ORAL ARGUMENT SCHEDULED FOR DECEMBER 11, 1997

   CORRECTED BRIEF FOR APPELLEE

UNITED STATES COURT OF APPEALS

   FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 97-3072

   United States of America v. Sun-Diamond Growers of California, Inc.

APPEAL FROM THE UNITED STATES DISTRICT COURT

   FOR THE DISTRICT OF COLUMBIA

   Date: May 7, 1998

Authorities upon which we principally rely are marked with asterisks.

I. STATUTES AND REGULATIONS

    Except for the pertinent parts of the gratuity statute, 18 U.S.C. § 201(a)(3) and 18 U.S.C. § 201(c)(1)(A), and the relevant sections of the U.S. Sentencing Guidelines, all pertinent statutes, etc. are contained in Appellant's Brief.

II. STANDARD OF REVIEW

    The Government agrees that a question of law is reviewed de novo.

    On a claim of sufficiency of the evidence, the court must consider the evidence in the light most favorable to the prosecution and affirm if any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. United States v. Long, 905 F.2d 1572, 1576 (D.C. Cir. 1990).

    Review of a departure from the sentencing guidelines is "narrow in scope and entails two distinct inquiries." United States v. Dyce, 78 F.3d 610, 614 (D.C. Cir. 1996) (citing Williams v. United States, 503 U.S. 193, 202 (1992)). This Circuit applies a three step process to this review:

First, we determine whether the district court's reasons for the departure are, as a matter of law, "'of a kind or degree that may be appropriately relied upon to justify departure.'" Second, we determine whether the district court's factual findings are clearly erroneous. Finally, we review the extent of a departure (step two of the Williams analysis) under a standard of reasonableness.

Id. (internal citations omitted).

III. SUMMARY OF ARGUMENT

    The Count I (gratuities) conviction must be affirmed because the trial court properly denied the motion to dismiss and correctly instructed the jury on the law. The trial court required the Government to prove that the gratuities were given for or because of official acts, and it did so. The law does not require the Government to show a nexus between the gratuity and a specific official act. Nor is the statute void for vagueness, as it more than adequately sets forth what behavior is forbidden.

    The Counts III through IX convictions, for wire fraud and campaign contribution violations, must be affirmed because they were supported by more than sufficient evidence. The evidence presented at trial showed:

•    that it was readily foreseeable to Sun-Diamond's vice-president that his actions on behalf of the company would deprive RLSM and its parent of both money and the honest services of its employee;
•    that Sun-Diamond's vice-president acted on behalf of the company when he broke the law to curry favor with Secretary Espy, and indeed showed that cultivating this relationship was a major part of his job responsibilities; and
•    that the wire communication furthered the fraud was one step in a series of actions that resulted in the hatching of the illegal scheme later the same day.

    The sentence must be affirmed because the court properly took into account Secretary Espy's position, a factor not considered in the Sentencing Guidelines. The reporting requirements imposed on Sun-Diamond's members were proper in light of the cooperative structure of Sun-Diamond and its members.

IV. STATEMENT OF FACTS

    The facts that Sun-Diamond omits or alters demonstrate its culpability and the correctness of the jury's verdict and the district court's sentence. Stripped of the subterfuge, this case is about Sun-Diamond's single minded , illegal quest to gain and maintain its access to Secretary of Agriculture Mike Espy by whatever means necessary.

    Sun-Diamond was convicted for giving illegal gratuities to Secretary Espy. (Count I). The gratuities addressed at trial included a set of luggage; a $2,296 weekend in New York City;⁽¹⁾ meals at restaurants; and $3,100 in cash so that the Secretary's girlfriend could travel with him to Greece.⁽²⁾

    Sun-Diamond also stands convicted of wire fraud (Count III) and making illegal campaign contributions to Secretary Espy's brother, Henry Espy. (Counts IV-IX). These counts arose out of a plea from Secretary Espy to Sun-Diamond's vice president Richard Douglas to pay off the campaign debt from his brother's failed congressional campaign. As with the other gratuities, the campaign contributions were designed to keep Secretary Espy happy.

    Sun-Diamond Growers of California, Inc. is one of the largest agriculture cooperatives in this country. Self-described as a "mega-cooperative," it has 2,500 employees. In 1994, for example, the combined sales and revenues were $670 million. Tab 3, RT 12:7-10.

    Douglas was Sun-Diamond's senior vice president of corporate affairs. Douglas handled all of Sun-Diamond's interests in Washington, D.C. and directed the Washington lobbying staff composed of James Lake and members of his firm, Robinson Lake Sawyer and Miller (RLSM) for which they were paid a $240,000 a year retainer. Douglas maintained an office at RLSM. See Joint App. Tab 3, RT at 46; 50-51, 55, 56, 60. RLSM was a wholly owned subsidiary of Bozell Worldwide.

    Douglas not only acted on behalf of Sun-Diamond, but on behalf of the individual member cooperatives as well. Id. at 47. A key component of Richard Douglas' position "was to maintain relations with key decision-makers at the Department of Agriculture and other agencies in Washington." Id. at 48. Douglas would spend an average of two or three weeks per month in Washington, reporting back to Sun-Diamond's president, Larry Busboom, at least once a week. Id. at 51.

The Sun-Diamond Philosophy of Government by Gratuity

    Sun-Diamond describes in detail the friendship between Douglas and Michael Espy. However, this case is not about friendship. It is about a company giving illegal gratuities to the Secretary. Douglas summarized this in his own words:

"We have no permanent friends or permanent enemies, only a permanent interest in Sun-Diamond Growers of California."

Revised Sentencing Recommendations of the United States, Ex. 6.

    Sun-Diamond's 1988 annual report illustrates the corporate mind-set that capitalized on the Espy-Douglas relationship in 1993 and 1994:

Effective political action, in many ways, is similar to farming. . . . Successful political action today requires more than simply communicating our views to politicians or trying to get specific legislation passed. . . . Like farming, it is an ongoing process whereby new ideas are planted, friendships developed and past relationships cultivated.⁽³⁾

Joint App. Tab 27.

    With President Clinton's 1992 election, Douglas, who had been cultivating his relationships with Republican administrations, became concerned that in a new Democratic administration he would lose his network and therefore his lobbying power on the behalf of Sun-Diamond. See Joint App. Tab 3, RT 181 (Busboom testimony). For Richard Douglas, whose job it was to be the "eyes and ears" of Sun-Diamond in Washington, Joint App. Tab 3, RT 164, the change in administrations became all the more significant with the announcement that his "friend" Mike Espy was to be named the new Secretary of Agriculture. As he told Busboom, "Now my relationships and information network will remain intact." Id.

    Larry Busboom and Douglas saw the relationship as a starting point for Sun-Diamond efforts to pursue their agenda with Espy. If that meant picking up expenses for Espy, so be it:

[A]s part of Richard Douglas' ongoing relationship with Mr. Espy, to maintain his information network, to make sure he was aware of any proposed regulations, legislation coming down the pipeline, . . . [t]o meet with Secretary Espy, when they met for dinner or lunch, as a courtesy to pick up the tab. . . [T]he entree to Secretary Espy was used to the benefit of our business.

Joint App. Tab 3, RT 163-64 (emphasis added). Sun-Diamond and Larry Busboom
knew this was wrong but they did it anyway:

    In February 1994, Lake was in Dallas, Texas. Lake checked with his office and learned that Douglas had left a telephone message for him. Later that day, Douglas informed Lake that Secretary Espy had contacted him regarding the retirement of his brother Henry's outstanding campaign debt.⁽⁵⁾ Douglas explained to Lake that he needed to raise funds quickly and Lake immediately offered to write a check for $1,000. Douglas needed more money; he explained to Lake that he needed $5,000 and asked for help from Lake. Douglas then told Lake that the money was needed quickly and he could not wait for Lake to make other arrangements. Lake agreed to help upon his return to Washington.

    Douglas suggested that Lake ask people in his firm to write checks for $1,000 each to the Henry Espy campaign for which Lake would reimburse them personally. Douglas even suggested who within Lake's firm would be likely targets of Lake's persuasion. See id. at 416. Douglas told Lake everyone would be reimbursed from Sun-Diamond. Id. at 415. Lake knew Douglas's proposal was illegal but agreed to do it. Id. Lake went to each of the people identified by Douglas and procured $4,000 in contributions for the Henry Espy campaign. He then gave the contributions to Douglas, id. at 422, who deposited them into a Henry Espy campaign account he had opened.

    Douglas then informed Lake's staff that Sun-Diamond was to be billed for a $5,000 (not the $4,000 in funds raised by Lake) table at the "Joint Center Dinner."⁽⁶⁾ Id. Since Lake had billed for this in the past, Douglas explained that Sun-Diamond would see this as a routine expense handled in the normal course of the business relationship. Id. at 423. Lake instructed his staff to prepare a routine billable expense report that eventually would become part of Sun-Diamond's billable expenses. Id.

    In the routine course of business, the false invoice was transmitted to Lake's parent company, Bozell Worldwide. Id. at 426. Bozell then issued a reimbursement check to Lake in the amount of $5,000. The fictitious expense was then included in Bozell's bill to Sun-Diamond. See Government Ex. 355. Richard Douglas, as part of his official Sun-Diamond duties, approved payment of that invoice.

    Lake cashed the reimbursement check from Bozell, including the extra $1,000 for which Lake had overbilled Bozell. Id. at 427. Lake admitted at trial that he was not entitled to the money and no one at either Robinson Lake or Bozell knew of the scheme concocted by Douglas because they had hidden the facts from Bozell and Robinson Lake. Id. at 430.

VI. THE GRATUITY STATUTE DOES NOT REQUIRE A NEXUS BETWEEN THE GRATUITY AND A SPECIFIC OFFICIAL ACT⁽⁷⁾

    Both Sun-Diamond and its amicus the Lobbyists demand that this court rewrite the gratuity statute, 18 U.S.C. § 201(c)(1)(A), to require the government to demonstrate a nexus between the gratuity and a specific official act. ("[T]he government must prove a nexus between the thing of value and a specific, official act." Sun-Diamond Br. at 1.) This result would run contrary to the decisions of every court that has considered the issue (including this one) and would defeat the Congressional purpose behind the statute.

    Sun-Diamond and the Lobbyists attack a straw man version of the district court's rulings regarding § 201(c)(1)(A). Specifically, both imply that the district court allowed the case to proceed, and that the jury found liability, solely on the naked fact that the recipient of the gratuities was the Secretary of Agriculture, without regard to official acts. ("The District Court's analysis of this Court's precedent is flawed because this Court consistently has adhered to the statutory language requiring that the thing of value be provided for or because of an official act." Sun-Diamond Br. at 16. "[T]he District Court held that § 201(c) does not require that there be any connection between the gift and an official act." Lobbyists' Br. at 3-4 (emphasis in original).) But the Government did not contend, and the trial court did not hold, that § 201(c)(1)(A) forbids any gratuity given to a government official, without regard to official acts affecting the giver.

    Sun-Diamond and the Lobbyists quote selectively from the jury instructions to convey the false impression that the district court allowed the jurors to find guilt simply on the basis that Sun-Diamond gave gratuities to the Secretary of Agriculture. See, in particular, Sun Diamond Br. at 6-7, Lobbyists' Br. at 4, where they quote small segments of the jury instructions to argue that government did not need to show certain facts in order to establish guilt. However, this approach carefully ignores the portions of the instructions setting forth what the Government did need to show.

    Sun-Diamond and the Lobbyists thereby look at only half the story, and the verdict cannot be reversed on that basis. It is axiomatic that the charge to the jury must be considered as a whole. United States v. Lemire, 720 F.2d 1327, 1340 (D.C. Cir. 1983); Carter v. United States, 427 F.2d 619, 625 (D.C. Cir. 1970). Jury instructions are not erroneous if, when viewed as a whole, they fairly present the applicable legal principles and standards. Joy v. Bell Helicopter Textron, Inc., 999 F.2d 549, 556 (D.C. Cir. 1993).

    The portions of the instructions that Sun-Diamond and the Lobbyists neglect to quote show quite clearly that the court carefully instructed the jury that it was not sufficient for the Government to prove that Sun-Diamond gave gratuities to the Secretary merely because of his office. Rather, the Government was also required to show that Sun-Diamond was aware that the Secretary of Agriculture was in a position to take specific actions in his official capacity. Thus, the jury was instructed:

    In order to sustain its burden of proof for the crime of giving, offering or promising anything of value to the Secretary of Agriculture as charged in Counts One and Two of the indictment, the government must prove each of the following three elements beyond a reasonable doubt:

    . . . . . . . . . .

    Third, the defendant Sun-Diamond Growers of California acting through Richard Douglas, its senior vice president for corporate affairs, did so for or because of an official act performed or be performed by Michael Espy. I will define the term, official act separately.

    . . . . . . . . . . .

    The term "official act" means 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 on such official's place of trust or profit.

    . . . . . . . . . . .

    The government need not prove that the alleged gratuity was linked to a specific or identifiable official act or any act at all. In other words, the government need not prove that the gratuity was given as a quid pro quo, that is, in exchange for any one specific action performed or to be performed by the Secretary. For example, the government need not prove that when Sun-Diamond gave Secretary Espy a thing of value on a particular date, that Secretary Espy took any particular official action or changed any particular official action with respect to matters pending before the USDA in which the defendant had an interest because of Espy's receipt of the thing of value.

    . . . . . . . . . . .

    With respect to official acts, the government has to prove that Sun-Diamond Growers of California gave knowingly and willingly Secretary Espy things of value while it had issues before the United States Department of Agriculture.

   Joint App. Tab 3, RT :21-25, 861:10-14, 862:5-9, 871:16-872:2, 872:7-10.

    These instructions refute Sun-Diamond and the Lobbyists' argument that the district court somehow criminalized conduct solely "for or because of the official's position." Appellant's Br. at 23, n.4. The gratuities were illegal, not just because Espy was the Secretary of Agriculture, but because they were given for or because of official acts performed or to be performed by the Secretary. The Government was properly allowed to prove that the gratuities were given for or because of official acts by showing that Sun-Diamond gave them while it had important issues for decision before the Secretary.⁽⁸⁾

    The same flaw permeates Sun-Diamond and the Lobbyists' attack on the district court's denial of the motion to dismiss.⁽⁹⁾ Once again, they emphasize what the district court said the Government did not need to prove , while ignoring what it said the Government did need to show. While it is true that the district court, in the Introduction to its decision, stated that "[i]t is sufficient for the indictment to allege that Sun-Diamond provided things of value to Secretary Espy because of his position," Joint App. Tab 2 (941 F. Supp. at 1265), the court went on in the body of its decision to explain that this meant that the Government needed to show both that the gratuity was provided to the official and that the official's position was such that he could perform official acts to the benefit of the giver. Specifically, the district court ruled:

[I]t is sufficient for the indictment to allege that "the provider of the gratuities has matters within the purview of the official receiving the gratuity, and that the gratuity be provided simply because of the official's position, in appreciation of the relationship, or in anticipation of its continuation."

Joint App. Tab 2 (941 F. Supp. at 1266) (internal quotation marks, emphasis, ellipses, and citation omitted). As the district court recognized, the Indictment clearly alleged that there were "two matters pending before the Department of Agriculture in which Sun-Diamond had a significant economic stake," Joint App. Tab 2 (941 F. Supp. at 1266), thus satisfying the statutory requirement that the gratuities be given for or because of official acts.

    Consideration of what the district court actually did hold also exposes the fallacy behind the seemingly perverse hypotheticals given at page 5 of the Lobbyists' brief, such as elementary school students giving the Secretary of Education a school jacket, or a senior citizen who sends brownies to her Senator. What distinguishes these frivolous examples from the present case is that Sun-Diamond knew that it had major, big-dollar issues up for decision by the Secretary. Thus, when it gave gratuities to the Secretary -- not nominal or symbolic gifts, but items of real value -- it was giving gratuities not just in recognition of his position, but "for or because of an official act performed or to be performed" by the Secretary.

    The jury instructions and the ruling on the motion to dismiss fully accord with this court's decisions in United States v. Campbell, 684 F.2d 141 (D.C. Cir. 1982) and United States v. Brewster, 506 F.2d 62 (D.C. Cir. 1974). Neither required the Government to prove a nexus between the gratuity given and a specific official act, although Brewster did establish a heightened threshold of inquiry for campaign contributions to an elected official. ("There must be more specific knowledge of a definite official act for which the contributor intends to compensate before an official's action crosses the line between guilt and innocence." 506 F.2d at 81.)

    Indeed, Campbell shows quite clearly that the statute does not require a nexus between the gratuity and a specific official act. The public official in Campbell was a judge who gave a moving company lenient treatment in the disposition of citations and who received assistance in moving his household furnishings from the same company. 684 F.2d at 144. The jury instructions there, like the jury instructions here, required the jury to find that the gratuity be given "knowingly and willingly," and "for or because of an official act." Id. at 150; Joint App. Tab 3, RT 861:4-14. Following conviction, Campbell argued (as Sun-Diamond argues here) that "the trial court erred in not requiring the jury to find that the gratuity was conferred with 'specific knowledge' of 'a definite official action for which compensation was intended.'" Id. at 149. This court, however, rejected this argument, holding that under the statute it was sufficient for the jury to find that the giver of the gratuity was merely seeking or rewarding "lenient treatment" from the judge. Id. at 150.

    Despite this clear holding, Sun-Diamond insists that Campbell requires the Government to establish a nexus between the gratuity and a specific official act. Sun-Diamond Br. at 20. It makes this argument through a circuitous (and totally inaccurate) reading of two footnotes to the decision. Specifically, footnote 13 states that cash payments to defendant allegedly began before he was a judge, at a time when he was an Assistant Corporation Counsel "sympathetic to the trucking industry." Footnote 14 observes that the indictment alleges only overt acts by the defendant while he was a judge. It goes on to state -- and this is what Sun-Diamond sees as the telling point -- that "[i]t is not . . . clear which 'acts' of [defendant] could have been the basis for . . . gratuities prior to 1973 [i.e., while he was Assistant Corporation Counsel], because 'sympathy to trucking interests' does not constitute an official act." Id. at 149, n.14.

    However, this footnote does not undercut the square holding of the Campbell decision. It merely states the obvious point that (at least as far as the record showed) an Assistant Corporation Counsel, unlike a judge, was not in a position to perform official acts to benefit a trucking company. Thus, while the cash payments to Campbell the Assistant Corporation Counsel might have made him sympathetic to the trucking industry, there was no showing of official acts he might take for which the gratuities were given -- there was, in other words, no indication that the moving company had issues before the Assistant Corporation Counsel the way it did before the judge. In contrast, Campbell as a judge was able to give a trucking company lenient treatment, so that a gratuity could be found to be "for or because of an official act" even though no nexus between the gratuity and a specific official act could be shown.

    As the Campbell decision specifically notes, this holding is entirely consistent with the Brewster decision. Brewster concerned campaign contributions to a Senator, and, as Sun-Diamond is quick to point out, this court there held that, in those circumstances, "[t]here must be more specific knowledge of a definite official act for which the contributor intends to compensate before an official's action crosses the line between guilt and innocence." 506 F.2d at 62. This means, Sun-Diamond contends, that any prosecution under § 201(c)(1)(A) requires the Government to show a nexus between the gratuity and a specific official act.

    The defendant in Campbell made precisely the same argument, and this court rejected it:

    Based on [Brewster], appellants here urge that the trial court erred in not requiring the jury to find that the gratuity was conferred with "specific knowledge" of "a definite official action for which compensation was intended."

    Appellants' argument reveals a fundamental misconception of the gratuity statute and an overreading of Brewster. . . . The hard question in Brewster involved distinguishing illegal gratuities from innocent campaign contributions.

    We must therefore conclude that appellants have taken Brewster entirely out of context in suggesting that it was insufficient for the [giver of the gratuity] to seek or reward "lenient treatment" from Judge Campbell. . . . It was more than sufficient in this case for the trial court to require that the alleged gratuities be given and received "knowingly and willingly," and "for or because of an official act."

   684 F.2d at 150. In the present case, the trial court gave precisely the instructions that the Campbell decision held were "more than sufficient." Joint App. Tab 3, RT 8611-14.⁽¹⁰⁾

    The Campbell and Brewster decisions thus are not only consistent with the district court's rulings, they compel them. And, as these are the only D.C. Circuit cases upon which Sun-Diamond relies, the district court was indisputably correct in following them. But it should also be noted that the district court's rulings are consistent with the other authorities Sun-Diamond examines.

    Sun-Diamond criticizes the district court for citing to United States v. Secord, 726 F. Supp. 845 (D.D.C. 1989) (Sun-Diamond Br. at 21), but the criticism is unjustified. Secord is a discovery decision that does not pretend to analyze the gratuity statute in great depth, but, even so, the district court in the present case grasped the essence of the decision. Secord correctly noted that "the focus of the statute is not on any particular transactions or dealings," 726 F. Supp. at 847 (emphasis added), but also held that what made the gratuities illegal was both the recipient's official position and his ability to refer deals to the giver. Id. The district court in the present case appropriately analyzed Secord to hold that the statute is broken when the gratuity is provided because of the official's position and when the provider of the gratuity has matters within the official's purview. Joint App. Tab 2, 941 F. Supp. at 1266.

    Sun-Diamond admits (at page 21 of its Brief) that the district court's decision is consistent with two Fifth Circuit cases, United States v. Evans, 572 F.2d 455 (5th Cir. 1978) (conviction of government official for accepting gratuity upheld even though he directly administered a loan program different from one in which donors had primary interest), and United States v. Bustamante, 45 F.3d 933, 940-941 (5th Cir. 1994) (conviction of Congressman for accepting gratuity upheld where evidence showed that donors called on him to assist them in his official capacity). Sun-Diamond merely dismisses these decisions as inconsistent with Campbell and Brewster, which clearly they are not, for the reasons discussed above. Indeed, as the district court noted (Tab 2, 941 F. Supp. at 1268), this court quoted Evans with approval in United States v. Baird, 29 F.3d 647, 652 (D.C. Cir. 1994) (holding that 18 U.S.C. § 203(a) does not require specific intent because, as for § 201(c), the gravamen is the acceptance of unauthorized compensation).

    The district court's treatment of the statute is consistent with the view of every circuit that has considered the issue. See, for example, United States v. Niederberger, 580 F.2d 63 (3^rd Cir. 1978):

[W]e find it unnecessary for the Government to allege in an indictment charging a [§ 201(c)] 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 subsection [(c)] 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 activities, 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.

Id. at 68-69. See also, United States v. Alessio 528 F.2d 1079 (9th Cir. 1976) (offense found where son of prisoner gave gratuities to prison administrator, but particular beneficial acts toward prisoner not specified); United States v. Barash, 412 F.2d 26, 29 (2nd Cir. 1969) (offense can be found for gifts to IRS agents where intent was to create a better working environment or show appreciation for a speedy audit.)

    Sun-Diamond is quick to criticize the decisions that disagree with its position, but cannot identify any that support it. The best authority it can find for its position is United States v. Sawyer, 85 F.3d 713, 735-736 (1st Cir. 1996), but Sawyer is entirely consistent with the proceedings below. Sawyer interprets a state statute with the same language as § 201(c), and holds that a gratuity is not illegal if it is motivated solely by an official's position. But -- contrary to Sun-Diamond's position -- "[t]his observation . . . does not lead to the conclusion that the gratuity must be shown to be motivated by a specifically identified official act." 85 F.3d at 735. Rather, like the district court in the present case, the First Circuit in Sawyer recognized that it is sufficient for the prosecution to show that the donor had matters within the purview of the recipient government official. The First Circuit explained this distinction as follows:

For example, if the parent of a student gives the school principal a gift of substantial value at the student's graduation, that alone would not constitute a gratuity offense. . . . If, however, the gift was given under circumstances in which the principal had the discretion to decide whether or not the student would graduate, a gratuity offense might be found.

Id. at n.22.

    Here, similarly, the district court did not allow the Government to seek a conviction solely on the basis that Sun-Diamond gave a gratuity to the Secretary, but further required it to show "the provider of the gratuities ha[d] matters within the purview of the official receiving the gratuities." Joint App. Tab 2 (941 F. Supp. at 1266). This interpretation of the statute is consistent with every decision Sun-Diamond and the Lobbyists cite.

    Sun-Diamond's narrow reading of the statute, which would criminalize gratuities given for specific official acts but not for general official acts, runs counter to the plain meaning of the words Congress chose in enacting the statute: The statute speaks not of definite, identifiable official acts, but of "any official act performed or to be performed," where an official act is defined as any decision or action . . . which may at any time be pending, or which may by law be brought before any public official." 18 U.S.C. § 201(a)(3). Under the statute a gratuity would be, and should be, no less illegal simply because the official acts that might affect the donor cannot be identified with specificity.

    Sun-Diamond's reading of the statute also defies the Congressional purpose behind the statute. This court noted that purpose in United States v. Anderson, 509 F.2d 312 (the companion case to Brewster):

Congress has decided that bribery and kindred practices imperil the very nature of democratic government. It has legislated a vigorous attack on those practices.

   509 F.2d at 333 (holding that separate bribes merit separate sentences).⁽¹¹⁾ The court should not now retreat from that characterization to indulge Sun-Diamond and the Lobbyists' position that a gratuity given for official acts in general is somehow less offensive to public integrity than a gratuity given for a specific official act.

V. THE GRATUITY STATUTE IS NOT VOID FOR VAGUENESS

    The foregoing discussion of what the district court required the Government to prove under the gratuity statute also refutes completely Sun-Diamond's "void for vagueness" argument. Although the nature of the crime justifies a standard close to strict liability, Campaign Contributions and Federal Bribery Law, 92 Harv. L. Rev. 451, 455 the district court did not convert § 201(c) into a "strict liability" statute. To the contrary, it required the Government to prove not only that Sun-Diamond gave the gifts to the Secretary of Agriculture, but also that it gave these gifts "for or because of any official act performed or to be performed" by the Secretary. This formulation, while not requiring specific intent, does require criminal intent. United States v. Barash, 412 F.2d at 29. It therefore is not constitutionally vague. United States v. Brewster, 506 F.2d at 76.

    It is not surprising that, as Sun-Diamond portrays it, two old friends "should eat and attend sporting events together." Sun-Diamond Br. at 24. What is surprising is that one of the two "old friends," the one whose employer had much to gain from favorable action by the other, a high government official, would subsidize those meals and sporting events for the government official, claim those subsidies from the employer as a business expense, and win the adulation of the employer for the deft way he had curried the official's favor to the employer's advantage.

    A "man of common intelligence" can scarcely claim that he would not know that such behavior is prohibited by a statute that forbids the giving of "anything of value" to a public official "for or because of any official act performed or to be performed . . . ." (Indeed, Sun-Diamond's president testified at trial that he knew that it was illegal to pay for a public official's meals because of his official position. Joint App. Tab 3, RT 224:3-5.) Consequently, there is no constitutional impediment to applying the statute, even though there is no specific identifiable governmental act for which the gratuity was given.

    The language of the statute clearly and adequately expresses its purposes. Accordingly, the statute as applied here is not constitutionally vague.

United States v. Alessio 528 F.2d 1083 (citation omitted).

VII. THE RECORD CONTAINS SUBSTANTIAL EVIDENCE THAT
DOUGLAS INTENDED TO DEFRAUD RLSM AND BOZELL

    The wire fraud statute, 18 U.S.C. § 1343, carries an intent requirement. "The wire fraud statute makes criminal only breaches of duty that are accompanied by a misrepresentation or non-disclosure that is intended or is contemplated to deprive the person to whom the duty is owed of some legally significant benefit." United States v. Lemire, 720 F.2d at 1335. This is precisely what the Government's evidence showed at trial -- that Sun-Diamond's scheme was intended to, and did, defraud Bozell and RLSM, the employers of James Lake.⁽¹²⁾

    Sun-Diamond's first argument (which it did not press in the court below) is that since the Government considered (although it did not pursue) prosecution of Bozell and RLSM, Sun-Diamond could not have intended to defraud Bozell and RLSM. The convoluted logic behind this argument is that if the government considered prosecuting them, Bozell and RLSM must have been wrongdoers themselves, and if they were wrongdoers themselves, it would have been impossible for Sun-Diamond to intend to defraud them. Sun-Diamond therefore accuses the Government of "prosecutorial position-switching." Sun-Diamond Br. at 29.

    Sun-Diamond's logic fails at every step. The Government never did prosecute RLSM or Bozell. And, even if it had done so, it is not necessarily inconsistent to charge a single corporate entity with being both a perpetrator and a victim in a single criminal enterprise. See, e.g., Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union 639, 883 F.2d 132, 140 (D.C. Cir. 1989), modified in part on other grounds on rehearing, 913 F.2d 948 (D.C. Cir. 1990) (en banc), noting that in a RICO prosecution the same institution can function as both the perpetrator and the victim.

    More to the point, there simply is not any prosecutorial "inconsistency" on this record. The facts are, and have always been, that Douglas of Sun-Diamond and Lake of RLSM/Bozell worked out a scheme to funnel illegal campaign contributions to Henry Espy, through contributions made by Lake's family and friends; Lake was reimbursed by his employer, which was reimbursed by Sun-Diamond, and all of which was suggested by Richard Douglas. This case is nothing like Sun-Diamond's authority United States v. Kattar, 840 F.2d 118 (1st Cir. 1988). In Kattar, the government presented two diametrically opposed versions of the facts in two different trials, and the district court would not allow the defendant to put the factual contradictions into evidence. Id. at 126-27. Even so, the First Circuit refused to reverse. Here there was only one trial, there was no factual contradiction between Sun-Diamond's trial and any other proceeding, and the jury heard the very evidence that it now claims shows that the Government took an inconsistent position. Joint App. Tab 3, RT 352:8-353:2. See, Sun-Diamond Br. at 27-28. Apparently, the jury did not consider this a reason not to convict.

    Sun-Diamond further argues that there is no evidence on the record to show that it intended to deprive RLSM and Bozell of the honest services of its employee Lake. Sun-Diamond Br. at 32-34. The thrust of the argument is that Lake's perfidy would have harmed his employers only if discovered, and since no criminal wants his crime to be discovered, Sun-Diamond could not have intended the harm. This argument is easily answered by the basic principle stated in the Lemire decision:

So long as the jury finds the non-disclosure furthers a scheme to abuse the trust of an employer in a manner that makes an identifiable harm to him, apart from the breach itself, reasonably foreseeable, it may convict the employee [or, in the present case, his confederate] of wire fraud. The crucial determination must be whether evidence can support inference that defendant might reasonably have contemplated some concrete business harm to his employer [or, in the present case, his confederate's employer] stemming from his failure to disclose the conflict along with any other information relevant to the transaction.

720 F.2d at 1337 (emphasis added).

    There was more than ample evidence that Sun-Diamond's Douglas might reasonably have contemplated the reasonably foreseeable harm to RLSM and Bozell. As James Lake testified:

Joint App. Tab 3, RT 431:24-433:33.

    While Mr. Douglas might not have wanted to be caught, the jury certainly had more than ample grounds for deciding that he had created a reasonably foreseeable risk of harm to RLSM and Bozell from his actions.

    Sun-Diamond's other argument is that the jury saw no evidence of Sun-Diamond's intent to defraud Bozell of money or property. Sun-Diamond Br. at 29-32. This argument proves nothing, because the Indictment charged Sun-Diamond with defrauding both Bozell and its subsidiary RLSM. Tab A, 22, ¶ 21. This means that any fraud on RLSM worked an injury on Bozell, and that the conviction must stand even if the jury could not have found that Bozell was defrauded.

    Furthermore, it is not necessary that every participant in a scheme to defraud be aware of every aspect of the scheme or of every entity that could be harmed by it. See United States v. Leach, 613 F.2d 1295, 1300-01 (5th Cir. 1980). Instead, what matters is that the harm resulting from a scheme to defraud must have been reasonably foreseeable to the participants. See United States v. Lindemann, 85 F.3d 1232, 1240-41 (7th Cir. 1996).

    Applying these principles to the proof in this case shows that there was ample evidence to support the verdict. Since the scheme involved the creation of a false charge for RLSM to invoice to Sun-Diamond, it was unquestionably foreseeable that Lake's corporate employer would be the vehicle through which Sun-Diamond reimbursed Lake to its detriment. Mr. Douglas proposed a scheme to Mr. Lake which involved Mr. Lake's employer being reimbursed with a corporate check from Sun-Diamond. Whether that reimbursement was to RLSM or its parent was of little concern to Mr. Douglas, since he intended to defraud whomever was the corporate employer of Mr. Lake. Additionally, it was certainly reasonably foreseeable that the $5,000 would have been advanced by Bozell/RLSM to Lake before the funds were reimbursed by Sun-Diamond because Lake had to create a reimbursable expense invoice to Bozell/RLSM to cover the fictitious expense before RLSM/Bozell sought reimbursement from Sun-Diamond.

    Moreover, it does not in any sense negate the fraud that, three months later, RLSM/Bozell was reimbursed the $5,000, regardless of whether the reimbursement occurred before or after Bozell/RLSM expended the money. The monetary fraud was completed when the parties to it acted to -- and did -- fraudulently extract the $5,000 from Bozell/RLSM. The fact that reimbursement occurred does not cure the fraud any more than the subsequent return of a stolen item negates a theft.

VIII. THE RECORD CONTAINS SUBSTANTIAL EVIDENCE THAT
DOUGLAS ACTED ON BEHALF OF, AND TO THE BENEFIT OF,
SUN-DIAMOND

    Sun-Diamond argues that, since it paid out $5000 as a result of Douglas's scheme, and since no one at the company except Douglas knew why the $5000 was paid, the record lacks evidence sufficient to hold it liable for Douglas' acts. To the contrary, the record is clear that Douglas was a principal officer of the corporation acting on its behalf and for its benefit when he carried out the wire fraud scheme.

    Sun-Diamond's argument is clearly refuted by its own corporate documents and the testimony of Larry Busboom, all of which proved beyond any doubt that it was an important and integral part of Mr. Douglas' duties to maintain his relationship with Secretary Espy. Lake reported to Douglas, and Douglas approved Lake's monthly invoices. Accordingly, the suggestion that Mr. Douglas was not acting in his business capacity should be rejected.

    In order for a corporation to be criminally liable for the acts of an employee, the employee must have acted within the scope of his employment and for the benefit of the corporation. United States v. Hilton Hotels Corp., 467 F.2d 1000, 1007 (9th Cir. 1972). Acting within the scope of employment means acting within the scope of the general duties that the employee was expected to perform. It is not necessary that the criminal act be specifically authorized by the corporation. "A 'forbidden' or even 'consciously criminal or tortious' act may still be within the scope of employment." Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1351 (4th Cir. 1995) (citations omitted). If the action is undertaken to further the corporation's interests, "the expectation or hope of a benefit, whether direct or indirect, makes the act that of the [corporation]," even if there is no actual benefit or the benefit to the corporation is of secondary importance. Standard Oil Co. v. United States, 307 F.2d 120, 128-29 (5th Cir. 1962); Old Monastery Company v. United States, 147 F.2d 905, 908 (4th Cir.) (showing of actual benefit not touchstone of corporate criminal liability because "benefit, at best, is an evidential, not an operative fact"); United States v. Incorporated Village of Island Park, 888 F. Supp. 419, 438 (E.D.N.Y. 1985) (same).

    Sun-Diamond does not contest the fact that Douglas' actions were within the scope of his employment. Rather, it suggests that he did not act in order to benefit Sun-Diamond. In fact, however, from the evidence presented at trial, the jury had little choice but to conclude that Douglas acted to benefit Sun-Diamond. Dealing with and pleasing Espy was a major part of Douglas's job, and the campaign contribution scheme resulted from Espy's request to Douglas, which prompted Douglas's request to Lake.

    Douglas's job with Sun-Diamond was to influence governmental officials to act in a manner that would benefit Sun-Diamond. Mr. Busboom testified that Douglas' "entree to Secretary Espy was used to the benefit of our business." Joint App. Tab 3, RT 164:13-24; 236:16-237:5. At stake in Sun-Diamond's issues before Secretary Espy was millions of dollars in revenue for Sun-Diamond. As Senior Vice President for Corporate Affairs, Mr. Douglas was responsible for dealing with Secretary Espy and, in the words of Sun-Diamond President Larry Busboom "maintaining the relationship" with key decision makers in the USDA and Secretary Espy. Joint App. Tab 3, RT 61:9-11; 61:24-62:5. Mr. Douglas's job performance appraisal specifically commended him for advancing Sun-Diamond's interests with Secretary Espy. Joint App. Tab 34. It also states that his "long-term friendship with Mike Espy served Sun-Diamond's interests well when Mike became Secretary of Agriculture. (Id.). Based on this appraisal, Douglas received an $80,000 bonus payment in 1993. Joint App. Tab 3, RT 54:5-15.

    Furthermore, there was more than sufficient evidence for the jury to conclude that one of the ways Mr. Douglas was able to nurture his relationship with Secretary Espy was to be responsive to the Secretary's request to raise funds to pay off the campaign debt that his brother had accumulated in an unsuccessful bid for Congress. As Mr. Lake testified, Mr. Douglas proposed the fraudulent and illegal scheme alleged in the Indictment precisely for the purpose of assisting Secretary Espy in that regard after being asked to do so by Secretary Espy. Joint App. Tab 3, RT 414:3-19. It was certainly reasonable for the jury to conclude that Douglas acted to benefit Sun-Diamond by assisting the Secretary in a matter that was important to him, i.e., retiring his brother's campaign debt.

    Notably, defendant has not challenged its conviction on Count I for providing gratuities to Secretary Espy through Mr. Douglas on the ground that those activities by Mr. Douglas did not benefit Sun-Diamond. The distinction that defendant presumably is making is that no one else at Sun-Diamond was aware of Mr. Douglas' scheme relating to the campaign contributions. Therefore it alleges that Sun-Diamond was the "victim" of the scheme. Sun-Diamond Br. at 35-37. But the fact that only Mr. Douglas knew about the scheme is immaterial. It is hornbook law that a defendant corporation can be criminally liable for the acts of a single employee, such as Mr. Douglas, without any other employee knowing of, or acquiescing in, the activity. See Hilton Hotels Corp., 467 F.2d at 1007; see also United States v. Phelps Dodge Industries, Inc., 589 F. Supp. 1340, 1358 (S.D.N.Y. 1984) ("The standard for imputing liability to a corporation for the acts of its employees should be no more stringent in civil penalty proceedings than in criminal prosecutions, where courts generally require only that the illegal act be committed within the scope of the wrongdoer's employment and refuse to allow technical claims of lack of authority or even evidence that the employee acted against express instructions to defeat the corporation's responsibility."). There can be no question that Mr. Douglas acted for Sun-Diamond; its president testified that he "relied solely on Douglas to maintain all of [Sun-Diamond's] relationships in the corporate affairs area," and that Mr. Douglas met with Secretary Espy periodically "to maintain his information network and basically be on top of any type of items that might be coming down the pipeline." Joint App. Tab 3, RT 61:3-8; 63:1-10.

    After allegations of Mr. Douglas's possible misconduct appeared in the press, the Sun-Diamond Board never requested or demanded repayment from him. Joint App. Tab 3, RT 237:6-238:4. Mr. Douglas' actions took place while he was employed by Sun-Diamond, doing the business of Sun-Diamond, with Lake, whose work he directed on behalf of the company. Under these circumstances it is clear that the jury's attribution of Mr. Douglas' conduct to Sun-Diamond was reasonable.⁽¹³⁾

IX. THE RECORD CONTAINS SUBSTANTIAL EVIDENCE THAT THE
WIRE COMMUNICATION FURTHERED THE SCHEME

    Sun-Diamond argues that the underlying wire communication did not further the illegal scheme, as required by 18 U.S.C. § 1343. The reasoning behind this argument is that Douglas's first telephone call to Lake resulted in his leaving a phone message, and the details of the scheme were actually outlined on Mr. Lake's return call. This argument misapprehends what the evidence showed and what it means, under the statute, for a communication to further an illegal scheme.

    Defendant urges that the initial telephone message "could not have 'furthered' the alleged scheme because [it] preceded the scheme." Sun-Diamond Br. at 37 (emphasis in original). This argument is premised on the erroneous proposition that since the illegal scheme was detailed when Lake and Douglas spoke on the telephone in late February or early March 1994, Douglas's telephone message to Lake earlier the same day could not have been in furtherance of the fraud. That, however, is not the case. According to Lake's testimony, after Douglas advised him of the Secretary's interest in effecting repayment of his brother's campaign debt, the conversation went as follows:

Mr. Douglas asked me if I could help. I immediately said that I'd be happy to write a check for $1,000 to Henry Espy's campaign, and that is the permissible amount that any individual may write. Richard said that was fine, he appreciated that, but he needed to raise at least $5,000 and could I help him. And I said I'd be happy to as soon as I returned to Washington, I would get on the phone and call others and see if they would make similar contributions. And [Douglas] indicated that would be okay, but there was some time urgency to get the funds in as quickly as possible, and he didn't think he could wait for those funds to come in, and would I, perhaps, go to people in my firm, ask them to write checks for Henry Espy. I would then reimburse them from my own funds, and then he would see that I was reimbursed from Sun-Diamond for that . . . act.

    We talked about it some time, and I knew it was wrong, not legal, but after some conversation he asked me again would I do it, and I agreed to do it.

Joint App. Tab 3, RT 414:20-415:11.

    Thus, as Lake's testimony makes clear, Douglas had a fraudulent scheme in mind when he called Lake, and the call to Lake, enlisting his assistance, was "a part of the execution of the fraud." Kann v. United States, 323 U.S. 88, 95 (1944). Mr. Douglas's call to Mr. Lake undoubtedly was in furtherance of the scheme because it caused Mr. Lake to return the call enabling Mr. Douglas to present the scheme to Mr. Lake.

    All of the authorities upon which Sun-Diamond relies show that this evidence would in fact establish that the wire communication satisfied the statute. In Kann v. United States, 323 U.S. 88, 95 (1944), and United States v. Maze, 414 U.S. 395, 400-405 (1974), the communication was an innocent consequence of the scheme undertaken by an innocent party, after the scheme reached fruition. In Parr v. United States, 363 U.S. 370, 389-391 (1960), the communication was an act required of defendant by law without regard to whether he was defrauding anyone. As the Supreme Court made clear, such cases are "to be distinguished from those where the mails [or the wires] are used prior to, and as one step toward, the receipt of the fruits of the fraud . . . ." Kann, 323 U.S. at 94. Here, of course, Sun-Diamond's senior vice-president, the creator of the scheme, made the communication that led to the fraud, and he certainly was not required by law to do so. The communication was prior to, and one step toward, realizing the fruits of his scheme to secure illegal campaign contributions. It therefore provided the necessary predicate for the wire fraud statute.

X. THE DISTRICT COURT PROPERLY SENTENCED SUN-DIAMOND

The District Court Did Not Err in Departing Upward
From the Sentencing Guidelines

    Sun-Diamond asserts that the district court erred in departing two points upward for Secretary Espy's unique position in the government. See Appellate Br. at 38. The district court did not err; it may depart from the Sentencing Guidelines if there exists circumstances not considered by the Sentencing Commission. U.S.S.G. § 5K2.0.

Sun-Diamond's Sentencing

    Sun-Diamond argued below that the Secretary of Agriculture and a federal judge, for instance, share common types of responsibilities in "rare circumstances," Joint App. Tab, RT 39. The district court properly concluded that the Sentencing Commission did not take into consideration the a cabinet-level secretary when it drafted the Guidelines:

The President has but one cabinet with select members who the court deems to be on a higher level with regard to the type of responsibility which is otherwise contemplated by the guidelines, and the Secretary of Agriculture, in fact is tenth in the order of succession to the Office of the Presidency. That is not an insignificant fact, and as unlikely as it may be that the Secretary of Agriculture would assume the Presidency of the United States because circumstances would not normally present that opportunity, nevertheless, there is a reason for creating a pecking order to the position which many believe is the position of the most powerful person on the face of the earth.

Joint App. Tab , RT 39-40.⁽¹⁴⁾

    Sun-Diamond attempts to equate the Secretary of Agriculture to the judges, prosecutors, and agency administrators with similar levels of responsibility cited within the Sentencing Guidelines. See U.S.S.G. § 2C1.2, comment, (n.1). The fact remains, however, that a cabinet secretary is not analogous to those other types of high level officials.

As the Government explained and the district court noted:

Secretary Espy administered a budget of $65 and one half billion, this figure represents 4.3 percent of the total federal budget. [Secretary Espy was] responsible for a great work force [124,421 people or six percent of the total federal workforce] and [made] decisions frequently that [had] a significant and broad and wide-ranging effect on the American population, and some might believe on the population of the citizens of other parts of the world.

Joint App. Tab 3, RT 40. Although the Government recognizes the importance of judges and prosecutors, whose work can significantly impact the lives of parties involved in their cases, they cannot be equated to a cabinet secretary. There is only one Secretary of Agriculture but literally thousands of judges, prosecutors, and administrative agency heads.⁽¹⁵⁾

    Upward departure was wholly warranted in this instance. The Sentencing Commission and Congress did not address the unique position of trust and responsibility held by a Cabinet level secretary.

    In its brief, Sun-Diamond cites to Schuman v. Commissioner of Internal Revenue, 857 F.2d 808 (D.C. Cir. 1988) to support its proposition that cabinet level secretaries are included within U.S.S.G. § 2C1.2. In Schuman, the Court stated that the term "includes" when used in a partial laundry list within the applicable statute requires broader interpretation of all the ordinary meanings of those listed items. Schuman at 811. But it cannot be said that a cabinet secretary is included within the application of the section. U.S.S.G § 2C1.2. Within the ordinary meanings of "prosecuting attorneys, judges, agency administrators, supervisory law enforcement officers" one cannot find a "similar level[] of responsibility" for a cabinet secretary. U.S.S.G. § 2C1.2, comment, (n.1).

    Sun-Diamond also asserts that Congress clearly intended the Guidelines to cover Secretary Espy and others similarly situated because it specifically made the bribery and gratuity statutes applicable to its members. Appellant Br. at 38 (citing United States v. Brewster, 506 F.2d at 76.) But this is a non-sequitur; all such offenses are within the substantive scope of the statute. Congressional intent in one circumstance simply cannot be imputed to another, especially when the Sentencing Guidelines are also mute on the application to Congressional Members.⁽¹⁶⁾

    The sentencing court was correct in departing upward because of Secretary Espy's unique position within the government.

The District Court Correctly Computed Sun-Diamond's Fine

    Given the correctness of the district court's upward departure, Sun-Diamond's argument that the fine imposed was too severe also fails. As part of its attack on the district court's departure for Secretary Espy's position within the government, Sun-Diamond insists that the eight level increase mandated by U.S.S.G. § 2C1.2 (b)(2)(B) was sufficient to punish Sun-Diamond.

    The district court's calculations are absolutely correct. The increase in base level was not done because the district court was unhappy with the sentencing guidelines as Sun-Diamond attempts to argue, id., but rather the result of the correct departure caused by Secretary Espy's unique position. Therefore, the applicable sentencing range was $1,000,000 to $2,000, 000. The district court could have sentenced Sun-Diamond to the maximum within this range but did not do so. For Sun-Diamond now to argue that the sentence was too severe is simply another example of its unwillingness to accept responsibility for its misdeeds.

XI. THE DISTRICT COURT ACTED PROPERLY BY IMPOSING
REPORTING REQUIREMENTS ON THE MEMBER COOPERATIVES

    Sun-Diamond contends that the district court erred in imposing probationary reporting requirements on the member cooperatives. Sun-Diamond's Br. at 39-40. Sun-Diamond's position is that the member cooperatives were not parties to the litigation, afforded no opportunity to be heard, and therefore, the imposition of probation cannot be valid. Id. It must be noted at the outset that Sun-Diamond's argument is not properly before this Court. Sun-Diamond's motion to correct sentence and the member cooperatives Rule 307.1 motions were filed out of time. The fact that the district court did not rule on it is moot. See, United States Opposition to Rule 307.1 Motion, Misc. No. 97-152, at 3.

    Sun-Diamond's 1988 Annual report states , "Sun-Diamond provides services to the Cooperatives through which they share certain management, marketing, financial and administrative costs." Joint App. Tab 27 at SUN0161943 (emphasis added). For Sun-Diamond to try to separate itself from the very entities from which it is formed, is to ignore the facts.

    As the Seventh Circuit noted in Waste Management of Wisc., Inc. v. Fokakis, 614 F.2d 138, 142 (7th Cir. 1980), the American corporate system provides unique advantages to corporations in order to promote capital formation such as the inability to imprison them. This does not mean, however, that by the same token a corporation can avoid penalties by hiding behind its corporate nature; to do so would be to afford corporations far more leniency than Congress ever intended.

    The fact is that Sun-Diamond Growers existed solely for the benefit of its member cooperatives; their boards were virtually identical, their finances heavily intertwined. Clearly, Sun-Diamond and the member cooperatives are related parties with integrated activities. This is so given:

Revised Sentencing Recommendations of the United States, at 31-32. The district court properly recognized this fact and issued the conditions of probation accordingly.

    The imposition of probation is within the sentencing court's discretion if granted by statute whenever a court is satisfied that the ends of justice and the best interest of the public will be served. See, e.g., United States v. Missouri Valley Constr. Co., 741 F.2d 1542, 1546 (8th Cir. 1984) (noting that courts have power to impose probation but that it is not inherent). Sun-Diamond contends that the district court's sentence should be vacated as to the member cooperatives because they were not parties to the litigation, Appellate Br. at 39-40, and therefore, the Court exceeded its authority by requiring them to comply with the terms of probation. The sentencing court acted well within established legal principles.

    Upon appellate review, the district court's decision to impose probation is judged by whether the sentence was imposed for permissible purposes and then whether the conditions of such probation are reasonably related to those purposes. United States v. Clark, 918 F.2d 843, 848 (9th Cir. 1990)(citing United States v. Terrigno, 838 F.2d 371, 374 (9th Cir. 1988); see also, United States v. Arthur, 602 F.2d 660 (4th Cir. 1979)(commenting that generally a sentencing court has very broad discretion in imposing conditions on probation).

    The Ninth Circuit has addressed the unique problems presented by sentencing a corporate defendant. In United States v. Mitsubishi Int'l Corp., 677 F.2d 785 ( 9th Cir. 1982) the court explained the need for more creative probationary terms when sentencing corporate defendants because of the inability to put a corporation in prison. The ends of justice are not served by merely allowing a corporation to "just write a check and walk away." Mitsubishi, 677 F.2d at 788. So long as the probation conditions are tailored to meet the special problems of a particular defendant" they do not amount to an abuse of discretion by the sentencing court. Id. Thus the District Court's imposition of quarterly reporting requirements regarding expenditures by Sun-Diamond and its member cooperatives related to federal officials accomplishes the judicial goals set forth in the applicable statutes. These reporting requirements are particularly applicable to a company whose corporate philosophy is to give illegal gratuities to the Secretary.

    Through its attack on the imposition of probation on it and the member cooperatives, Sun-Diamond is trying to disguise its very nature as one of the largest cooperatives in the country. Sun-Diamond exists solely for the benefit and use of its member cooperatives; its actions are the actions of those members.⁽¹⁷⁾ As the government explained in its submissions to the district court and in response to the member cooperatives Rule 307.1 motions, Sun-Diamond literally "combined" itself with the cooperatives. Ownership and control, business dealings, reports and benefits, all were combined and issued collectively. The district court recognized that Sun-Diamond and the member cooperatives are related parties with integrated activities and framed the terms of probation accordingly.

XII. CONCLUSION

    For the foregoing reasons, the judgment below should be affirmed in all respects.

Date: May 7, 1998

CERTIFICATION AS TO LENGTH OF BRIEF

    I hereby certify pursuant to Circuit Rule 28(d)(1) that the length of Appellee's Reply Brief is 12,429 words.

CERTIFICATE OF SERVICE

    I hereby certify that two true and correct copies of Appellee's Corrected Brief were served via hand delivery this 16th day of October 1997 on:

STATUTES AND REGULATIONS