In the

United States Court of Appeals

For the Seventh Circuit

No. 08-3000

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

DOLI SYARIEF PULUNGAN,

Defendant-Appellant.

Appeal from the United States District Court

for the Western District of Wisconsin.

No. 07-CR-144-BBC—Barbara B. Crabb, Chief Judge.

ARGUED MAY 15, 2009—DECIDED JUNE 15, 2009

Before EASTERBROOK, Chief Judge, and BAUER and

FLAUM, Circuit Judges.

EASTERBROOK, Chief Judge. Federal law prohibits the

export of “defense articles” without a license. 22 U.S.C.

§2778. A “defense article” is any item on the United

States Munitions List, which §2778(a) authorizes the

President to promulgate. The President has delegated that

power to the State Department’s Directorate of Defense

Trade Controls. The Munitions List includes “[r]iflescopes
2 No. 08-3000

manufactured to military specifications.” 22 C.F.R. §121.1

Category 1(f). Designations are not subject to judicial

review. 22 U.S.C. §2778(h).

Doli Pulungan tried in 2007 to export 100 Leupold Mark

4 CQ/T riflescopes (made in Oregon by Leupold & ® ®

Stevens, Inc.). He planned to transship through Saudi

Arabia to Indonesia in order to conceal the destination,

because his clients told him that the United States had

an embargo on military exports to Indonesia. There had

been such an embargo between 1999 and 2005, but there

was none when Pulungan tried to acquire and export

the ‘scopes. He was charged with violation of §2778(c),

however, on the theory that the Leupold Mark 4 CQ/T

riflescope is “manufactured to military specifications.” A

jury found him guilty of attempting to export defense

articles without a license, and the judge sentenced him

to 48 months’ imprisonment.

Section 2778(c) makes it a crime to violate (or attempt

to violate) any part of §2778 “willfully”. The parties agree

that “willfully” means with knowledge that a license is

required. Pulungan concedes that he attempted to

acquire and export Leupold Mark 4 CQ/T riflescopes to

Indonesia without a license. But he contends that the

prosecution did not prove that these ‘scopes are “manufactured to military specifications”—and that, even if

they are so manufactured, he did not know it and therefore lacked the required mental state.

Pulungan contends that the prosecution must prove,

beyond a reasonable doubt, that the Leupold Mark 4 CQ/T

riflescope was “manufactured to military specifica-
No. 08-3000 3

tions”—just as the prosecution must prove in a prosecution

for distributing cocaine that the substance is cocaine

rather than sugar. The prosecutor addressed this topic

through the testimony of Anthony Dearth, who testified

that the Directorate of Defense Trade Controls has concluded that the Leupold Mark 4 CQ/T is “manufactured

to military specifications”—but he would not say what

those specifications are or why the Directorate believes

that the Mark 4 CQ/T is “manufactured to” them. The

decision itself was not produced.

After Dearth testified, the prosecutor asked the judge

to instruct the jury that, as a matter of law, the Leupold

Mark 4 CQ/T riflescope is “manufactured to military

specifications.” The judge gave the requested instruction,

taking the issue out of the jury’s hands. The judge

agreed with the prosecutor that §2778(h) prevents any

inquiry, by either judge or jury, into the propriety of an

item’s classification. The judge confirmed this ruling

after trial when denying Pulungan’s motion for acquittal.

561 F. Supp. 2d 1019 (W.D. Wis. 2008). Pulungan disputes

this understanding of §2778(h) and adds that, if the

prosecutor is right, then the defendant’s sixth amendment right to trial by jury supersedes the statute. See

United States v. Gaudin, 515 U.S. 506 (1995) (in a prosecution for fraud, the judge must allow the jury to decide

whether the false statements were material; the judge

may not treat materiality as a matter of law).

Section 2778(h) provides: “The designation by the

President (or by an official to whom the President’s

functions . . . have been duly delegated), in regulations
4 No. 08-3000

issued under this section, of items as defense articles or

defense services for purposes of this section shall not be

subject to judicial review.” (Emphasis added.) So if 22

C.F.R. §121.1 Category 1(f) read “any Leupold Mark 4

CQ/T riflescope”, that designation would be incontestable

(even though made by the Directorate rather than the

President), and the question for the jury would be whether

the item that Pulungan tried to export was indeed a

Leupold Mark 4 CQ/T riflescope. If Pulungan had conceded that the Leupold Mark 4 CQ/T riflescope is “manufactured to defense specifications”, he could not

avoid liability by arguing that the Munitions List should

not require licenses for these items. See United States v.

Martinez, 904 F.2d 601 (11th Cir. 1990). But he does not

concede that the Leupold Mark 4 CQ/T riflescope is

within the domain of 22 C.F.R. §121.1 Category 1(f).

The only regulation is that “[r]iflescopes manufactured

to military specifications” require export licenses. It is

easy to see why the regulation’s language deals with

attributes rather than names; an effort to enumerate

each item would be futile, not only because some are

bound to be overlooked (imagine a regulation that tried

to list all bicycles by manufacturer and model number)

but also because manufacturers change their designations.

The Mark 4 may be succeeded by a Mark 5, or the CQ/T

model may become the CQ/X. But while a narrative

description may be the most sensible way to proceed, it

also limits the effect of §2778(h). Only material “in regulations” is covered by that statute. The Directorate’s

conclusion that the Leupold Mark 4 CQ/T riflescope is

“manufactured to military specifications” is not in a

regulation and so is unaffected by §2778(h).
No. 08-3000 5

The Directorate’s claim of authority to classify any

item as a “defense article,” without revealing the basis

of the decision and without allowing any inquiry by the

jury, would create serious constitutional problems. It

would allow the sort of secret law that Panama Refining

Co. v. Ryan, 293 U.S. 388 (1935), condemned. (That case

dealt with an unpublished regulation that remained “in

the hip pocket of the administrator,” a serious problem

apart from the nondelegation holding usually associated

with Panama Refining.) A regulation is published for all

to see. People can adjust their conduct to avoid liability.

A designation by an unnamed official, using unspecified

criteria, that is put in a desk drawer, taken out only for

use at a criminal trial, and immune from any evaluation

by the judiciary, is the sort of tactic usually associated

with totalitarian régimes. Government must operate

through public laws and regulations. See United States v.

Farinella, 558 F.3d 695 (7th Cir. 2009). Thus the United

States must prove, and not just assert, that the Leupold

Mark 4 CQ/T riflescope is “manufactured to military

specifications.”

It does not necessarily follow that proof must come

in open court. Congress has made some special provisions

for classified information—and both the manufacturing

details of the Leupold Mark 4 CQ/T riflescope and the

precise specifications for military ‘scopes may be

classified as state secrets; some details also may be trade

secrets. Until Congress enacted the Classified Information

Procedures Act, 18 U.S.C. App. 3 §§ 1–16, defendants

frequently engaged in “greymail”—they threatened to

expose secrets as the price of successful prosecution, which
6 No. 08-3000

induced the government to dismiss the indictments or

prosecute for less serious crime. The Classified Information Procedures Act is designed to allow disputes involving material legitimately kept secret to be resolved without unnecessary public disclosures.

Pulungan’s lawyer said at oral argument that he

had not asked for a hearing under this statute. Nor did

the prosecutor offer one. Both took an all-or-nothing

approach: Pulungan demanded a public jury trial, and

the prosecutor total secrecy. We need not decide whether

either litigant has waived or forfeited its position by

disdaining the statutory middle ground—or whether any

error is harmless (Pulungan has never argued that the

Mark 4 CQ/T ‘scope is not actually a mil-spec product

and didn’t ask for an expert to explore that subject)—because Pulungan is entitled to prevail even if the

criminal-justice system must proceed on the assumption

that the Mark 4 CQ/T riflescope is a “defense article.”

It is not enough for the Leupold Mark 4 CQ/T riflescope

to be a “defense article.” Pulungan cannot be convicted

unless he knew that it is one, and that licenses are necessary to export them. The United States concedes that the

word “willfully” in §2778(c) requires it to prove that the

defendant knew not only the material facts but also the

legal rules. (We need not decide whether the concession

is correct. “Willfully” is a notoriously plastic word. See

Bryan v. United States, 524 U.S. 184 (1998).)

That the Directorate’s determination about the status of

the Leupold Mark 4 CQ/T riflescope was unknown to

the general public until Pulungan’s trial makes it hard to
No. 08-3000 7

show his knowledge. Some people in the business

knew the Directorate’s view. Leupold & Stevens itself

asked after bringing the ‘scope to market in 2002, and the

Directorate replied in 2003 that the Mark 4 CQ/T is covered

as a “defense article.” But Pulungan was not an industry

insider, nor were his potential customers (he says that

his clients were civilian police departments). The United

States does not contend that Pulungan knew what the

Directorate told Leupold & Stevens in 2003, or indeed

knew that the firm had even made an inquiry.

The United States offered three kinds of proof on the

subjects of knowledge and intent. It observed, first, that

Pulungan had in his possession printouts of web pages

at the site Telescopes.com that limit the countries available for shipment. It showed, second, that Pulungan lied

to his business associates about how many riflescopes

he wanted and where they would be sent. The prosecutor

contends that these lies, coupled with a willingness to

pay above-market prices ($1,000 per Leupold ‘scope, when

retailers charge only $700), show that he knew that his

proposed transaction of 100 riflescopes to Indonesia was

unlawful. Third, Pulungan sent email messages and

made notes evincing a belief that munitions exports to

Indonesia were unlawful; the prosecutor submits that

Pulungan has effectively conceded intending to violate

the law.

Let us start with the first of these. Telescopes.com

advised its customers that “[w]e are allowed to ship

riflescopes, laser sights and riflescope accessories only to

certain countries.” And one of the web pages devoted to
8 No. 08-3000

the Leupold Mark 4 CQ/T riflescope contained this text,

in bold red type: “We cannot export this item outside

the U.S.” The prosecutor says that a jury could infer

from Pulungan’s possession of these statements that he

knew that a license was required to export the Leupold

Mark 4 CQ/T riflescope. The problem with this inference

is obvious: Telescopes.com did not say why the available

destinations are limited. Its web pages seemed to say

that the Leupold Mark 4 CQ/T riflescope cannot be exported (at least not by Telescopes.com) even if the

buyer has a license.

And there may be a very good reason. Perhaps

Telescopes.com had a restricted territory. It is common

for a manufacturer to authorize a dealer to sell in one

country but not another. Leupold & Stevens may ship

directly to dealers in foreign nations (getting licenses if

necessary) and forbid any of its dealers to ship across

international borders. Such limits can be enforced

through trademark and patent laws, whether or not a

given nation’s contract or antitrust laws recognize

vertical restrictions on dealers’ sales territories. To see

the absence of a link between no-export notices and

military technology, look at almost any web page at

Amazon.com devoted to electronic equipment. The web

page for every USB flash-memory stick—a commodity

item that is manufactured outside this nation, and thus

unaffected by export-control laws—contains the statement: “Currently, item can be shipped only within the

U.S.” That’s pretty much what Telescopes.com told

Pulungan about the Leupold Mark 4 CQ/T riflescope. The

same legend can be found on Amazon’s pages for
No. 08-3000 9

some movie DVDs and other copyrighted material. And

Amazon’s page for LaraBar Jocalat orange milk chocolate

says: “Currently, item can be shipped only within the

U.S.” The military may run on coffee and chocolate, but

that does not make either a “defense article.”

At the Telescopes.com web site, quite a few pages for

binoculars say: “Only ships in contiguous USA”.

Telescopes.com no longer sells riflescopes, but

OpticsPlanet.com, which does, does not display a USAonly shipping restriction on its page for the Leupold

Mark 4 CQ/T riflescope. We conclude that no reasonable

jury could infer from the presence, or absence, of a USAonly shipping legend on a commercial web site that a

would-be buyer knows that the item is, or is not, a

“defense article.”

The prosecutor’s second and third reasons may be

taken together. They show convincingly that Pulungan

believed that what he was doing was illegal. The problem

is that they evince a belief in a nonexistent rule (the

embargo that had been lifted two years earlier) rather

than a belief that an export license was necessary.

As the prosecutor sees things, an intent to violate one

law is as good as the intent to violate any other. The

United States’ appellate brief essentially invokes the

doctrine of transferred intent (though it does not use

that name or cite authority). If you set out to kill A by

poisoning his whiskey, and B drinks from the glass first

and dies, you are guilty of B’s premeditated murder: The

intent to kill A is “transferred” to B’s death. See Bradshaw

v. Richey, 546 U.S. 74 (2005); see also Wayne R. LaFave, 1

Substantive Criminal Law §5.2(c) (2d ed. 2003); Anthony M.
10 No. 08-3000

Dillof, Transferred Intent: An Inquiry into the Nature of

Criminal Culpability, 1 Buff. Crim. L. Rev. 501 (1998); Model

Penal Code §2.03 (1962). So far as we can tell, however,

transferring intent from one genus of offense to another

has never been permitted. Suppose Pulungan had

believed (wrongly) that the United States imposes an

excise tax on exports of optical gear and had tried to

avoid payment; an intent to evade a nonexistent tax

would not transfer to an intent to export riflescopes

without a license; the crimes are too different for one

intent to suffice for the other.

The crime that Pulungan set out to commit was

unrelated to unlicensed exports. An embargo on sales to

Indonesia would not have prevented a shipment to

Saudi Arabia; it is only the intent to transship in

Saudi Arabia that would have created a legal problem

(had there been an embargo). It would be a stretch to

treat “intent to transship lawfully exported riflescopes” as

equivalent to “intent to export riflescopes without a

required license.” Both crimes are malum prohibitum

rather than malum in se—that is, they are regulatory

offenses rather than acts evil in themselves under widely

held moral codes—and the “willfullness” element in a

regulatory offense such as §2778(c) is designed to

require knowledge of this rule, rather than of some other

actual or potential regulation. See Staples v. United States,

511 U.S. 600 (1994); Cheek v. United States, 498 U.S. 192

(1991).

No matter. Suppose that intent can be transferred from

a nonexistent embargo to a licensing requirement. Still, the

United States has conceded that §2778(c) requires proof
No. 08-3000 11

of knowledge of the law’s coverage, as well as intent to

violate the law. Pulungan acted willfully only if he

knew that Leupold Mark 4 CQ/T riflescopes are “manufactured to military specifications.” It may be a fool’s errand

to try to list every riflescope that is made to military

specifications, but the Directorate could avoid problems

such as this by putting into the text of the regulation all

riflescopes that it has tested and found to be covered. An

“including but not limited to . . .” listing would take

advantage of §2778(h), give notice to affected persons,

yet not restrict the listing’s domain.

As things stand, though, the only basis for inferring

Pulungan’s knowledge is the legend on the web page. We

explained above why that is insufficient. If Indonesia

had not so recently been subject to an arms embargo, then

hugger-mugger alone might permit a jury to infer knowledge that a license was required. Pulungan’s efforts to

work through intermediaries, and to acquire 100 ‘scopes

without placing one large order that might have set off

warning systems, do not point in that direction, however.

The prosecutor does not contend that Pulungan’s emails

and notes about the embargo were part of a ruse to

create a defense for someone who knew that the embargo

had been rescinded but that other laws might block

exports. So the evidence is insufficient to show, beyond

a reasonable doubt, that Pulungan knew that these

‘scopes were “defense articles” that required export

licenses, and the conviction is

REVERSED.

6-15-09