In the

United States Court of Appeals

For the Seventh Circuit

No. 99-4302

United States of America,

Plaintiff-Appellee,

v.

Jose J. Arambula,

Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Indiana, Indianapolis Division.

No. 99 CR 57--David F. Hamilton, Judge.

Argued November 27, 2000--Decided January 26, 2001

 Before Bauer, Posner, and Easterbrook, Circuit Judges.

 Bauer, Circuit Judge. Jose J. Arambula

challenges the district court’s enhancement of

his sentence for obstruction of justice and

denial to reduce for acceptance of

responsibility. We vacate the obstruction

enhancement, but affirm the denial of an

acceptance of responsibility reduction.

BACKGROUND

 A. Facts

 A postal inspector suspected that a parcel

addressed from Greg Brown, 1302 Lowry Road,

Laredo, Texas to Joe Arambula at Courtyard by

Marriott Hotel in Indianapolis, Indiana contained

narcotics based on its size, weight, shape, and

mailing origin. Investigation revealed the Laredo

address was fictitious. The parcel underwent a

canine examination, which indicated that it

contained a controlled substance. Based on this

information, a federal search warrant was issued

for the parcel. Tests revealed that it harbored

two pounds, nine ounces of cocaine. Under court

authorization, an electronic transmitter was

placed inside the parcel with a counterfeit

substance mixed with a small amount of the

original cocaine.

 Law enforcement officers then delivered the
parcel to the hotel desk and Arambula took it to

his room. Arambula returned to the lobby to meet

a man identified as Frederick L. Hand and

escorted him to the room. Minutes later the

electronic transmitter signaled that the parcel

had been opened. The officers knocked and

announced, asking that the door be opened.

Receiving no response, but hearing movement

inside, the officers forced entry and found

Arambula near an open window and Hand sprawled on

a roof about two floors below. 

 Arambula and Hand were arrested and properly

warned. Arambula consented to a room search and

agreed to speak with law enforcement agents. He

confessed that he was in Indianapolis to sell the

cocaine to Hand and that the sale had been

arranged a month prior in Cincinnati. Arambula

revealed that the source of the cocaine was Juan

Medina Gonzales. He also admitted that a few

months before this incident he had received

additional parcels from Gonzales containing

cocaine and marijuana.

 A grand jury indicted Arambula, Hand, and other

persons unknown with conspiracy to distribute

cocaine and possession with intent to distribute

cocaine under 21 U.S.C. sec. 841(a)(1) and sec.

846. Arambula pled guilty and agreed to provide

complete and truthful information regarding his

involvement and the involvement of others in

distributing controlled substances. To fulfill

his end of the plea agreement, he testified for

the government in Hand’s trial. The jury

convicted Hand.

 B. Arambula’s Sentencing Hearing

 Arambula was subsequently sentenced by the same

judge that presided over Hand’s trial. The judge

expressed his belief that Arambula’s testimony at

Hand’s trial was not complete and truthful. The

government conveyed its satisfaction with

Arambula’s testimony and considered it credible

and complete. The government stood by the PSR,

which recommended no obstruction of justice

enhancement and recommended reductions under sec.

5C1.2, sec. 5K1.1 (substantial assistance), and

sec. 3E1.1 (acceptance of responsibility).

Arambula concurred with the government. The judge

held to his finding that Arambula’s testimony was

false and raised his offense level for

obstruction of justice and denied the reductions.

 The judge began his ruling regarding the

obstruction of justice enhancement by reciting

the elements of perjury: "I believe he has

provided false testimony; I believe he has done

so willfully; and it goes to matters that are
material." Tr. at 33. The judge proceeded to

discuss the first element--false testimony. The

judge enunciated: "What I need to do is make a

determination, as I said, based on the

preponderance of the evidence, as to whether Mr.

Arambula is providing truthful, complete

information about his involvement and the

involvement of others in this cocaine

distribution conspiracy." Tr. at 35. The judge

then outlined aspects of Arambula’s testimony and

concluded that it was not complete and truthful.

 In determining that Arambula’s testimony was

false, the judge parsed telephone records

unexplained at Hand’s trial. Despite the gap in

evidence at Hand’s trial as to who made the

telephone calls, and what was said during them,

the judge believed that the extensive records

were circumstantial evidence of a drug conspiracy

larger than Arambula had revealed. He found the

records in conflict with Arambula’s claim that

during his escapades in drug trafficking he had

only dealt directly with Mauricio Inecencio and

Hand, and indirectly with Gonzales. The judge

believed that Arambula had been involved in other

drug deals in Pittsburgh, Pennsylvania and

Columbus, Ohio. The judge felt that Arambula "was

holding back and protecting" other drug

traffickers. Tr. at 11. The judge stated: "If he

had been [more complete in his testimony],

perhaps it would have been possible to make cases

against" other players. Tr. at 42. Thus,

Arambula’s lack of forthrightness about others

amounted to false testimony.

 Further, the judge found that Arambula’s false

testimony was willfully given, because he

believed that Arambula had concocted an "exit

story" to blame Hand in order to protect others.

The court credited Hand’s defense, believing that

the conspiracy was grander than Arambula

revealed. At trial Hand’s defense was that he was

a small fish in a big pond. Arambula, however,

testified that the pond was actually rather small

(comprised of himself, Hand, Inecencio, and

Gonzales), but that Hand was definitely a fish.

As to the materiality element of perjury, the

judge did not articulate specific findings.

Indeed, the judge acknowledged that his concerns

"[did] not go directly to Mr. Hand’s guilt or

innocence on the conspiracy charge against him."

Tr. at 26. The judge noted that Arambula’s

testimony did not obstruct justice in the sense

that he was trying to protect his co-defendant.

Further, the judge recognized that Arambula’s

false testimony actually hurt Hand’s defense,

thus bolstering the government’s case. The

sentencing transcript is barren as to precisely

why the sentencing judge found that Arambula’s

false testimony was material for the purposes of
the obstruction of justice enhancement.

DISCUSSION

 A defendant who attempts to or does obstruct or

impede the administration of justice faces a twopoint base offense level sentence increase for

obstruction of justice. Obstruction of justice

includes committing perjury. See U.S.S.G. sec.

3C1.1, cmt. n.4 (b) (2000). A sentence may be

adjusted if the defendant provides perjurious

testimony in either the defendant’s own case or

a co-defendant’s case. Perjury for sentencing

purposes has been defined as perjury under 18

U.S.C. sec. 1621. Thus, perjury is providing

false testimony under oath or affirmation

concerning a material matter with the willful

intent to provide such false testimony, rather

than as a result of confusion, mistake, or faulty

memory. See United States v. Stokes, 211 F.3d

1039, 1045 (7th Cir. 2000) (citing United States

v. Dunnigan, 507 U.S. 87, 94 (1993)).

 In enhancing a defendant’s sentence for perjury,

a district court ought to render specific and

clear findings as to each element of perjury

(false, willful, and material). Nonetheless, we

have upheld adjustments when a court’s findings

have at least encompassed the factual predicates

of perjury. See United States v. Freitag, 230

F.3d 1019, 1026 (7th Cir. 2000).

 The sum of Arambula’s argument on appeal is as

follows. While the sentencing judge specified the

testimony it found false, the obstruction

enhancement was erroneous because Arambula’s

false testimony at Hand’s trial did not

constitute perjury, as perjury is false testimony

of a material matter. Citing United States v.

Senn, 129 F.3d 886, 898 (7th Cir. 1997) (quoting

United States v. Mustread, 42 F.3d 1097, 1106

(7th Cir. 1994)), Arambula protests that a matter

is material only if it is crucial to the question

of guilt or innocence. Since Arambula falsely

testified to facts inconsequential to the

question of Hand’s guilt, these facts were not

material, and thus not perjury. Arambula does not

dispute that he provided false statements;

rather, he rests his appeal on their materiality.

 Evidence is material when "if believed, would

tend to influence or affect the issue under

determination." U.S.S.G. sec. 3C1.1, cmt. 6

(2000). We have translated this to mean that

false testimony is material if it is "’designed

to substantially affect the outcome of the case.’"

United States v. Galbraith, 200 F.3d 1006, 1014

(7th Cir. 2000) (citations omitted). To put a

finer point on it, we have found false testimony
material when it was crucial to the question of

guilt or innocence. See id.; Senn, 129 F.3d at

898 (quoting Mustread, 42 F.3d at 1106); see also

United States v. Craig, 178 F.3d 891, 901-02 (7th

Cir. 1999) (affirming obstruction enhancement

where defendant falsely denied recruiting

fictitious students in large scam because denial

was material "to the question of her guilt"). An

assessment of the materiality of false testimony

to the issue under determination is crucial

because "’obstruction of justice’ refers to

efforts to impede the process of legal justice .

. . ." United States v. Buckley, 192 F.3d 708,

710 (7th Cir. 1999) (citations omitted). Thus,

"not every instance of false testimony under oath

warrants the enhancement," United States v. Gage,

183 F.3d 711, 715 (7th Cir. 1999), and "the

materiality of the lie becomes a focus of inquiry

because a lie that is immaterial to the justice

process is not a potential interference with it."

Buckley, 192 F.3d at 710. Therefore, the inquiry

is whether Arambula’s false testimony could tend

to influence the issue under determination--

namely, did Hand conspire to possess cocaine with

the intent to distribute it?

 We view Arambula’s false statements as

immaterial to this issue and not affecting the

outcome of the case. We liken Arambula’s

situation to those in United States v. Parker, 25

F.3d 442 (7th Cir. 1994) and United States v.

Senn, 129 F.3d 886 (7th Cir. 1997). In Parker, we

vacated an obstruction enhancement for a

defendant who admitted his guilt, but falsely

stated that he stole $200 rather than $1252 from

a bank. See id. at 449. The obstruction

enhancement was unwarranted because the false

statement was not material to his guilt or

innocence; he had admitted his guilt and the

amount taken was not an element of the offense.

Likewise, in Senn, the defendant admitted his

guilt in a conspiracy to distribute drugs. The

sentencing judge applied the obstruction

enhancement because the defendant had lied about

some of the details of his involvement;

specifically, about what had happened to the

marijuana after he agreed to accept it. Relying

on Parker, we vacated the enhancement because his

false testimony about these details was not

material. We reasoned:

It does not matter whether Weaver drove off with

the marijuana and sold it, whether he drove off

with it and gave it away, or whether he drove off

without it. By agreeing to accept the marijuana

in lieu of cash, he admitted his involvement in

the conspiracy to distribute marijuana.

Id. at 899. We found that the "prevarications on

the details cannot be considered crucial to the
question of guilt." Id.

 In this case, the district court had a beef

with the fact that Arambula minimized the scope

of the conspiracy as to other drug traffickers

not on trial with Hand. Here, the defendant

(Arambula) testified that the co-defendant (Hand)

was guilty. Arambula fingered Hand and Hand was

convicted. The district court, however, believed

Arambula’s finger ought to have pointed to others

as well. But is this extra pointing material?

 Certainly in a conspiracy case it is essential

to define the conspiracy’s scope. The Indictment

defined the scope by charging Arambula, Hand, and

others unknown with conspiring to distribute

cocaine on or about April 12-14, 1999. While

evidence about the entire conspiracy would have

assisted the government in charging other

players, the government was satisfied with

Arambula’s story and only put Hand on trial. ’Tis

true, Arambula’s minimization of the conspiracy

probably hurt Hand’s defense by undermining his

claim that he was a small fry in a bigger scheme.

This, however, does not detract from the fact

there is not the slightest hint that Arambula’s

testimony that Hand was indeed a compatriot--the

issue under determination--was false. We do not

see how it would have been germane for the

government to elicit testimony from Arambula that

would not have aided the case at hand. Whether

others were involved was not material to the

question of Hand’s guilt or innocence. It seems

a needless complication to lead Arambula on a

wild goose chase about individuals not seated at

the defense table.

 The government was satisfied with the scope of

Arambula’s testimony, and has not indicated that

its investigation was impeded because Arambula

limited his testimony to only Hand, Inecencio,

and Gonzales. Quite to the contrary, it credits

Arambula’s testimony with helping to seal Hand’s

fate. Indeed, the government even reveals that it

would not prosecute Arambula for perjury, and

concedes that if it did, it would likely fail.

So, any falsehood Arambula uttered did not seem

to obstruct or impede the government’s case. This

is important because we must also look to whether

the falsity impeded or obstructed the

investigation, sentencing, or prosecution of the

offense. See U.S.S.G. sec. 3C1.1(A). For example,

in United States v. Francis, the obstruction

enhancement was applicable because a defendant

retracted statements he made about coconspirator’s involvement in a drug distribution

scheme. See 39 F.3d 803, 811 (7th Cir. 1994). In

affirming the obstruction enhancement, we

believed that the retracted statements were

material because the "criminal investigation of
the conspiracy was still underway and obviously

any information concerning his co-conspirators

was material evidence." Id. The retraction

impeded the investigation and prosecution because

the government had to file a new indictment

dismissing the charges against a co-conspirator

implicated by the retracted statement. See id.

The retraction was material because it went to

the heart of whether the individual was involved

in the conspiracy; in other words, whether he was

guilty or innocent. As mentioned, there is no

notion here that Arambula’s lies impeded or

obstructed the investigation, sentencing, or

prosecution of Hand.

 Furthermore, the nature of the false testimony

provided by Arambula is unlike that which we have

previously found to merit an obstruction

enhancement when one co-defendant testifies

against another. The obstruction enhancement has

been appropriate where a defendant testifies

falsely that a co-defendant was innocent. See

United States v. Kroledge, 201 F.3d 900, 905 (7th

Cir. 2000). Testifying falsely to exculpate a codefendant is material because it speaks to their

guilt or innocence. See id. Certainly testimony

as to whether someone is guilty or innocent is

material to whether they are guilty or innocent.

This situation is inapposite since Arambula did

not testify that Hand was innocent. Quite to the

contrary. Thus, since we find that Arambula’s

false testimony was not material to the issue

under determination, we vacate the obstruction of

justice enhancement.

 The government briefly argues, citing United

States v. Letchos, 316 F.2d 481, 484 (7th Cir.

1963), that even if Arambula’s false testimony

was not material to any elements of the offense,

it was material to Arambula’s credibility.

Letchos involved a perjury prosecution under 18

U.S.C. sec. 1621 against a witness who falsely

testified during cross-examination in the trial

of a defendant charged with making false

statements on his income tax returns. See 316

F.2d at 482. Prior to the trial, IRS agents

interviewed the witness to gather evidence about

whether the defendant had been a beer salesman

during the years in which he claimed tax

deductions for such activity. The witness told

the IRS that he did not know the defendant. At

trial, however, the witness testified for the

defendant, asserting that he knew the defendant

and that he had indeed been a beer salesman. On

cross-examination, the government asked the

witness whether he had previously told the IRS

the opposite, and the witness denied having told

the IRS such. The government impeached him with

his prior inconsistent statement. The witness was

subsequently tried for perjury for the false
testimony. The witness argued that his false

testimony was not material. We disagreed, finding

the testimony material to the question of the

defendant’s guilt for tax fraud. In so finding,

we stated: "Impeachment of a witness goes to his

credibility and questions on cross-examination

for this purpose may be material in the sense

required for a perjury conviction." See id. at

484. We later addressed this passage in Letchos

in United States v. Akram, 152 F.3d 698 (7th Cir.

1998).

 Akram involved a perjury conviction against the

defendant under 18 U.S.C. sec. 1623(a), based on

lies made during cross-examination during the

defendant’s own trial. See id. at 699. The

defendant argued that his false testimony was not

material. Relying on Letchos, the government

argued that the statements were material because

they went to the defendant’s credibility. We

reasoned that Letchos did "not say that questions

on cross-examination are always material . . . ."

Id. at 702. We went on to state that in

determining whether false testimony is material,

we are required "to evaluate whether the

credibility of the defendant is an issue capable

of influencing the jury." Id. We recognized that:

[C]ertain lies on cross-examination might be too

trivial to count as being relevant to the

question of credibility. Similarly, some cases

might involve such irrefutable and objective

proof that the issue of the defendant’s

credibility is itself a minor consideration and

not one capable of influencing the jury’s

decision.

Id. We believe Arambula’s case is one in which

his false statements were not pertinent to the

case at hand. Indeed, he testified truthfully to

the material issue of whether Hand was a coconspirator. Any irregularities as to the details

of the involvement of others was of no matter for

the purposes of resolving Hand’s culpability.

There was certainly objective proof of Hand’s

guilt (for example, the cocaine or the telephone

records) upon which the jury’s consideration

could have safely rested. We sympathize with the

district court’s hunch that the drug distribution

ring was larger than revealed. Nevertheless, the

application of the obstruction enhancement was

improper because the record has not born out that

Arambula’s testimony obstructed justice in the

case against Hand.

 Finally, we decline Arambula’s request to have

the district court reconsider its denial of a

reduction for acceptance of responsibility. It

was proper that the district court found that

although Arambula implicated himself and Hand, he
diminished his role in and the true scope of the

conspiracy, and thus did not accept

responsibility. See Gage, 183 F.3d at 717

(affirming denial of reduction for acceptance of

responsibility based on false representations by

defendant because the "district court was

entitled to conclude that [the defendant’s]

failure to come clean about the limits of his

memory was inconsistent with a full acceptance of

responsibility").

CONCLUSION

 We find error with the enhancement for

obstruction of justice, but not with the denial

for an acceptance of responsibility reduction.

Therefore, Arambula’s sentence is Vacated and

Remanded to the district court for resentencing

consistent with this opinion.