Court Opinion

ID: 2994143
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:13:02.755614+00
Date Added: 2024-06-11T11:45:14.847604
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 99-2796

United States of America,

Plaintiff-Appellant,

v.

Michael J. Tomasino,

Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 CR 956--Robert W. Gettleman, Judge.

Argued January 5, 2000--Decided March 15, 2000

 Before Posner, Chief Judge, and Easterbrook and
Ripple, Circuit Judges.

 Posner, Chief Judge. The government appeals from
the district court’s refusal (reported at 57 F.
Supp. 2d 565 (N.D. Ill. 1999)) to enhance the
defendant’s mail fraud sentence under U.S.S.G.
sec. 2F1.1(b)(7)(B), which provides for a 4-level
increase in sentence if the fraud "affected a
financial institution and the defendant derived
more than $1,000,000 in gross receipts from the
offense." The appeal confronts us with the
question, left open in United States v. Lauer,
148 F.3d 766, 768-70 (7th Cir. 1998), of the
guideline’s validity.

 The guideline was promulgated in response to
section 2507(a) of the Crime Control Act of 1990,
Pub. L. 101-647, 104 Stat. 4789, 4862, which
commands increased punishment of persons who
derive more than $1 million in gross receipts
from mail fraud affecting "a financial
institution (as defined in Section 20 of title
18, United States Code)." The list of financial
institutions in section 20 does not include,
either explicitly or implicitly, pension funds,
yet the only "financial institution" affected by
Tomasino’s fraud was a pension fund. However, the
Sentencing Commission’s authority to promulgate
sentencing guidelines is not limited to ones that
interpret or apply a statute. On the contrary,
the Commission’s major task is that of picking
sentencing ranges within statutory minimum and
maximum limits--a legislative rather than an
interpretive task. So even though Congress did
not command the Commission to increase the
punishment of people who commit a mail fraud that
affects a pension fund and yields the malefactor
more than $1 million, the Commission was free to
legislate such an increase (within the statutory
maximum) by means of a guideline. United States
v. Rutherford, 54 F.3d 370, 374 n. 11 (7th Cir.
1995). The question is whether in including
pension funds in the punishment-increasing
guideline the Commission was exercising its
legislative authority or merely misreading
section 2407(a) by overlooking the cross-
reference to section 20. In the latter event, the
guideline is invalid as applied to pension funds.
See United States v. Lightbourn, 115 F.3d 291,
292-93 (5th Cir. 1997), where the general point
is clearly stated.

 There is no doubt that the guideline embraces
pension funds. Application Note 14 (now 16) to
guideline section 2F1.1 says so, and the
application notes are part of the guidelines
themselves, and not mere commentary on them.
Stinson v. United States, 508 U.S. 36, 38 (1993);
United States v. Joseph, 50 F.3d 401, 402-03 (7th
Cir. 1995). But a background note to subsection
(b)(7)(B), the subsection under which the
government sought to increase Tomasino’s
sentence, says that the subsection "implements
the instruction to the Commission in Section
2507" of the Crime Control Act. Standing alone,
this implies that the Commission thought
erroneously that section 2507 requires the
Commission to treat a pension fund as a financial
institution within the meaning of the section. If
this is what it thought, it presumably never
considered whether such a guideline would be a
good idea if not commanded by Congress.

 History may cast some light on the question. A
year before subsection (b)(7)(B) was promulgated,
the Commission had added a similar subsection to
section 2F1.1-- (b)(7)(A)--in response to section
961(m) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (FIRREA),
Pub. L. 101-73, 103 Stat. 183, 501, which had
similarly required the Commission to up the
punishment of defrauders of financial
institutions. That statute, however, was limited
to "federally insured financial institutions," a
term that, appearing as it did in a statute
concerned with the savings and loan crisis, was
unlikely to be thought to include pension funds.
By Application Note 14 the Commission had made
the guideline that it promulgated in response to
section 961(m) of FIRREA include pension funds,
but the background note had been explicit that in
doing so the Commission was "implement[ing], in a
broader form, the instruction to the Commission
in section 961(m)" (emphasis added). It was
clear, therefore, that the Commission believed
that it was exercising its legislative power
rather than merely interpreting the statute. When
one year later the Commission added (b)(7)(B) to
the guideline in response to the Crime Control
Act, it did not change Application Note 14, and
so (B) like (A) includes pension funds. But the
background note to (B) omits "in a broader form."

 This omission could have been inadvertent, as
the government argues. Another possibility,
however, is that the Commission overlooked the
cross-reference to 18 U.S.C. sec. 20, the
provision which makes clear that section 2507
does not cover pension funds. The Commission was
less likely to have made such a mistake with
reference to FIRREA, the scope of which would
have seemed clearer without looking up the
definition of "federally insured financial
institution."

 The question is not whether the application note
takes precedence over the background note, or
vice versa. Stinson v. United States, supra, 508
U.S. at 43. There is no conflict. Unquestionably
the Commission wanted Tomasino punished more
heavily than he was, and this intention is
expressed in both notes. The question is whether
the Commission wanted this because it thought
Congress had ordered it to want this, as it were,
or because it had made its own independent
legislative judgment--prompted by section 2507,
but not commanded by it--that frauds affecting
pension funds should be punished as severely as
frauds affecting the financial institutions
enumerated in 18 U.S.C. sec. 20. That is a
question on which the application note casts no
light. The only clue to the Commission’s thinking
on whether it was engaged in legislation or
interpretation is the background note. Read
literally, the note says that the application
note is interpretive ("implements the instruction
to the Commission in Section 2507" of the Crime
Control Act), not legislative. A textualist would
stop there. And the history behind the note does
nothing to dispel the impression that a literal
reading creates.

 If the Commission had not published a background
note to the new subsection, the natural inference
would be that it was doing just what it had done
a year before--assimilating pension funds to
financial institutions as a matter of legislative
judgment. The Commission is not required to
publish background notes, and in their absence
courts will assume that the Commission knows when
it is exercising a legislative judgment,
especially since that is what it usually does in
issuing guidelines. A presumption of regularity
attends the Commission’s doings, as it does that
of other official bodies. But if a background
note said, "This is a dumb guideline we’re
promulgating, and we’re doing it only because
Congress has commanded us to," and this was
wrong--Congress had not commanded, but merely
authorized--the courts could not overlook the
error. Discretion is abused when the decision
maker erroneously thinks that he is compelled to
make a particular decision and so fails to
exercise judgment. The fact that the error might
be concealed does not justify overlooking it when
it is disclosed, blatantly in our example. And,
although the Commission has like other
administrative agencies a discretionary power
that is legislative in character, we do not think
the background note can be dismissed as mere
"legislative history," or a demand for
clarification as a demand for "subsequent
legislative history," both being aids to
interpretation that are derided in some
influential quarters. Lacking the democratic
legitimacy of legislatures, agencies do not have
the same freedom to base decisions on arbitrary
grounds, let alone on misunderstandings of their
own powers. The issue here, moreover, is not
whether the Sentencing Commission was legislating
wisely, but whether it was legislating at all; if
it thought it was interpreting, as the background
note suggests, it was acting ultra vires,
purporting to carry out a congressional command
that had never been given.

 Despite what we have said, it is of course
possible that the Commission dropped the words
"in a broader form" inadvertently. We are not so
devoted to literalism in interpretation that we
are unwilling to consider such a possibility. But
before jacking up a defendant’s sentence on the
basis of a legislative determination by the
Sentencing Commission, a court should have at
least minimal confidence, here lacking, that the
Commission was not simply misinterpreting a
statute. If we do not know whether the Commission
was exercising its legislative judgment, we do
not know whether Tomasino was lawfully sentenced.

 Any risk of underpunishing Tomasino can be
avoided by the district court’s deferring, on
remand, resentencing Tomasino until the
Sentencing Commission has had a reasonable
opportunity to clarify its understanding in
issuing the pension-fund guideline under which he
was sentenced. (The needed clarification, of
course, is not of the application note itself,
which is pellucid, but of the background note.)
Although the membership of the Commission has
turned over since the guideline was promulgated,
we assume that like any administrative agency it
has an institutional memory that enables it to
clarify an action that a court cannot evaluate
without clarification. A clarifying guideline can
lawfully be applied retroactively, U.S.S.G. sec.
1.B1.11(b)(2); United States v. Goudy, 78 F.3d
309, 314-15 (7th Cir. 1996); United States v.
Patasnik, 89 F.3d 63, 70 (2d Cir. 1996), as
distinct from one that increases the defendant’s
punishment. United States v. Bullis, 77 F.3d
1553, 1561 (7th Cir. 1996). But we do not think
the formality of issuing a new guideline, whether
as a guideline formally so denoted, an
application note, or even a background note, is
required here. The application note under which
Tomasino was sentenced gave him clear notice of
the Commission’s intention that he be sentenced
within the range used by the judge in sentencing
him, and so there is no issue of retroactivity.
The background note does not prescribe
punishment, and the question of its meaning is
unrelated to retroactivity. The question whether
Tomasino was sentenced under a valid guideline is
the question that requires clarification.

 We vacate Tomasino’s sentence and remand the
case to the district court to resentence him
after giving the Commission a reasonable
opportunity to clarify its intentions in
promulgating U.S.S.G. sec. 2F1.1(b)(7)(B).
Vacated and Remanded, with Directions.

 Easterbrook, Circuit Judge, dissenting. Our case
arises from the interaction of decisions by two
policy-making bodies. First, there is a decision
of the Sentencing Commission that fraud affecting
a bank should be treated identically to fraud
affecting a pension fund. Second, there are
decisions of Congress in 1989 and 1990 that
change the penalties for persons who defraud
banks. When implementing the first statute, the
Commission adopted parity between bank fraud and
pension-fund fraud. When responding to the second
statute, the Commission amended sec.2F1.1(b) and
parts of sec.2B1.1 and sec.2B4.1, each already
subject to a declaration that frauds affecting
pension funds are treated the same as frauds
affecting banks. It is easy for us to respect
both the Commission’s decision and Congress’s.
Yet my colleagues dishonor one of these
decisions--the decision by the Sentencing
Commission to treat pension-fund fraud the same
as bank fraud--on the ground that the
Commissioners might have misunderstood their
options in 1991. This elevates speculation about
the Commissioners’ mentation over the
Commission’s deeds. Normally a court will say
that clear legislative history cannot contradict
a clear statutory text; here my colleagues say
that an unclear administrative history prevails
over a pellucid text.

 If this case depends on whether the Sentencing
Commission’s Background Note to the 1991
amendment fully reveals the Commission’s
understanding of its options, then Tomasino has
been sentenced improperly. The Background Note
does not show whether the Commission understood
its discretion to limit the higher sentences for
fraud affecting "financial institutions" to the
entities listed in 18 U.S.C. sec.20. But the
sentence ought not depend on the extent to which
the Commission discussed the options it rejected,
because we know which one it embraced.
Application Note 16 (formerly 14) to U.S.S.G.
sec.2F1.1(b)(7)(B) provides:

"Financial institution," as used in this
guideline, is defined to include any institution
described in 18 U.S.C. sec.sec. 20, 656, 657,
1005-1007, and 1014; any state or foreign bank,
trust company, credit union, insurance company,
investment company, mutual fund, savings
(building and loan) association, union or
employee pension fund; any health, medical or
hospital insurance association; brokers and
dealers registered, or required to be registered,
with the Securities and Exchange Commission;
futures commodity merchants and commodity pool
operators registered, or required to be
registered, with the Commodity Futures Trading
Commission; and any similar entity, whether or
not insured by the federal government. "Union or
employee pension fund" and "any health, medical,
or hospital insurance association," as used
above, primarily include large pension funds that
serve many individuals (e.g., pension funds of
large national and international organizations,
unions, and corporations doing substantial
interstate business), and associations that
undertake to provide pension, disability, or
other benefits (e.g., medical or hospitalization
insurance) to large numbers of persons.

Because Application Notes are treated as part of
the Guidelines, Stinson v. United States, 508
U.S. 36 (1993), the rule governing Tomasino’s
sentence is explicit: he committed a fraud from
which he derived more than $1 million in gross
receipts; one of his victims was a pension fund;
thus under sec.2F1.1(b)(7)(B) his offense level
must be increased. Tomasino was sentenced to 31
months in prison, but under sec.2F1.1(b)(7)(B)
his range is 51-63 months. "Unquestionably the
Commission wanted Tomasino punished more heavily
than he was" (majority op. 4).
 Because the Application Note is clear, our job
is over-- there is no ambiguous text requiring
interpretation--unless the Application Note is
invalid. If the Commission were an ordinary
agency, the Application Note, and thus
sec.2F1.1(b)(7)(B), might be deemed invalid under
the Administrative Procedure Act, because the
Commission did not adequately explain why it
decided to jack up the punishment of persons who
defraud pension funds, when Congress required an
increase only for certain crimes that have banks
as victims. The Commission did not do this in
1991, when it adopted sec.2F1.1(b)(7)(B) as part
of Amendment 364, or for that matter in 1990,
when as part of Amendment 317 it promulgated what
is now sec.2F1.1(b)(7)(A) and the Application
Note defining pension funds as "financial
institutions". All the Commission said in 1990 is
that it was implementing "in a broader form" a
legislative command to increase penalties for
jeopardizing banks’ financial soundness. No court
would let the Federal Energy Regulatory
Commission adopt a rule with such elliptic
explanation. But the portion of the APA that
authorizes judicial review of the adequacy of
agencies’ explanations does not apply to the
Sentencing Commission. It must follow some of the
APA’s procedures, see 28 U.S.C. sec.994(x),
incorporating 5 U.S.C. sec.553, but its
substantive decisions are not subject to review
under the APA’s standards. The 1991 amendment
therefore cannot be deemed invalid as
inadequately explained.

 My colleagues do not hold the Commission to a
minimum standard of explanation. They would
enforce the Application Note as written if the
Commission had kept silent. But because it spoke,
and because the 1990 Background Note ("Subsection
(b)(7)(A) implements, in a broader form, the
instruction to the Commission in section 961(m)
of Public Law 101-73.") differs from the 1991
Background Note ("Subsection (b)(7)(B) implements
the instruction to the Commission in section 2507
of Public Law 101-647."), my colleagues wonder
whether omission of "in a broader form" implies
that the Commission misunderstood its obligation
under sec.2507 of Pub. L. 101-647. Puzzlement
leads to a refusal to enforce the guideline and
its note unless within a "reasonable" time
(whatever that may mean) the Commission clarifies
its "understanding" of the issue. Slip op. 6.

 I agree in principle with the proposition that
a Background Note could show that the Guideline
is invalid, for the same reason that the FERC’s
explanation of a regulation in the Federal
Register could show that its rule is irrational.
But for reasons discussed later I do not think
that the omission of "in a broader form"
demonstrates a misunderstanding of the legal
rules governing the amendment of the rules in
1991. What we have is not a clear legal error but
uncertainty. How should a court deal with an
ambiguous background note? My colleagues’
approach, a form of "remand" in spirit to the
Commission (but without any actual remand), is
unprecedented and invites evasion of the
Commission’s enabling legislation. The
unprecedented part is clear enough; our decision
is the first to hold that a sentence must be kept
in limbo pending new action by the Commission.
The Commission, which had no members between
October 1998 and the end of November 1999, is
just beginning to address a substantial backlog
of old business and cannot attend to our demands
on short notice. Why should my colleagues (or the
Commissioners) think that this issue is entitled
to priority over other matters? Yet even if it
had nothing else to do the Commission could not
revise guidelines with dispatch. Proposals must
be published for comment under sec.994(x); after
receiving comments the Commission must promulgate
a text and send it to Congress; the change does
not take effect for at least 180 days, during
which Congress may legislate. 28 U.S.C.
sec.994(p). The Commission generally promulgates
amendments in April and makes them effective the
next November 1. No proposal added to the
Commission’s agenda today could go into force
until November 1, 2000, no matter how abbreviated
the schedule for publication, public comment, and
promulgation. November 1, 2001, would be a more
realistic target. By inviting the Commission to
issue a new background note (or to clarify
matters in some other, unspecified, way, perhaps
by a press release) rather than to reissue the
guideline or an application note, my colleagues
invite evasion of these time limits. I am not
aware of any prior effort by the Commission to
change the legal effect of a guideline--and that
is what the majority contemplates--without using
the processes of sec.994. If the Commission
rather than a court came up with this back door
method of changing the rules, I doubt that we
would permit the gimmick to work.

 What principally concerns me, however, is
interpretive method. Congress has specified a
means to clear up ambiguities and prevent unjust
applications of the Guidelines. The Commission
may direct the retroactive application of
amendments. 18 U.S.C. sec.3582(c)(2). The right
thing for a court to do when it is unsure whether
the Commissioners understood all of their options
is to apply the text as written and to draw the
subject to the Commission’s attention. Compare
Chapman v. United States, 500 U.S. 453 (1991)
(applying the LSD guideline even though it is
harsh and can work erratically), with Neal v.
United States, 516 U.S. 284 (1996) (noting that
the Commission later amended the LSD guideline).
If the Commission believes that a guideline has
been applied in an inappropriate way, it may
change the rules and apply that amendment to all
affected persons. Even relatively short sentences
such as Tomasino’s are long enough in relation to
the amending cycle that the defendant may receive
the benefit. Thus the right thing for us to do is
remand with instructions to resentence Tomasino
within the range prescribed by sec.2F1.1(b)(7)(B)
and send a copy of the opinion to the Commission.
If the Commission concludes that pension funds
should be excluded from the application of
sec.2F1.1(b)(7)(B), it can put that change into
effect by November 1, 2001, and Tomasino will be
eligible for release after serving 31 months (the
right sentence without the extra levels). My
colleagues’ approach, by contrast, spurns the
method Congress provided while inviting violation
of sec.994.

 Unless the Commission uses sec.3582(c)(2),
Tomasino should serve a sentence within the
guideline range. By ruling otherwise my
colleagues curtail the effect not only of
sec.2F1.1(b)(7) but also of sec.2B1.1 and
sec.2B4.1, which were altered in the same way and
at the same time by Amendments 317 and 364. A
Background Note is a form of administrative
history. Just as legislative committees sometimes
explain why they enacted the law, and what they
expect it to accomplish, the Commission sometimes
explains why it amended the guidelines. An
explanation from either Congress or the
Commission may suggest that the matter has not
been thought through fully. Does this authorize
either refusal to enforce a rule or
"construction" of a text to confine it to the
situation that the judges deem well thought out?
No. We have it on the highest authority that when
a legal text is unambiguous a court must
disregard its background. Robinson v. Shell Oil
Co., 519 U.S. 337, 340 (1997); United States v.
Ron Pair Enterprises, Inc., 489 U.S. 235, 241
(1989); Burlington Northern R.R. v. Oklahoma Tax
Commission, 481 U.S. 454, 461 (1987); United
States v. Locke, 471 U.S. 84, 95-96 (1985); Rubin
v. United States, 449 U.S. 424, 430 (1981);
Packard Motor Car Co. v. NLRB, 330 U.S. 485, 492
(1947); United States v. Shreveport Grain &
Elevator Co., 287 U.S. 77, 83-84 (1932);
Wisconsin R.R. Commission v. Chicago, Burlington
& Quincy R.R., 257 U.S. 563, 588-89 (1922);
Caminetti v. United States, 242 U.S. 470, 490
(1917). See also In re Sinclair, 870 F.2d 1340
(7th Cir. 1989). The text of the Application Note
could not be clearer; there is no excuse for
resort to the legislative history. A textualist
does not "stop" with the language of this
Background Note (majority op. at 4) because a
textualist does not reach the language of this
Background Note! (Not, that is, as an
interpretive tool.)

 If the 1991 Background Note is legislative
history, then what the Commissioners might say in
2000 or 2001 about this Background Note (or about
its "understanding" of its options) is subsequent
legislative history, which is even less useful.
Pierce v. Underwood, 487 U.S. 552, 566-68 (1988).
At least contemporaneous legislative history may
illuminate the social or political context that
produced the text being construed. Yet no member
of the Sentencing Commission now serving has been
there for more than four months. Only one has any
way to retrieve what members serving in 1991
"intended." (Commissioner Steer was the
Commission’s General Counsel in 1991 and may be
able to consult his memory or files on the
subject.) We would be better off asking the
members from a decade ago to file affidavits
narrating what they (or their staffs) thought
about the matter. But that approach would be
improper for too many reasons to count; the ban
on scrutinizing public officials’ mental
processes, see United States v. Morgan, 313 U.S.
409, 421-22 (1941), is only the most prominent.
Thus if "intent" matters, it is too late to do
reconstruction work. If the Guideline and
Application Note were not valid when Tomasino
committed his crime, they cannot be resuscitated
retroactively, whether by statements of
"understanding" or by new rulemaking. Bowen v.
Georgetown University Hospital, 488 U.S. 204,
208-09 (1988). But if they were valid when
issued, no new declarations are called for. A
declaration by the sitting Commissioners that
they think in 2000 that their predecessors
thought a particular thing in 1991 is irrelevant.
West Virginia University Hospitals, Inc. v.
Casey, 499 U.S. 83, 100-01 & n.7 (1991). When a
legislative body amends a rule, its declarations
tell us only what the new text means. Lawmakers
do not "construe" or "interpret" the work of
their predecessors in office. Rivers v. Roadway
Express, Inc., 511 U.S. 298, 304-13 (1994);
Mojica v. Gannett Co., 7 F.3d 552, 562-64 (7th
Cir. 1993) (concurring opinion).

 Actually, nothing in the 1991 Background Note
implies that the Commissioners misunderstood
their marching orders. The Commission said that
the 1991 amendment "implements the instruction to
the Commission in section 2507 of Public Law 101-
647." That it does. Amendment 364 also increases
the penalty for people who receive more than $1
million in gross receipts of fraud, and have a
pension plan among their victims. The Commission
did not add "and we really mean it!", but even
fanciers of legislative history don’t require
that of a lawmaker. See Harrison v. PPG
Industries, Inc., 446 U.S. 578, 592 (1980); Swain
v. Pressley, 430 U.S. 372, 378-79 (1977). Unlike
my colleagues, I do not find it odd or jarring
that in 1990 the Commission said that it was
implementing a statutory directive "in a broader
form" yet omitted that phrase in 1991. The reason
for the difference is that Amendment 317, the
1990 change, added Application Note 14 (now 16)
to sec.2F1.1 (and added identical notes to
sec.2B1.1 and sec.2B4.1). The Commission had to
decide in 1990 whether to treat pension funds
like banks. It considered the subject and
answered "yes." Having taken that decision in
1990, the Commission did not have to remark on it
again in 1991.

 If we are to give any weight to Commissioners’
unrevealed thoughts, plans, intent, or general
mental state in 1991--an inquiry that I think
inappropriate for reasons already given--we
should ask these homunculi the right question. It
is whether the Commissioners believed in 1991 (or
would have concluded, had they given the subject
any thought) that the sentences for persons who
defraud pension plans should be lower than the
sentences for persons who defraud banks, holding
constant the size of the fraud. That is, would
the need to comply with sec.2507 of Pub. L. 101-
647 have led the Commission to reverse its
decision, made a year earlier, to treat the two
alike for sentencing purposes? Nary a clue
suggests that any Commissioner thought, or could
under truth serum have been induced to say, that
the sentences for those who defraud pension plans
should be lower. Every mention of financial
institutions everywhere in the Sentencing
Guidelines treats the two alike. Similarly,
Chapter 8 of the Guidelines groups pension funds
with other organizations (including banks) for
the purpose of organizational sentencing.
U.S.S.G. sec.8A1.1 Application Note 1. Some
guidelines apply exclusively to offenses against
banks, and others exclusively to offenses against
pension funds (e.g., U.S.S.G. sec.2E5.1), but
wherever the victim of the crime is a generic
"financial institution" the Guidelines treat
banks and pension funds identically. (Only
sec.2B3.1(b)(1), which uses the term "financial
institution" without definition, is a possible
counterexample; but still there is no hint that
the Commission provided a lower punishment for
persons who defraud pension funds.) The
Commission’s failure to add the words "in a
broader form" to a Background Note in 1991 does
not imply that this equation should be
jettisoned. To sentence Tomasino, all the court
need know is whether persons who defraud pension
funds properly receive lower sentences than
persons who defraud banks. The Sentencing
Guidelines answer in the negative.

 The Commission did not say anything like "this
is a dumb guideline that we’re promulgating only
because Congress held a gun to our head." That
proposition, if uttered, would indeed demonstrate
that the amendments made in 1991 are invalid. My
colleagues proceed as if the Commission had
written something of the sort, but it did not.
All the Background Note does is relate a matter
of fact: Amendment 364 implements sec.2507 of
Pub. L. 101-647. The majority errs in writing
that the Background Note "interprets" sec.2507;
what it says, rather, is that the amendments
"implement" the law, which is true (and not
ambiguous). We then must choose what to make of
the omission of the words "in a broader form".
Should we assume that the difference in language
between the 1990 and 1991 Background Notes is
attributable to the fact that the fundamental
decision ("do we equate banks with pension
funds?") had been made in 1990 rather than 1991?
Or should we assume that the 1991 amendment
reflects incompetence--that the Commissioners
issued Amendment 364 without bothering to read
either the cross-reference in sec.2507 of Pub. L.
101-647 or the Application Notes they had adopted
the year before? My colleagues say that because
the Background Note is ambiguous, we should adopt
the reading that treats the Commissioners and
their staff as bumblers. Yet there is a
longstanding norm of administrative law that when
the record is silent or ambiguous, we treat the
agency as competent. A presumption of regularity,
judges call it. Like other presumptions, it can
be upset by contrary indicators, but here there
are none. The Background Note stands alone. If
the Sentencing Commission were an informal body
composed of lay members like a draft board under
the old Selective Service System, then maybe we
should assume that silence implies legal error--
though judges did not assume this even about
draft boards. United States v. Neckels, 451 F.2d
709, 712 (9th Cir. 1971); United States v.
Harris, 436 F.2d 775, 777 (9th Cir. 1970). But
the Commission is part of the Judicial Branch of
government. 28 U.S.C. sec.991(a); Mistretta v.
United States, 488 U.S. 361, 384-97 (1989). At
least three of its seven members must be federal
judges, and the Commission also has a large legal
staff. The Commissioners who promulgated
Amendment 364 included two circuit judges, two
district judges, and one professor of law./* To
suppose that none of them looked up the
cross-reference in sec.2507, that the legal staff
did not alert them to its significance, that as a
result the Commissioners wrongly thought that
they had been compelled to increase the sentences
of persons who defraud pension funds, and that
but for this legal error the Commission would
have reversed the 1990 decision mandating
identical sentences for frauds committed against
pension funds and banks, is fantastic. Doubtless
a presumption of regularity sometimes looks
implausible. But here a presumption of regularity
is fitting, and the contrary presumption imputes
foolishness (or extreme carelessness) to too many
intelligent people.

 In the end, my colleagues depart from what the
Commission adopted because they are not sure what
it thought. We ought, instead, enforce its rules.
Deeds prevail over thoughts (or the lack of
thoughts). Section 2F1.1(b)(7)(B) and its
Application Note cover Tomasino’s conduct
directly. There is no ambiguity. We should apply
the Sentencing Guidelines as written, and leave
to the Commission under sec.3582(c)(2) the
decision whether to reduce the sentences of
persons in Tomasino’s position.

/* The Chairman of the Commission in 1991 was
Circuit Judge William W. Wilkins. The other members
were Julie E. Carnes (appointed to the
district court in 1992), Helen G. Corrothers,
Michael S. Gelacak, Circuit Judge George E.
MacKinnon, District Judge A. David Mazzone, and
Professor Ilene H. Nagel. The General Counsel
was John R. Steer, who was appointed to the
Commission as a member in November 1999. Carol
Pavilack Getty and Paul L. Maloney served
as members ex officio.