Opinion ID: 22977
Heading Depth: 2
Heading Rank: 1

Heading: Connection to Federal Dollars

Text: 53 Reyes argues that his convictions under 18 U.S.C. § 666 for federal programs bribery must be reversed because the government failed to establish the required connection between the charged criminal acts and federal dollars. Whether under § 666 the requisite nexus between the criminal activity and federal dollars exists is a question of law we review de novo. See United States v. Westmoreland, 841 F.2d 572, 576 (5th Cir. 1988). Section 666, entitled theft or bribery concerning programs receiving Federal funds, provides, in relevant part: 54 (a) Whoever, if the circumstance described in subsection (b) of this section exists-- 55 (1) being an agent of an organization, or of a State, local, or Indian tribal government, or any agency thereof-- 56 . . . . 57 (B) corruptly gives, offers, or agrees to give anything of value to any person, with intent to influence or reward an agent of an organization or of a State, local or Indian tribal government, or agency thereof, in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more. . . . 58 . . . . 59 shall be fined under this title, imprisoned not more than 10 years, or both. (b) The circumstances referred to in subsection (a) of this section is that the organization, government, or agency receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of federal assistance. 60 . . . . 61 18 U.S.C. § 666. 62 In United States v. Westmoreland, we said that § 666 limits its reach to entities that receive a substantial amount of federal funds and to agents who have the authority to effect such significant transactions. 841 F.2d at 578. In that case, the defendant was convicted of receiving kickbacks on purchases he made for the county government. We upheld the conviction, noting that the defendant served as a county supervisor and that the county received federal revenue sharing funds. Id. at 575. Later, in United States v. Moeller, 987 F.2d 1134 (5th Cir. 1993), we further delineated the reach of § 666, concluding that the particular program involved in the theft or bribery scheme need not be the recipient of federal funds, id. at 1137 (citing United States v. Little, 889 F.2d 1367 (5th Cir. 1989)). There, the defendants worked for the Texas Federal Inspection Service (TFIS), an agency jointly supervised by the Texas Department of Agriculture (TDA) and the United States Department of Agriculture. The defendants were alleged to have improperly awarded consulting contracts to supporters of candidates for TDA commissioner. One defendant was an associate director of TFIS; the other held various managerial positions. The district court dismissed the indictment, concluding that TFIS did not receive the statutory amount in federal benefits. On appeal, we reversed, concluding that it was enough that the TDA, which in part was responsible for TFIS, received the level of federal funding required under § 666. Id. at 1137. 63 Applying Westmoreland and Moeller to the case at bar, we conclude that the connection between federal benefits and the charged conduct is sufficient to uphold Reyes's convictions under § 666. It is not disputed that, during the relevant periods in this case, three city of Houston departments received federal funding in excess of § 666's statutory requirement: the Finance and Administration Department; the Housing and Community Development Department, including $28.5 million in fiscal year 1996; and the city legal department. 5 Like the federally-funded TDA did with respect to TFIS in Moeller, the evidence in this case shows that these same three city departments shared responsibility for the hotel project: the legal department was responsible for evaluating competing bids to develop the hotel; the finance department was responsible for soliciting bids and coordinating the process through which bids were considered; and the housing and community development agency oversaw revitalization and improvement of downtown Houston, wherein the hotel project was planned. Further, like the county supervisor in Westmoreland and the senior agency officials in Moeller, here the charged criminal conduct related to city council members, who, by voting up or down on bids, ultimately decide how federal money will be spent. 64 Reyes argues that we should follow a line of cases decided after the Supreme Court announced its opinion in Salinas v. United States, 522 U.S. 52 (1997). In Salinas, the Court held that to sustain a conviction under § 666 the government need not show that federal dollars were directly tied to the alleged bribery transaction. Id. at 58. The Court, however, declined to detail the connection required under § 666 or even state whether such a connection is required at all. Id. at 59. 6 The two post-Salinas cases that Reyes urges us to follow now--United States v. Zwick, 199 F.3d 672 (3d Cir. 1999), and United States v. Santopietro, 166 F.3d 88 (2d Cir. 1999)--enunciated a degree of connectivity between the federal dollars and the charged conduct perhaps more exacting than other recent cases, cf. United States v. Dakota, 188 F.3d 663, 668 (6th Cir. 1999)(upholding a conviction under § 666 where the defendant was alleged to have received kickbacks on an Indian tribe's lease of gaming machines and the tribe, for purposes not specified by the court, received yearly federal funds in excess of the statutory amount); United States v. Grossi, 143 F.3d 348, 350 (7th Cir. 1998)(upholding a conviction under § 666 where the defendant, a township supervisor, received kickbacks for making distributions from the town's general assistance program, which received no federal money). 65 We are not convinced that Salinas wrought a change upon our earlier precedents. Even if we were to follow the two cases proffered by Reyes, however, we would arrive at the same result. In one of Reyes's cases, United States v. Zwick, the Third Circuit concluded that the uses for which federal funds were provided--snow removal and prevention of stream-bank erosion--bore no obvious connection to the charged conduct and that the defendant's conduct did not therefore constitute a violation of § 666. 199 F.3d at 688. There, an elected member of the city board of commissioners was alleged to have solicited money from persons with business before the town's board; one such person needed a permit for sewer access, another had requested a use permit, and a third had sought a city contract for landscaping services. The limited amount of federal funds involved in Zwick, coupled with the specific and narrow purposes for which such funds were given, bears no resemblance to the facts in this case. In Reyes's other case, United States v. Santopietro, the defendant mayor accepted bribes from real estate developers that wanted to influence the decisions of various city departments before which the developers had pending business. 166 F.3d at 91. In that case, the Second Circuit concluded that the connectivity requirement of § 666 was met: Since federal funds were received by [the city] for housing and urban development programs and the corrupt payments concerned real estate transactions within the purview of the agencies administering federal funds, the requisite connection between the bribes and the integrity of federal funding programs is satisfied. Id. at 93. The facts of Santopietro are in accord with those in this case, and Santopietro's holding, like ours in Moeller, directly contradicts Reyes's argument that the government must tie the federal monies to the specific project involved in the illegal activity. 7