United States Court of Appeals
For the First Circuit
Nos. 05-2676, 05-2677, 05-2678
UNITED STATES OF AMERICA,
Appellee,
v.
NIGEL POTTER; DANIEL BUCCI;
and LPRI, LLC, f/k/a Burrillville Racing Association,
a/k/a Lincoln Park, a/k/a Lincoln Greyhound Park,
a/k/a Lincoln Park, Inc.,
Defendants, Appellants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Mary M. Lisi, U.S. District Judge]
Before
Boudin, Chief Judge,
Selya, Circuit Judge,
and Saris,* District Judge.
John A. MacFadyen with whom B. Jean Rosiello and MacFadyen,
Gescheidt & O'Brien were on brief for appellant Nigel Potter.
Anthony M. Traini for appellant Daniel Bucci.
John A. Tarantino with whom Patricia K. Rocha and Adler
Pollock & Sheehan P.C. were on brief for LPRI, LLC.
*
Of the District of Massachusetts, sitting by designation.
Donald C. Lockhart, Assistant United States Attorney, with
whom Robert Clark Corrente, United States Attorney, and Lee H.
Vilker and Peter F. Neronha, Assistant United States Attorneys,
were on consolidated brief for appellee.
September 8, 2006
BOUDIN, Chief Judge. These are appeals by three
defendants–-two individuals, Daniel Bucci and Nigel Potter, and a
business entity, LPRI, LLC ("Lincoln Park")--convicted after a jury
trial of conspiracy to commit wire fraud and of multiple counts of
wire fraud. 18 U.S.C. §§ 371, 1343, 1346 (2000). The essence of
the scheme charged by the government was to bribe the then-speaker
of the Rhode Island House of Representatives, John Harwood, to
influence state legislation in ways favorable to Lincoln Park.
Lincoln Park ran a gambling facility and dog track in
Lincoln, Rhode Island. The company was wholly owned by Denver-
based Wembley USA which in turn was wholly owned by Wembley PLC of
Great Britain. Lincoln Park generated huge revenues (over $170
million in 2000), much of it from coinless slot machines, and after
Wembley PLC's sale of another major asset in 1998-1999, Lincoln
Park accounted for most of Wembley PLC's profits.
Bucci was general manager of Lincoln Park, responsible
for its business strategy. During the period in question, his
direct superior was Francis Sherman, the president of Lincoln Park
and of Wembley USA. Potter was the chief executive officer of
Wembley PLC. Daniel McKinnon was a Rhode Island lawyer who
represented Lincoln Park on zoning and other matters; Harwood was
McKinnon's law firm partner. Annual fees paid to McKinnon &
Harwood prior to 2000 were in the range of $200,000 to $300,000.
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On September 9, 2003, a federal grand jury indicted the
three defendants for conspiracy to deprive Rhode Island citizens of
their right to honest services and for individual counts of
transmitting messages by wire communication in interstate and
foreign commerce for purposes of executing this scheme. 18 U.S.C.
§§ 371, 1343, 1346. The government's evidence, yet to be
described, was intended to show that in 2000-2001 Bucci and Potter
had plotted to pay McKinnon's law firm a very large sum in order to
pay Harwood to shape legislation to assist Lincoln Park.
A first trial led to acquittals of the defendants on
certain of the substantive wire-fraud counts but a hung jury on the
conspiracy charge and on other substantive counts. In a second
trial, all three defendants were convicted of the charged
conspiracy; each defendant was convicted of two or more specific
substantive counts and acquitted on others. The court sentenced
Bucci to 41 months in prison, Potter to 36 months and Lincoln Park
to a fine of $1.5 million.1
Sufficiency of the Evidence. The appeals now before us,
by all three defendants, present issues relating to the convictions
but none as to the sentences. We begin with challenges to the
sufficiency of the evidence, reserving for later treatment one such
1
In connection with various post-trial motions, the district
court wrote opinions addressing, inter alia, the sufficiency of the
evidence and alleged prosecutorial misconduct. United States v.
Potter, 2005 U.S. Dist. LEXIS 21451 (D.R.I. Sept. 27, 2005); United
States v. Potter, 2005 WL 2367627 (D.R.I. Sept. 27, 2005).
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issue peculiar to Lincoln Park. Because these sufficiency claims
were preserved by motions for judgment of acquittal, review is de
novo, United States v. Shea, 211 F.3d 658, 664 (1st Cir. 2000),
cert. denied, 531 U.S. 1154 (2001). The question is whether
any rational factfinder could have found that
the evidence presented at trial, together with
all reasonable inferences, viewed in the light
most favorable to the government, established
each element of the particular offense beyond
a reasonable doubt.
United States v. Richard, 234 F.3d 763, 767 (1st Cir. 2000)
(quoting United States v. Gabriele, 63 F.3d 61, 67 (1st Cir.
1995)).
The substantive offense is defined by 18 U.S.C. § 1343,
which pertinently states:
Whoever, having devised or intending to
devise any scheme or artifice to defraud, . .
. transmits . . . by means of wire . . . in
interstate or foreign commerce, any writings,
. . . for the purpose of executing such scheme
or artifice, shall be fined under this title
or imprisoned . . . .
The conspiracy offense consists of an agreement to do the same.
Id. § 371. As a result of a 1988 statutory amendment, a scheme to
deprive citizens of their officials' honest services can fall
within the statute if the necessary transmittal occurs (or, for a
conspiracy, is agreed to). Id. § 1346.
The government's evidence, based primarily on faxes and
other company documents, showed that beginning in August 2000,
Bucci began to press Potter to support a very large payment to
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McKinnon because Lincoln Park had received benefits in "hundreds of
millions of additional revenues" due to its "supporters" and would
need additional support to advance its interests. Bucci said that,
while no one had stated “that a quid pro quo is essential,” “a wink
is as good as a nod to a blind man” and that “we are represented by
people who believe it is incumbent upon us to reflect gratitude.”
Initially, the proposal was for a $1 million "performance
bonus" to McKinnon. At an August 25, 2000, meeting of Wembley USA,
Bucci supported the payment, while Sherman and David Brents,
Wembley USA's chief financial officer, opposed it. Potter did not
commit himself. In September, Bucci, Potter and Claes Hultman,
chairman of the Wembley PLC board, had dinner with McKinnon. In
early October, Bucci sent a fax to Sherman, which Potter later
received, outlining Lincoln Park's political goals–-such as
authority for more lottery machines–-and again proposing a large
payment to McKinnon.
Potter then raised the issue with the Wembley PLC board
on October 11, 2000, leading some members to question the propriety
of such a payment. Later that month, at a Wembley USA meeting in
Las Vegas, Sherman told Potter, according to Sherman's testimony,
that such a payment would be "improper and illegal," and Brents
omitted the item from Wembley USA's 2001 budget. Nevertheless,
Bucci pursued the matter with Potter in a one-on-one meeting in
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November. Memorializing the meeting in a December 1, 2000, fax to
Bucci, Potter wrote:
Clearly most of the lobbying of the
above will be done by yourself and other
members of the Lincoln Park team. We also
agreed however, that Dan McKinnon was an
unimportant element to the success of this
strategy. [The parties agreed that the
intended word was "important."] I suggested
(following your requests for recognition of
McKinnon's past contribution as well as
further commitment) that we should pay
McKinnon's law practice a 'retainer' of $500k
in 2001 and 2002. If the strategy is
successful and extra machines (1000+) are
implemented in 2002 we would consider
increasing the retainer to $1m for each of
2003/2004/2005. Similarly if no additional
machines are achieved then the $500k p.a. for
2001 and 2002 would cease.
There followed a number of faxes between Potter and Bucci
arguing about the details of the plan and making quite clear that
the payments contemplated were intended to advance Lincoln Park's
legislative agenda. In an exchange of faxes on December 11 and
12, 2000, Potter stated:
I am happy that the McKinnon payments
are as we agreed when we met and which you
reiterated in your note to me of last Friday,
i.e. $500,000 a year in 2001 and 2002 followed
by $1m a year for the next three years (or
sooner if machines installed prior to
31/12/2002) subject to the receipt of
permission to install at least 1,000 extra VLT
or slot machines.
Sherman was not copied on most of these communications, Potter
later testifying that under a new corporate reorganization plan,
the responsibility for handling the matter would be Bucci's.
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At a Wembley PLC board meeting in December 2000, a
$600,000 retainer for McKinnon & Harwood was inserted at Potter's
request into the 2001 Wembley USA budget. On January 18, 2001,
Bucci faxed Potter an editorial from the Providence Journal that
described Harwood as the “Ocean State emperor,” a reference to
Harwood’s alleged vast influence in Rhode Island politics. In the
margin of the article, Bucci wrote a comment emphasizing the
article's description of Harwood's "power [and] influence."
Another Wembley USA meeting was held on January 24, 2001,
and Sherman (according to his testimony) again complained about
inappropriate payments. Brents testified that Potter told him and
Sherman that the payments had been approved by the Wembley PLC
board and were a “done deal.” Sherman testified that, in response,
he resigned as president of Lincoln Park, although he remained
president of Wembley USA for several months. After a discussion
with the company's accountants, a legal opinion as to the payment
plan was sought; but no clearance was ever obtained.
After Potter was hospitalized in February 2001, Bucci
pursued the payment plan with Hultman and another Wembley PLC
director. This evidence, admitted only against Bucci, included
further faxes charged as counts against Bucci, but it simplifies
our discussion to focus on the evidence implicating all of the
defendants. At trial Potter testified that he had made no final
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commitment and had acted in good faith–-evidence whose value was a
matter for the jury.
In substance, the government's claim as to the conspiracy
was that Potter and Bucci, no later than December 11-12, 2000, had
agreed with each other to pay McKinnon a very large sum for the
purpose of influencing Harwood improperly to use his authority as
a state official to assist Lincoln Park in obtaining favorable
legislation (and defeating unfavorable proposals). The first
question is whether the jury could rationally have found that in
fact such a conspiracy had been formed. See Richard, 234 F.3d at
767.
Harwood and McKinnon were partners; McKinnon, as the
evidence makes clear, was not engaged primarily to perform ordinary
lobbying services and had previously been paid only $200,000-
$300,000 a year; by contrast, the much larger sums envisioned–-
ultimately $4 million–-were explicitly aimed at achieving future
legislation. We think a reasonable jury could infer that Potter
and Bucci expected some of the money to reach Harwood--a partner in
the firm--even if they did not know the precise way in which the
money would reach him.
This inference of intended gain to Harwood is a matter of
some importance. If McKinnon were merely a lobbyist with a golden
touch and Harwood did not exist, a very large payment to McKinnon
alone--contingent on results but without any intimation of intended
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bribery or other wrongdoing--could not be said to aim at depriving
the public of an official's honest services. With the inference of
intended payment to Harwood, a scheme to deprive is made out.
Much of the language used by the defendants about the
expectations and identity of their unnamed "supporters" was vague,
but this is hardly of help to them; one fax fills in the gaps left
by another and the pattern permitted the jury to infer that Harwood
was the real target.2 The evidence includes indirect or coded
references to Harwood, descriptions of Harwood's power, and
discussions of Harwood's past accomplishments.
Further, the indirect language supports the inference of
concealment or deceit, which is a necessary part of a "scheme or
artifice to defraud." See United States v. Sawyer, 239 F.3d 31, 41
(1st Cir. 2001) ("Sawyer II"). The evidence of conspiracy and
concealment went well beyond the use of cryptic language and
included evidence of Potter and Bucci's concealment of the plan or
of critical details of it from both Sherman and the Wembley PLC
board. This element, at least, was not remotely a close call.
Defendants argue that in this instance a final agreement
on such a scheme never occurred. In particular, relying upon
2
The defendants argue that United States v. Petrozziello, 548
F.2d 20 (1st Cir. 1977), prohibited the district court from
considering the conditionally admitted faxes between the individual
defendants in its Rule 29 determination because a definitive
Petrozziello finding occurs only at the end of the case. The
argument is mistaken: if Petrozziello is satisfied on the evidence
available when the government rests, then the evidence is properly
considered by the judge at this stage.
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various qualifications in his faxes and other documents, Potter
argues that he never definitively agreed to have the company pay
large sums to McKinnon; rather, he describes his actions as
preliminary and contingent, possibly even dependent on further
assurances as to its lawfulness. The jury, however, could
rationally reach the opposite conclusion.
If there was an agreement covertly to compensate Harwood
for using his office to assist Lincoln Park in obtaining
legislation, it could hardly be disputed that interstate faxes were
to be used in executing the scheme; this was a major means of
communication between Potter and Bucci. And, for the substantive
counts, which identified specific faxes as violations, the same
scheme or artifice would satisfy the predicate "devised or
intending to device" requirement of the statute.
Attacking both the evidence and the indictment, the
defendants say that there is no evidence that Harwood was a party
to any agreement or even knew of the scheme. Admittedly, some
honest services fraud decisions assume that one of the parties to
such a scheme will be a public official;3 but it is hard to find
any considered holding that this is essential. Neither the
language nor the policy of the wire-fraud statute suggests such a
3
See United States v. Gray, 790 F.2d 1290, 1295 (6th Cir.
1986); United States v. Alexander, 741 F.2d 962, 964 (7th Cir.
1984), overruled on other grounds, United States v. Ginsburg, 773
F.2d 798 (7th Cir. 1985); United States v. Kaye, 593 F. Supp. 193,
196 (N.D. Ill. 1984); United States v. Freedman, 568 F. Supp. 450,
453-56 (N.D. Ill. 1983).
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requirement. See United States v. Sawyer, 878 F. Supp. 279, 289
(D. Mass. 1995), vacated on other grounds by 85 F.3d 713 (1st Cir.
1996); United States v. Yonan, 622 F. Supp. 721, 731-32 (N.D. Ill.
1985).
Certainly Harwood himself could not be convicted without
proof of his knowing participation; but under the statute anyone
could concoct a scheme to deprive Rhode Island citizens of
Harwood's honest services and could send a fax for the purpose of
executing such a scheme. Similarly, two persons could conspire to
devise the scheme and to use faxes for purposes of executing the
scheme. That Harwood might prove unwilling or unable to perform,
or that the scheme never achieved its intended end, would not
preclude conviction for either the substantive offense (sending the
fax) or forming the conspiracy.
The statute also requires that the message be for the
purpose of "executing" the scheme. Juxtaposing "executing" with
"devised or intending to devise" a scheme, see 18 U.S.C. § 1343,
the defendants argue that the faxes they sent could at most relate
to the devising (rather than the executing) of the scheme. True
enough, much of the faxing concerns whether such payments are
necessary at all, what form they should take, and similar details
that the defendants say were at most preliminary to execution.4
4
Bucci and Potter also say that they differed on and never
settled certain of the details; but the central agreement to make
the payment can constitute the conspiracy without regard to whether
some details were unsettled. United States v. Sanchez, 917 F.2d
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However, this argument depends on whether the term
"executing" is construed narrowly and whether some sharp division
exists between devising and executing schemes. In our view, the
statute requires no strict sequence of exclusive phases: a faxed
document that aims to settle the amount to be paid for illicit
conduct can be part of the devising of a scheme and also sent "for
the purpose of executing" the scheme. We have found little direct
precedent but words and policy support this view.
To execute is to "perform or complete," Black's Law
Dictionary 609 (8th ed. 2004); but the statute does not require
that the scheme be "executed" or that the fax be directed to the
last step of the scheme. A scheme, after all, may comprise a
series of steps and any one of them integral to the scheme can be
part of the execution. What is necessary is that the fax be sent
"for the purpose" of fostering that execution. See, e.g., United
States v. Luongo, 11 F.3d 7, 8-9 (1st Cir. 1993).
The defendants say that a narrow construction of
"executing" is required; there is some case law suggesting the
opposite. See, e.g., United States v. Silvano, 812 F.2d 754, 760
(1st Cir. 1987); accord Jed S. Rakoff, The Federal Mail Fraud
Statute (Part I), 18 Duq. L. Rev. 771 (1980). It is enough here
that the term executing, if used in its ordinary sense, includes
the various steps in the execution and is not limited to the very
607, 610 (1st Cir. 1990), cert. denied, 499 U.S. 977 (1991).
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last one.5 This alone answers the defendants' claim that the
statute as applied did not give them fair warning of the elements
of the offense.
Even if the defendants expected the payments to benefit
Harwood, defendants say that there was no direct evidence that such
payments were for a specific legislative act, such as a vote by
Harwood; the government stipulated that Harwood, presumably because
of his partner's normal work for Lincoln Park, had recused himself
from voting on matters that might affect the company. The
government, say the defendants, never proved that they sought to
have Harwood misuse his official power and thereby deprive the
state's citizens of his honest services.
It is common knowledge that powerful legislative leaders
are not dependent on their own votes to make things happen. The
honest services that a legislator owes to citizens fairly include
his informal and behind-the-scenes influence on legislation. There
was adequate evidence, if any was needed beyond the size of the
payment, that Bucci and Potter both believed Harwood to be
powerful. And Sawyer II, 239 F.3d at 40 n.8, forecloses any
argument that the government must prove the specific official act
targeted by the defendants.
5
Certain instructions tendered by the defendants which the
trial judge refused to give were thus not proper because their
premise was that the law does create a rigid division between
devising and executing. Indeed, if the judge had been called upon
to instruct in detail on the relationship, the instruction would
likely not have been to the defendants' advantage.
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We have held that favors, such as lunches, golf games,
and sports tickets, may be modest enough and sufficiently
disconnected from any inferable improper quid pro quo that a
factfinder might conclude that only business friendship was at
work, or at least nothing more than a warm welcome was being sought
by the favor giver. See United States v. Sawyer, 85 F.3d 713, 728-
29 (1st Cir. 1996) ("Sawyer I"). The line between permissible
courting and improper use of gifts to obtain behind-the-scenes
influence by an official is not always an easy one to draw, but one
draws close at one's peril.
Given the sum involved in this case, its contingent
character and the link to specific legislative ends, a jury could
easily have found that this was a heartland quid pro quo case.
Indeed, as we will explain in due course in relation to
instructions, a reasonable jury could hardly find otherwise. Thus
the predicates for the conspiracy conviction exist; the defendants
do not make detailed separate claims addressed to the individual
faxes.
Defendants cite a couple of cases to suggest that other
courts have held that the kind of conduct involved in this case did
not involve a contemplated theft of honest services, but these
cases are distinguishable. For example, United States v. Rabbitt,
583 F.2d 1014 (8th Cir. 1978), cert. denied, 439 U.S. 1116 (1979),
involved only payments to a third party for introductions to
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decision makers, and United States v. McNeive, 536 F.2d 1245 (8th
Cir. 1976), was a case of gratuities rather than quid pro quo
bribery. See also Sawyer I, 85 F.3d at 725 (discussing these
cases). None of the cases cited involves conduct of the kind
proved here.
Jury Instructions. The next set of arguments by
defendants is directed to the instructions. Broadly speaking, the
instructions must give the jury an accurate picture of the
pertinent law (e.g., elements of the offense, defenses colorably
presented by the evidence); the trial judge enjoys latitude in
phrasing and emphasis; objections must be preserved subject to
plain error (just as preserved objections are subject to harmless
error); and, if a tendered instruction is itself inaccurate, it
need not be given.6
The defendants' most important claim is that the district
court should have given instructions crystalizing the distinction
just touched upon: between forbidden efforts to deprive the public
of honest services and permissible efforts--so far as the fraud
statutes are concerned–-merely to express friendship and assure a
warm welcome. The defendants asked the district judge to give
instructions, paraphrasing language mandated by us in Sawyer I, to
tell the jury what would not be a theft of honest services.
6
Jones v. United States, 527 U.S. 373, 388-90 (1999); United
States v. Prigmore, 243 F.3d 1, 17 (1st Cir. 2001); United States
v. Gamache, 156 F.3d 1, 9 (1st Cir. 1998).
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In Sawyer I, the lobbyist had provided gifts of some
value (sports tickets, trips, meals) to certain legislators, but
there was mixed evidence as to what was sought in exchange.
Because in Sawyer I these activities could easily have been viewed
as distasteful, and were arguably illegal under state anti-gratuity
laws, see Sawyer I, 85 F.3d at 727-32, the jury could have believed
that cultivating a business friendship by means of gifts was itself
honest services fraud. We said that the jury should be told that
the latter was not honest services fraud. Id. at 727-29, 732, 741.
So far as proposed instructions sought a paraphrase of
this proposition, the short answer is that this prosecution did not
present the risk posed in Sawyer I. The defendants perhaps had
colorable arguments for a jury on other issues (e.g., that the
scheme had never become sufficiently concrete). But if the jury
agreed that a matured scheme existed, aimed at providing millions
of dollars in which Harwood would share, no jury could rationally
believe that this was merely to cultivate friendship.
Thus, the Sawyer instruction was not required. That an
instruction sought may be an accurate legal proposition does not
make it relevant. This is obvious in cases where a defendant seeks
an instruction on an affirmative defense like entrapment; the judge
is entitled to refuse if the evidence does not make this a
colorable claim for the jury. See, e.g., United States v. Sanchez-
Berrios, 424 F.3d 65, 76-77 (1st Cir. 2005), cert. denied sub nom.,
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Cruz-Pagan v. United States, 126 S. Ct. 1105 (2006). Here, the
principle is the same: what the jury is to be given is the law
pertinent to the case before it.
In two other instructions, the defense sought to have the
jury told that it was not unlawful merely to hire a lawyer whose
partner is a member of the legislature even if the client has
business in the legislature nor honest services fraud to violate
conflict of interest or ethics laws. In the context of this case,
the government's case rested on no such theory, nor was there any
likelihood that jury might convict on such a theory. Again, the
instructions were unnecessary.
Similarly, another instruction proposed by the defendants
closely tracks language from Sawyer I stating that if "the 'scheme'
does not, as its necessary outcome, deprive the public of honest
services, then independent evidence of the intent to deprive
another of those services must be presented." 85 F.3d at 725.
Again, this was required by the weaker facts in Sawyer I. Here, by
contrast, if the defendants schemed to pay millions of dollars,
some of which would go to Harwood in exchange for various
legislative acts, the necessary outcome (if the scheme worked)
would be to defraud the citizens of Rhode Island.
Finally, defendants asked that the jury be told that "it
is not enough . . . that a defendant intended to make a payment as
a reward for past services or in order to ensure future services."
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The former proposition might or might not be true depending upon
context; a payment that had been promised in advance but paid
afterwards could be unlawful. In any event the latter proposition
is patently too broad and disqualifies the instruction in
question.7
Potter also argues that the jury should have been
instructed that withdrawal is a defense to conspiracy. His basis
for the requested instruction was evidence that, in late January
2001, Potter contacted an attorney seeking advice as to whether the
proposal payment was lawful. Withdrawal is a demanding defense
requiring affirmative evidence of an effort to defeat or disavow or
confess, United States v. Munoz, 36 F.3d 1229, 1234 (1st Cir.
1994), cert. denied, 513 U.S. 1179 (1995), and Potter's evidence
proved nothing of the kind.
Rulings on Evidence. Certain evidentiary rulings by the
district judge are challenged on appeal. The first claim,
primarily by Potter, grew out of evidence that Potter, in the
January 24, 2001, meeting in Las Vegas, said that the Wembley PLC
board had approved the payment to McKinnon. Reviewing the minutes
of the Las Vegas meeting, Potter added the phrase "in principle" to
7
In Sawyer I, we said that a gratuity for an act already taken
or planned by the legislator was not, absent an intended causal
connection, a theft of honest services. 85 F.3d at 730; see also
United States v. Mariano, 983 F.2d 1150, 1159 (1st Cir. 1993). By
contrast, the term "ensure" in the proposed instruction suggests a
causal connection and yet seeks exculpation.
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the word "approval." The jury was shown the minutes and Potter was
allowed to testify as to what he intended by the addition.
What the court did not allow was Potter's attempt then to
offer two faxes from him to Bucci in which he used the phrase "in
principle" together with further language in the faxes indicating
that Potter was using the phrase "in principle" to mean something
short of unqualified or unconditional approval. The government
argued that "in principle" in the minutes spoke for itself and that
the faxes were irrelevant.
The faxes were not irrelevant. They arguably had some
tendency to show that Potter sometimes used the phrase "in
principle" to mean less than unqualified approval; this is how many
people use the phrase anyway, but Potter had a special interest in
softening any evidence of his approval. The district judge did not
explain her ruling; she probably thought that the other faxes--not
directed to the Wembley PLC approval--were more confusing than
enlightening.
The latter judgment would be reviewable only for abuse of
discretion, United States v. Perez-Ruiz, 353 F.3d 1, 10 (1st Cir.
2003), cert. denied, 541 U.S. 1005 (2004), but, even if we deemed
it mistaken (and we make no such ruling), there is no realistic
possibility that exclusion of the faxes altered the outcome of the
case. The phrase "in principle," mildly helpful to Potter with or
without a separate gloss, was contained in the admitted minutes;
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and he was allowed to elaborate from the stand on what he meant.
The excluded documents would have added very little.
In his brief, Potter says that in English business argot,
approval "in principle" was not approval at all but merely a green
light for a proposer to renew his request. Potter could have so
testified, but he did not, and the faxes do not support such a
view. While the government doubtless stressed the "approval"
language, its claim that Potter had effectively signed on to the
payment scheme rested on a succession of events involving Potter
and not on one document.
The defendants also claim that the district court erred
in refusing to admit into evidence three contracts between Lincoln
Park and Alan Goldman, a Rhode Island attorney who had provided
political consulting and lobbying services for Lincoln Park in the
early 1990s. Having successfully achieved results for the company,
Goldman renegotiated his previous two contracts, leading to a third
contract paying him $1 million for his past work.
Potter was allowed to testify to these events, obviously
hoping to support the contention that the payment to McKinnon was
for past work or, alternatively, that large payments contingent on
legislative outcomes were not uncommon. However, the district
court refused to allow the contracts themselves to be offered in
evidence once Potter conceded that he had not earlier seen the
contracts or even had their specific terms described to him.
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If Potter did not see the contracts, it is hard to see
how they were relevant to his state of mind; and it is also
debatable whether the contracts, even assuming away authentication
and hearsay issues, were proper evidence of ordinary practice in
Rhode Island--being at most a single datum. Anyway, as Potter had
testified to the key terms (which the government did not dispute),
it is hard to see what the contractual detail would have added--and
Potter offers no explanation.
The whole Goldman episode was of marginal importance.
The evidence in this case showed that the proposed payments to
McKinnon were patently linked to future performance and were not
merely a renegotiated award for past service. And, while the
Goldman contracts also contemplated payment for results, there is
no evidence that they involved indirect payments to a legislator.
The district court's compromise--testimony but no documents--was
just the kind of judgment that Rule 403 leaves to the trial judge.
E.g., United States v. Cunan, 152 F.3d 29, 36 (1st Cir. 1998).
Potter, in an argument adopted by Bucci, offers a
separate claim of error addressed to the government's evidence.
The trial court admitted some pieces of government evidence for
limited purposes (e.g., against one defendant but not another or to
show knowledge or intent but not for the truth of the matter
asserted). Although the district court gave such limiting rulings
as evidence came in, it refused at the close of the case to give
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the jury a separate list of items admitted only for limited
purposes.
The defendants say that despite the presumption that the
jury follows the court's directions, United States v. Smith, 46
F.3d 1223, 1229 n.2 (1st Cir.), cert. denied, 516 U.S. 864 (1995),
and the court's wide discretion in matters of this kind, United
States v. Moreno, 991 F.2d 943, 947 (1st Cir.), cert. denied, 510
U.S. 971 (1993), the jury needed the help of a list in its
deliberations. They argue that the present case was unusual
because of the length of the trial, number of exhibits and variety
of limitations.
Judged by such numbers, the trial was not unusually
complex: there were 11 days of testimony, 54 exhibits from the
government and several others from the defense, and conventional
limits on permissible use were imposed on a number of the exhibits
but by no means all. Major drug cases are often far lengthier and
far more complicated. Nevertheless, just how great a threat of
misunderstanding existed depends upon specific evidence and issues
more than on numbers alone.
Here, the defendants quite properly do point to a couple
of specific examples--presumably their best examples--of evidence
that they say the jury may well have overvalued. Two of the items-
-exhibits concerning Harwood's alleged power--are quite important.
The first was a newspaper editorial proclaiming Harwood the "Ocean
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State emperor" and expressing the view that Harwood through secret
backroom deals managed the legislature. This was sent by Bucci to
Potter and admitted for state of mind but not for truth (for the
latter purpose it was mere hearsay).
The defendants now complain that the limitation on use
may have been ignored, noting that the government itself referred
to Harwood in closing as the Ocean State emperor. But all that
mattered for the crimes charged was whether the defendants believed
that Harwood possessed such power. See Yonan, 622 F. Supp. at 731.
The document, in context, was some evidence that they did so
believe (Bucci sent it to persuade Potter of Harwood's importance),
and their actions then confirmed that they so believed.
If defendants formed such a scheme and took such actions,
it would not matter if their belief as to Harwood's power were
mistaken. A plot to purchase drugs is unlawful even if the
supposed supplier turns out to be a government agent. E.g., United
States v. Giry, 818 F.2d 120, 126 (1st Cir.), cert. denied, 484
U.S. 855 (1987). No impossibility defense was offered nor could
one have succeeded on the present facts. United States v. Pierce,
224 F.3d 158, 166 (2d Cir. 2000), is inapposite, for it presents an
issue of legal impossibility whereas the defendants in this case
now press a claim of factual impossibility. See United States v.
Ames Sintering Co., 927 F.2d 232, 235-36 (6th Cir. 1990).8
8
In part for this reason, the defendants' proposed instruction
stating that it was lawful for them to pay McKinnon any amount so
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The other document was a fax from Bucci to Potter placing
Harwood at the top of the hierarchy of legislators concerned with
the state budget. The document was admitted only against Bucci and
yet the government's reference to it in closing could have been
taken to use the document against Potter as well. But Potter's
counsel made no timely objection directed to this arguable
misstatement; and this fax was a much milder version of the Ocean
State emperor fax properly admitted against Potter.
No substantial trial is likely to be without minor errors
or close judgment calls that might better have been made otherwise.
Cumulative effect is relevant; but so is trial judge latitude,
failures to object, and the overall strength of the government's
case. See United States v. Sepulveda, 15 F.3d 1161, 1195-96 (1st
Cir. 1993), cert. denied, 512 U.S. 1223 (1994); Moreno, 991 F.2d at
947. Just how and in what terms to tell the jury (again) about
evidence earlier admitted for limited purposes is not the subject
of strict rules. We see neither an abuse of discretion nor any
resulting miscarriage of justice in what occurred here.
Alleged Misconduct. Next, the defendants claim as error
the district court's denial of their motion for a new trial. The
substantive claim is that a new trial was required because of
allegedly improper and prejudicial remarks by the prosecutor in
long as Harwood "did not vote [on matters] or do any official acts"
relating to the defendants was an incorrect statement of the law;
the relevant question is whether the defendants intended for
Harwood to perform such acts.
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closing arguments to the jury. Although refusal to grant a new
trial is reviewed for "manifest abuse of discretion," United States
v. Mooney, 315 F.3d 54, 59 (1st Cir. 2002), specific wrongful
remarks can be challenged under conventional standards, which
depend principally on whether a claim of error was preserved.
If a specific remark was improper and a timely objection
was made, the issue is usually whether (taking account of any
curative instruction) it likely affected the trial's outcome,
Mooney, 315 F.3d at 61; deliberate misconduct may be viewed more
harshly. United States v. Balsam, 203 F.3d 72, 87 n.19 (1st Cir.),
cert. denied, 531 U.S. 852 (2000). Absent a timely objection, the
test is for plain error under the familiar four-part test of United
States v. Olano, 507 U.S. 725, 732-35 (1993).
Defendants allege that nine different statements by the
prosecutor were improper. We focus first on the one rather lengthy
passage which the government concedes to have been improper in one
important particular. In his rebuttal argument, the prosecutor
stated the following:
I also want to mention just briefly
what the case is not about. It is not about
who is not charged. It is not about what is
not charged. It is not about, well, what
didn't the Government bring in. It's not
about what didn't the Government tell you. It
is not about one line in one exhibit, one line
in another exhibit.
It's not about any of that. Why?
Because, as the Court will instruct you, your
job is to decide this case on the evidence,
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the evidence you've heard in this courtroom,
and that's all, according to the law as the
Court provides it.
If something's missing, if something
isn't perfect, blame me. The Government's not
perfect. I'm not perfect. Maybe it could
have been done better. Maybe there could have
been something that I could have given you,
brought in here. Maybe I could have brought
something in that the Court would have allowed
in that didn't come in.
I brought you the evidence as we have
it. I put if before you, and that's what you
have to work with, that and what the defense
put on and what the Court instructs you about.
And in that regard, I want to discuss a couple
of pieces of the evidence, just a couple.
Following the close of the rebuttal, the defendants moved
for a mistrial and got instead a cautionary instruction:
In the course of his rebuttal
testimony, Mr. Moore indicated and said
something along the lines of that perhaps
there was some additional evidence he might
have been able to bring or that the Court
would have allowed for your consideration.
It is not something that you should
take into account at all, and I'm asking you
at this time to disregard those comments
completely.
On appeal, the government agrees that the prosecutor's remarks were
improper so far as they suggested--primarily in the next-to-last
paragraph--that the government might have other evidence that it
did not offer because the prosecutor was not perfect. The
government says that no timely objection was offered and anyway the
comments did not alter the outcome of the case.
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Our recent decisions have reserved the issue of precisely
when objections must be made to closing statements to preserve the
objection for ordinary review.9 Circumstances vary (the nature of
the objection, problems of repetition and cumulative effect) as may
the relief sought; whether a single rule would serve might be
debated. Since the issue has not been fully briefed and does not
affect the result in this case, we follow the practice of United
States v. Laboy-Delgado, 84 F.3d 22, 31 n.7 (1st Cir. 1996), and
assume for present purposes that the objection was adequately
preserved by the mistrial motion.
Turning to substance, a clear and deliberate reference in
closing to supposedly favorable evidence that the government says
it possesses but did not offer at trial is one of the worst sins a
prosecutor can commit; and the effect may be just as bad even
though the jury is left to guess at the content. See United States
v. Manning, 23 F.3d 570, 572-75 (1st Cir. 1994). This may be so
even though a cautionary instruction is given--everything depends
on context, e.g., whether specific evidence was described (such an
instruction may be more likely to be effective where no specific
evidence is described), the timing and force of the cautionary
instruction, and the like.
9
United States v. Laboy-Delgado, 84 F.3d 22, 31 n.7 (1st Cir.
1996); United States v. Wihbey, 75 F.3d 761, 771 (1st Cir. 1996).
Compare United States v. Mandelbaum, 803 F.2d 42, 44 n.1 (1st Cir.
1986), with Sepulveda, 15 F.3d at 1186-87.
-27-
However, in this case, the prosecutor's mistake, although
real, was neither blatant nor seemingly calculated. The defense in
closing stressed lack of evidence--importantly, lack of proof of
Harwood's power and what specifically he could do to advance
legislation in favor of Lincoln Park. This explains how the
prosecutor got into the subject of arguing that the case was not
about "what didn't the Government bring in."
The prosecutor's two references to other evidence that
might exist (both qualified as "maybe") are something less than an
avowal of the existence of other evidence; and the very next
sentence says in substance that the government has no other
evidence: "I brought you the evidence as we have it." Nor need we
ignore the fact that the prosecutor's main theme in the quoted
remarks was that the jury should decide the case on "the evidence
you've heard in this courtroom."
This would be a very easy call if, as often happens, the
evidence were such as to guarantee a conviction. See, e.g.,
Mooney, 315 F.3d at 60-61. Contrary to the defendants' claim that
the case was very close, we think that the evidence amply supports
the verdict. But the jury at the first trial hung and we can
imagine how any jury might be led to entertain doubts in this case
(e.g., as to whether the plot got far enough) even though the
doubts might not be of much force from a strictly legal standpoint.
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Nevertheless, we are confident that the outcome was not
changed by the two sentences of the prosecutor that are the heart
of the error. Given their vagueness, the prosecutor's own
qualifications (that the case should be decided on the evidence and
that the government had given all it had) and the cautionary
instruction from the judge, this is not a case where the sentences
had any substantial chance--let alone a likelihood--of changing the
outcome. See generally Balsam, 203 F.3d at 87.
Defendants fairly argue that we should consider this
improper comment not alone but together with any other significant
errors in the prosecutor's closing. We have examined each of the
other errors alleged--to only one of which a timely objection was
made. In a couple of instances, there was nothing wrong with the
statement; in others, the prosecutor may arguably have misstated
evidence or could be taken to have asserted personal views or
otherwise erred.
The timely objection was to the prosecutor's statement in
rebuttal that Potter had never told the attorney (who was asked by
Wembley PLC to provide a legal opinion) that the payment was in
exchange for legislation raising the number of machines. The
district court in its post-trial opinion adequately explains why
the defendants are not persuasive in arguing that this claim
misstated the evidence. United States v. Potter, 2005 WL 2367627,
at *7 (D.R.I. Sept. 27, 2005).
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As for the other claims, most involve errors (if they
were errors at all) that were marginal on the facts of this case
(e.g., the implied claims of personal knowledge). A misstatement
of the evidence by the prosecutor did occur, but the district court
reasonably found that it was not harmful, Potter, 2005 WL 2367627,
at *7. All in all, unpreserved claims have to approach a
miscarriage of justice before they warrant reversal. Olano, 507
U.S. at 732-35. Taking all of the claims made here together,
nothing like that occurred in this case.
Corporate Liability. This brings us to a quite different
issue, involving both instructions and evidence, which concerns the
liability of Lincoln Park as a corporation. Lincoln Park says on
appeal that its judgment of acquittal motion should have been
granted. It points out that Sherman, president of Lincoln Park,
told Bucci not to pay McKinnon any supplemental amount and that
the district judge's own instructions appeared to make this a
defense.
In her post-trial decision, the district judge correctly
ruled that a corporation may be held liable for "the criminal acts
of its agents" so long as those agents are acting within the scope
of employment. United States v. Potter, 2005 U.S. Dist. LEXIS
21451, at *36 (D.R.I. Sept. 27, 2005); accord United States v.
Cincotta, 689 F.2d 238, 241 (1st Cir.), cert. denied, 459 U.S. 991
(1982). The test is whether the agent is "performing acts of the
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kind which he is authorized to perform," and those acts are
"motivated--at least in part--by an intent to benefit the
corporation." Cincotta, 689 F.2d at 241-42.
In this case, the evidence amply confirmed the district
court's statement that "Bucci, as General Manager of Lincoln Park,
assumed primary responsibility for maintaining relationships with
political figures" in an effort to achieve the company's political
goals. Potter, 2005 U.S. Dist. LEXIS 21451, at *37. As Potter
confirmed, Bucci "led the whole lobbying effort in Rhode Island."
The evidence, summarized above, also showed that Bucci led the
effort to make the payments to McKinnon's firm, advocating for them
at every stage.
Lincoln Park's brief on appeal concentrates almost
entirely upon Sherman's testimony, the truth of which is not
disputed, that he told Bucci not to make such payments. This,
Lincoln Park argues, shows that the payment plan was not
authorized. Further, it says that this testimony dovetailed with
the district court's jury instructions that a corporation is not
liable for acts that the corporation "in good faith" has forbidden
or those that it "tries to prevent."
The legal rules for imputing criminal responsibility to
corporations are built upon analogous rules for civil liability.
For obvious practical reasons, the scope of employment test does
not require specific directives from the board or president for
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every corporate action; it is enough that the type of conduct
(making contracts, driving the delivery truck) is authorized. See
United States v. Beusch, 596 F.2d 871, 877-78 (9th Cir. 1979).
The case law has rejected arguments that the corporation
can avoid liability by adopting abstract rules that no agent can
make an unlawful price-fixing contract or no driver exceed the
speed limit. United States v. Automated Med. Labs., Inc., 770 F.2d
399, 406 & n.5 (4th Cir. 1985); United States v. Basic Constr. Co.,
711 F.2d 570, 573 (4th Cir.), cert. denied, 464 U.S. 956 (1983).
Even a specific directive to an agent or employee or honest efforts
to police such rules do not automatically free the company for the
wrongful acts of agents. Thus,
The principal is held liable for acts done on
his account by a general agent which are
incidental to or customarily a part of a
transaction which the agent has been
authorized to perform. And this is the case,
even though it is established fact that the
act was forbidden by the principal.
H. Reuschlein & Gregory, The Law of Agency and Partnership 167
(1990) (footnote omitted).10
There is admittedly a gray area. The restrictions,
although not mechanically exculpatory of corporate liability, may
well bear upon what is or is not within the scope of the agent's
10
The Restatement (Second) of Agency explains by way of
illustration: P directs the salesman in selling guns, never to
insert a cartridge while exhibiting a gun. A, a salesman, does so.
This act is within the scope of employment. Restatement (Second)
of Agency § 230, illus. 1 (1958) (forbidden acts).
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duties. See generally Basic Constr., 711 F.2d at 572; Beusch, 596
F.2d at 878. Such fine distinctions are of no moment here:
despite the instructions Bucci remained the high-ranking official
centrally responsible for lobbying efforts and his misdeeds in that
effort made the corporation liable even if he overstepped those
instructions.
The district judge went too far in the above-quoted
instruction in seeming automatically to preclude liability for
actions that the company forbade or tried to prevent, but the
instruction--being overly favorable to the company--was a harmless
mistake. The mistake might be of concern if the overstatement
distracted the jury from its task. But the district court did give
a proper instruction on scope of employment, and the over-favorable
addendum was obviously ignored or found irrelevant on the facts.
Further, on the present evidence a reasonable jury could
not have avoided holding the corporation liable once Bucci was
found to have committed the offenses. Although a court may not
direct a verdict for the government in a criminal jury case, Rose
v. Clark, 478 U.S. 570, 578 (1986), the harmless error doctrine,
where it applies, may rescue a jury verdict despite deficiencies in
instructions--save for a small class of so-called structural
errors. Neder v. United States, 527 U.S. 1, 8-15 (1999).
We are thus spared any need to pursue a different and
potentially difficult question as to how far actions of Potter
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might themselves bear upon Lincoln Park's liability for Bucci's
acts. Potter, while higher than Sherman in the inter-corporate
hierarchy, was not an officer of Lincoln Park--although the
government makes something of his presence on the Lincoln Park
board. Such conundrums can be addressed in a case where they might
alter the outcome.
Our discussion has addressed the most prominent arguable
claims; other claims raised by defendants, including the claim that
they should have been granted a new trial based on the weight of
the evidence, have been considered but do not warrant discussion.
The trial was well conducted and the outcome is not a surprise.
The able appellate briefs by counsel on both sides are appreciated.
Affirmed.
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