Opposition Brief — Naccarato v. United States

bia Y t { 193)

No. 90-1478

Gitive Ur iik CLLKA

In the Supreme Court of the Gnited States

OCTOBER TERM, 1990

FRANK L. NACCARATO, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

KENNETH W. STARR

Solicitor General

ROBERT S. MUELLER, III

Assistant Attorney General

Louis M. FISCHER

Attorney

Department of Justice

Washington, D.C. 20530

(202) 514-2217

QUESTION PRESENTED

Petitioner was convicted of conspiring to bribe a public

official, in violation of 18 U.S.C. 201. The question

presented is whether the individual to whom the bribes were

paid was a “public official” within the meaning of Section

201(a).

(I)

TABLE OF CONTENTS

Page

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Lk un ak se ba¥iseees l

Se a re 5

ah a 8

TABLE OF AUTHORITIES

Cases:

Dixson v. United States, 465 U.S. 482 (1984)... 4, 5,

6,7, 8

United States v. Del Toro, 513 F.2d 656 (2d Cir.),

cert. denied, 423 U.S. 826 (1975) ............ 7

United States v. Loschiavo, 531 F.2d 659 (2d Cir.

AS Sle ONS Se pa ea 7

United States v. Madeoy, 912 F.2d 1486 (D.C. Cir.

1990), cert. denied, 111 S. Ct. 1008 (1991) ... 6-7

United States v. Romano, 879 F.2d 1056 (2d Cir.

SI 8

United States vy. Strissel, 920 F.2d 1162 (4th Cir.

8 SGT SL sid or ee re 6

United States v. Velazquez, 847 F.2d 140 (4th Cir.

Te Sw Yedda aleve’ 6, 7

Statutes:

Criminal Law and Procedure Technical Amendments

Act of 1986, Pub. L. No. 99-646, § 46(a), 100 Stat.

eg gue es wa wk bs 4

United States Housing Act of 1937 (Comprehensive

Improvement Assistance Program) 42 U.S.C.

yy a ee eae 5 hak x cea eve o>

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Statutes — Continued:

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Jn the Supreme Court of the United States

OCTOBER TERM, 1990

No. 90-1478

FRANK L. NACCARATO, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The memorandum opinion of the court of appeals (Pet.

App. I-12) is not reported, but the judgment is noted at

921 F.2d 282 (Table).

JURISDICTION

The judgment of the court of appeals was entered on

December 18, 1990. The petition for a writ of certiorari was

filed on March 12, 1991. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

STATEMENT

After a jury trial in the United States District Court for

the District of Alaska, petitioner was convicted of con-

(1)

2

spiring to bribe a public official, in violation of 18 U.S.C.

201(b) and 371. He was sentenced to 18 months’ imprison-

ment and was ordered to pay $50,000 in restitution. The

court of appeals affirmed. Pet. App. 1-12.

1. The evidence at trial showed that petitioner conspired

with co-defendants Myron Brinkman, Michael Orsborn, and

Ken Eldridge to bribe Felipe Tagaban, the administrative

officer of the Tlingit-Haida Regional Housing Authority

(Tlingit), an Alaska state housing corporation.' Petitioner

and his co-conspirators made two $10,000 payments to

Tagaban in return for Tagaban’s entering a lease, on behalf

of Tlingit, for a warehouse the co-conspiiators owned and

for other favorable treatment. Pet. App. 3-4.

The Department of Housing and Urban Development

dispensed some $3,500,000 to Tlingit between May 1983 and

the spring of 1985 to promote renovation of low income

housing in Juneau, Alaska. The funds were provided under

the Comprehensive Improvement Assistance Program

(CIAP), a special program conducted under the Housing

Act of 1937, 42 U.S.C. 1437. Tlingit was required to ob-

tain HUD’s approval before spending any funds under the

CIAP program. Pet. App. 2-3; Gov’t C.A. Br. 3-4.

Tagaban was Tlingit’s administrative officer and the coor-

dinator of its participation in CIAP. Subject to the approval

of a superior, Tagaban had authority to hire and fire

employees, to negotiate contracts, and to locate warehouse

or office space. Tagaban determined that Tlingit would need

a warehouse for the supplies and equipment involved in its

renovation program. Co-defendant Orsborn, an acquain-

tance of Tagaban, offered to help find a warehouse for

Tlingit. Pet. App. 2-3; Gov’t C.A. Br. 4.

' Tagaban, Brinkman, and Orsborn pleaded guilty and testified on

behalf of the government at petitioner’s trial. Eldridge was acquitted.

See Gov't C.A. Br. 10; C.A.E.R., Docket Entries 7.

3

In the summer of 1983, petitioner met with Orsborn and

undertook to build a warehouse for Tlingit. Petitioner

solicited co-defendant Brinkman’s assistance in the project.

- Brinkman provided financing for the project, and he and

petitioner selected a site on co-defendant Eldridge’s land for

the warehouse. Petitioner, Brinkman, and Eldridge formed

a partnership, the Lemon Glacier Development Company,

to complete the project. Pet. App. 3.

The partnership agreed to pay Orsborn a $25,000 finder’s

fee if he obtained a reliable tenant for the warehouse.

Orsborn in turn told Tagaban that Tagaban would receive

$10,000 if he signed a lease for the warehouse on Tlingit’s

behalf. Tagaban signed a lease on October 18, 1983. The

lease called for Tlingit to pay $1.25 per square foot for a

five-year rental term. The rental price was approximately

twice the fair market rate for the warehouse space. Tagaban

entered the lease on behalf of Tlingit even though he lacked

authority to do so. In December of 1983, Tagaban signed

a letter of intent, on behalf of Tlingit, indicating that Tlingit

would lease office space at the warehouse for $1.65 per

square foot. Pet. App. 3-4 & nn.1-2; Gov't C.A. Br. 6-7.

In March 1984, Tagaban contacted Orsborn and asked

about the promised $10,000 payment. Orsborn told Tagaban

to call petitioner. After Tagaban contacted petitioner, peti-

tioner and Brinkman delivered $10,000 in cash to Tagaban.

Pet. App. 4; Gov’t C.A. Br. 7.

Petitioner, Brinkman, and Eldridge also controlled a com-

pany known as “Heavier Than Air,” which performed repair

and renovation work f@r Tlingit under the CIAP program.

Heavier Than Air was paid more than $700,000 by Tlingit

under that program. In September 1984, Brinkman delivered

another $10,000 to Tagaban on behalf of petitioner,

Brinkman, and Eldridge. Brinkman testified that he

understood it to be a payment tor Tagaban’s continued

4

favorable treatment of their companies. Pet. App. 4; Gov’t

C.A. Br. 7-8.

In March 1985, Tlingit fired Tagaban after discovering

that he had acted without authority in entering the

warehouse lease with the Lemon Glacier partnership. Before

he left Tlingit, however, Tagaban signed nine emergency

repair contracts assigning some $500,000 in work to peti-

tioner’s company. Tagaban backdated the contracts to Oc-

tober 1984. Pet. App. 4 & n.3; Gov't C.A. Br. 8-9.

Prior to trial, petitioner moved to dismiss the indictment

on the ground that Tagaban was not a “public official”

covered by the federal bribery statute.? The district court

denied the motion, and petitioner was convicted.

2. In an unpublished opinion, the court of appeals af-

firmed the conviction. Pet. App. 1-12. The court rejected

petitioner’s contention that Tagaban was not a “public of-

ficial” within the meaning of 18 U.S.C. 201. Applying the

standards outlined in Dixson v. United States, 465 U.S. 482,

486 (1984), the court of appeals noted that “[t}he determina-

tion of whether Tagaban was a ‘public official’ turns on the

relationship between him and the Federal Government” —

specifically, whether “Tagaban occupied a position of public

trust with official federal responsibilities.” Pet. App. 5, 6.

The court found that “[b]y administering HUD funds,

Tlingit subjected itself to federal constraints and restrictions”

? Section 201(a)(1) defines a “public official,” in pertinent part, as:

an officer or employee or person acting for or on behalf of the

United States, or any department, agency or branch of Govern-

ment thereof, including the District of Columbia, in any official

function, under or by authority of any such department, agency,

or branch of Government.

This provision was amended in 1986, but the amendments did not alter

the substance of the definition and are not material to this case. See

Criminal Law and Procecure Technical Amendments Act of 1986, Pub.

L. No. 99-646, § 46(a), 100 Stat. 3601.

and that “[a]s the coordinator of Tlingit’s involvement with

CIAP [Tagaban] had authority to negotiate contracts, and

expend Federal Government funds.” /d. at 6. Thus, the court

concluded, “Tagaban’s role in Tlingit is not distinguishable

from the role of petitioners in Dixson.” Ibid. Tagaban “was

in a position of responsibility, acting on behalf of the

Federal Government in administering expenditures of

federal funds and implementing federal policy.” /bid.}

ARGUMENT

Petitioner contends (Pet. 6-9) that Tagaban did not

qualify as a “public official” within the meaning of Section

201.

As the court of appeals found, Dixson v. United States,

supra, forecloses that contention. In Dixson, the defendants

were officers of a private, non-profit corporation that ad-

ministered and expended block grants disbursed by HUD

under a federal urban renewal program. The defendants

were convicted of violating 18 U.S.C. 201(c) by soliciting

kickbacks from contractors seeking to perform work on

urban renewal projects. Based upon the language and

legislative history of Section 201, the Court concluded that

Congress did not intend to restrict the definition of “public

official” to “those persons in an employment or agency rela-

tionship with the Federal Government” or to “individuals

tied to the Federal Government by direct contractual obliga-

tions.” 465 U.S. at 493-494. The Court explained that “[t]o

determine whether any particular individual falls within this

> The court also held that there was sufficient evidence to sustain

petitioner's conviction, that the district court did not commit plain error

in declining to instruct on the offense of giving an illegal gratuity, and

that the district court did not abuse its discretion in ordering petitioner

to pay $50,000 in restitution. Pet. App. 7-12. Petitioner does not seek

further review of those determinations.

6

category, the proper inquiry is not simply whether the per-

son ha[s] signed a contract with the United States or agreed

to serve as the Government’s agent, but rather whether the

person occupies a position of public trust with official

federal responsibilities. Persons who hold such positions are

public officials within the meaning of § 201.” Jd. at 496.

The facts of this case are strikingly similar to those of

Dixson. Tlingit, like the non-profit corporation involved

in Dixson, was the recipient of federal funds, intended for

use in renovation projects, that were expended in accordance

with detailed federal standards. See Pet. App. 2, 5-6; 465

U.S. at 486-489. Tagaban had operational responsibility —

comparable to that of the defendants in Dixson—for

Tlingit’s participation in the CIAP program. See Pet. App.

2-3; 465 U.S. at 497. Dixson thus compels the conclusion

that Tagaban was a “public official” within the meaning of

Section 201. The court of appeals’ straightforward applica-

tion of Dixson to the particular facts of this case presents

no question calling for this Court’s review.

Contrary to petitioner’s contention (Pet. 7), it is im-

material that Tlingit was not wholly dependent upon federal

funds. In United States v. Strissel, 920 F.2d 1162, 1165-1166

(1990), the Fourth Circuit rejected the same contention in

a case involving the CIAP program and a local housing

authority indistinguishable from Tlingit. The court explained

that although the defendant “also had some state respon-

sibilities and state funding,” “[h]e administered federal funds

in a federal program, and the nature of his responsibilities

* * * was clearly federal.” /d. at 1165, 1166. Accord United

States v. Velazquez, 847 F.2d 140, 142 (4th Cir. 1988) (a

jailer employed by a county who, pursuant to a contract

between the county and the federal government, supervised

federal prisoners housed together with state inmates at a

county jail was a “public off'cial”). See also United States

v. Madeoy, 912 F.2d 1486, 1494-1495 (D.C. Cir. 1990)

~~]

(VA-approved fee appraiser was a public official despite the

fact that he was not employed by the federal government),

cert. denied, 111 S. Ct. 1008 (1991).

Similarly, the fact that Tagaban lacked actual authority

to enter a lease with the Lemon Glacier partnership does

not undercut his status as a public official within the mean-

ing of Section 201. See Pet. 8. As the court below found,

Tagaban had substantial authority under the housing

renovation program, including the authority to hire and fire

employees, to negotiate contracts, and to commit Tlingit’s

funds, subject to the approval of its executive director.

“Although Tagaban was not the ultimate authority in

Tlingit, he had a substantial role in the housing authority’s

implementation of CIAP.” Pet. App. 6. He held “a posi-

tion of responsibility, acting on behalf of the Federal

Government in administering expenditures of federal funds

and implementing federal policy.” Jbid. Under the standard

set forth in Dixson, therefore, Tagaban was a “public

official.’4

Finally, like tiie defendants in Dixson (see 465 U.S. at

490), petitioner relies on United States v. Del Toro, 513 F.2d

656 (2d Cir.), cert. denied, 423 U.S. 826 (1975), and United

States v. Loschiavo, 531 F.2d 659 (2d Cir. 1976). In both

of those cases, the Second Circuit reversed convictions based

upon kickbacks paid to a city employee who was involved

in the Model Cities program, a program financed in part

with federal funds. To the extent that De/ Toro and

4 Petitioner also asserts (Pet. 8) that there is nothing in the record

to show that Tagaban’s salary was paid in whole or part from federal

funds. Although the source of Tagaban’s salary does not control the

question whether he was a public official, see United States v. Velaz-

quez, 847 F.2d at 142, the record reflects that federal funds were used

to make up the difference between Tlingit’s receipts and its expenditures.

Gov't C.A. Br. 16. Thus, Tagaban was paid, at least in part, with HUD

funds.

Loschiavo suggest that an individual must be employed by

or report directly to the federal government in order to

qualify as a “public official,” they are no longer good law.

As noted, Dixson squarely held that the federal bribery

statute is not restricted to “persons in an employment or

agency relationship with the Federal Government.” 465 U.S.

at 493-494. Since Dixson, moreover, the Second Circuit has

indicated that De/ Toro and Loschiavo turned on the fact

that “the funds at issue in the case — although substantially

generated by a federal agency — were administered and con-

trolled by the city, not the federal government.” United

States v. Romano, 879 F.2d 1056, 1059 (2d Cir. 1989). In

this case, by contrast, “HUD approval was required prior

to any expenditure of funds pursuant to CIAP.” Pet. App.

3. There is therefore no conflict between the court of ap-

peals’ decision in the instant case and decisions of the Sec-

ond Circuit.

CONCLUSION

~The petition for a writ of certiorari should be denied.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

ROBERT S. MUELLER, III

Assistant Attorney General

Louis M. FISCHER

Attorney

MAy 199]

US GOVERNMENT PRINTING OFFICE 1991 —282.061/20546