## United States Court of Appeals FOR THE EIGHTH CIRCUIT

_____________________________________ Nos. 97-4025WM, 97-4027WM, 98-1070WM

_____________________________________

__________________________ * * Nos. 97-4025WM, 98-1070WM *

__________________________ * * United States of America, * * On Appeal from the United Appellee, * States District Court * for the Western District v. * of Missouri. * * Cathryn M. Simmons, * * Appellant. * * *

______________ * * No. 97-4027WM *

______________ * * United States of America, * * On Appeal from the United Appellee, * States District Court * for the Western District v. * of Missouri. * Michael L. Fisher, * * Appellant. *The Honorable Owen M. Panner, United States District Judge for the District 1 of Oregon, sitting by designation. The Ho norable Dean Whipple, United States District Judge for the Wester n 2 District of Missouri.
-2- ___________ Submitted: June 9, 1998 Filed: August 17, 1998

___________ Before RICHARD S. ARNOLD and MORRIS SHEPPARD ARNOLD, Circuit Judges, and PANNER, District Judge. 1

___________ RICHARD S. ARNOLD, Circuit Judge.
A jury convicted Cathryn M. Simmons of twelve bribery violations under 1 8 U.S.C. § 666( a)(2) (1994), five mail-fraud violations under 18 U.S.C. § 1341 (1994), and one violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U .S.C. § 1962 (1994). The same jury convicted Michael L. Fisher of two bribery violations, one mail-fraud violation, and one RICO violation. S immons and Fisher now appe al the District Court’s resolution of forfeiture issues, and Simmons also appeals 2 sentencing issues.

I.

On Oct ober 31, 1996, a grand jury returned a twenty-six-count indictmen t against Bob F. Griffin, Cat hryn M. Simmons , Michael L. Fisher, and Steven R. Hurst

. Atth e time, Griffin served as Speaker of the Missouri House of Representatives ; Simmons owned and operated several political consulting firms; Fisher was the-3-

President of the Greater Kansas City AFL-CIO; and Hurst was a registered lobbyist. App. at 10-11. Count One of the indictment charged that the four defendants an d Ric hardE. Moore, who was a member of the Clay County Commission in Cla y County, Missouri, an d was not a defendant in this case, were associated with a RICO ent erprise, through which Griffin and Moore, in return for bribe payments, obtaine d consulting contracts for Simmons. Ap p. 11-12. In addition to the RICO violation, the indictment alleged 25 violations of federal bribery and mail-fra ud statutes. App. 39-52. The indi ctment also sought forfeiture of assets from the defendants pursuant to th e RICO Act. App. 36-38

. The indictment set forth the racketeering and ot her charges in the context of five di fferent “schemes.” The first scheme involved the Motor Fuel Tax Bill, which wa s intr oducedin the Missouri House of Representatives on January 9, 1992, and whic h was proposed to in crease the state motor fuel tax by six cents a gallon over five years to pay for construction of highways, roads, and bridges in Missouri. Prop onents of this legislat ionincluded the Heavy Constructors Association of Kansas City and th e Associ ated General Contractors of Missouri, two organizations representin g
con struction companies in Missouri. The indictment alleged that shortly after th e introduc tionof the Motor Fuel Tax Bill, Griffin met with members of the Heav y Constructors Association, the Associated General Contractors, and other construction groups in a hotel in Jefferson City, and recommended that members of the construction indust ry hire Simmons to assist them in lobbying for the new motor fuel tax. Th e Hea vy Constructors Association and the Associated General Contractors hire d Simmons to lobby for the Motor Fuel Tax Bill -- which eventually passed the Missouri House of Representatives -- and paid her a total of $264,000 for her efforts. According to the i ndictment, in February 1994, after the passage of the fuel tax, Simmons gav e Griffin two checks for $5,000 each. App. 13-15.

The second scheme alleged in the indictment involved Health Midwest, Inc., a Kansas City corporation which owned a nd operated hospitals in Missouri and Kansas,-4-

andwhich sought to purchase North Kansas City Hospital, which was owned by the Cit y of North Kansas City, Missouri. To facilitate this sale, Health Midwest hire d Richard E. Moore and his public-relations firm, Moore, Sturges and Associates

. Moore in turn hired Simmons to aid in the purchase of the hospital, and agreed to pay Simmons $9,200 per mont h for her services. Around this time, Simmons also entered into a contract with City Management Corporation, a corporation tha t operated landfills in Missou ri, under which Simmons would assist City Management Corporation i n establishing a landfill in Clay County, Missouri. According to the indictment, Simmons agreed to forego the $9,200 monthlypayment for her work on the hospital purchase in exchange for Moore’s using his position as a Clay County Commissioner to influence the Clay County Commission to approve the establishment of the new landfill. App. 21-23.

The third scheme alleged in the indictment involved the Certificate of Nee d (CON) Committee, a committee e stablished by Missouri statute to determine the need for health care facilities at different locations in the state. The members of the CON Committee

are appointed by the Governor of Missouri, the President Pro Tem. of the Missouri Senate, and the Speaker of Mi ssouri’s House of Representatives. According to the ind ictment, officials with Health Midwest, Inc., believed that Missouri Stat e Represen tative Bill Skaggs, a member of the CON Committee appointed by Griffin , was hostile to some of their activities. In August 1992, Griffin, Simmons, Fisher , Hurst, and Moore met and discussed the poss ibility of Griffin’s removing Rep. Skaggs fromth e committee. In January 1993, Griffin removed Rep. Skaggs from the CO N Committee, allegedly in exchange for a $ 10,000 check paid to him by Simmons. App. 25-26.

The fourt h scheme alleged in the indictment involved a special session of th e Miss ouri legislature called in September 1993, in the wake of heavy flooding tha t
summe r, to consider legislation authorizing the Missouri State Highway an d Tr ansportation Commission to issue revenue bonds for the construction and repair of-5-

highwa ys, roads, and bridges. Griffin suggested to representatives of the Heav y Constructors Association and other members of the construction industry that they hire Si mmons as a consultant to work on the proposed revenue bond legislation, and th e construction industry representatives followed Griffin’s suggestion. The indictmen t alleged that in e xchange for Griffin’s recommendation, Simmons, through Hurst, paid Griffin’s son, Jeff Griffin, $5,000 to lobby on behalf of the rev enue bond bill. App. 28- 30.

The fi nal scheme alleged in the indictment involved a Health Care Reform Bill considered by the Missouri legislature in late 1993 and early 1994. The indictmen t allegedthat in January 1994, executives at Blue Cross Blue Shield of Kansas City, a health insurance company, met with Simmons and Fisher and entered into an agreement under which Simmons and Fisher, through Simmons’s public relations firms, woul d
as sist them in defeating or substantially amending any health care reform legislatio n being con sidered by the legislature. In February 1994, Griffin met with Blue Cros s Blue Shield officials at Simmons’s home in Jefferson City to discuss the health car e legisl ation. And in late January and early March, Simmons and Fisher allegedly paid Griffin a total of $41,000 for his help in advising Blue Cross Blue Shield executive s about the pending Health Care Reform Bill. App. 31-33.

Afters everal weeks of trial in May and June 1997, a jury convicted Cathry n Simmons of 18 of the 20 counts agai nst her, including the RICO count. Simmons was acquitted of the bribery count involving the removal of R ep. Bill Skaggs from the CON Committee and the bribery count involving the payment of money to Jeff Griffin for his work on the highway bond bill. Michael Fisher was convicted of four of the fiv e counts against him, including the RICO count, and was acquitted of the bribery count involving th e removal of Rep. Skaggs from the CON Committee. Bob Griffin wa s acquitted of four of the counts against him, including the RICO count, and the jury was unable to reach a decision on the other five counts against him. Steven Hurst wa s acquitted of all three counts brought against him.-6-

For purposes of the federal Sentenci ng Guidelines, Simmons’s offense level was determined to be 29, Criminal History Category I, which has a range of 87 to 10 8 months’ imprisonment. Fisher’s offense level was 26, Criminal History Category I , which has a range of 63 to 78 months’ impris onment. However, because Simmons and Fisherbo th agreed to testify against Griffin at Griffin’s retrial, they each receive d downward departures below the applicable Sentencing Guidelines pursuant to U.S.S.G. § 5K1 .1 (1997). Simmons’s sentence was reduced to 50 months’ imprisonment, with three years of supervised release and a $900 special assessment. Fisher’s sentence was reduced to 39 months’ imprisonment, with three years of supervised release, a $5,000 fine, and a $200 special assessment. The government also sought forfeiture of $366,000 obtained by Simmons and F isher in violation of RICO, including $264,000 paid to one of Simmons’s consulting firms for a consulting contract related to the 1992 Motor Fuel Tax Bill, and $102,000 paid to two of Simmons’s other firms for consulting contracts related to the 1994 Health Care Reform Bill. Simmons and Fi sher agreed to waive their right to submit any forfeiture issues to the jury and to allow the District Court to decide these issue s. In an order filed October 23, 1997, the District Court granted th e governmen t’s motion and ordered forfeiture of $366,000 jointly and severally b y Simmons and Fisher.

On a ppeal, Simmons argues the District Court erred when, for purposes of th e Sent encing Guidelines, it found that she was a leader or organizer of a crimina l enterprise. Fisher and Simmons also challen ge the District Court’s rulings with respect to the forfeiture issues in this case.

II.

When the District Court calculated Cathryn Simmons’s offense level, sh e received a f

our-level increase to her sentence for being “an organizer or leader of a criminal activity” involving five or more particip ants or which was otherwise extensive.Simmo ns argues that the sentencing issues must be remanded because th e 3 District Cour

t relied on objected-to portions of the Presentence Report with regard to sentencing. Simmons Br. at 5. We disagree. The district judge made clear t o Simmons that he was relying on factual information from the Presentence Report and evidence presented at trial, and Simmons did not object. Sentencing Tr. at 9-10.
-7- U.S.S.G. § 3B1.1(a) (1997). In determining whether to en hance a defendant’s sentence 3 under U .S.S.G. § 3B1.1, the sentencing court should consider such factors as “th e exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of th e fruits of the crime, th e degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the deg ree of control and authority exercised over other s.” U.S.S.G. § 3B1.1, comment 4. This Court has interpreted “organizer or leader of criminal activity” broadly. United States v. Manuel , 912 F.2d 204, 207 (8th Cir. 1990). We revie w a sentencing court’s findings under § 3B1.1, like other findings of fact, for cl ear error. United States v. Peters , 59 F.3d 732, 734 (8th Cir. 1995)

. Simmo ns argues not only that a four-level increase was unjustified, but also that she is entitled to a downward departure be cause her role in the RICO enterprise was minimal.

The District Court’s ruling that Simmons was a leader or organizer of crimina l activit y, and therefore subject to the four-level increase, was not clearly erroneous

. Testimony at Simmons’s trial showed that she was heavily involved with organizing the schemes alleged in the indictment. Rick Moore testified that Simmons attended several meetings in the su mmer of 1992 with Hurst, Moore, and Fisher to discuss the purchase of the North Kansas City Hospital by Health Midwest, Inc., and that she organized a t least on e of these meetings. Trial Tr. at 720-23. John W. Walker and Larry Chastain, executives with Blue Cross Blue Shield of Kansas City, testified that S immons organized
ameeting at her town house in Jefferson City between Hurst, Fisher, Bob Griffin , herself, and Blue Cross Blue Shield officials to discuss the 1994 Health Care Refor m Bill, and how Simmons’s public relations firm might represent Blue Cross Blue-8-

Sh ieldin lobbying the legislature. Id. at 1529-31, 1631. And Bill Williams, th e executi ve director of the Heavy Contractors Association, testified that Simmon s presented to the Missouri Transportation Coalition a handwrit ten proposal that it employ her fir m to work on the Motor Fuel Tax Bill in 1992. Id. at 501. Given this testimony, it was not clear error to hold that Sim mons was an organizer of the bribery schemes. In af firming the District Court on this point, we also reject Simmons’s argument that th e District Court erred in not granting a downward departure for a minimal role in the RICO enterprise. Her role was anything but minimal.
Much of Simmons’s argument that she did not deserve the four-level enhancement relies on her assertion that Bob Griffin, as an experienced politician and lawyer, was in control of the RICO enterprise and at times directed her actions. This argument ignores the Sentencing Guidelines comment that “[t]here can, of course, be more than one person who qualifies as a leader or organizer of a criminal association o r conspiracy.” U.S.S.G. § 3B1.1, comment 4. Emphasis on the organizati onal or leadership role of Griffin in the conspiracy does not diminish the fact that, on several occasions, it was Simmons who organized the meetings between herself, Griffin, and corporations like Health Midwest and Blue Cross Blue Shield, that enabled her to procure consulting contracts an d continue the bribery schemes.

III.

A.

The Dis trict Court ordered forfeiture of $366,000 from Simmons and Fisher, a
su m which included $264,000 in proceeds paid by construction and transportatio n interest s for lobbying on the 1992 Motor Fuel Tax, and $102,000 paid by Blue Cros s Blue Shield for lobbying on the 1994 Health Care Reform Bill. Fisher argues that the District Court erred when it held him liable for the $264,000in proceeds associated with the Motor Fuel Tax scheme. While Fisher admits that the evidence at trial showed-9-

that he helped Simmons obtain the lobbying contract for the Motor Fuel Tax Bill an d later assisted her with the lobb ying efforts, Fisher Br. at 18, he maintains that he should not be re quired to forfeit the relevant proceeds because he was neither indicted for nor convicted of any of the racketeering acts related to the Motor Fuel Tax scheme.

The three individual counts on which Fisher was convicted had nothing to do with the Motor Fue l Tax scheme. He was also convicted, however, on the RICO count , whichalleged that all five schemes were part of the illegal enterprise. In addition, the forfeiture portion of the indictment a lleged that Fisher was responsible for the $264,000 paid to Simmons’s company as part of t he Motor Fuel Tax scheme. The District Court, sitting as the trier of fact by agreement of the parties on forfeiture issues, found tha t Fis her’s complicity in the Motor Fuel Tax scheme had been established beyond a
reas onable doubt. The RICO statute, alone to our knowledge among federal crimina l laws, expressly states th at it is to be construed broadly to effect its remedial purpose of combati ng organized crime. In these circumstances, we see no error in the Distric t Court’s decision to hold Fisher liable for forfeiture of the proceeds associated with the Motor Fuel Tax scheme.

Codefend ants are properly held jointly and severally liable for the proceeds of a RICO enterprise. See United States v. Hurley , 63 F.3d 1, 22-23 (1st Cir. 1995), cert. denied , 517 U.S. 1105 (1996); United States v. Masters , 924 F.2d 1362 (7th Cir.), cert. denied , 500 U.S. 919 (1991); United States v. Benevento , 836 F.2d 129, 130 (2d Cir. 1988) (per curiam); United States v. Caporale , 806 F.2d 1487, 1506-09 ( 11th Cir. 1986), cert. denied , 482 U.S. 917 (1987). The governme nt is not required to prove the specific portion of proceeds for which each defendant is responsible. Such a requirement would allow d efendants “to mask the allocation of the proceeds to avoid forfeiting the m altogether.” Caporale , 806 F.2d at 1508. In addition, the District Court found that the actions of the other defendants with respect to the Motor Fuel Tax scheme wer e reasonably foreseeable to Fisher. See Hurley , 63 F.3d at 22 (defendant jointly an d severally liable for laundered funds obtained by other members of a RICO-10-

conspir acy to the extent that they were reasonably foreseeable to the defendant). Our ruling is in accord with the traditional rules with respect to criminal conspiracy, under which all m embers of a conspiracy are responsible for the foreseeable acts of co

conspirators taken in furtherance of the conspiracy. See Pinkerton v. United States , 328 U.S. 640, 646-47 (1946); Hurley , 63 F.3d at 22.

Inthis case, after Fisher and Simmons elected to have the District Court render the verdict on the forfeiture issue, the Court found that “funds obtained and used b y Simmons in connection with her violation of the RICO statute were reasonabl y foreseeable to Fisher . . ..” Order at 10. Indeed, Fisher recognizes in his brief that a factfinde r could reasonably find that he assisted Simmons in obtaining the contract t o work on the Motor Fuel Tax. Fisher Br. at 18. Given Fisher’s knowledge of the funds obtained by Simmons, an d his status as a member of the RICO enterprise, we hold him jointly and severally liable for the full $366,000 forfeiture.

B.
Simmons and Fisher also challenge the District Court’s refusal to dedu ct the direct costs associated with their lobbying efforts from the amount th ey were required to forfeit because of the ir participation in the 1992 Motor Fuel Tax Bill scheme. Based on th e evidence of costs offered at trial, Simmons and Fisher argue that the costs associate d wi ththeir lobbying for the Motor Fuel Tax Bill, or $101,787.07, should be deducte d fromthe amo unt of money Fisher and Simmons received for their work on the Moto r Fuel Tax Bill, or $264,000, so that the amount they would forf eit would be $162,212.93. See Fisher Br. Add. at 1. The District Court refused to deduct any costs associated with lobbying and ordered a forfeiture of the full $264,000.

Atthe hear t of Simmons’s and Fisher’s argument is a disagreement with th e Distri ctCourt and the government over what is meant by the term “proceeds” fo r purposes of the RICO statute’s forfeiture provisions. Defendants who violate the-11-

RICO Act must forfeit “any property constituting, or derived from, any proceeds which the person obta

ined, directly or indirectly, from racketeering activity . . ..” 18 U.S.C. § 1963(a)(3) (1994). Some courts have interpreted “proceeds” as the gross revenue s obtain ed from illegal activity. See United States v. DeFries , 129 F.3d 1293, 1313-1 4 (D .C. Cir. 1997); United States v. McHan , 101 F.3d 1027, 1041-42 (4th Cir. 1996) , cert. denied , 1 17 S. Ct. 2468 (1997); United States v. Hurley , 63 F.3d 1, 21 (1st Cir

. 1995), cert. denied , 517 U.S. 1105 (1996). One court has held that “proceeds” means net profits, or the money received from the i llegal activity minus the costs of performing the ac tivity. See United States v. Masters , 924 F.2d 1362, 1369-70 (7th Cir.), cert

. den ied , 500 U.S. 919 (1991). And one court has held that for purposes of calculating “proceeds,” RICO v iolators may deduct the direct costs of performing illegal contracts from gross receipts, but may not deduct indirect operating expenses and taxes paid on profits. United States v. Lizza Industries, Inc. , 775 F.2d 492, 498 (2d Cir. 1985), cert. denied , 475 U.S. 1082 (1986).

We think the better vi ew is the one that defines proceeds as the gross receipts of the ill egal activity. As noted above, the RICO Act calls for the forfeiture of “an y proceeds which the person obtained, directly or indirectly, from racketeerin g activity . . ..” 18 U.S .C. § 1963(a)(3). The legislative history of the 1984 amendments to R ICO states that “the term ‘proceeds’ has been used in lieu of the term ‘profits’ i n order to all eviate the unreasonable burden on the government of proving net profits. It shoul d not be necessary for the prosecutor to prove what the defendant’s overhea d expenses were.” S. Re p. No. 225, 98th Cong., 2d Sess. 199 (1984). These statements indicate that Congress meant the word “proceeds” to be read more broadly than merely “profi ts.” See United States v. Hurley , 63 F.3d at 21. In addition, Congress ha s explicitly directed that RICO “shall be liberally construed to effectuate its remedia l purpo ses.” Pub. L. No. 91-452 § 904(a), 84 Stat. 947 (1970). See Russello v. United States , 464 U.S. 16, 26 (1983) (observing that the RICO statute “was intended t o provide new weapons of unprecedented scope for an assault upon organized crime and its economic roots”). Reading the word “proceeds” broadly has the benefit of-12-

pu nishing, through RICO’s forfeiture provisions, all convicted criminals who receiv e income from illegal activity, and not merely those whose criminal activity turns a profit. See United States v. McHan , 101 F.3d at 1042 (“The proper measure of crimina l respon sibility generally is the harm that the defendant caused, not the net gain that h e realized from his conduct.”).
Simmons and Fisher rely heavily on United States v. Riley , 78 F.3d 367 (8th Cir. 1996), for t heir interpretation of the meaning of “proceeds.” We read Riley mor e narrowly than do the defend ants. In Riley , the RICO defendants, who were accused of bribing state officials and defrauding insurance regulators, appealed a preconvictio n order appointing a receiver to manage their insurance and finance companies. Whil e there wa s some evidence that the defendants’ companies had gross receipts of $2 8 mil lionfrom 1988 to 1992, the period in which they were accused of engaging in th e illegal activity, the government could not identify what property was potentially subject to forfeiture if the defendants were convicted, and could not establish the extent of the defendants’ interests in the companies which the government wanted to put i n receivership. Id. at 368-69. In an attempt to save the preconviction restraint orde r issued by the District Court, the government alleged that it intended to forfeit “at least $28 m illion,” or the gross receipts of the defendants’ companies over the four-year peri od. Id. at 371. This Court characterized this argument as “absurd,” noting tha t under RICO’s forfeiture provisions, “ ‘proceeds’ means something less than the gross recei pts of a defendant’s insurance business because an insurer’s gross receipts would include, for example, amounts needed to pay pol icyholder claims.” Id . The $28 million “gross re ceipts” referred to in Riley apparently included money obtained through legal
ac tivity ( e.g. , premiums paid by insureds) as well as that obtained through th e defendants’ allegedly illegal behavior.
From 1992 to 1994, the period during whic h Simmons and Fisher took part in the RI CO enterprise alleged in the indictment, the gross income of their public relation s firms was approximately

$4.5 million. See Trial Exhibit 713. The $264,000 sought by-13-

the government in this case, however, does not include the total “gross receipts” of these public relations firms during this period. It represents only the money they were paid for lobbying on behalf of the construction industry for the Moto r Fuel Tax Bill. The District Court recognized as much when it wrote, “The government clearly has not sought the forfeiture of all proceeds from these defendants[;] they have only sought the gains which
were achieve d through these specific wrongful acts.” Order at 7. This case i s dis tinguishable from Riley , where the government sought forfeiture of all income from the defen dants’ businesses, even that which was obtained through legal means fo r legitimate purpose s. Therefore, because we believe that “proceeds” includes the gross receipts obtained from illegal activity, we hold that the District Court properly forfeited from Simmons and Fisher the $264,000 t hey obtained for their work on the 1992 Motor Fuel Tax Bill.

C.
Finally, Fisher also argues that because he was not a shareholder or principal in the corporations used by Simmons to engage in the bribery schemes, he should b e responsible only for the wages he received from the corporations related to the 199 2 Motor Fuel Tax Bill and the 1994 Health Care Reform Bill. In this case, the Distric t Court chose to disregard the corporate legal fiction, writing, “the Court finds that in this case therewas no difference between Simmons and Fisher’s actions and the actions of [Simmons’s corporations]. These corp orations were used to allow Simmons and Fisher to perpetuate their bribery schemes. In such a case defendants should not be allowed to hide behind the corporate s hell of an enterprise engaged in violating the RICO statute.” Order at 6. We agree. At trial, Richard Moore, discussing Fisher’s relationship with Simmon s, testified that while Fisher did not receive as much money as he thought h e deserved from the

work on the Motor Fuel Tax Bill, Fisher worked “as a partner in the business relationship, and he received compensation as a salary.” Trial Tr. at 693. On the basis of that evidence, we hold that the district judge did not err in-14-

refusing to allow Fishe

r to shield himself from criminal forfeiture through the corporate form when, in substance, he was a partner in Simmons’s bribery schemes.

IV.
For the reasons discussed above, the judgment of the District Court is affirmed.

It is so ordered.
A true copy.

Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.