Opinion ID: 2976408
Heading Depth: 4
Heading Rank: 2

Heading: Houston, Texas

Text: Gray’s Hobbs Act convictions on Counts 26 through 31, and Jackson’s convictions on Counts 26 and 28, stem from their interactions with Monique McGilbra, the Director of Building Services for the City of Houston, Texas, and allegations that Gray and Jackson provided money and gifts to McGilbra in exchange for McGilbra’s assistance in securing municipal contracts for Gray’s corporate clients and business associates. Count 26 alleged a Hobbs Act conspiracy between Gray, Jackson, Honeywell Corporation vice-president Brent Jividen, McGilbra, and others, including “Gray’s clients” and “Gray’s consulting associates,” who allegedly provided “things of value, including money, luxury items and food,” to Houston public officials McGilbra and Oliver Spellman, in return for official acts intended to benefit Gray, the Gray businesses, Jividen, and Honeywell. Counts 27, 28, and 29 alleged that favors were provided to McGilbra and her boyfriend, Garland Hardeman, in exchange for official acts. Count 27 related to a Cleveland Browns football weekend provided to McGilbra and Hardeman by Gray and Jividen, in return for her assistance in securing subcontracts from Reliant Energy for Honeywell. Count 28, the only substantive Hobbs Act count on which Jackson was convicted, alleged that Gray, Jackson, and Jividen provided McGilbra and Hardeman with an all-expenses-paid Super Bowl weekend in New Orleans, Louisiana, in exchange for McGilbra’s use of her official position to ensure that Honeywell was Nos. 05-4482; 06-3086/3209 United States v. Gray, et al. Page 18 retained as a subcontractor on a Houston energy contract. Count 29 arose out of Gray’s purchase of a Louis Vuitton purse for McGilbra. At trial, the government presented substantial evidence supporting these charges. From 1993 to 2003, Gray was employed as a consultant by Honeywell and received regular payments under a series of contracts with the company. In 2001, Honeywell expressed an interest in being hired as a subcontractor for Reliant Energy, one of the companies competing for a $180 million contract to provide electricity and energy efficiency services to the City of Houston, Texas. McGilbra, in her official capacity as director of building services, oversaw the energy contract. Gray invited McGilbra to attend a Cleveland Browns football game in October 2001, telling her that he would take care of all expenses, including accommodations. McGilbra and Hardeman stayed at the Ritz Carlton Hotel, charged a massage and flowers to the room account, and enjoyed a dinner paid for by Gray. The next day, McGilbra and Hardeman attended the football game with Gray and Jividen. During the game, Jividen discussed Honeywell’s interest in securing energy contracts through the City of Houston. Gray thereafter hired Hardeman as a “consultant” to assist Honeywell in obtaining a share of the Houston energy contract. The consulting contract provided that Hardeman would receive half of one percent of the gross revenue that Honeywell received under the energy contract. McGilbra subsequently demanded half of whatever compensation Hardeman received, purportedly because she had directed Hardeman to Gray in the first place. McGilbra thereafter told Reliant’s vicepresident that she wanted Reliant’s proposal to the city to include Honeywell as a subcontractor. Reliant complied and added Honeywell as a subcontractor for demand-side services. McGilbra recommended to the mayor that Reliant be selected as Houston’s energy services provider, and Reliant was in fact awarded the contract in December 2001. The evidence established that Honeywell funded McGilbra’s Cleveland weekend. McGilbra testified at the trial that she realized during the football weekend in Cleveland in October 2001 that “this whole thing was sort of a set up” and that Honeywell was involved in paying for the weekend. Her suspicions were correct. The Cleveland weekend expenses were charged to Honeywell executive Jividen’s credit card. McGilbra knew that Hardeman would be compensated under this agreement with Gray and would share the money with her only if Honeywell received payments under the Houston energy contract. McGilbra acknowledged that she used her official position with the City of Houston to ensure that Reliant was awarded the contract and that Honeywell was selected as a subcontractor. Gray continued to provide McGilbra with favors during the initial phase of the Houston energy contract: he purchased tickets and accommodations for McGilbra and Hardeman to attend the Super Bowl in New Orleans in February 2002, treated McGilbra and her family to a $900 dinner in Florida, and purchased a $700 designer purse for McGilbra. McGilbra testified that after buying the purse, Gray questioned her about the status of Honeywell’s Houston contract and expressed concern about possible competition for the contract by another company. Gray submitted the invoices for the Super Bowl tickets and accommodations directly to Honeywell for payment. During this time period, Honeywell was making monthly payments of $5,000 to Gray for his services as a “consultant.” The jury heard a taped discussion between Gray and Jividen, during which they talked about McGilbra’s expenses for the Super Bowl trip and McGilbra’s resultant indebtedness to them as Honeywell representatives. McGilbra testified that at the time of the Super Bowl, she was supervising the demand-side energy contract in Houston for Reliant Energy and that Honeywell would not make money on the contract until it reached a second phase. Thus, the jury could reasonably infer that Gray, Jividen, and Jackson provided an incentive to McGilbra, in the form of Super Bowl entertainment, to ensure her cooperation in expediting the contract. This evidence additionally indicated that Honeywell was Nos. 05-4482; 06-3086/3209 United States v. Gray, et al. Page 19 the source of the funds used by Gray to finance the Super Bowl weekend and to purchase the designer purse for McGilbra. Although Jackson attempts to minimize his involvement with Gray, McGilbra, and Hardeman during the Super Bowl weekend and suggests that he was merely being hospitable to outof-town guests, rather than aiding Gray and Jividen in the manipulation of municipal contracts, the government provided substantial evidence that Jackson assisted in the scheme by delivering the Super Bowl tickets to McGilbra’s hotel. A taped conversation between Gray and Jackson was played for the jury during the trial. In the conversation, Jackson agreed to host McGilbra during the Super Bowl weekend and told Gray to tell Hardeman that “I’ll have his . . . tickets.” Jackson also stated that he planned to “try to switch their tickets . . . with somebody,” and Gray assured Jackson that “if there’s a cost associated with that just let me know and I’ll take care of it.” Jackson entertained McGilbra and Hardeman by taking them out to dine on more than one occasion, including brunch with the mayor of New Orleans. Gray paid Jackson a monthly fee to assist Gray in obtaining public contracts for corporate clients, including Honeywell. Gray told Honeywell executive Jividen that he had “Gilbert at 2500.” When Jividen responded “that’s too much for what he’s doing for us right now,” Gray insisted that “he has done a lot.” In light of this conversation insinuating Jackson’s participation and Jackson’s own comments, the jury was “free to disbelieve” the “innocent explanation for the incriminating facts proved by the government.” United States v. Schreane, 331 F.3d 548, 562 (6th Cir. 2003) (internal quotation omitted). Contrary to defendants’ claims, and unlike Brock, where the illegal payments came from defendants’ own bank accounts or from their company’s bank account, 501 F.3d at 769, the evidence showed that the payments and privileges bestowed upon McGilbra did not originate with defendants. Gray’s corporate clients, seeking government contracts, funneled the illegal payments through defendants to McGilbra. We therefore conclude that the evidence was sufficient to sustain defendants’ convictions on these counts. Gray was convicted on two other substantive Hobbs Act counts, Counts 30 and 31, that alleged illegal transactions with Oliver Spellman, the Chief of Staff for Houston’s mayor. Count 30 alleged that Gray and “others known and unknown to the Grand Jury, aiding and abetting each other, attempted to and did obstruct, delay and affect commerce and the movement of a good or commodity through commerce through extortion, by Oliver Spellman obtaining under color of official right approximately $2000 in cash from Gray with his consent.” Count 31 similarly charged Gray and others with aiding and abetting each other and obstructing commerce through extortion “by Oliver Spellman obtaining, under color of official right, a hotel stay in Las Vegas, Nevada from Gray with his consent.” The evidence bearing on these counts indicates that in 2002, Gray was part of a joint venture, First Transit, that was bidding for a contract to operate a shuttle service at the Houston airport. Gray was concerned that Houston Mayor Lee Brown might favor a local contractor who was competing for the contract. Gray paid Spellman $2,000 in cash in July 2002 and paid the hotel bill for Spellman’s trip to Las Vegas in September. In exchange, Spellman provided Gray with information about the mayor’s position on the competing bids for the shuttle contract. Gray also made regular payments to the mayor’s brother, Earl Brown. Gray promised Earl Brown an incentive if he talked to the mayor about the shuttle contract; Earl responded that he would “make that phone call.” First Transit was eventually awarded the contract. However, although others were involved in the joint venture with Gray, there was no evidence that the allegedly extortionate payments to and on behalf of Spellman came from a source other than Gray. The proof therefore cannot support the convictions of Gray on Counts 30 and 31, Nos. 05-4482; 06-3086/3209 United States v. Gray, et al. Page 20 a point that the government concedes. As a result, Gray’s convictions on Counts 30 and 31 must be reversed.