See also United States v. Irwin, 354 F.2d 192, 197 (2d Cir. 1965) (to sustain an unlawful gratuity conviction, the Government must prove the defendant gave the gratuity "knowingly and purposefully and not through accident, misunderstanding, inadvertence or other innocent reasons"); United States v. Barash, 412 F.2d 26 (2d Cir. 1969) (affirming § 201 unlawful gratuity conviction of tax attorney who paid IRS auditors, and noting that it made no difference "whether the payments were made because of economic duress, a desire to create a better working atmosphere, or [in] appreciation for a speedy and favorable audit"); United States v. Biaggi, 853 F.2d 89, 101 (2d Cir. 1988) (affirming § 201 unlawful gratuity convictions of former Congressman; citing and quoting United States v. Evans, 572 F.2d 455 (5th Cir. 1978) with approval).

3. Some decisions appear to go even further, upholding § 201(c)(1)(A) convictions upon proof that the giver of the gratuity was motivated simply by the federal official’s status or position. For example, soon after its decision in United States v. Niederberger, discussed above, in considering the prosecution and conviction of the company official (Standefer) who gave the golf trips to the IRS agent (Niederberger), the Third Circuit en banc held that "[a]ll that was required in order to convict Standefer was that the jury conclude that the gifts were given by him for or because of Niederberger’s official position, and not solely for reasons of friendship or social purposes." United States v. Standefer, 610 F.2d 1076, 1080 (3d Cir. 1979)(en banc). That decision, which this Court affirmed, Standefer v. United States, 447 U.S. 10 (1980), is the subject of the second section of this petition.

More recently, the Fifth Circuit arguably extended its holding in Evans to permit § 201(c)(1)(A) to reach the giving of any gratuity motivated solely by the official’s status or position, without requiring proof that the official had been, is, will or could ever be in a position to take official action that might benefit the giver. In United States v. Bustamante, 45 F.3d 933 (5th Cir. 1995), the Fifth Circuit affirmed the § 201 unlawful gratuity convictions of a former Congressman who accepted loan guarantees from a private person in connection with his participation in an effort to seek a television station license from the Federal Communications Commission. There was no evidence that the defendant in any way actually engaged in any conduct designed to influence the awarding of the license, nor that he had any authority to do so.

The Fifth Circuit upheld the convictions, relying on Evans. The court reiterated that, in order to establish an unlawful gratuity offense under § 201, "it is sufficient for the government to show that the defendant was given the gratuity simply because he held public office." 45 F.3d at 940. Furthermore, the court declared that "the jury need not find that the official accepted the gratuity with the intent to be influenced. The jury must only conclude that the evidence establishes beyond a reasonable doubt that the official accepted unauthorized compensation." Id. The defendant in Bustamante filed a petition for a writ of certiorari, which this Court denied. Bustamante v. United States, No. 95-60, 516 U.S. 973 (1995).

4. Other Circuits, including the First and Fourth Circuits, which the D.C. Circuit cited as supporting its interpretation of the statute, either have expressly left the issue undecided, or appear not to have considered it directly. For example, in United States v. Previtte, 648 F.2d 73 (1st Cir. 1981), the First Circuit addressed and rejected a challenge to an unlawful gratuity conviction under § 201, finding that there was no plain error in the jury instructions (the defendant did not object at trial). In response to the defendant’s argument that the government had failed to prove that the gratuity was given for or because of an official act, the First Circuit observed:

The government points out that it is not required to prove that any such official act actually occurred, and argues in addition that in a gratuity prosecution, unlike a bribery prosecution, it need prove no causal relation to any "specific, identifiable act performed or to be performed by the official." We need not decide whether this last point is correct or not, because of our conclusion that the instruction given in this case does not constitute plain error under either standard.

648 F.2d at 82 n.8. The First Circuit more recently noted the issue again in a case involving a Massachusetts unlawful gratuity statute worded similarly to § 201, but concluded that "[t]his is not the proper case for us to decide the federal issue." United States v. Sawyer, 85 F.3d 713, 738 (1st Cir. 1996). See also United States v. Muldoon, 931 F.2d 282, 287 (4th Cir. 1991) (no occasion to directly address the issue because the defendant had been convicted of bribery as well as unlawful gratuity offense and conceded that evidence was sufficient to prove gratuity offense).

Some Circuits have made general, but relatively unilluminating, statements about the scope of § 201(c)(1)(A) in cases where the question presented here was not directly under consideration. For example, in United States v. Patel, 32 F.3d 340 (8th Cir. 1994), the Eighth Circuit affirmed the unlawful gratuity conviction of a defendant who offered $50,000 to federal officials during his efforts to buy a hotel from the Resolution Trust Corporation. (Defendant’s plans went awry when the official receiving the offer reported it to the FBI.). The district court instructed the jury that, in order to find the defendant guilty under § 201(c)(1)(A), the following three things had to be proven: (1) that the defendant offered something of value to the federal official; (2) that at the time the donee was a federal official; and (3) that the defendant made the offer because the official performed or was going to perform an official act for him. 32 F.3d at 344-45. Reviewing the instructions only for plain error — because the defendant did not properly object at trial — the Eighth Circuit concluded that they closely paralleled the statute’s language and fell "well within the district court’s discretion to choose the language that will formulate the charge." Id. at 345. See also United States v. Johnson, 621 F.2d 1073, 1076 (10th Cir. 1980) (it is the "element of quid pro quo that distinguishes the heightened criminal intent requisite under the bribery sections of the statute from the simple mens rea required for violation of the gratuity sections").

5. Ultimately, there is no dispute that the D.C. Circuit, probably the most important circuit for the enforcement of the unlawful gratuity prohibition, has interpreted the statute differently and more leniently than virtually every other circuit. Nor is there any dispute that Sun-Diamond’s conviction under § 201(c)(1)(A) in this case would be sustained in at least five, if not all, of the other circuits. At a minimum, the jury instructions in this case required, the Government in this case proved, and the jury in this case found, that Sun-Diamond (1) provided gratuities to Secretary Espy while matters of interest to Sun-Diamond were pending before the Secretary, and (2) did so because of Espy’s position and authority as the Secretary of Agriculture. By virtue of the circuit split alone, this case merits plenary review.

B. The D.C. Circuit’s Decision Seriously Undermines The Enforcement Of An Important Federal Criminal Statute Designed To Promote Government Integrity

1. At issue ultimately in this case is whether a large agricultural cooperative, regulated by the federal government, may lavish gifts upon the Secretary of Agriculture and yet escape prosecution under the unlawful gratuities statute. The D.C. Circuit’s decision permits such conduct unless the Government is able to prove the virtual equivalent of a bribe. A construction of the statute that eliminates the distinction between bribes and unlawful gratuities is contrary to the significantly different language of the two statutes,

Congress’ clear intent to create two separate offenses,

and the longstanding judicial interpretation of § 201 as creating two separate offenses.

Moreover, the D.C. Circuit’s interpretation presents a serious obstacle to the federal prosecution of official corruption and the restoration of public confidence in governmental integrity.

Effectively, the D.C. Circuit held that, unless the United States proves that a defendant gave gratuities to a government official either to reward that official for specific past official acts, or with the intent to increase the likelihood of future acts, there can be no conviction under § 201(c)(1)(A), because there would be no proof that the defendant acted "for or because of any official act performed or to be performed." App. 7. The Circuit rejected the interpretation of the other circuits that a violation of the statute is established by proof that the gratuity was given to an official who was in a position to take official actions that could benefit the giver.

2. The D.C. Circuit’s decision in this case has potentially disastrous practical consequences. In many instances, it may make an unlawful gratuity under § 201(c)(1)(A) virtually indistinguishable from a bribe, a considerably more serious offense that is already covered by a separate statutory provision with far stiffer penalties (up to 15 years imprisonment for bribery, compared to a maximum of 2 years for unlawful gratuities). The House Report that accompanied the original § 201 provisions in 1961 clearly indicates that Congress contemplated the offense of giving or receiving an unlawful gratuity to be something less than a bribe. In describing the unlawful gratuity offense, the Report declares that "[t]he conduct which is forbidden has the appearance of evil and the capacity of serving as a cover for evil." H.R. Rep. No. 748, at 19 (July 20, 1961) (emphasis added).

Under the D.C. Circuit’s decision, however, when a gratuity is given in anticipation of future official action, an unlawful gratuity conviction will be sustained only if the Government proves that the defendant acted with the intent to increase the likelihood of an official act. As a practical matter, it is difficult to see how the D.C. Circuit’s view of an unlawful gratuity is really any different than proof that the giver had the intent to influence an official act, which is an element of bribery. Because no other circuit requires proof of this level of criminal intent, the D.C. Circuit’s decision has the undesirable result that the most restricted and limited enforcement of the unlawful gratuity statute in this country will occur in the District of Columbia, our nation’s capital.

The end result is that it may be easier for regulated entities to bestow largesse on Cabinet Secretaries without fear of criminal prosecution than it would be to provide small gifts to minor officials far down a Department’s hierarchy who are located in a different circuit.

Another irony is that Cabinet Secretaries, who deal with issues of national scope and regularly travel across the country in performing their official duties, as well as those regulated entities that might provide favors to such officials, may be subject to different standards for gratuities, depending on where a gratuity is given or received. The rules governing the conduct of Cabinet Secretaries and other federal officials should be uniform, and not an accident of venue.

II. The D.C. Circuit’s Decision Is Arguably Inconsistent With A Prior Decision Of This Court

1. In Standefer v. United States, 447 U.S. 10 (1980), this Court arguably endorsed a broader interpretation of § 201 than the D.C. Circuit adopted in this case.

Among other charges, Standefer was convicted of four counts of violating § 201’s unlawful gratuity prohibition by providing free golf trips to an IRS agent who was auditing Standefer’s company. Standefer’s defenses included that the gifts in fact had no influence on the outcome of the audits and that he gave the trips out of friendship, with no intent to influence or reward any official acts of the IRS agent. Both initially, and in response to a question from the jury regarding criminal intent under § 201, the District Court instructed the jury that a conviction could be sustained if it found that Standefer gave the trips because of the IRS agent’s official position, and not simply out of friendship.

On appeal, Standefer challenged the jury instructions on several grounds, including some similar to the position the D.C. Circuit adopted in Sun-Diamond, i.e., that the instructions permitted a conviction without proof that Standefer gave the gratuities as a reward for or to influence official acts. The Third Circuit, sitting en banc, rejected Standefer’s argument, declaring that "[a]ll that was required in order to convict Standefer was that the jury conclude that the gifts were given by him for or because of [the IRS agent’s] official position, and not solely for reasons of friendship or social purposes." United States v. Standefer, 610 F.2d 1076, 1080 (3d Cir. 1979) (en banc).

2. In this Court, Standefer petitioned for review of several issues, including that the Third Circuit’s decision incorrectly "allow[ed] the charge of the court below to eliminate from the consideration of the jury the correctness of returns audited by the Internal Revenue Service agent in determining the issue of intent where the jury after deliberation asked the court whether intent was to be considered in its deliberations." Petition for a Writ of Certiorari in No. 79-383, Standefer v. United States, at 3-4

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