United States Court of Appeals,
Eleventh Circuit.
Nos. 95-9066, 95-9085 and 95-9165.
UNITED STATES of America, Plaintiff-Appellee,
v.
Thomas Lowrance KUMMER, Defendant-Appellant.
UNITED STATES of America, Plaintiff-Appellee,
v.
Robert Jerva JERNIGAN, Defendant-Appellant.
UNITED STATES of America, Plaintiff-Appellee,
v.
John E. OGLESBY, Defendant-Appellant.
Aug. 2, 1996.
Appeals from the United States District Court for the Southern
District of Georgia. (No. CR494-165), B. Avant Edenfield, Chief
Judge.
Before EDMONDSON and DUBINA, Circuit Judges, and LOGAN*, Senior
Circuit Judge.
LOGAN, Senior Circuit Judge:
In these consolidated direct criminal appeals, defendants
Thomas Kummer (No. 95-9066), John Oglesby (No. 95-9165), and Robert
T. Jernigan (No. 95-9085) appeal from sentences imposed after they
each pleaded guilty to one count of violating 18 U.S.C. § 1954
("Offer, acceptance, or solicitation to influence operations of
employee benefit plans")1 pursuant to plea agreements. Defendants
*
Honorable James K. Logan, Senior U.S. Circuit Judge for the
Tenth Circuit, sitting by designation.
1
Initially Kummer was charged with and pleaded guilty to
conspiracy to violate the statute, under 18 U.S.C. § 371. The
court then determined that Kummer pleaded guilty without knowing
argue that the district court erred in sentencing them for
involvement in a bribe rather than a gratuity, which they assert
was the charge and the plea to which they agreed. Alternatively
defendants Kummer and Jernigan contend they should be allowed to
withdraw their guilty pleas. Defendants also individually allege
various errors by the district court related to sentencing.
I
Defendant Jernigan was the business agent and financial
secretary for the United Brotherhood of Carpenters Local 256 in
Savannah, Georgia; he was also trustee of the local's health and
welfare plan, an employee benefit plan. His union needed to obtain
a loan to assist in financing its union hall, and he asked
defendant Oglesby for assistance in that matter. Oglesby was the
general representative of the Brotherhood of Carpenters
International Union in the southeastern United States. Oglesby and
Jernigan had worked together because of Jernigan's representation
of the local union and Oglesby's work with the international
office. In response to Jernigan's request for assistance in
obtaining a loan for the union hall, Oglesby told Jernigan about
his associates Thomas Kummer and Edward Killian who were involved
in the Tahoe Company, a real estate development company located in
Reno, Nevada. Kummer was general counsel of Tahoe; Killian was
acting vice president and secretary of Tahoe, as well as being a
member of the board of directors of Commercial Pacific Savings and
that the conspiracy charge carried a five-year statutory maximum
penalty, and it allowed him to plead to a new information
charging the substantive offense of 18 U.S.C. § 1954 which has a
three-year statutory maximum penalty.
Loan (Compac). Tahoe was engaged in soliciting investments from
business agents of union benefit plans in exchange for promoting
union labor and construction projects developed by Tahoe.
Following Oglesby's advice, Jernigan talked to Killian about
getting a loan for the union hall. Jernigan also told Killian that
he needed to refinance a mortgage on the house where he lived.
Killian suggested that Compac might be able to make Jernigan a
personal loan. Killian sent Jernigan a personal loan application,
which Compac denied because of his poor credit rating. Oglesby
then told Jernigan that Tahoe was receiving investments from local
unions and that if an investment was made from Jernigan's local
union it would increase the possibility that he would receive the
personal loan he was seeking. Jernigan then called Killian, who
told him that an investment from the health and welfare plan would
"just about secure any type of loan" for which Jernigan applied.
Oglesby Presentence Report (PSR) at ¶ 5; 2 R. at 15 (No. 95-9085).
Killian advised Jernigan to ask his girlfriend, Lori Stone, to
apply for the refinancing loan in her name because Stone's credit
rating was better than Jernigan's. Killian apparently told Oglesby
that a personal loan would have to be made to Jernigan to make sure
that he would invest approximately $250,000 from the health and
welfare plan in Tahoe. Oglesby Presentence Report at WW 4, 6. On
February 2, 1990, Jernigan wired $253,041.84 from the union's
health and welfare plan to Compac to purchase Tahoe stock. In
making this transfer Jernigan did not obtain the required
authorization of another representative of the health and welfare
plan. On February 5, 1990, Jernigan received an $85,000 loan from
Compac secured by a $95,000 certificate of deposit that Tahoe
obtained using the funds Jernigan had wired to Tahoe.
On February 21, 1990, in a recorded conversation defendant
Kummer told David Brumbeloe, a Tahoe shareholder, that he had
called Jernigan to persuade him to purchase the stock with funds
from the union's health and welfare plan. Kummer indicated that in
return Tahoe would ensure that Jernigan received the home loan.
On March 31, 1990, Jernigan received from Tahoe a $6,000 check
made out to him but which he was to deliver to Waylon Morton, a
business agent of the union local in Macon, Georgia. Morton had
requested a cash payment from Tahoe before he would agree to use
union annuity funds to purchase shares of Tahoe stock. Jernigan,
however, cashed the check and spent the money. On May 8, 1990,
Morton invested $78,586.72 from his union's annuity plan with
Tahoe. The following July 2 Killian sent a $6,000 payment to
Morton as a result of his earlier investment.
Oglesby received $29,900 over a period of time in fees, loans
and expense reimbursements from Tahoe; some of this money was
obtained through a personal loan made to him by Compac based on
Killian's authorization.
After a lengthy investigation by the Department of Labor,
defendants were charged by information with violating 18 U.S.C. §
1954, "Offer, acceptance, or solicitation to influence operations
of employee benefit plan." Section 1954, as pertinent, provides
that:
Whoever being—
(1) an administrator, officer, trustee, custodian,
counsel, agent, or employee of any employee welfare benefit
plan or employee pension benefit plan; or
(2) an officer, counsel, agent, or employee of an
employer or an employer any of whose employees are covered by
such plan; or
(3) an officer, counsel, agent, or employee of an
employee organization any of whose members are covered by such
plan; or
(4) a person who, or an officer, counsel, agent, or
employee of an organization which, provides benefit plan
services to such plan
receives or agrees to receive or solicits any fee, kickback,
commission, gift, loan, money, or thing of value because of or
with intent to be influenced with respect to, any of his
actions, decisions, or other duties relating to any question
or matter concerning such plan or any person who directly or
indirectly gives or offers, or promises to give or offer, any
fee, kickback, commission, gift, loan, money, or thing of
value prohibited by this section, shall be fined under this
title or imprisoned not more than three years, or both.
18 U.S.C. § 1954.
Although § 1954 does not use the term "bribe" or "gratuity,"
the courts have noted that the language "because of, or with intent
to be influenced" corresponds with a "bribe/gratuity dichotomy."
United States v. Lopreato, 83 F.3d 571, 575 (2d Cir.1996). The
"with intent to be influenced" language prohibits a bribe, which
involves a quid pro quo. Id.; see also United States v. Mariano,
983 F.2d 1150, 1159 (1st Cir.1993) (a bribe involves intention of
briber to gain quid pro quo); United States v. Muldoon, 931 F.2d
282, 287 (4th Cir.1991) (payer's intent to influence recipient's
actions distinguishes bribe from gratuity). The "because of"
language prohibits a gratuity, which involves no quid pro quo, but
is a payment made "because of the act." Muldoon, 931 F.2d at 287.
Unlike other federal statutes prohibiting bribes and
gratuities, § 1954 provides the same maximum penalty for violation
of the "because of" (gratuity) or the "intent to be influenced"
(bribe) language of the statute. See 18 U.S.C. § 1954 (providing
maximum of three years imprisonment); cf. 18 U.S.C. § 201(b)
(bribery of public official or witness) (maximum penalty fifteen
years) and id. § 201(c) (gratuity) (maximum penalty two years).
The Sentencing Guidelines that apply to § 1954, however, do make a
distinction between a bribe and a gratuity, providing for a base
offense level often for a bribe and six for a gratuity. USSG §
2E5.1(a)(1) and (2). Application Note 1 to USSG § 2E5.1 defines
bribe as "the offer or acceptance of an unlawful payment with the
specific understanding that it will corruptly affect an official
action of the recipient;" Application Note 2 defines gratuity as
"the offer or acceptance of an unlawful payment other than a
bribe." Thus the Guidelines follow the distinction made in other
statutes that a bribe involves a specific understanding that it
will affect an official action—a quid pro quo.
The informations in the instant cases alleged that defendants
were involved in a "gratuity," and did not refer to a "bribe." But
they each included essentially the "with intent to be influenced
with respect to" language of § 1954 that generally refers to a
bribe. See 1 R. doc. 1 at WW 3, 6, 7 (No. 95-9066) (Kummer
conspired to obtain money for stock "in exchange for" providing a
loan for Jernigan's benefit, ¶ 3; he combined with others to offer
value "to influence" the operations of an employee benefit plan, ¶
6; he assisted others "to influence" Jernigan to use plan moneys
to buy Tahoe stock, ¶ 7); 1 R. doc. 1 at WW 5, 6 (No. 95-9165)
(Oglesby received from Tahoe moneys "because of and with intent to
be influenced with respect to his actions" concerning a welfare
plan, ¶ 5; he participated in negotiations to arrange a financial
benefit to Jernigan "in exchange for" Jernigan's use of plan funds
to buy Tahoe stock, ¶ 6); 1 R. doc. 1 at ¶ 5 (No. 95-9085)
(Jernigan received moneys "because of and with intent to be
influenced with respect to his actions" relating to a welfare plan,
¶ 5).
The plea agreements also used the language in a confusing
manner, stating that "Count One alleges a violation of Title 18,
United States Code, Section 1954, that is, to offer a gratuity to
influence the operations of an employee benefit plan." (emphasis
added). See 1 R. doc. 19 at ¶ 5a (No. 95-9066) (Kummer); see also
1 R. doc. 13 at ¶ 5a (No. 95-9085) (Jernigan) (same except "accept
a gratuity to influence"); 1 R. doc. 12 at ¶ 5a (No. 95-9165)
(Oglesby) (same except "offer and accept a gratuity to influence").
The agreements also stated "defendant understands that Count One
... charges the defendant with offering something of value to
influence the operations of an employee benefit plan." 1 R. doc.
19 at ¶ 6a (No. 95-9066) (Kummer); see also 1 R. doc. 13 at ¶ 6a
(No. 95-9085) (Jernigan) (same except "obtaining a gratuity to
influence"); 1 R. doc. 12 at ¶ 6a (Oglesby) (same except "Offer,
Acceptance, and Solicitation to Influence"). The government then
agreed that the base offense level was based on USSG § 2E5.1(a)(2),
gratuity, which would be six.
When defendants Kummer and Jernigan entered their guilty
pleas, the district court told each defendant, as the plea
agreement provided, that for sentencing purposes it was not binding
on the court and that if the court did not accept the
recommendations in it they would not be able to withdraw. See 2 R.
at 32-33 (No. 95-9066); 3 R. at 32-33 (No. 95-9085). The judge
also stated, however, that if he did not accept the plea agreements
he would give them a chance to withdraw. Id. at 43-44; 66 (both
records).
Upon completion of the presentence reports (PSRs), the
probation officer recommended that the judge find all of the
defendants had been involved in a bribe, and thus apply the base
offense level of ten. The PSRs differed in several respects from
the plea agreements, including recommending a higher valuation.
Defendants made numerous objections to the PSRs. The U.S. Attorney
also filed objections, in particular stating that the transaction
should not be classified as a bribe. The probation office then
produced an addendum to the PSRs, in which it revised upward some
of its recommendations. Defendants then filed further objections
and the probation office made a final report.
After holding a hearing for defendants Kummer, Jernigan and
Killian, during which both the probation officer and the labor
department investigator testified, the district court accepted the
PSRs' recommendations that the payments were bribes and thus the
base offense level was ten. The district court did not allow
defendants Kummer or Jernigan to withdraw their pleas.2 Defendant
Oglesby was sentenced later than the other defendants; the
2
The district court did at one point ask defendant
Jernigan's counsel if he wanted to withdraw the guilty plea.
When Jernigan's counsel stated he would "have to think about
that," the district court rescinded the offer. See 2 R. 23 (No.
95-9085).
district court gave him the opportunity to withdraw his plea but
Oglesby declined. The district court adopted most of the other
sentencing recommendations in each defendant's PSR and addendum.
It sentenced Jernigan to twenty-four months; Kummer to eighteen
months, and Oglesby to fourteen months.
II
Defendants argue that they were charged with and pleaded
guilty only to the gratuity prong of § 1954; that they must be
sentenced for a gratuity; that the court should have applied the
base offense level for gratuities in the Sentencing Guidelines.
This argument is based on a reading of § 1954 as including two
distinct offenses—bribe or gratuity—as opposed to one offense. We
have found no Eleventh Circuit case, or any other circuit case
specifically addressing whether § 1954 contains two separate
offenses. Cf. United States v. Gayle, 967 F.2d 483, 485 n. 3 (11th
Cir.1992) (en banc) (stating that 18 U.S.C. § 912, which provides
"Whoever falsely assumes or pretends to be an officer or employee
acting under the authority of the United States ... and acts as
such, or in such pretended character demands or obtains any money"
contains two distinct offenses), cert. denied, 507 U.S. 967, 113
S.Ct. 1402, 122 L.Ed.2d 775 (1993). But the case law we have found
from other circuits suggests that § 1954 contains only one offense.
See, e.g., United States v. Rosenthal, 9 F.3d 1016, 1017, 1020,
1024 (2d Cir.1993) (defendant was charged "with offering a gratuity
in connection with a pension plan" and court referred to conviction
for "intent to influence"); see also United States v. Lopreato, 83
F.3d 571, 574 (2d Cir.1996) ("While the difference between a bribe
and a gratuity does not affect the propriety of [defendant's]
conviction under section 1954(1), a bribe commands a higher base
level under the Sentencing Guidelines."). Further, neither the
title of the statute, "Offer, acceptance, or solicitation to
influence operations of employee benefit plan," nor its wording
make a distinction between bribe and gratuity. We hold that the
statute states a single crime, and it is only the Sentencing
Guidelines that differentiate between levels of punishment
applicable to that single offense. Thus, even though the
informations in these cases used the term "gratuity," defendants
pleaded guilty to violating the statute. The language of the
informations alone did not foreclose the district court from
assigning a base offense level for bribe.3
3
Sentencing Guideline § 1B1.2 provides that the court
"Determine the offense guideline section in Chapter Two (Offense
Conduct) most applicable to the offense of conviction (i.e., the
offense conduct charged in the count of the indictment or
information of which the defendant was convicted)." There is no
question that the offense guideline section applicable here is §
2E5.1, "Offering, Accepting, or Soliciting a Bribe or Gratuity
Affecting the Operation of an Employee Welfare or Pension Benefit
Plan; Prohibited Payments or Lending of Money by Employee or
Agent to Employees, Representatives, or Labor Organizations."
That Guideline, however, contains two offense levels. The
Guidelines provide that "[w]here there is more than one base
offense level within a particular guideline, the determination of
the applicable base offense level is treated in the same manner
as a determination of a specific offense characteristic." USSG §
1B1.2, comment. (n. 2). Then USSG § 1B1.3(a) states,
Unless otherwise specified, (I) the base offense level
where the guideline specifies more than one base
offense level, [and] (ii) specific offense
characteristics, ... shall be determined on the basis
of the following:
1(A) all acts and omissions committed, aided, abetted,
counseled, commanded, induced, procured, or willfully
caused by the defendant; and
III
Defendants next assert that the plea agreements provided that
they were involved in a "gratuity" but not a "bribe." As
previously noted, Jernigan's plea agreement stated, "[t]he
defendant understands that Count One alleges a violation of Title
18, United States Code, Section 1954, that is, to accept a gratuity
to influence the operations of employee benefits plans." 1 R. doc.
13 at ¶ 5a (No. 95-9085) (emphasis added); see also 1 R. doc. 12
at ¶ 5a (No. 95-9165) (Oglesby) ("offer and accept a gratuity");
I R. doc. 19 at ¶ 5a (No. 95-9066) (Kummer) ("offer a gratuity").
Indeed, our review of the record suggests that both the government
and defendants believed that the agreement was to plead to a
violation of the statute through the gratuity prong.
Defendants Jernigan and Kummer argue that under Federal Rule
of Criminal Procedure 11 the court was obligated to enter a
sentence consistent with the plea agreement or to reject the plea
agreement entirely and allow defendants to withdraw their guilty
plea.
Rule 11(e)(1) provides:
In General. The attorney for the government and the
attorney for the defendant or the defendant when acting pro se
may engage in discussions with a view toward reaching an
agreement that, upon the entering of a plea of guilty or nolo
contendere to a charged offense or to a lesser or related
offense, the attorney for the government will do any of the
following:
(4) any other information specified in the
applicable guideline.
Thus, despite use of the term gratuity in the
information, the determination of the base offense level
under § 2E5.1 is to be made based on all of the information
provided at sentencing.
(A) move for dismissal of other charges; or
(B) make a recommendation, or agree not to oppose the
defendant's request, for a particular sentence, with the
understanding that such recommendation or request shall not be
binding upon the court;
(C) agree that a specific sentence is the appropriate
disposition of the case.
The court shall not participate in any such discussion.
In United States v. Dean, 80 F.3d 1535 (11th Cir.1996), this court
distinguished subsection (B) plea agreements from those under the
other subsections.
One important distinction between "B" pleas and "A" or
"C" pleas is that only "B" pleas may be modified: "such a
recommendation or request shall not be binding upon the
court." This is made clear in Rule 11(e)(2), which states, in
pertinent part:
If the agreement is of the type specified in subdivision
(e)(1)(A) or (C), the court may accept or reject the
agreement, or may defer its decision as to the acceptance
or rejection until there has been an opportunity to
consider the presentence report. If the agreement is of
the type specified in subdivision (e)(1)(B), the court
shall advise the defendant that if the court does not
accept the recommendation or request the defendant
nevertheless has no right to withdraw the plea.
Id. at 1539. As applicable here, if this is a "C" plea agreement
the court must simply accept or reject the entire plea agreement;
if it is a "B" agreement the court may accept the plea and reject
the recommended punishment. See id. at 1541.
The plea agreements here contained the prosecution's promise
to recommend a downward adjustment for acceptance of
responsibility, and to consider asking for a USSG § 5K1.1
substantial assistance downward departure if it appeared justified.
Those are clearly type "B" recommendations; defendants would not
be able to withdraw their guilty pleas if the district court
decided not to follow them. See Dean, 80 F.3d at 1538-39.
Defendants argue, however, that the government's agreement that
each defendant was involved in a gratuity and that USSG §
2E5.1(a)(2) controlled the determination of the sentencing
guideline range should be construed as a type "C" agreement. Thus,
defendants contend that the instant agreements contained both type
"B" agreements to recommend particular sentencing options as well
as type "C" agreement that the offense fell under the gratuity base
level offense of USSG § 2E5.1(a)(2).
This court has said that when the government "or the court"
does not follow a plea agreement the court should order specific
performance or afford the defendant an opportunity to withdraw the
plea; and specific performance is preferred. United States v.
Jefferies, 908 F.2d 1520, 1527 (11th Cir.1990) (plea stipulation
specified drug quantity but court found quantity to be larger);
see also United States v. Taylor, 77 F.3d 368, 371 (11th Cir.1996)
(government paid "lip service" to plea agreement but then
affirmatively supported position inconsistent with agreement;
defendant allowed to withdraw plea); United States v. Rewis, 969
F.2d 985, 988-89 (11th Cir.1992) (when government breached plea
agreement, remedies include specific enforcement or permitting
withdrawal of plea).
Considering the ambiguous nature of the agreement, this is a
close case. The agreements did not state that they were type "C"
agreements or that they were type "B" agreements. They did not
provide that defendants could withdraw if the court determined it
could not apply the gratuity base offense level. The references to
"gratuity" might be viewed as factual stipulations, and as such
they would not be binding on the court. See USSG § 6B1.4(d). For
the reasons stated in the prior sections of this opinion the text
of the agreement is not inconsistent with holding they are type "B"
agreements, from which defendants would not be entitled to withdraw
when the court decided not to follow the sentencing
recommendations. But we must also consider the advisement of the
court when it accepted the pleas of Kummer and Jernigan. Although
the district court told defendants they would be unable to withdraw
because the agreement was not binding on the court, it also twice
informed them that they would be able to withdraw their plea if the
court did not accept the agreement.4
Considering all the circumstances, including the sentencing
court's statements to the defendants, if the court could not in
good conscience accept the violations as justifying a sentence
under the gratuity guideline, the sentencing court was obligated to
4
At the plea hearing, the district court stated that the
"[p]lea agreement is not binding upon the Court. The Court, of
course, will have the presentence at some time, and if the Court
should reject the plea agreement, of course, you may withdraw and
enter a plea of not guilty and proceed to trial." 2 R. at 32
(No. 95-9066); 3 R. at 32 (No. 95-9085). The court also stated
that "[y]our lawyers and the government, no doubt, will make a
recommendation to me as to what sentence should be imposed, as
well as the probation officers. I am not bound by those
recommendations; they are only that. You cannot withdraw your
plea of guilty even though I do not accept the recommendation."
Id. at 33. The government then recited the terms of the plea
agreements, referring to gratuity. See id. at 36-38, 41-42. The
district court then stated "the agreement is not binding upon the
Court, but if the Court should reject it, or any of them, you
will be given an opportunity to withdraw your plea of guilty and
enter a plea of not guilty." Id. at 43-44. Finally, at the end
of the hearing the judge stated that he accepted the guilty plea,
but that after the PSRs were prepared, "if I find that I cannot
accept the plea, at that point I will reject it and allow
everybody to enter a plea of not guilty." Id. at 66.
allow withdrawal of the guilty pleas. See United States v. Forbes,
888 F.2d 752, 753-54 (11th Cir.1989) (when court found reduction
for minor role, as agreed upon by defendant and government, not
justified by PSR, court offered to allow defendant to withdraw
guilty plea). Because defendants Kummer and Jernigan were not
afforded the opportunity to withdraw their pleas, we remand to the
district court with the direction that it permit them to withdraw
their guilty pleas.
The court did offer defendant Oglesby the opportunity to
withdraw his plea and he declined. He does not argue that the
government breached the plea agreement. Thus, defendant Oglesby's
right to any relief is dependent upon the merits of the claims he
raises that we discuss hereafter.
IV
Each defendant asserts that the district court erred in its
factual determination that the base offense level for the offense
of conviction was ten (bribe) rather than six (gratuity). See USSG
§ 2E5.1(a)(1) and (2). As previously noted, the base offense level
for a bribe applies if there was an offer or acceptance of unlawful
payment "with the specific understanding that it will corruptly
affect an official action of the recipient," USSG § 2E5.1 comment.
(n. 1); a gratuity is "the offer or acceptance of an unlawful
payment other than a bribe," id. comment. (n. 2). We review the
district court's findings of fact on this issue for clear error and
review de novo the application of the Guidelines to the facts. See
United States v. Jennings, 991 F.2d 725, 732 (11th Cir.1993).
Defendants argue that there was no evidence of a specific
understanding or a quid pro quo. They point to testimony by Sandra
Rackleff, the labor department agent who investigated the case over
a five year period, that she did not think there was enough
evidence of a quid pro quo on which to base a bribe offense level.
The United States probation officer, in contrast, testified that
her recommendation to the contrary was based on a belief that the
evidence supported an understanding between Jernigan and the Tahoe
Company which prompted him to invest the health and welfare plan
money in Tahoe stock. She recited evidence that Oglesby spoke to
Jernigan several times to encourage Jernigan to invest in Tahoe,
the turndown of Jernigan's first application for a loan, the timing
of the defendants' discussions, the investment purchase, the loan
made to Jernigan's girlfriend, and Oglesby's grand jury testimony.
The probation officer highlighted Jernigan's grand jury testimony5
that he was pushed into purchasing Tahoe shares by phone calls and
contacts in part from Oglesby and also from Killian. She also
pointed to Oglesby's grand jury testimony that "[the home loan] was
a commitment that [Ed Killian] had made to Robert Jernigan in order
5
Defendant Jernigan raises the issue whether the probation
officer improperly relied on information gained from his grand
jury testimony in determining his guideline range. That would
violate USSG § 1B1.8, which prohibits use of self-incriminating
information provided pursuant to a cooperation agreement from
being used in determining the applicable guideline range, except
to the extent provided in the agreement. The PSR, its addendum,
and the probation officer's testimony indicate that she relied on
Jernigan's and Ogelsby's grand jury testimony in making the
bribery recommendation. But the court reminded the officer that
such self-incriminating testimony could not be used against a
cooperating defendant. The court then elicited from the officer
that she would have arrived at the same conclusion without
considering the grand jury testimony. More importantly, as noted
by the quotation in the text, the district court disclaimed any
such reliance in making its own conclusion.
for Robert Jernigan to make the investment." 2 R. 68 (No. 95-
9085).
In sentencing Jernigan the district court alluded to its own
prior comments, as the testimony and arguments were made to it.
The judge stated, "I think I made it known of my beliefs of why I
found the bribe instead of the gratuity. According to the law and
to case law it is not a matter of semantics. In no way can
[Jernigan's] testimony before the grand jury be used against him.
But the clear wording of the excerpts of the other defendants, the
coincidences or lack of coincidences and all indicated but one
conclusion to this Court." Id. at 87. The court's comments in
sentencing Kummer, 3 R. at 49, 56 (No. 95-9066), and Ogelsby, 2 R.
at 83-84 (No. 95-9165), are not as extensive but are to the same
effect.
Of course, the standard for a sentencing court on a disputed
fact involved in sentencing is a preponderance of the evidence.
United States v. Ignancio Munio, 909 F.2d 436, 439 (11th Cir.1990),
cert. denied, 499 U.S. 938, 111 S.Ct. 1393, 113 L.Ed.2d 449 (1991).
"In resolving any reasonable dispute concerning a factor important
to the sentencing determination, the court may consider relevant
information without regard to its admissibility under the rules of
evidence applicable at trial, provided that the information has
sufficient indicia of reliability to support its probable
accuracy." USSG § 6A1.3(a). The court's finding is not clearly
erroneous. There was sufficient evidence on which the court could
find that the loan was a bribe under USSG § 2E5.1(a)(1), and thus
a base offense level of ten was appropriate.
V
Defendants argue that the district court erred in determining
the increase in their offense levels under USSG § 2E5.1(b)(2). We
review the district court's determinations on this issue for clear
error. See United States v. Hang, 75 F.3d 1275, 1284 (8th
Cir.1996).
The Guidelines direct the court to increase the offense level
"by the number of levels from the table in § 2F1.1 (Fraud and
Deceit) corresponding to the value of the prohibited payment or the
value of the improper benefit to the payer, whichever is greater."
USSG § 2E5.1(b)(2). The district court adopted the PSRs
recommendation that the offense characteristics be increased based
on the "value of the improper benefit to the payer," which it
stated was the full amount of Jernigan's $253,041 purchase of Tahoe
securities.6 All defendants argue the value of the improper
benefit to Tahoe executives was not the full amount of the stock
purchase.
Defendants contend that the "value of the prohibited
payment"—the loan to Jernigan—should be used as the basis for
increasing the offense level. 7 They then argue that the value of
the loan for Jernigan's benefit was less than the $85,000 loan
amount. Oglesby argues further that his plea agreement stipulated
6
An additional $78,000 investment by a union official,
Morton, steered to Tahoe by Jernigan, was added to the improper
benefit total in the PSR addendum. We do not address that
addition because it makes no difference to our analysis.
7
The plea agreement with Jernigan stated that he agreed the
amount of the gratuity was "approximately $91,000," apparently
consisting of the $85,000 loan plus the $6,000 check Jernigan
received and kept. 1 R. doc. 13 ¶ 5a. (No. 95-9085).
the prohibited payment was a gratuity of less than $40,000.
If the increase in offense level is to be based on the "value
of the improper benefit to payer," that term is defined in the
"Commentary to § 2C1.1." USSG § 2E5.1 comment. (n. 4).
Application Note 2 to § 2C1.1 provides that " "the benefit received
or to be received' means the net value of such benefit." It then
provides as an example that if a $150,000 contract is awarded in
return for a bribe, and $20,000 profit was made on the contract,
the "value of the benefit received is $20,000." Id.
The basis of defendants' argument that the district court
erred in using the entire amount of the $253,000 purchase of Tahoe
stock is that the stock had some value. See United States v.
Fitzhugh, 78 F.3d 1326, 1331 (8th Cir.1996) ("value of transaction
is often quite different than the face amount of the transaction").
Although the district court adopted the PSR recommendation on this
issue, the factual findings underlying its determination are not
clear. The district court may have concluded the stock had no
value, and therefore the entire amount of the purchase was the net
value of benefit received by Tahoe. Cf. Lopreato, 83 F.3d at 576
(district court could have properly concluded securities had no
value where evidence showed active looting of company and impaired
collateral).
This issue may become relevant again on the remand we order.
If it does the district court should make explicit factual findings
as to value of the improper benefit. The court must determine the
net benefit of the $253,000 stock purchase to Tahoe. If that
figure is less than the $85,000 loan to Jernigan, as enhanced by
the $6,000 check payment Jernigan retained, the court will need to
determine the value of the loan to see if it is greater than the
net value of the Tahoe investment. The value of a loan to the
borrower may also be less than the face amount. See Fitzhugh, 78
F.3d at 1331 (remanding and noting that "scanty evidence" suggests
value of loan was less than face amount). If the borrower's
promise to repay were worthless or unenforceable, the value of the
loan might be the face value. Id. at 1331 n. 2. Further, "[w]hen
a loan is obtained by bribes, it is likely to be at favorable
terms, in which case its value will typically be the difference
between the actual cost of the loan and the cost of the same loan
at fair market terms and conditions." Id. at 1331. We leave the
valuation questions to the district court on remand.
VI
Defendants Ogelsby and Jernigan assert that the district
court erred in assessing them a two-level increase for abuse of
position of trust. USSG § 3B1.3 provides for a two level increase
in the base offense level "[i]f the defendant abused a position of
public or private trust, or used a special skill, in a manner that
significantly facilitated the commission or concealment of the
offense." They first attack the legal basis for the two-level
increase, asserting it amounts to double counting under Section
3B1.3, which also provides that "[t]his adjustment may not be
employed if an abuse of trust or skill is included in the base
offense level or specific offense characteristic." We review the
district court's factual determination on this issue for clear
error, but the question whether these facts justify the abuse of
trust enhancement is a question of law that we review de novo.
United States v. Terry, 60 F.3d 1541, 1545 (11th Cir.1995), cert.
denied, --- U.S. ----, 116 S.Ct. 737, 133 L.Ed.2d 687 (1996).
These defendants point to the commentary to other Guidelines
relating to public corruption cases, USSG §§ 2C1.1 and 2C1.2
(bribes and gratuities), which state that generally § 3B1.3 should
not be applied in these cases because the Guidelines took into
consideration the fact that such cases necessarily involve abuse of
positions of trust.8 See USSG §§ 2C1.1, comment. (n. 3) (bribery);
2C1.2, comment. (n. 2) (gratuity).
We reject this argument. First, any private citizen could
offer a bribe or gratuity to influence the operation of an employee
benefit plan in violation of § 1954; they need not be in any
position of trust. Thus, the § 2E5.1 base offense level does not
include an abuse of trust. In United States v. Pedersen, 3 F.3d
1468, 1470, 1470 n. 6 (11th Cir.1993), we allowed enhancement for
abuse of "special trust" under § 3B1.3 in an insider trading case
even though an element of trust is implicit in laws prohibiting
insider trading. We noted that the "Sentencing Commission has
8
These defendants also note that the base offense level for
a gratuity to a public official is a level seven, USSG § 2C1.2,
while the base offense level for a gratuity under § 2E5.1(a)(2)
is six; they assert this one-level difference demonstrates that
the Commission views public corruption offenses under § 2C1.2 as
more serious. Defendants argue "there is no rational basis for
permitting an increase of two levels pursuant to U.S.S.G. § 3B1.3
for a bribery or gratuity offense under U.S.S.G. § 2E5.1
involving union officials, where the Guidelines relating to the
more serious offense of public corruption covered by § 2C1.2 do
not permit such an increase because they recognize that the abuse
of trust factor was already taken into consideration in the
formulation of those Guidelines." Brief of Appellant Oglesby at
26.
expressly excepted certain offenders from particular enhancements
where it intended to do so." Second, this conclusion seems
compelled by Guideline section 2E5.1: "If the adjustment for a
fiduciary at § 2E5.1(b)(1) applies, do not apply the adjustment at
§ 3B1.3 (Abuse of Trust or Use of Special Skill)." USSG § 2E5.1,
comment. (n. 5).
Oglesby also attacks the factual finding that he was in a
position of trust, noting that he was not a "fiduciary of the
benefit plan or labor organization" as specified in § 2E5.1(b)(1).
But the abuse of trust enhancement only requires a finding that
defendant possessed a position "characterized by professional or
managerial discretion" which "contributed in some significant way
to facilitating the commission ... of the offense." USSG § 3B1.3,
comment. (n. 1). In his position as a union official Oglesby had
such discretion, and as the labor investigator pointed out, his
position significantly contributed to facilitating the commission
of the offense in this case. The district court did not abuse its
discretion in giving defendant Oglesby the two-level increase under
§ 3B1.3.
VII
Defendant Oglesby's argument that he should have received a
two-level downward adjustment under USSG § 3B1.2(b) for being "a
minor participant" does not impress us. Pointing to Special Agent
Rackleff's testimony at sentencing that he did not have control or
authority over the money or transactions, he contends he was less
culpable than the other defendants. But Rackleff also testified
that Oglesby was the facilitator of the transaction; and the
record shows he played a significant role in assuring the illegal
transactions were completed. He also profited, at least
indirectly, from them. The district court did not err in denying
a downward adjustment.
VIII
Defendants Kummer and Jernigan make certain other contentions
that we treat briefly because of the possibility these defendants
will not withdraw their guilty pleas, or the issues will arise
again after their trial.
Defendant Kummer argues that the district court erred in not
departing below the Guideline range based on the government's USSG
§ 5K1.1 motion to depart because of his substantial assistance. We
cannot review a court's refusal to grant a downward departure
unless the district court erred in concluding it did not have
authority to depart. United States v. Fossett, 881 F.2d 976, 979-
80 (11th Cir.1989). At the sentencing hearing the court resolved
the defendant's objections to the PSR, and found a total offense
level of 15 and criminal history of I, indicating a sentencing
range of eighteen to twenty-four months. After hearing testimony
of defendant Kummer's assistance to the government, the court
stated that it had read "the 5K1.1 motion filed by the government
which the Court grants." 3 R. at 56 (No. 95-9066). The court,
however, then sentenced defendant Kummer to eighteen months, which
would not be a downward departure. On remand the district court
should clarify this point if Kummer does not withdraw his guilty
plea.
As to defendant Jernigan's argument that he should have
received a departure outside the Guidelines range because his
behavior was aberrational and not within the heartland of cases
controlled by the Guidelines, we note that the government
recommended and the district court granted Jernigan a downward
departure to twenty-four months for cooperation. The court clearly
acknowledged that it could depart further downward but chose not to
do so. Defendant Jernigan also argues that he was entitled to a
downward adjustment under USSG § 3B1.2 as a minor or minimal
participant. He asserts he was unsophisticated in business
affairs, and attempts to frame the "offense" as Tahoe's overall
investment scheme. But the offense of conviction involved here is
the giving of a loan in exchange for or as a result of Jernigan's
$253,000 investment in Tahoe. We fail to see how defendant
Jernigan can argue he had a minor or minimal role in the offense of
conviction. There was no abuse of the court's discretion. The
other issues he raised are meritless and deserve no discussion.
Defendants Jernigan and Kummer request that a new judge be
assigned to conduct proceedings on remand. After reading the
record we are satisfied the district judge who conducted these
proceedings did nothing to justify reassignment. Therefore, we
decline the request.
AFFIRMED in part, REVERSED in part, and REMANDED for
proceedings consistent with this opinion.
. . . . .