Court Opinion

ID: 2773381
Source: CourtListenerOpinion
Date Created: 2015-01-26 23:00:52.00141+00
Date Added: 2024-06-11T13:23:19.063135
License: Public Domain

In the

      United States Court of Appeals
                      For the Seventh Circuit
                          ____________________  

Nos.  14-­‐‑1892  &  14-­‐‑1908  
UNITED  STATES  OF  AMERICA,  
                                                             Plaintiff-­‐‑Appellee,  
                                        v.  

THOMAS  HAWKINS  and  JOHN  W.  RACASI,  
                                       Defendants-­‐‑Appellants.  
                          ____________________  

           Appeals  from  the  United  States  District  Court  for  the  
             Northern  District  of  Illinois,  Eastern  Division.  
               No.  12  CR  528  —  John  J.  Tharp,  Jr.,  Judge.  
                          ____________________  

     ARGUED  JANUARY  7,  2015  —  DECIDED  JANUARY  26,  2015  
                  ____________________  

   Before  WOOD,  Chief  Judge,  and  POSNER  and  EASTERBROOK,  
Circuit  Judges.  
    EASTERBROOK,   Circuit   Judge.   Thomas   Hawkins   and   John  
Racasi  were  employed  as  analysts  on  the  staff  of  Larry  Rog-­‐‑
ers,   a   member   of   the   Cook   County   Board   of   Review,   when  
they   accepted   money   from   Ali   Haleem,   a   corrupt   Chicago  
police   officer   acting   as   an   undercover   agent   in   order   to   re-­‐‑
duce  the  penalties  for  his  own  crimes.  The  Board  of  Review  
hears   complaints   by   property   owners   who   believe   that   the  
2                                                  Nos.  14-­‐‑1892  &  14-­‐‑1908  

assessed   valuation   (which   affects   real-­‐‑estate   taxes)   is   exces-­‐‑
sive.  Haleem  paid  Hawkins  and  Racasi  to  arrange  for  lower  
assessments.   They   took   his   money,   and   the   assessments  
were  reduced,  except  for  one  parcel  about  which  the  protest  
was   untimely.   A   jury   found   that   Hawkins   and   Racasi   had  
violated   18   U.S.C.   §666   (theft   or   bribery   concerning   pro-­‐‑
grams  receiving  federal  funds)  and  §1341  (mail  fraud),  plus  
corresponding   prohibitions   of   conspiracy.   Hawkins   and  
Racasi   contend   that   they   committed   a   different   offense—
they   assert   that   they   took   the   money   with   the   intent   to   de-­‐‑
ceive  Haleem  and  did  nothing  in  exchange  for  the  cash—and  
that  the  jury  convicted  them  of  the  indictment’s  charges  only  
because  it  was  improperly  instructed.  
     The   parties   agree   that   Cook   County   is   covered   by   §666  
and  that  the  financial  effect  of  the  lower  assessed  valuations  
exceeds   the   $5,000   required   for   a   conviction.   Section  
666(a)(1)(B)   provides   that   any   agent   of   a   covered   organiza-­‐‑
tion   who   “corruptly   solicits   or   demands   for   the   benefit   of  
any  person,  or  accepts  or  agrees  to  accept,  anything  of  value  
from  any  person,  intending  to  be  influenced  or  rewarded  in  
connection  with  any  business,  transaction,  or  series  of  trans-­‐‑
actions  of  such  organization”  commits  a  felony.  The  prosecu-­‐‑
tor  contended,  and  the  jury  found,  that  Hawkins  and  Racasi  
took   Haleem’s   money   “intending   to   be   influenced   or   re-­‐‑
warded”  in  connection  with  their  jobs  as  analysts.  
   They   do   not   complain   about   the   jury   instruction   on   this  
element,  which  told  the  jury  that  it  must  find  that  they  acted  
with  one  of  the  two  forbidden  intents:  an  intent  to  be  influ-­‐‑
enced,  or  an  intent  to  be  rewarded.  Their  theory  of  defense—
that   they   took   the   money   planning   to   deceive   Haleem—
amounted  to  a  confession  of  accepting  payment  with  intent  
Nos.  14-­‐‑1892  &  14-­‐‑1908                                                   3  

to   be   “rewarded”   for   their   positions.   This   part   of   §666   for-­‐‑
bids   taking   gratuities   as   well   as   taking   bribes.   See   United  
States   v.   Anderson,   517   F.3d   953,   961   (7th   Cir.   2008);   United  
States  v.  Ganim,  510  F.3d  134,  150  (2d  Cir.  2007);  United  States  
v.  Zimmerman,  509  F.3d  920,  927  (8th  Cir.  2007);  United  States  
v.  Agostino,  132  F.3d  1183,  1195  (7th  Cir.  1997).  Contra,  United  
States  v.  Fernandez,  722  F.3d  1,  22–26  (1st  Cir.  2013).  (Defend-­‐‑
ants  have  not  asked  us  to  overrule  Anderson  and  Agostino  in  
favor   of   the   position   taken   in   Fernandez.)   The   record   shows  
that   the   payments   were,   if   not   bribes,   then   gratuities   (from  
defendants’   perspectives)   even   if   Haleem   would   have   pre-­‐‑
ferred   to   get   something   for   his   money.   The   jury   may   well  
have  found  that  defendants  intended  to  be  influenced;  but  if  
they  did  not,  then  they  intended  to  be  rewarded  for  the  posi-­‐‑
tions  they  held,  if  not  for  services  delivered.  They  are  guilty  
either  way.  
    The   contrary   argument   rests   on   the   word   “corruptly”.  
Hawkins   and   Racasi   maintain   that,   to   show   that   they   acted  
corruptly,   the   prosecutor   must   prove   that   they   took   the  
money  intending  to  perform  an  official  act  in  exchange.  The  
judge   thought   otherwise   and   told   the   jury   that   a   covered  
agent   acts   “corruptly”   if   he   takes   money   “with   the   under-­‐‑
standing  that  something  of  value  is  to  be  offered  or  given  to  
reward   or   influence   him   in   connection   with   his   official   du-­‐‑
ties.”   In   other   words,   the   “corruption”   entails   the   payee’s  
knowledge  that  the  payor  expects  to  achieve  a  forbidden  in-­‐‑
fluence   or   deliver   a   forbidden   reward.   This   definition   of  
“corruptly”  comes  from  the  Seventh  Circuit’s  Pattern  Crimi-­‐‑
nal  Jury  Instructions  (2012  ed.)  for  §666  (see  page  205),  which  
derived   it   from   United   States   v.   Bonito,   57   F.3d   167,   171   (2d  
Cir.   1995).   This   court   has   used   the   same   definition   of   “cor-­‐‑
4                                                   Nos.  14-­‐‑1892  &  14-­‐‑1908  

ruptly”   in   a   prosecution   under   18   U.S.C.   §201.   See   United  
States  v.  Peleti,  576  F.3d  377,  382  (7th  Cir.  2009).  
      Defendants   want   us   to   overrule   Peleti   and   disapprove  
Bonito.  We  shall  do  neither.  Defendants  treat  the  word  “cor-­‐‑
ruptly”   as   effectively   removing   the   statute’s   prohibition   of  
taking   money   as   a   “reward”.   Using   one   statutory   word   to  
blot   out   another   would   be   unsound.   The   understanding   in  
Peleti  and  Bonito  leaves  work  for  all  words  in  this  statute.  As  
defined   in   the   instruction,   agents   of   a   covered   jurisdiction  
act  corruptly  if  they  know  that  the  payor  is  trying  to  get  them  
to   do   the   acts   forbidden   by   the   statute,   and   they   take   the  
money   anyway.   That’s   a   sensible   definition   of   “corruptly”.  
As   this   jury   was   instructed,   Hawkins   and   Racasi   could   be  
convicted   only   if   (a)   the   payee   intended   to   be   influenced  
(that   is,   to   perform   some   quid   pro   quo)   or   rewarded;   (b)   the  
payor   intended   to   influence   or   reward   the   defendants,   and  
(c)   the   payee   knew   the   payor’s   intent.   That   is   a   triple   safe-­‐‑
guard   against   criminalizing   innocent   acts.   (Though   it   does  
not   matter   to   the   instructions   issue,   we   add   that   Haleem’s  
payments   were   not   small,   and   the   recorded   conversations  
show  that  they  were  not  innocent.)  
    The   convictions   under   §1341   pose   a   different   problem.  
The  mail-­‐‑fraud  statute  is  not  as  detailed  as  §666.  It  prohibits  
schemes  to  defraud  that  use  the  mails  but  does  not  elaborate.  
Hawkins  and  Racasi  may  have  defrauded  Haleem  out  of  his  
money  (this  was  their  defense!),  but  that  was  not  the  prosecu-­‐‑
tor’s   theory.   The   United   States   relied   on   18   U.S.C.   §1346,  
which  defines  scheme  to  defraud  as  including  “a  scheme  or  
artifice   to   deprive   another   of   the   intangible   right   of   honest  
services.”  The  idea  is  that  the  employer  has  a  right  to  loyalty  
from   agents   and   employees,   and   the   prosecutor   contended  
Nos.  14-­‐‑1892  &  14-­‐‑1908                                                          5  

that   Hawkins   and   Racasi   deprived   Cook   County   of   their  
loyal  services  by  taking  Haleem’s  money  secretly.  But  “hon-­‐‑
est   services”   is   open-­‐‑ended,   and   in   Skilling   v.   United   States,  
561  U.S.  358  (2010),  the  Justices  deflected  a  contention  that  it  
is  so  open-­‐‑ended  as  to  be  unconstitutionally  vague.  They  did  
this  by  holding  that  §1346  covers  only  bribery  and  kickbacks.  
This   means   that   an   agent’s   secret   receipt   of   a   gratuity   (a  
“reward”  in  the  language  of  §666)  does  not  violate  §1341,  for  
a  payment  that  does  not  entail  a  plan  to  change  how  the  em-­‐‑
ployee  or  agent  does  his  job  is  neither  a  bribe  nor  a  kickback.  
    The  district  court  instructed  the  jury  that  it  could  convict  
defendants   under   §1341   only   if   they   “intended   to   deprive  
another   of   the   intangible   right   to   honest   services   through  
bribery.”  So  far,  so  good.  (The  instructions  did  not  mention  
kickbacks,   because   the   prosecutor   did   not   allege   any.)   But  
the  instructions  then  defined  bribery  this  way:  
    A  defendant  commits  bribery  when  he,  while  acting  as  an  agent  
    of  government,  or  any  agency  of  that  government,  such  as  Cook  
    County,  solicits,  demands,  accepts,  or  agrees  to  accept,  anything  
    of   value   from   another   person   corruptly   intending   to   be   influ-­‐‑
    enced   or   rewarded   in   connection   with   some   business,   transac-­‐‑
    tion   or   series   of   transactions   of   the   government   or   government  
    agency.  

Under   this   instruction,   defendants   committed   “bribery”   if  
they   took   Haleem’s   money   “intending   to   be   …   rewarded”  
for  their  official  positions,  even  if  they  did  not  plan  to  lift  a  
finger  to  reduce  the  properties’  assessed  valuations.  Treating  
a   gratuity   as   a   bribe   transgresses   Skilling.   The   word   “cor-­‐‑
ruptly”  in  this  instruction  does  not  save  it,  given  the  way  a  
different   instruction   defined   “corruptly”   (a   subject   we   dis-­‐‑
cussed  above).  
6                                                        Nos.  14-­‐‑1892  &  14-­‐‑1908  

   The  district  judge  devised  the  definition  of  bribery  on  his  
own.   The   prosecutor   had   proposed   this   language,   from   the  
2012  edition  of  the  Pattern  Criminal  Jury  Instructions:  
      A  defendant  commits  bribery  when  he  demands,  solicits,  seeks,  
      or  asks  for,  or  agrees  to  accept  or  receive,  or  accepts  or  receives,  
      directly  or  indirectly,  something  of  value  from  another  person  in  
      exchange  for  a  promise  for,  or  performance  of,  an  official  act.  

The  judge  drafted  an  instruction  that  tracks  §666  (by  includ-­‐‑
ing   “reward”)   rather   than   use   the   circuit’s   pattern   instruc-­‐‑
tion  for  §1341  because,  he  said,  the  jury  would  be  confused  if  
the   §666   and   §1341   charges   were   treated   differently.   Yet   if  
the  statutes  are  different,  the  jury  must  be  told.  
     The   United   States   now   defends   the   district   judge’s   in-­‐‑
struction   despite   its   use   of   “reward.”   It   contends   that   treat-­‐‑
ing  a  gratuity  as  a  bribe  is  consistent  with  Skilling  because,  in  
the  course  of  a  lengthy  opinion,  the  Supreme  Court  cited  18  
U.S.C.   §201(b),   the   principal   bribery   statute   for   federal   em-­‐‑
ployees,  see  561  U.S.  at  412  &  n.45,  and  §201(b)  permits  con-­‐‑
viction   on   proof   that   the   defendant   accepted   a   reward.   But  
that’s  not  what  Skilling  says.  It  reversed  Skilling’s  conviction  
because   he   did   not   accept   anything   of   value   “in   exchange  
for”   making   misrepresentations   to   Enron’s   investors.   561  
U.S.   413.   If   accepting   some   reward   were   enough,   then   Skil-­‐‑
ling’s   conviction   would   have   been   affirmed—for   the   theory  
in   Skilling’s   own   mail-­‐‑fraud   prosecution   was   that   he   had  
been  rewarded  (by  his  salary)  for  his  services  during  a  time  
when   Enron   violated   the   securities   laws.   The   Justices  
thought   that   bribery   entails   a   quid   pro   quo   (planned   or   real-­‐‑
ized),   not   just   a   receipt   of   money.   And   §201   says   the   same  
thing.  Section  201(b)(2)  provides  that  whoever  
Nos.  14-­‐‑1892  &  14-­‐‑1908                                                                7  

    being   a   public   official   …   directly   or   indirectly,   corruptly   de-­‐‑
    mands,  seeks,  receives,  accepts,  or  agrees  to  receive  or  accept  an-­‐‑
    ything   of   value   personally   or   for   any   other   person   or   entity,   in  
    return  for:  
         (A)  being  influenced  in  the  performance  of  any  official  act;  
         (B)   being   influenced   to   commit   or   aid   in   committing,   or   to  
         collude  in,  or  allow,  any  fraud,  or  make  opportunity  for  the  
         commission  of  any  fraud,  on  the  United  States;  or  
         (C)  being  induced  to  do  or  omit  to  do  any  act  in  violation  of  
         the  official  duty  of  such  official  or  person  

commits  bribery.  Subsection  (b)  requires  proof  that  the  pub-­‐‑
lic   official   demanded   or   took   money   in   exchange   for   doing  
or  omitting  some  official  act.  Accepting  a  “reward”  for  doing  
something   the   official   would   have   done   anyway   does   not  
violate  §201(b).  By  contrast,  §201(c),  to  which  Skilling  did  not  
refer   when   identifying   “bribery”,   prohibits   some   kinds   of  
rewards,   though   far   from   all.   United   States   v.   Sun-­‐‑Diamond  
Growers  of  California,  526  U.S.  398  (1999).  
    The   United   States   maintains   that   proof   of   a   completed  
exchange   is   not   essential,   and   that’s   right.   A   plan   to   take  
money  in  exchange  for  an  official  act  constitutes  a  scheme  to  
defraud,   whether   or   not   the   plan   succeeds.   We   agree   with  
this   aspect   of   decisions   such   as   United   States   v.   McDonough,  
727  F.3d  143,  159–60  (1st  Cir.  2013);  United  States  v.  Rosen,  716  
F.3d   691,   700–02   (2d   Cir.   2013);   and   United   States   v.   Bryant,  
655  F.3d  232,  244–45  (3d  Cir.  2011),  on  which  the  prosecutor  
relies.  But  none  of  these  opinions  holds  that  accepting  a  “re-­‐‑
ward”   without   doing   anything   in   exchange—or   ever   plan-­‐‑
ning   to—is   “bribery”   that   can   support   a   mail-­‐‑fraud   convic-­‐‑
tion  after  Skilling.  That’s  the  problem  in  this  instruction.  
8                                                   Nos.  14-­‐‑1892  &  14-­‐‑1908  

    The   United   States   weakly   argues   that   any   error   was  
harmless,  but  that  contention  relies  entirely  on  the  undisput-­‐‑
ed   fact   that   the   defendants   told   Haleem   that   payments  
would  induce  them  to  lower  the  assessments.  Yet  defendants  
contend  that  they  were  lying.  If  they  were  indeed  lying,  then  
they  can’t  be  convicted  under  §1341,  even  though  the  convic-­‐‑
tions  under  §666  are  valid.  The  definition  of  “bribery”  in  the  
instructions  allowed  the  jury  to  bypass  the  question  whether  
Hawkins   and   Racasi   were   scamming   Haleem   rather   than  
Cook  County.  The  error  therefore  cannot  be  called  harmless,  
and   defendants   are   entitled   to   a   new   trial   of   the   mail-­‐‑fraud  
charges.  
     Because   the   subject   may   occur   on   resentencing—
immediately  if  the  United  States  elects  to  dismiss  rather  than  
retry  the  mail-­‐‑fraud  charges,  later  if  a  new  trial  is  held—we  
discuss   defendants’   contention   that   the   judge   erred   by   en-­‐‑
hancing  their  offense  levels  under  U.S.S.G.  §2C1.1(b)(3).  This  
provision   reads:   “If   the   offense   involved   an   elected   public  
official  or  any  public  official  in  a  high-­‐‑level  decision-­‐‑making  
or  sensitive  position,  increase  by  4  levels.  If  the  resulting  of-­‐‑
fense   level   is   less   than   level   18,   increase   to   level   18.”   The  
judge  concluded  that  Hawkins  and  Racasi  each  occupied  “a  
high-­‐‑level   decision-­‐‑making   or   sensitive   position”.   They  
maintain,   to   the   contrary,   that   they   served   in   menial   posi-­‐‑
tions  with  only  ministerial  functions.  
    Cook  County  updates  real-­‐‑estate  assessments  every  three  
years.   Taxpayers   dissatisfied   with   a   new   valuation   may  
complain  to  the  Board  of  Review.  Each  of  the  Board’s  three  
commissioners   employs   analysts,   and   a   protest   is   assigned  
initially   to   an   analyst   for   one   of   the   commissioners   (unless  
the   owner   requests   a   formal   hearing,   as   Haleem   did   not).  
Nos.  14-­‐‑1892  &  14-­‐‑1908                                                  9  

Cook  County  assigns  every  parcel  an  index  number.  An  ana-­‐‑
lyst   types   the   index   number   into   a   computer;   the   database  
software   responds   with   a   list   of   other   parcels   located   near  
the  one  in  question,  together  with  their  assessed  values.  The  
analyst  is  supposed  to  choose  the  other  parcels  most  similar  
to   the   one   in   question;   the   computer   then   changes   the   as-­‐‑
sessment  to  make  it  more  like  the  parcels  selected  as  compa-­‐‑
rable.   (Note   that   this   compares   one   assessment   against   oth-­‐‑
ers,   rather   than   the   contested   assessment   against   market  
transactions;  we  have  not  been  asked  to  decide  whether  this  
is  a  sensible  procedure.)  
     Data   show   that   this   procedure   leads   to   some   reduction  
79%   of   the   time,   and   the   parties   agree   that   commissioners  
tell   their   staffs   to   favor   modest   reductions   to   keep   constitu-­‐‑
ents  happy.  If  the  first  analyst  recommends  a  reduction,  the  
file  goes  to  an  analyst  for  a  second  commissioner  and  then  a  
third;   the   majority   rules.   Neither   the   second   nor   the   third  
analyst  repeats  the  work  done  by  the  first,  unless  something  
in   the   file   suggests   that   comparable   properties   have   been  
generated  or  compared  improperly.  
       These   facts   set   up   the   dispute:   defendants   say   that   ana-­‐‑
lyst  cannot  be  a  “high-­‐‑level”  or  “sensitive”  position,  because  
the  software  limits  the  choice  of  comparable  parcels  and  oth-­‐‑
er   analysts   could   outvote   them.   (The   record   does   not   show  
what   functions,   if   any,   the   commissioners   themselves   per-­‐‑
form.)   The   prosecutor   replied   that   analysts   have   effectively  
unlimited  discretion  to  choose  which  parcels  on  the  comput-­‐‑
er-­‐‑generated  list  to  use  for  comparison  and  that  the  choice  of  
comparable   properties   determines   the   outcome   of   the   own-­‐‑
er’s   protest.   The   prosecutor   illustrated   this   by   pointing   out  
that   Hawkins   told   Haleem   that   he   could   reduce   the   assess-­‐‑
10                                                 Nos.  14-­‐‑1892  &  14-­‐‑1908  

ment  of  a  parcel  substantially  by  comparing  it  with  another  
parcel  that  was  “just  a  lot.”  The  district  judge  sided  with  the  
prosecutor  and  did  not  err  in  doing  so.  How  much  discretion  
a   particular   person   possesses   is   a   question   of   fact.   The   dis-­‐‑
trict   judge   resolved   the   factual   dispute   against   defendants  
without  committing  a  clear  error;  and  given  that  finding  the  
application  of  §2C1.1(b)(3)  is  not  an  abuse  of  discretion.  
     It  is  perplexing  that  the  parties  have  devoted  so  much  at-­‐‑
tention   to   this   subject,   because   the   district   judge   imposed  
sentences  well  below  the  Guideline  range  of  33  to  41  months  
for   each   defendant:   24   months   for   Hawkins   and   18   months  
for  Racasi.  The  judge  did  not  imply  that  the  sentences  would  
have  been  lower  still,  had  he  resolved  the  §2C1.1(b)(3)  issue  
in  defendants’  favor.  We  have  encouraged  district  judges  to  
bypass  debatable  issues  in  the  calculation  of  Guideline  rang-­‐‑
es  if  the  issues  turn  out  not  to  matter,  and  to  state  on  the  rec-­‐‑
ord   whether   the   sentence   would   have   been   the   same   if   the  
debated  issue  had  come  out  the  other  way.  See,  e.g.,  United  
States   v.   Lopez,   634   F.3d   948,   953–54   (7th   Cir.   2011);   United  
States  v.  Sanner,  565  F.3d  400,  405–06  (7th  Cir.  2009);  cf.  Peugh  
v.  United  States,  133  S.  Ct.  2072,  2088  n.8  (2013)  (a  mistake  in  
calculating  the  Guidelines  level  is  harmless  if  the  sentencing  
judge   makes   clear   that   the   disputed   issue   did   not   affect   the  
sentence).  We  encourage  the  district  judge  to  follow  that  ap-­‐‑
proach  if  a  further  dispute  crops  up  on  remand.  
    The   §666   convictions   are   affirmed   and   the   §1341   convic-­‐‑
tions   vacated.   The   cases   are   remanded   for   further   proceed-­‐‑
ings  consistent  with  this  opinion.