Opinion ID: 204040
Heading Depth: 4
Heading Rank: 2

Heading: without authority

Text: Defendants next contend that there was insufficient evidence to prove that they were without authority to receive the Health Plan funds. The Defendants argue that they were entitled to additional compensation for the work they performed on behalf of the Health Plan, and that this compensation was authorized by the collective bargaining agreement, the constitution, the Plan bylaws, and historical practice. We conclude that the evidence was sufficient in this case to establish that the Defendants acted without authority. We stress at the outset that the issue is not whether the Defendants were anywhere explicitly prohibited from receiving payments from the Health Plan for services rendered; rather, the issue is whether they lacked the authority to do so. See United States v. Hammond, 201 F.3d 346, 349 (5th Cir.1999) (per curiam) (although union president did not break any law or union rule in spending political funds, court affirmed conviction because a rational juror could conclude that expenditure was unauthorized). And, in this case, the Defendants lacked such authority. The Defendants first point to the purported administrative services contract they provided to OIC, but that is a nonstarter. The evidence at trial showed that the contract was replete with irregularities, overcharged for services, was created after the fact, was ultimately rejected by the OIC, and the government provided evidence that the minutes supporting the contract were forged. The Defendants claimed that the OIC mistakenly rejected the contract on the assumption that [the Defendants] could not receive such compensation because they were paid labor license. Even if true (which it is not, as detailed in the OIC rejection letter), the contract was nonetheless rejected, and cannot authorize the Defendants' actions in this case. The Defendants further point to a number of provisions in the Health Plan bylaws, the constitution, and the collective bargaining agreement that would permit compensation or at least not prohibit it. For example:  The Health Plan bylaws establish the authority of the board of directors to set[] salaries of officials;  The constitution states that the [CEC] will fix the representative expenses and the bonuses of the Union's Officers;  The collective bargaining agreement puts Lugo in charge of managing and directing the rendering of services. These provisions, if exercised, may have provided authority for the Defendants' compensation. But there was no evidence, such as a formal resolution, meeting minutes, or any other documentation that showed that the Defendants exercised those provisions. Thus, these provisions cannot supply the necessary authority for their actions. The Defendant next argue that, as a matter of practice, they received compensation for the services they provided for the Health Plan. They point to the testimony of Rubén Luciano, who testified that, under the Old Health Plan, there was always compensation paid to the Board of Directors. But this purported historical practice lacks any formal resolution or other authorization. Moreover, unlike the Old Health Plan, the Health Plan was subject to Puerto Rico's Insurance Code, and under the Code the Health Plan was required to seek approval from the OIC, and to furnish to the Commissioner the adequate information to justify the delegation of administrative services to the Defendants. See P.R. Laws Ann. tit. 26, § 1905(2)(a). The evidence showed that the Defendants failed to do so in this case, and thus they cannot resort to their historical practice as a source of authority. Finally, the Defendants challenge testimony given by Aurea López, the OIC's chief investigator into the Union's scheme, concerning the Defendants' labor license. [35] At trial, López testified to the following: The reason for excluding those enjoying Union leave is that the position held by the Commissioner of Insurance is that those persons were already being compensated by AAA so that they could offer services to the Union. So we understood that it was also not correct that the [Health Plan] be charged for services that these people rendered to the [Health Plan]. The Defendants claim that López provided unqualified opinion testimony to the effect that the labor license prohibited the Defendants from receiving additional compensation for their work on the Health Plan. See Fed.R.Evid. 702 (permitting opinion testimony if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case). The Defendants point out that López was not established as an expert on the Union's activities to opine on the labor license. The government argues that, when read in context, López was only giving testimony on historical fact as to the OIC's conclusion that the Defendants' six percent charges for services were unreasonable in light of prevailing market rates. We need not decide the issue, because any error in admitting the testimony was harmless, because it would not have affected the outcome of the trial. United States v. Dunbar, 553 F.3d 48, 59 (1st Cir.2009)(`The essential inquiry in harmless error review is whether the improperly admitted evidence likely affected the outcome of the trial.') (quoting United States v. Tom, 330 F.3d 83, 95 (1st Cir. 2003)). As noted above, there was no evidence of any authorization for the payments the Defendants received. The Defendants claim prejudice because, they argue, the government relied upon López's testimony at trial in support of its theory that the Union's labor license precluded compensation for Health Plan work, and even cited it in their closing. However, the government argued below, as here, that no provision in the constitution, collective bargaining agreement, the Health Plan by-laws, or any other document provided authority for the payments. Moreover, no mention was made of López's testimony in the government's closing. Thus, for all of the above reasons, the evidence was sufficient to permit a rational jury to conclude beyond a reasonable doubt that the Defendants acted without authority.