Opinion ID: 359689
Heading Depth: 1
Heading Rank: 4

Heading: Berger-Field.

Text: 55 Rabbitt's conviction on eleven counts relating to his association with Berger-Field included ten counts under the mail fraud statute and one under the Hobbs Act. Rabbitt contends that the district court erred in overruling his motion for judgment of acquittal on these counts because the Government's evidence failed to prove either mail fraud or extortion under the Hobbs Act. We agree and set aside these convictions. 56
57 According to this court in United States v. Brown, 540 F.2d 364, 374 (8th Cir. 1976), the mail fraud statute can be utilized to prosecute a public official if he devises a scheme whereby bribes or kickbacks are accepted in the course of conduct of his office, since such conduct operates to defraud the citizens of his government of their right to his honest and faithful service. 58 This concept offers a broad interpretation of the mail fraud statute applicable in situations in which the official commits fraud in connection with an affirmative duty of his office. The concept of fraud upon the public may clearly fall within the ambit of the mail fraud statute where dishonest conduct by a public official directly implicates the functions and duties of that official's public office. Whether a showing of dishonesty on the part of a state official, outside his official duties, with no financial loss to the state constitutes a fraud upon the public and thereby statutory mail fraud is, in our judgment, highly questionable. Every case of breach of public trust and misfeasance in office in connection with which some mailing has occurred does not and cannot fall within the confines of the mail fraud statute. In the instant case, we hold the evidence does not establish mail fraud within the federal statute. 59 The indictment charges, in essence, that Rabbitt defrauded the citizens of Missouri by accepting a ten percent commission on architectural contracts awarded to the Berger-Field firm and concealing or failing to disclose his interest in those contracts. The evidence clearly shows that Rabbitt acted unethically and violated his canons as a lawyer, 16 a candidate disclosure statute requiring disclosure of fees received during the preceding twelve months, 17 and possibly a Missouri law rendering  partiality or abuse in public office unlawful. 18 But such violations, although bearing on intent to defraud, do not in and of themselves establish the substantive crime of mail fraud under 18 U.S.C. § 1341. 60 In support of its argument that Rabbitt's conduct constituted mail fraud, the Government relies on several cases in which the courts employed various combinations of factors to establish a scheme to defraud cognizable under the mail fraud statute. In each of these cases, the conduct deemed fraudulent deprived the public either of some potential tangible gain such as favorable contracts, 19 or of its right to honest and fair dealing in the conduct of the officer in question, 20 or of its right to disclosure of the officer's interest in the transaction at issue. 21 61 We find none of these factors present in this case. The state officials who awarded architectural contracts did so on merit. 22 There is no evidence that Rabbitt's use of his friendship, position, and influence to aid Berger-Field in obtaining contracts resulted in inferior work, greater expense, or any other tangible loss to the citizens or state. 62 We also find no evidence that Rabbitt's conduct deprived the citizens of their right to honesty and fairness in the conduct of his official duties. Rabbitt did not, in his official capacity, control the awarding of state contracts to architects. There is no evidence that Rabbitt failed to carry out the duties and responsibilities of his legislative office or leadership positions for the sake of Berger-Field. In this respect, the case resembles United States v. McNeive, 536 F.2d 1245 (8th Cir. 1976), in which the chief plumbing inspector for the City of St. Louis accepted unsolicited gratuities from plumbing contractors. While McNeive benefited from his office in a reprehensible way, his conduct neither injured the Government nor affected the performance of his duties and therefore did not violate federal law. We held that McNeive did not commit fraud by defrauding citizens of a right to honest and faithful service. 23 63 Finally, Rabbitt was under no affirmative duty to disclose his interest. The Government refers to no standard of conduct applicable to legislators which clearly required disclosure of Rabbitt's interest in the Berger-Field contracts. 24 The candidate disclosure act applied to Rabbitt as a candidate for Lieutenant Governor, not to his services as a legislator. Thus, he did not deprive the citizens of any right to disclosure. 64 To affirm the convictions on the Berger-Field mail fraud counts would mean expansion of the statute beyond its application in prior political corruption cases. This we refuse to do. We hold that Rabbitt's motion for judgment of acquittal on mail fraud counts I through X should have been granted. Accordingly, we reverse his convictions on those counts. 65
66 The statutory definition of extortion is the obtaining of property from another, with his consent, induced by wrongful use of    fear, or under color of official right. 18 U.S.C. § 1951. The evidence must establish the payment was made under some form of compulsion. See United States v. Adcock, 558 F.2d 397, 403 (6th Cir. 1977). However, bribery and extortion need not be mutually exclusive. See United States v. Hathaway,534 F.2d 386, 393 (1st Cir.), Cert. denied, 429 U.S. 819, 97 S.Ct. 64, 50 L.Ed.2d 79 (1976). The existence of compulsion is determined by the mental state of the extorted party. United States v. Adcock, supra, 558 F.2d at 403. Rabbitt argues the Government failed to prove he compelled the victims to part with money either out of fear or under color of official right. 67
68 The Government alleges extortion by fear of economic injury. Fear of economic loss is sufficient to constitute extortion, See Callanan v. United States, 223 F.2d 171, 175-76 (8th Cir.), Cert. denied, 350 U.S. 862, 76 S.Ct. 102, 100 L.Ed. 764 (1955); Bianchi v. United States, 219 F.2d 182 (8th Cir.), Cert. denied, 349 U.S. 915, 75 S.Ct. 604, 99 L.Ed. 1249 (1955), even if the interest threatened is only an anticipated one. See United States v. Addonizio, 451 F.2d 49 (3d Cir. 1971), Cert. denied, 405 U.S. 936, 92 S.Ct. 949, 30 L.Ed.2d 812 (1972). 69 The record lacks any substantial evidence of fear as a basis for the Berger-Field payments to Rabbitt. 25 Neither did the firm believe that state contracts could not be acquired without Rabbitt's introduction. Indeed, evidence indicated Berger-Field had secured state contracts prior to its agreement with Rabbitt and acquired other state contracts during the years here in question without Rabbitt's assistance. The evidence further indicates Berger-Field was a willing collaborator who sought and paid for Rabbitt's good words to influential people, thus giving Berger-Field access on a friendly basis to state officials who awarded architectural contracts on merit. The principals of Berger-Field all expressed anger, not fear, at hearing of Rabbitt's ten percent demand. One associate described the demand as poor thanks after their consistent political contributions and support. Nevertheless, they decided to pay. 70
71 Extortion under color of official right incorporates common law extortion, the taking of money by a public official not due him or his office for the performance or nonperformance of an official function. The term includes the misuse of one's office to induce payments not due the person or his office. United States v. Hathaway, supra, 534 F.2d at 394. The official need not control the function in question if the extorted party possesses a reasonable belief in the official's powers. See United States v. Hathaway, supra, 534 F.2d 386; United States v. Mazzei, supra, 521 F.2d 639; United States v. Braasch, 505 F.2d 139 (7th Cir. 1974), Cert. denied,421 U.S. 910, 95 S.Ct. 1561, 1562, 43 L.Ed.2d 775 (1975). 26 72 In the present case, the Government does not contend that Rabbitt possessed actual power to award contracts for architectural services within his legislative powers or that Rabbitt so intimated. The Government argues that Rabbitt possessed the apparent power to award contracts and that Berger-Field believed in Rabbitt's power to secure contracts for the firm. The evidence, however, does not support that argument. All the principals of Berger-Field knew Rabbitt did not award contracts in his official capacity. Each architect knew the most Rabbitt could do was recommend them to state contractors as qualified architects and thereby gain them a friendly ear. Moreover, while Rabbitt's influence obviously helped these architects obtain state jobs, no testimony established that any state contracting officer awarded any contract to Berger-Field because of Rabbitt's influence or that Berger-Field believed Rabbitt's introduction was enough to secure the work. The Government failed to prove Berger-Field entertained a reasonable belief Rabbitt possessed effective control over the award of architectural contracts necessary to establish extortion under color of official right in violation of the Hobbs Act. 27 73 The evidence received on this count is distinguishable from that on the S.B. 110-Hobbs Act counts. Control over legislation such as S.B. 110 was at the heart of Rabbitt's responsibility in his position as a legislator and House Speaker. We hold Rabbitt's motion for judgment of acquittal on Hobbs Act count XI should have been granted. Accordingly, we reverse his conviction on this count. 74