Amicus Curiae Brief — Fischer v. United States

: Supreme Court, U.S.

F It FD

No. 99-116 —_——

In The

Supreme Court of the United States

JEFFREY ALLAN FISCHER,

Petitioner,

Vv.

UNITED STATES OF AMERICA,

Respondent.

On Writ of Certiorari

to the United States Court of Appeals

for the Eleventh Circuit

BRIEF OF THE NATIONAL ASSOCIATION OF

CRIMINAL DEFENSE LAWYERS AS

AMICUS CURIAE IN SUPPORT OF PETITIONER

LISA KEMLER RICHARD W. GARNETT

~ Counsel of Record Of Counsel

National Association of Ass’t Professor of Law

Criminal Defense Lawyers Notre Dame Law School

108 North Alfred Street Notre Dame, IN 46556

Alexandria, VA 22313 (219) 631-6981

(703) 684-8000

December 1999 Attorneys for Amicus Curiae

QUESTION PRESENTED

Whether Medicare payments to a hospital for services

provided to Medicare patients qualify as "benefits" to meet the

jurisdictional requirements of Title 18 U.S.C. § 666 so as to

federalize crimes of theft, embezzlement, and bribery

involving the hospital?

TABLE OF CONTENTS

Page

GRE es COU oak sec atndecuscusteuns i

Ae Cle Pes CSU ov cvvn Owbseeerxesenasie ill

INTEREST OF AMICUS CURIAE ..........0000 000s |

CCRT ED 6 0 ine usceeutkaeee-seennee then 2

SUMMARY OF THE ARGUMENT ................ 7

pt, re reer acre ne ee etre

I. FEDERAL PAYMENTS TO A HOSPITAL FOR

HEALTH-CARE SERVICES PROVIDED TO

MEDICARE BENEFICIARIES ARE NOT

"BENEFITS" UNDER 18 U.S.C. § 666(b) ........ 8

A. The Decision Below Is Inconsistent

with the Plain Meaning of Section 666(b) ............ 9

B. Even if Section 666(b) Were Ambiguous,

the Decision Below Could Not Be Sustained ..... 15

If THE COURT OF APPEALS’ INTERPRETATION

OF SECTION 666(b) IS UNCONSTITUTIONAL .. 22

A. Constitutional "First Principles" Circumscribe

Federal Criminal Jurisdiction ............cc0cceeeeen 23

B. Congress’ Ability To Expand Criminal Jurisdiction

Through the Spending Power Is Limited ............ 25

C. The Court of Appeals’ Decision Extends the Reach

of Section 666 Beyond Constitutional Limits .... 28

CONLIN ccrenssecsarcccssessoenicemninssantiasemniommeamaintnotabiias 30

TABLE OF AUTHORITIES

Page

Cases

Agostini v. Felton, 521 U.S. 203 (1997) occcccccccccccccceeeeeees 16

Alden v. Maine, 119 S. Ct. 2240 (1999) ooo. 23, 24

Ardestani v. INS, 502 U.S. 129 (1991) ooccccceccccccceceeeeeeeeeeeees 9

Bell v. United Staies, 349 U.S. 81 (1955) cocccccccccccccccccceeeeee 17

Board of Educ. v. Allen, 392 U.S. 236 (1968) ...........0000000. 16

Chapman v. United States, 500 U.S. 453 (1991) ..........0.... 15

City of Boerne v. Flores, 521 U.S. 507 (1997) ............ 23, 25

College Savings Bank v. Florida Prepaid

Postsecondary Educ. Expense Bd.,

RR 23

Dowling v. United States, 473 U.S. 207 (1985) ................ 17

Edward J. DeBartolo Corp. v. Florida Gulf

Coast Bldg. & Constr. Trades Council,

EE 19

Everson v. Board of Educ. , 330 U.S. 1 (1947) ...........0000 16

Gregory v. Ashcroft, 501 U.S. 452 (99D)... 7, 19,24

Jarecki v G_D. Searle & Co., 367 U.S. 303 (1961) ........... 14

Kimel v. Florida Bd. of Regents,

Nos. 98-791, 98-796 (Sept. 28, 1999) .......cccccccceeereeeeeees 23

Liteky v. United States, 510 U.S. 540 (1994) ..0......cccecceee 15

McBoyle v. United States, 283 U.S. 25 (L931) .ccccccceeceees 17

McNally v. United States, 483 U.S. 350 (1987) ..........000+ 19

Mueller v. Allen, 463 U.S. 388 (1983) ........ccccccccceereeeeeeeees 16

Murray v. Schooner Charming Betsy,

6 U.S. (2 Commcha) 64 (1804) .....cccercosvrcsccscccesccccsscescosesees 19

Printz v. United States, 521 U.S. 898 (1997) ............00. 23

Reno v. Condon, No. 98-1464 (May 17, 1999) .............0+. 23

Rewis v. United States, 401 U.S. 808 (1971) ..................04 17

Salinas v. United States, 118 8. Ct. 469 (1997) .......... passim

Seminole Tribe of Florida v. Florida,

gl ee ee 23

Smith v. United States, 508 U.S. 223 (1993) .........cccccccceeee 18

iV

South Dakota v. Dole, 483 U.S. 203 (1987) ...... 2, 19, 26, 29

United States v. Bass, 404 U.S. 336 (1971) .00....... 17, 19, 27

United States v. Cantor,

S97 F. Supp. 110 (S.D.N.Y. 1995) .........cccccscccoccescsceeseee 25

United States v. Cicco, 938 F.2d 441 (3d Cir. 1991) ........ 21

United States v. Copeland,

143 F.3d 1439 (11th Cir. 1998) 200. passim

United States ex rel. Attorney General v.

Delaware & Hudson Co.,

i Te Oe 19

United States v. Delpit,

ee 23

United States v. Del Toro,

I, 20

United States v. Fischer,

168 F.3d 1273 (11th Cir. 1999),

cert. granted, 120 S. Ct. 395 (1999) .o....ccccccccccccceeeenees 4,7

United States v. Hinton,

683 F.2d 195 (7th Cir. 1982), aff'd sub nom.,

Dixson v. United States, 465 U.S. 482 (1984) ............... 20

United States v. Jones,

No. 99-5739 (Nov. 15, 1999) ..................cccceceeeeereeee 23, 29

l/nited States v. LaHue,

998 F. Supp. 1182 (D. Kan. 1998) 00.0... ccceeeeees passim

U/nited States v. LaHue,

170 F.3d 1026 (10th Cir. 1999) ................cccccceseseees passim

United States v. Lopez, 514 U.S. 549 (1995) .............. passim

United States v. McCormack,

31 F. Supp. 2d 176 (D. Mass. 1998) ...........c.ccce 22, 26

(/nited States v. Morrison,

Nos. 99-5, 99-29 (Sept. 28, 1999) oo... cccscccsscsssseesseeee 23

United States v. Mosley,

of ll | ee 20

United States v. Roberts,

28 F. Supp. 2d 741 (E.D.N.Y. 1998) .............cc0sceessseees 28

United States v. Rooney,

pg Ge 21

United States v. Santopietro,

SEP cE wicusinsnctenssnesianeemnesnnindinmeimnnanansianiiiie 28

United States v. Turkette, 452 U.S. 576 (1981) ............. 9.15

United States v. Universal C.1.T. Credit Corp.,

DOO TA See CO cntectnnectnssionnenenimmnsnion 17

vi

United States v. Wiltberger,

Ee 9

United States v. Wyncoop,

of Eee 12, 21

United States v. X-Citement Video, Inc..

TC a ne AL a ea ae 15, 19

Vermont Agency of Natural Resources v.

United States, No. 98-1828 (June 24, 1999) .00000000000.... 23

Witters v. Washington Dep't of Servs. for Blind,

NS ee ITD rilinincrntictitltaiiienenidnrtnrpnninincnteniainattiinentes 16

Zobrest v. Catalina Foothills Sch. Dist.,

AEE ES ESE CE eT 16

United § eeetintion:

ae 25, 28

Statutes:

Se iss PCIE sineincinisneiencinaenanesuittteinbemadenes 3, 4, 27, 28

Es CITED diciiisinnesnceseiiiapitasanatntnncieasesinmmmanainniei 3

FIED Wisiettindiiiemninccnnisciintiiienimnteinieniniiiinenn passim

SP a INT seritiicninsercsinteliasinnnengemsepennninuiities 3, 10, 20

ee le ae viniccinainciteanenaecenintinliniiitinaneaiiaenineennes 3

Seite: Ct HITED. ciapeesticaptitdiasiahniidanisniicinaieateandincioiiatmasnaiiinnicitnneainenti 3

vii

gtk Co |) 5

NE 5

Pe Ce 00 | 5

GB UB. © COIBEID ccecceccescevsccseccczssscessssvenvencvesssenepensenessoss 5

Legislativ

S. Rep. No. 98-225 (1984), reprinted in

yy 21

Ot rities:

ABA Task Force on the Federalization of Criminal Law,

The ralizati Crimi CN 2,18

George D. Brown, "Stealth Statute: Corruption, The

Spending Power, and the Rise of Section 666,"

73 Notre Dame L. Rev. 247 (1998) ................. 1, 20, 25

Committee on Long Range Planning of the

Judicial Conference of the United States,

Propos ng ye Plan for ‘ourts

I. TIPE. cececssaseintntsiiidanstescnatiieantentetnaiebieemnnumeaiinaid 2

David E. Engdahl, “The Spending Power,"

a Ok TED knssstiiciictcinsieiiticisniiadbiiinrniteiecciutitiainialan 8, 29

The Federalist (C. Rossiter ed. 1961) ..................cccceeeeeeeeee 24

Henry J. Friendly, Benchmarks (1967) ..........:ccccscceeeeeeeees 17

Vill

oe

«=f

—- ee Pe Le ee

Richard W. Garnett, "Once More Into the Maze:

United States v. Lopez, Tribal Self-Determination,

and Federal Conspiracy Jurisdiction in Indian Country,"

Fa ee eke SUNN EE PIED scacdinenrsbttntibeciantdisthunhcoccmninaacansneen 3

EAE ee RRS Res ae ee eS 10

Chief Justice William H. Rehnquist,

Report to Congress (Jan. 1, 1999) ooo..ccccccccccccccccecseeeeees 24

Daniel N. Rosenstein, Note, "Section 666: The Beast

in the Federal Criminal Arsenal," 39 Cath. U.

ES ERR RRC |S A |

James A. Strazzella & William W. Taylor, III,

"Federalizing Crime: Examining the Congressional

Trend to Duplicate State Laws,"

14 Crim. Just. 4 (Spring 1999) .0...........ccccccsssssssereesseees 18

Webster's Third New Int'l Dictionary (1986) ..............00000 1]

ix

INTEREST OF AMICUS CURIAE '

The National Association of Criminal Defense Lawyers

("NACDL") submits this amicus curiae brief in support of

the Petitioner, Jeffrey Allan Fischer. The NACDL is a

nonprofit corporation with more than 10,000 lawyer-

members and 28,000 affiliate-members in all 50 States. The

American Bar Association recognizes the NACDL as an

affiliate organization and awards it full representation in the

ABA’s House of Delegates.

The NACDL was founded in 1958 to promote criminal-

law research, to disseminate and advance knowledge in the

area of criminal practice, and to encourage integrity,

independence, and expertise among criminal-defense

counsel. The NACDL is particularly dedicated to advancing

the proper administration of justice and to ensuring that

criminal statutes are construed and applied in accord with the

United States Constitution.

This case involves the interpretation and application of a

relatively novel federal criminal statute, 18 U.S.C. § 666.’

We believe the Court of Appeals’ expansive reading of this

statute disregards its plain language, its legislative history,

'The parties have consented to the submission of this amicus

curiae brief. Their letters of consent have been filed with the Clerk of

this Court. None of the parties authored this brief in whole or in part

and no one other than amicus curiae, its members, or its counsel

contributed money or services to the preparation or submission of this

brief. See S. Ct. Rule 37.6.

*See generally Daniel N. Rosenstein, Note, "Section 666: The

Beast in the Federal Criminal Arsenal,” 39 Cath. U. L. Rev. 673 (1990);

George D. Brown, "Stealth Statute: Corruption, The Spending Power,

and the Rise of Section 666," 73 Notre Dame L. Rev. 247 (1998).

and the traditional canons for interpreting federal criminal

statutes. This reading is misguided as a matter of

construction, creates serious federalism-based concerns, and

could undermine the States’ primary role in criminal-law

enforcement.’ The NACDL urges this Court to re-affirm the

principle that courts should exercise restraint in construing

federal criminal statutes, thereby preserving our system of

enumerated powers and dual sovereignty and the individual

liberties that system was designed to protect.

INTRODUCTION

This case presents a question of statutory interpretation

that is clear and straightforward but at the same time of great

constitutional importance. The decision below flies in the

face of the relevant statute’s plain meaning, see 18 U.S.C. §

666(b), and disregards established canons of construction and

"first principles" of our Nation’s constitutional federalism.

United States v. Lopez, 514 U.S. 549, 552 (1995); see also

South Dakota v. Dole, 483 U.S. 203, 207 (1987) ("The

spending power is of course not unlimited . . . , but is instead

subject to several general restrictions[.]").

Generally speaking, commercial bribery is not a federal

crime. Before purely local criminal activity may be subject

’See generally ABA Task Force on the Federalization of

Criminal Law, The Federalization of Criminal Law 56 (1998) (arguing

that the health of our constitutional system of dual federalism depends

on halting "inappropriate federalization"); Committee on Long Range

Planning of the Judicial Conference of the United States, Proposed

Long Range Plan for the Federal Courts 19 (Nov. 1994) ("If federal

courts were to begin exercising . . . the broad range of subject-matter

jurisdiction traditionally allocated to the states, they would lose both

their distinctive nature and . . . their ability to resolve fairly and

efficiently those cases of clear national import and interest{.]").

2

to federal penalties, the Constitution requires some federal

"jurisdictional hook,"* such as, for example, an effect on or

connection with interstate commerce. See, ¢.g., 18 U.S.C. §§

201 ("Bribery of public officials and witnesses"), 214 ("Offer

for procurement of Federal Reserve bank loan"), 224

("Bribery in sporting contests"). Here, Section 666 makes it

a federal crime to offer or receive a bribe in connection with

the business of any "organization" that "receives, in any one

year period, benefits in excess of $10,000 under a Federal

program involving . . . Federal assistance." 18 U.S.C. §§

666(a)(1)-(2), (b). It is the "recei[pt]" of more than $10,000

in federal-assistance-program "benefits" that ensures a

sufficient federal interest in what would otherwise only be a

state-law offense. Thus, that "receipt" of program "benefits"

is Section 666's statutorily and constitutionally required

"jurisdictional hook."

This case is about that jurisdictional hook. It is about

the meaning of the words "receives," "benefits," and

"assistance." This Court must decide whether bribes relating

to the business of an organization - in this case, a health-care

facility - that does not itself "receive[]" "benefits" under a

federal "assistance" program, but that does get paid for

services from people who themselves "receive[]" financial

"benefits" under such a program, are federal crimes. Put

simply, would Section 666 apply to a bribe offered to the

proprietor of a corner grocery store that "receive[d]" more

than $10,000 in food stamps from its low-income patrons

who are beneficiaries of the food-stamp program? See

United States v. LaHue, 998 F. Supp. 1182, 1187 (D.Kan.

“See generally, Richard W. Garnett, “Once More Into the

Maze: United States v. Lopez, Tribal Self-Determination, and Federal

Conspiracy Jurisdiction in Indian Country," 72 N. D. L. Rev. 433, 449-

450 (1996) (discussing “jurisdictional hooks" in federal criminal law).

3

1998) ("[N]early every large grocery store chain directly

receives more than $10,000 in food stamps as payment from

customers. . . . [Surely a checkout clerk's theft of $5,000 in

cash from a cash register does not constitute federal program

fraud."), aff'd, 170 F.3d 1026 (10th Cir. 1999). The Court of

Appeals for the Eleventh Circuit, in effect, answered "yes" to

this question. United States v. Fischer, 168 F.3d 1273 (11th

Cir. 1999). But this simply cannot be the law.

The relevant facts can. be summarized quickly:* The

Petitioner, Jeffrey Allan Fischer, was convicted under

Section 666. Pet. App. 1-2. The government charged that

Mr. Fischer arranged for a $10,000 "kickback" (Pet. App. 5)

to be paid to the Chief Financial Officer of the West Volusia

Hospital Authority ("WVHA") in return for a $1.2 million

loan from WVHA to Quality Medical Consultants, Inc., of

which Mr. Fischer was President and part owner. Pet. App.

3-5. But again, because bribery, standing alone, is not a

federal crime, "[t]o establish that Fischer had violated 18

U.S.C. §§ 666(a)(1) and (a)(2), the Government was required

to prove that WVHA was an agency receiving, in any one

year period, benefits in excess of $10,000 under a federal

assistance program. 18 U.S.C. § 666(b).” Pet. App. 6.

To meet this burden, the Government introduced

testimony that "WVHA had collected between ten and fifteen

million Medicare dollars in 1993." /bid. The government

did not present any evidence showing whether these

Medicare payments were disbursed under Medicare "Part A"

or "Part B" (Pet. App. 14); that is, the government’s evidence

"did not clearly establish whether WVHA received funds

directly from the Medicare program or received funds as an

“See generally Pet. App. 1-8.

4

assignee under Part B or even Part A of the federal

program."® /bid. Thus, the Court of Appeals observed,

"there is a possibility in this case that WVHA received funds

directly from the Medicare program without having been

assigned the right to receive those funds by a patient." Pet.

App. 14. However, the Court of Appeals stated clearly that

"even if the WVHA received funds as an assignee, the plain

language of Section 666(b) does not distinguish between an

organization, government, or agency that receives ‘benefits’

directly under a federal program and an organization,

government, or agency that receives ‘benefits’ as an assignee

under a federal program." Pet. App. 14 (emphasis added).’

*As the Court of Appeals observed, "(t]he Medicare program is

divided into two parts, Part A and Part B. See 42 U.S.C. § 1395, et

seq." Pet. App. 13 n.9. The Court of Appeals for the Tenth Circuit

described recently the differences between these two "parts" of the

program: "Payment by Medicare under Part A for services rendered by

a hospital or other institution may only be made to the institution, and

the institution may not bill the patient directly, except for deductibles

and coinsurance .... Under Part B, a physician may either request

direct payment by patients on the basis of an itemized bill or accept

assignment agreements. ... This assignment scheme implies that the

intended beneficiary of Medicare Part B is the patient." United States

v. LaHue, 170 F.3d 1026, 1027-1028 n.3 (10" Cir. 1999).

"In our view, it makes no difference whether the Medicare

funds were "assigned" by the program’s beneficiaries to the health-care

facility or were sent directly by the government to the facility in

exchange for services provided to the beneficiaries. Under both Parts

of Medicare, it is the patient, and not the health-care provider, that is

the beneficiary and who "receives" “benefits” under that federal

assistance program The relevant Medicare-related provisions make this

clear. Under Part A, "[t]he benefits provided to an individual by the

insurance program under this part shall consist of entitlement to have

payment made on his behalf." 42 U.S.C. § 1395d(a). See also 42

U.S.C. §§ 1395k(aX(1), 139Su(a) ("individuals” receive "benefits" under

Part B).

The Court of Appeals stated that Section 666's "use of

the term ‘benefits’ serves to emphasize not that the recipient

must be a ‘target recipient,’ but rather that the funds must

have been received by the organization, Covernment, or

agency as part of an ‘assistance’ program, rather than a

purely commercial transaction - the federal government’s

purchase of goods from a contractor, for example." Pet. App.

14-15 (citing United States v. Copeland, 143 F.3d 1439 (11th

Cir. 1998)). The court held that the constitutionally and

statutorily required jurisdictional hook - that the

"organization" (here, the WVHA) "receive[d]" at least

$10,000 in "benefits" under a federal "assistance" program -

was established so/e/y* on the basis of the funds the WVHA

received as payment for services provided to that the

Medicare program’s beneficiaries. See Pet. App. 10-12, 14.

Less than three weeks after the Court of Appeals’ ruling

below, the Tenth Circuit reached the opposite conclusion,

holding that payments to a health-care organization for

services provided to Medicare Part B beneficiaries were not

"benefits" "receive[d]" under Section 666(b):

We conclude that Congress intended the reference in

section 666(b) to an organization receiving federal

program benefits to mean one that receives benefits

before final distribution to the intended beneficiary, here

the patient. What happens to the funds once the patient

receives them is beyond the scope of section 666. Thus,

any assignment of such funds to a third party does not

*There was no evidence presented that the WVHA

administered any programs or disbursed any funds for or on behalf of

the United States.

ee ee ee

constitute a receipt of federal program benefits within

the reach of section 666.

United States v. LaHue, 170 F.3d 1026, 1031 (10" Cir. 1999)

(emphasis added). This Court granted certiorari to resolve

this conflict. Fischer v. United States, 120 S. Ct. 395 (Nov.

1, 1999) (No. 99-116).

SUMMARY OF THE ARGUMENT

We agree with the Petitioner that the Court of Appeals

misread Section 666(b). Section 666 was designed to protect

the integrity of federal funds by outlawing bribery in

connection with the administration of those funds, and the

plain meaning of the language the statute employs is

adequate to achieve that purpose. The Court of Appeals, on

the other hand, exploded the well defined limits that the

statute's text imposes on federal jurisdiction over local

bribery and embraced a reading that severely disrupts the

Constitution’s "delicate balance" between state and federal

power. Gregory v. Ashcroft, 501 U.S. 452, 460 (1992). The

rationale of the decision below has no logical stopping point.

See Lopez, 514 U.S. at 563 ("[I]f we were to accept the

Government's arguments, we are hard pressed to posit any

activity by an individual that Congress is without power to

regulate.").

The Court of Appeals’ interpretation of Section 666(b) is

inconsistent with the plain meaning of the statute’s terms.

Moreover, even if the provision or its terms were ambiguous,

the decision below could not be reconciled with longstanding

canons of statutory construction and "first principles" of

constitutional federalism. The spending power enjoyed by

Congress under Article | does not permit the federal

government to nationalize all local bribery prosecutions

7

absent some connection with the integrity of a federal

program. The judgment of the Court of Appeals should be

reversed.

ARGUMENT

Il.

FEDERAL PAYMENTS TO A HOSPITAL FOR

HEALTH-CARE SERVICES PROVIDED TO

MEDICARE BENEFICIARIES ARE NOT

"BENEFITS" UNDER 18 U.S.C. § 666(b).

The Court of Appeals validated a reading of Section 666

in which federal criminal jurisdiction lives like a virus in all

program funds disbursed by the United States, wherever they

go, however they are spent, and whoever eventually benefits

from them.’ We recognize, of course, that Congress used

"expansive, unqualified" language when it outlawed bribery

involving organizations that receive federal benefits or

administer federal funds, Salinas v. United States, 118 S. Ct.

469, 473 (1997), but even "expansive" language has limits.

See Copeland, 143 F.3d at 1441 ("The scope of § 666 . . . is

not limitless."). The Court of Appeals’ reading cannot be

sustained.

*See David E. Engdahl, “The Spending Power," 44 Duke L. J.

1, 92 (1994) ("Money cannot infect the recipient with the germ of

generalized federal government control, or an infectious virus capable

of spreading that disease to anyone who touches the recipient or its

property.").

A. The Decision Below Is Inconsistent with the Plain

Meaning of Section 666(b).

Just two Terms ago, this Court emphasized - in its only

other Section 666 case - that "[c)ourts in applying criminal

laws generally must follow the plain and unambiguous

meaning of the statutory language. Only the most

extraordinary showing of contrary intentions in the

legislative history will justify a departure from that

language." Salinas, 118 S. Ct. at 474 (internal quotation

marks and citations omitted); Ardestani v. INS, 502 U.S. 129,

135 (1991) (courts may deviate from a statute’s plain

language only in "rare and exceptional circumstances");

United States v. Turkette, 452 U.S. 576, 580 (1981) ("If the

statutory language is unambiguous, in the absence of a

clearly expressed legislative intent to the contrary, that

language must ordinarily be regarded as conclusive.")

(citation and internal quotation marks omitted). The plain-

language rule reflects, as Chief Justice Marshall emphasized,

a respect not only for the means chosen by legislators but

also for "the rights of individuals." United States v.

Wiltherger, 18 U.S. (S Wheat.) 76, 95 (1820) ("The rule that

penal laws are to be construed strictly, is perhaps not much

less old than construction itself. ... It is the legislature, not

the Court, which is to define a crime, and ordain its

punishment.").

The Court of Appeals concluded - based "entirely on the

plain language of [the statute]" - that "WVHA received a

type of ‘benefits’ expressly covered by Section 666(b)." Pet.

App. 11 (emphasis added). In fact, though, the "plain

language" of the statute requires reversal.

Section 666(b) defines the class of bribes that do not

involve federal officials but are nonetheless federal crimes.'°

These bribes must involve an "organization, government, or

agency” that "receives, in any one year period, benefits in

excess of $10,000 under a Federal program involving . . .

Federal assistance." 18 U.S.C. § 666(b). There is no

question here whether WVHA is an "organization" nor, we

think, is there any dispute whether the Medicare program -

Part A or Part B - is a “Federal program involving Federal . .

. assistance." What's more, it can be conceded that funds

disbursed through the Medicare program are "benefits" -

"benefits" that are "receive{[d]" as "assistance" by the

program's beneficiaries, the patients.

Thus, the question in this case is not whether the

Medicare program disburses "benefits" - of course it does -

but whether health-care providers like WVHA "receive[]"

"benefits" when they are paid (whether by assignment or

directly) for providing valuable services to Medicare

beneficiaries. In other words, do "benefits" stay "benefits"

forever -- do funds once disbursed through a federal program

bear forever the federal brand'' -- or do they ever, through

exchange in commerce, become just regular, everday

“money”?

"Benefit," Webster notes, comes from the Latin bene

factum, its original English meaning is "an act of kindness."

"Before § 666 was enacted, the federal criminal code

contained a single, general bribery provision codified at 18 U.S.C. §

201. Section 201 by its terms applied only to public official[s}{.]"

Salinas, 118 S. Ct. at 474.

"Compare Genesis 4:15 (God “put a mark on Cain, lest any

who came upon him should kill him").

10

ss

Webster's Third New Int'l Dictionary 204 (1986) ("benefit").

Its modern noun usages include "something that guards, aids,

or promotes well being"; "useful aid"; "help"; and "financial

help in time of sickness, old age, or unemployment." Given

these definitions, "benefits" describes quite accurately what it

is that America’s elderly and disabled "receive[{]" from the

federal government through Medicare. It does not at all

describe, though, what it is that the health-care providers

"receive[]." When WVHA "receives" funds from the

Medicare program's beneficiaries (whether by assignment

from the beneficiaries themselves or from the government

directly on their behalf), it does not "receive[]" "useful aid"

or "financial help in time of sickness." Rather, it "receives"

compensation in exchange for services rendered. See

Copeland, 143 F.3d at 1441 ("[O}rganizations engaged in

purely commercial transactions with the federal government

are not subject to § 666.").

Payments "receive[d]" by health-care providers like

WVHA as a result of the Medicare program’s disbursements

- however such disbursements might be characterized when

received by the program’s beneficiaries, the patients - are

simply not "benefits" "receive[d]" under a Federal

“assistance” program, even if these providers do "benefit"

from the government’s involvement in the health-care

market. The manufacturers and sellers of consumer goods

that senior citizens can afford and live to enjoy, thanks to

Medicare, also "benefit" in this sense, but no one thinks

Cadillac is an "organization" under Section 666. Grocery

stores obviously "benefit" from the funds disbursed through

the federal food-stamp program, and food-stamps are clearly

"benefits" to someone, but the stores do not "receive[]"

1

"benefits" within the meaning of Section 666(b).'? Were it

otherwise, where would it end?

The Court of Appeals failed to appreciate that Section

666(b) does not ask simply whether given monies are, at

some point, to someone, "benefits," but instead focuses on

whether federal-program "benefits" are "receive[d]" under a

federal "assistance" program. The Court of Appeals

concluded that "WVHA’s receipt of between ten and fifteen

million dollars in Medicare funds qualified as receipt of

‘benefits’ under a federal assistance program[.]" Pet. App. 9.

Rather than asking whether, as received by the health-care

provider, the funds paid for health-care services rendered

could fairly be viewed as federal-program "benefits," the

Court of Appeals asked whether the funds were disbursed

“under a program involving federal assistance" rather than as

a "result of ‘purely commercial transactions with the

government.’" Pet. App. 10 (quoting Copeland, 143 F.3d at

1442). This is where the court erred. It assumed that

because the Medicare program does provide "benefits," under

a federal "assistance" program, fo its beneficiaries, the

Medicare funds paid to WVHA for services rendered

remained "benefits" for Section 666 purposes. See Pet. App.

11 ("Because WVHA received payments under a federal

"See United States v. LaHue, 998 F. Supp. 1182, 1187 (D.

Kan. 1998) ("[NJearly every large grocery store chain directly receives

more than $10,000 in food stamps as payment from customers|, but] a

checkout clerk's theft of $5,000 in cash from a cash register does not

constitute federal program fraud."), aff'd, 170 F.3d 1026 (10th...

1999). United States v. Wyncoop, |i F.3d 119, 123 (9th Cir. 1993)

("Yet there is no more reason to conclude that Congress in enacting

Section 666 intended to bring employees at every college and

university in the country within the scope of potential federal criminal

jurisdiction than it is to assume that Congress wished to reach

employees of every grocery store.").

12

;

§

assistance program, WVHA received a type of ‘benefits’

expressly covered by § 666(b).").

En route to this mistaken interpretation, the Court of

Appeals took pains to reject the "narrow" (Pet. App. 12)

reading of Section 666(b) adopted by the District Court in

United States v. LaHue, 998 F. Supp. 1182 (D. Kan. 1998),

and affirmed by the Tenth Circuit, 170 F.3d 1026 (10th Cir.

1999). The court in LaHue had correctly concluded that

although, under Medicare, health-care providers "ultimately

receive funds traceable to a federal program, [they] do so

only through patient payments or assignments." 998 F.

Supp. at 1187. In the LaHue court’s view, these funds

ceased to be "benefits" after they reached the Medicare

program’s "target recipients." /d. at 1187-88; see Pet. App.

13." The Court of Appeals in this case disagreed: "[T]}he use

of the term ‘benefits’ serves to emphasize not that the

recipient must be a ‘target recipient’, but rather that the funds

must have been received by the organization . . . as part of an

‘assistance’ program, rather than a purely commercial

transaction - the federal government's purchase of goods

from a contractor, for example." Pet. App. 14-15.

The Court of Appeals was wrong, and the LaHue court

was right, for at least two reasons: First, the Court of

Appeals’ reading completely misses the point that, although

it is true that Section 666(b) requires the receipt of "benefits"

under a federal assistance program, it still requires, more

fundamentally, that the "organization" in question

"The LaHue court reached this conclusion after turning to the

statute's legislative history. We agree with the court’s interpretation,

but believe that this interpretation is compelled by the plain,

unambiguous meaning of the statute's terms and confirmed by the

legislative history.

13

"receive[]" the "benefits." The question, then, is not so

much whether the statute says explicitly that the

“organization must be the target recipient" - it doesn’t - but

whether the funds received by the hospital as compensation

for services rendered can meaningfully be called "benefits."

Second, the Court of Appeals completely overlooked the

fact that Section 666 is not satisfied simply when an

organization receives federal funds. The organization must

receive "benefits," and the term "benefits" must be read in

light of the words that follow: "under a Federal program

involving . . . Federal assistance." The maxim "noscitur a

sociis" ~ "a word is known by the company it keeps" - is

relevant here. Jarecki v. G.D. Searle & Co., 367 U.S. 303.

307 (1961) (noting that this maxim "is often wisely applied

where a word is capable of many meanings in order to avoid

the giving of unintended breadth to the Acts of Congress").

Under the Medicare program, elderly citizens receive a

"benefit" - they receive help and aid under an "assistance"

program. But the health-care providers who serve these

citizens do not, to put it crudely, get aid, they get paid. They

"receive" funds in the market, not under an "assistance"

program. So far as a health-care provider is concerned, the

fact that a patient’s bills are being paid by Uncle Sam no

more converts those payments into federal /argesse than if

the bills were paid by the patient’s Aunt Edna. The

payments are, from the perspective of the provider, precisely

the kind of "purely commercial transaction" that the Court of

Appeals conceded Section 666 does not reach, and the funds

received from patients in payment for medical services are no

more federal-program "benefits," or "assistance," than a

check drawn on a patient’s checking account into which he

deposits his federal military pension.

14

B. Even if Section 666(b) Were Ambiguous, the Decision

Below Could Not Be Sustained.

The meaning of Section 666(b)’s language is clear, and

that is reason enough to reverse the decision below. But

even if this Court were to find some ambiguity in the

meaning of the "benefits" that must be "receive[d]" under a

Federal "assistance" program, the best course would still be

to reject the untethered and boundless interpretation adopted

by the court below, because it conflicts not only with the

statute’s legislative history but also with established

background interpretive principles and canons of

construction. '*

First of all, as the LaHue court’s food-stamps

hypothetical shows, supra, the interpretation adopted below

yields patently absurd results. This would be reason enough

to reject the Court of Appeals’ reading, even if that reading

were consistent with the language of the statute. United

States v. X-Citement Video, Inc., 513 U.S. 64, 69 (1994)

("Some applications of respondents’ position would produce

results that were not merely odd, but positively absurd.");

Liteky v. United States, 510 U.S. 540, 550 (1994) (noting that

a proposed interpretation "produces results so intolerable as

to be absurd"); Chapman v. United States, 500 U.S. 453, 476

(1991) ("There is nothing in our jurisprudence that compels

us to interpret an ambiguous statute to reach such an absurd

result."); Turkette, supra, at 580 ("[A]bsurd results are ic be

avoided[.]").

“We emphasize that we are not suggesting that this Court

should turn to legislative history or interpretive principles in order to

avoid the plain meaning of the statute. Cf Salinas, 118 S. Ct at 474.

15

The untenable implications of the Court of Appeals’

interpretation were recognized by the court in the leading

case on the question presented here. The Tenth Circuit in

LaHue, supra, noted that "[u]nder the government’s theory,

any organization that is assigned $10,000 in a year in funds

initially disbursed under a federal program source would fall

within the statute." Pet. App. 26. It follows from this

premise, though, that "if the recipient physician endorsed

Medicare checks to pay a supplier of medical goods, the

supplier would be receiving benefits from a federal program.

As the district court aptly noted, this construction creates

almost a limitless statutory reach beyond a plain

commonsense interpretation of the statute." /bid (citing

LaHue, 998 F. Supp. at 1187).

It is also worth noting here that if the Court of Appeals is

right, and funds once in the hands of the federal government

retain forever their character as federal "benefits," even after

they are disbursed to and perhaps spent by a federal

program's beneficiaries, then it would seem that a number of

this Court’s leading Establishment Clause cases have been

wrongly decided. In a long line of decisions, this Court has

held that government funds distributed to individuals through

religion-neutral public-benefit programs /ose their

government character when those individuals independently

decide to direct those funds to religious uses or institutions."

But if the Court of Appeals’ reading of Section 666(b) were

correct, the fact that, for example, that Mr. Witters and not

the State of Washington decided to spend government

'SAgostini v. Felton; 521 U.S. 203 (1997); Zobrest v. Catalina

Foothills Sch. Dist., 509 U.S. | (1993); Witters v. Washington Dep't of

Servs. for Blind, 474 U.S. 481 (1986); Mueller v. Allen, 463 U.S. 388

(1983); Board of Educ. v. Allen, 392 U.S. 236 (1968); Everson v. Board

of Educ., 330 U.S. 1 (1947).

16

"benefits" on a religious education could not have prevented

the government program through which those benefits were

disbursed from violating the First Amendment. See Witters

v. Washington Dep't of Servs. for Blind, 474 U.S. 481 (1986).

Second, it is well established that any "ambiguity

concerning the ambit of criminal statutes should be resolved

in favor of lenity." Rewis v. United States, 401 U.S. 808, 812

(1971); see also United States v. Bass, 404 U.S. 336, 348

(1971) ("[W]here there is ambiguity in a criminal statute,

doubts are resolved in favor of the defendant."); United

States v. Universal C.1.T. Credit Corp., 344 U.S. 218, 221-

222 (1952) ("[W]hen choice has to be made between two

readings of what conduct Congress has made a crime, it is

appropriate, before we choose the harsher alternative, to

require that Congress should have spoken in language that is

clear and definite."); Dowling v. United States, 473 U.S. 207,

229 (1985) (lenity is a "time-honored interpretive

guideline"). The Court of Appeals’ reading is inconsistent

with this principle.

The rule of lenity serves, as this Court has observed, see

Bass, 404 U.S. at 348, at least two important purposes: First

of all, “a fair warning should be given to the world in

language that the common world will understand, of what the

law intends to do if a certain line is passed. To make the

warning fair, so far as possible the line should be clear."

McBoyle v. United States, 283 U.S. 25, 27 (1931). In

addition, given our "instinctive distastes against men

languishing in prison unless the lawmaker has clearly said

they should," Henry J. Friendly, Benchmarks 202 (1967), and

given that "criminal punishment usually represents the moral

condemnation of the community, legislatures and not courts

should define criminal activity." Bass, 404 U.S. at 348; see

also Bell v. United States, 349 U.S. 81, 83 (1955) (rule of

17

lenity does not reflect "any sentimental consideration, or . . .

want of sympathy with the purpose of Congress in

proscribing evil or antisocial conduct. It may fairly be said

to be a presupposition of our law to resolve doubts in the

enforcement of a penal code against the imposition of a

harsher punishment.").

This is not a case in which a criminal defendant invokes

lenity based on "[t]he mere possibility of articulating a

narrower construction," Smith v. United States, 508 U.S. 223,

239 (1993), or in order to "engraft an illogical requirement to

[a statute’s] text." Salinas, 118 S. Ct. at 478. The "narrower

construction" advocated here is not a desperate gambit by

defense counsel but the more natural reading of the text.

Thus, even if there were any ambiguity in the meaning of the

terms "receives," "benefits," and "assistance," as they are

used in Section 666(b), that ambiguity should be resolved in

favor of restraining, rather than expanding, that criminal

statute’s reach.

Third, and related, it is particularly important that courts

interpret federal criminal statutes with care, and avoid

adding to the already rampant "federalization" of crime that

has so gravely upset the federal-state balance in recent

years.'© In other words, although courts generally and

appropriately exercise restraint when interpreting ambiguous

"The American Bar Association issued a report in late 1998

calling for “principled recognition by Congress of the long-range

damage to real crime control and to the nation’s structure caused by

inappropriate federalization.". ABA Task Force on the Federalization of

Criminal Law, The Federalization of Criminal Law 56 (1998); see also

James A. Strazzella and William W. Taylor, Ill, "Federalizing Crime:

Examining the Congressional Trend to Duplicate State Laws," 14 Crim.

Just. 4 (Spring 1999) (synopsis of the ABA’s Task Force’s Report).

18

terms in criminal statutes, that restraint becomes all the more

important in cases involving the reach of a federal criminal

statute. Courts should "not be quick to assume that Congress

has meant to effect a significant change in the sensitive

relation between federal and state criminal jurisdiction."

Bass, 404 U.S. at 349. Instead, courts should require a "clear

statement" that Congress intended to expand its own power

into areas of traditional state concern. /d. at 349-350; see

also Gregory v. Ashcroft, 501 U.S. 452, 460-461 (1992);

McNally v. United States, 483 U.S. 350, 360 (1987).

Fourth, as we discuss in more detail below, the Court of

Appeals’ reading of Section 666(b) is so broad and so

untethered - at least in many of its likely applications - to a

federal interest in particular federal projects or programs, see

Dole, 483 U.S. at 207-209, as to trigger the established canon

of construction that statutes be read so as to eliminate

constitutional doubts. See, e.g., X-Citement Video, 513 U.S.

at 78; Edward J. DeBartolo Corp. v. Florida Gulf Coast

Bidg. & Constr. Trades Council, 485 U.S. 568, 575 (1988);

United States ex rel. Attorney General v. Delaware &

Hudson Co., 213 U.S. 366, 408 (1909) ("[W]here a statute is

susceptible of two constructions, by one of which grave and

doubtful constitutional questions arise and by the other of

which such questions are avoided, our duty is to adopt the

latter."); Murray v. Schooner Charming Betsy, 6 U.S. (2

Cranch) 64 (1804).

Finally, the legislative history and evident

congressional purpose of Section 666 cut against the Court of

Appeals’ "viral" theory of the unbreakable link between

once-federal money and federal criminal jurisdiction. As this

Court observed in Salinas, Section 666 was enacted in

response to a split in authority in the Courts of Appeals on

whether state and local employees were "public officials"

19

within the meaning of the general federal bribery statute, 18

U.S.C. § 201. Salinas, 118 S. Ct. at 474." Section 666 was

"designed to extend federal bribery prohibitions to bribes

offered to state and local officials employed by agencies

receiving federal funds." /bid.

There is no evidence, however, that Congress intended

to federalize bribery generally, or to invite federal

prosecution of bribes involving grocery stores that accept

food stamps in exchange for their wares and hospitals that

serve Medicare recipients. Instead, as the foremost scholar

of Section 666 has observed, the relevant legislative history

"support(s] the interpretation that Congress intended to deal

with a relatively narrow problem, [namely,] specified forms

of malfeasance in connection with the administration of

federal assistance." See George D. Brown, "Stealth Statute:

Corruption, The Spending Power, and the Rise of 18 U.S.C.

§ 666," 73 Notre Dame L. Rev. 247, 280 (1998). The Tenth

Circuit similarly noted in LaHue, 170 F.3d at 1030 (Pet. App.

28), that:

The legislative history reveals that although Congress

intended "federal programs" to be broadly construed,

Congress also intended to limit the statute to be

consistent with its underlying purpose to "protect the

vast sums of money distributed through federal

programs from theft, fraud, and undue influence by

"See United States v. Del Toro, 513 F.2d 656, 661-662 (2d

Cir.); United States v. Mosley, 659 F.2d 812, 814-816 (7" Cir. 1981);

United States v. Hinton, 683 F.2d 195, 197-200 (7 Cir. 1982), aff'd

sub nom., Dixson v. United States, 465 U.S. 482 (1984).

20

a

ee a

bribery." S. Rep. No. 98-225, at 370 (1984), reprinted

in 1984 U.S.C.C.A.N. 3182, 3511."

Thus, Congress’ purpose for enacting Section 666 was

"to augment the ability of the United States to vindicate

significant acts of theft, fraud, and bribery involving Federal

monies[.]" S. Rep. No. 98-225, at 369 (1984), reprinted in

1984 U.S.C.C.A.N. 3182, 3510. In so doing, Congress was

careful to disclaim any such extravagant ambitions. It took

pains to define the phrase "federal program" in Sec. 666(b)

narrowly and to require a "specific statutory scheme

authorizing the Federal assistance in order to promote or

achieve certain policy objectives. Thus, not every Federal

contract or disbursement of funds [is] covered." S. Rep. No.

98-225, supra, at 370.

There is nothing about this clear purpose of protecting

the integrity of federal-program funds that requires recourse

to the Court of Appeals’ broad interpretation. It would do no

violence to Section 666 - indeed, it would fulfill Congress’

stated objective - to limit the statute’s reach to bribes

involving organizations that actually "receive[]" "benefits"

through federal "assistance" programs. Congress determined

that such bribes - and only such bribes - actually threaten the

"See also United States v. Wyncoop, \\ F.3d 119, 123 (9th

Cir. 19°9)) ("The statute . . . is not intended to do anything except

protect the integrity of federal funds."),; United States v. Rooney, 37

F.3d 847, 850-54 (2d Cir. 1994) ("666's manifest purpose is to

safeguard finite federal resources from corruption and to police those

with control of federal funds."); Copeland, 143 F.3d at 1441-1442

(relying on legislative history and insisting that "it is not the role of this

Court to expand the scope of Section 666"); United States v. Cicco, 938

F.2d 441, 445 (3d Cir. 1991) (reviewing legislative history and

concluding that Congress did not intend the statute to apply the

defendants’ solicitation of loyalty in exchange for municipal jobs).

21

integrity of the programs through which federal benefits are

disbursed. But this case has nothing to do with the integrity

of the Medicare program, or of those who administer it, or

even of its beneficiaries. The Court of Appeals has read a

statute designed to "vindicate significant acts of theft, fraud,

and bribery involving Federal monies" as federalizing bribery

involving any organization with which a federal-program

beneficiary happens to do busir.ss

THE COURT OF APPEALS’ INTERPRETATION OF

SECTION 666(b) IS UNCONSTITUTIONAL.

Section 666(b)’s text provides a clear answer to the

Question Presented in this case: Payments to a hospital for

services provided to Medicare beneficiaries - whether those

payments are made "directly" to the hospital by the

government or "indirectly" (i.e., are "assigned" by the

beneficiary to the hospital) - are not "benefits" "receive[d]"

by the hospital under a federal "assistance" program.

Therefore, such payments cannot supply the basis for federal

criminal jurisdiction over a run-of-the-mine commercial

bribery case.

But this case also, in the words of one District Court,

"raises the question of how far Congress has gone, and, under

the Constitution, may go, to federalize crime." United States

v. McCormack, 31 F. Supp. 2d 176, 177 (D. Mass. 1998).

And so, even were the statute’s language not clear, and even

if there were evidence that Congress intended the broad reach

conferred on Section 666 by the Court of Appeals, that

court’s expansion of federal criminal jurisdiction would so

infringe "first principles" of dual sovereignty that this Court

22

i

would be required to reverse the Petitioner’s conviction

under Section 666 as unconstitutional.

A. Constitutional "First Principles" Circumscribe

Federal Criminal Jurisdiction.

As the former Chief Judge of the Eighth Circuit, Judge

Richard S. Arnold, has observed, "[o]ur Constitution is a

charter for a federal government of limited powers, and under

this charter the States possess primary authority for defining

and enforcing the criminal law." United States v. Delpit, 94

F.3d 1134, 1149 (8th Cir. 1996) (internal quotation marks

and citation omitted). In the same spirit, this Court has in

recent years identified and enforced constitutional limits on

Congress’ power to expand federal regulatory power and

jurisdiction.'? It has been a persistent theme of this Court's

See, e.g., Alden v. Maine, 119 S. Ct. 2240 (1999); College

Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd.,

119 S. Ct. 2199 (1999); Printz v. United States, 521 U.S. 898 (1997);

City of Boerne v. Flores, 521 U.S. 507 (1997), Seminole Tribe of

Florida v. Florida, 517 U.S. 44 (1996), United States v. Lopez, 514

U.S. 549, 552 (1995). This Court has also accepted several federalism

cases for its October Term 1999. See United States v. Morrison, Nos.

99-5, 99-29 (Sept. 28, 1999) (whether provisions of the Violence

Against Women Act exceed Congress’ power under the Commerce

Clause and Section 5 of the Fourteenth Amendment); Reno v. Condon,

No. 98-1464 (May 17, 1999) (whether the Drivers’ Privacy Protection

Act is a valid exercise of Congress’ power under the Commerce Clause

or Section 5 of Fourteenth Amendment); Kimel v. Florida Bd. of

Regents, Nos. 98-791, 98-796 (Sept. 28, 1999) (whether the Eleventh

Amendment bars a private suit against a state under the Age

Discrimination in Employment Act); Vermont Agency of Natural

Resources v. United States, No. 98-1828 (June 24, 1999) (whether

Eleventh Amendment immunity precludes a private relator from suing a

state under the federal False Claims Act); United States v. Jones, No.

99-5739 (Nov. 15, 1999)(whether federal arson statute applies to arson

23

decisions that these are meaningful limits, and that Congress

must "treat the States in a manner consistent with their status

as residuary sovereigns and joint participants in the

governance of the Nation." Alden v. Maine, 119 S. Ct. 2240,

2263 (1999).

In particular, the Court’s 1995 decision in United States

v. Lopez, supra, illustrates this Court’s respect for the "first

principles” of Our Federalism. In Lopez, the Court

emphasized that "[t]he Constitution creates a Federal

Government of enumerated powers[,]," 514 U.S. at 552, and

- quoting Madison - reminded Congress and courts that

"[t]he powers delegated by the proposed Constitution to the

United States are few and defined. Those which are to

remain in the State governments are numerous and

indefinite." /bid (quoting The Federalist No. 45, at 292-293

(C. Rossiter ed. 1961)).

Our dual-sovereignty structure, this Court made clear, is

not a matter of mere administrative convenience; rather, the

Framers limited the power of the federal government for a

clear and crucial purpose - "to ensure protection of our

fundamental liberties." /bid (quoting Gregory v. Ashcroft,

501 U.S. 452, 458 (1991)). It is for this reason, among

others, that the "States possess primary authority for defining

and enforcing the criminal law." Lopez, 514 U.S. at 552, 561

n.3. The over-federalization of crime, however, “threatens to

change entirely the nature of our federal system[.]" See

generally Chief Justice William H. Rehnquist, Report to

Congress (Jan. 1, 1999).

of private residence and if such application is constitutional).

24

a

So, while it is unquestionably true that Congress has

broad regulatory powers, there nevertheless remain real and

justiciable lines - dictated by the Constitution - beyond

which those powers cannot reach. See, e.g., City of Boerne v.

Flores, 521 U.S. 507, 516 (1997) ("Under our Constitution,

the Federal Government is one of enumerated powers.").

The Court of Appeals’ interpretation of Section 666(b), and

the Petitioner’s conviction under that statute, crossed these

lines. If, as the Court of Appeals believed, Section 666(b)

extends federal bribery jurisdiction to transactions involving

any organization that takes in, in the course of a year’s

business, at least $10,000 in funds that once upon a time

passed through the federal coffers, then, for all practical

purposes, the statute covers everything. Lopez, 514 U.S. at

564 ("[I]f we were to accept the Government's arguments, we

are hard pressed to posit any activity by an individual that

Congress is without power to regulate.").

B. Congress’ Ability To Expand Criminal Jurisdiction

Through the Spending Power Is Limited.

This Court’s Lopez decision - like many of its recent

federalism decisions - turned on the interpretation and

application of the Commerce Clause.” Section 666, by

contrast, was enacted pursuant to Congress’ "Spending

Power."*' See Brown, supra, at 262; see also, e.g., United

States v. Cantor, 897 F. Supp. 110, 113 (S.D.N.Y. 1995).

This Court will return to the question of Congress’ power to

expand federal criminal! jurisdiction using the Commerce Clause power

in United States v. Jones, No. 99-5739, supra.

"Congress has the power to “provide for the common Defense

and general Welfare of the United States," U.S. Const. art. I, § 8, cl. 1.

25

The federal government’s ability to expand the reach of

its regulatory authority by attaching conditions to the money

it spends is no less subject to the "first principles" that guided

this Court in Lopez than is its power to legislate pursuant to

the Commerce Clause. Accordingly, in South Dakota v.

Dole, 483 at 206-208, the Court identified specific

restrictions on the extension of federal regulatory authority

through conditions attached to federal spending, including a

requirement that any such conditions must be related to the

federal interest in the particular federal projects or programs

through which the funds in question are disbursed. And

although Congress’ power to regulate what it funds is far-

reaching, the restrictions outlined in Dole are real.

Otherwise, "the spending power could render academic the

Constitution’s other grants and limits of federal authority."

New York v. United States, 505 U.S. 144, 167 (1992) (under

Dole’s "relatedness" restriction, the conditions on federal

spending must bear some relationship to the purpose of that

spending. ).

This Court has not yet had occasion to apply the Dole

criteria in a criminal case. But courts are increasingly

recognizing that, given the "first principles" of federalism

emphasized in Lopez and the restrictions on conditional

spending set out in Dole, the reach of Section 666 must be

carefully controlled. For example, in United States v.

McCormack, 31 F. Supp. 2d 176 (D. Mass. 1998), the

District Court applied the Dole criteria - in particular, the

"relatedness" requirement, McCormack, 31 F. Supp. 2d at

188 - to a Section 666 prosecution in a local-corruption case

and held that in such a case the government must at least

show that the bribe threatened the integrity of the program

26

through which the federal funds are disbursed. /d. at 189.

The court stated:

Directed by the concerns expressed in Salinas about

applying § 666(a) to conduct that has no connection with

the federal funds or programs, and the broader concerns

of Lopez and Bass, | find that "integrity" must be more

carefully construed to provide for at least some nexus

with the federal funds or programs. Establishing such a

requirement is consistent with the limits the Supreme

Court has placed on the spending power. In particular, it

gives meaningful content to the "relatedness" standards

as applied to this statutory scheme.

[bid (citations omitted).

This Court’s one opinion dealing with the scope of

Section 666 explicitly acknowledged the possibility that the

Constitution limits the use of Section 666 in cases not

implicating the integrity of federal programs and funds. In

Salinas, supra, this Court rejected a criminal defendant’s

challenge to his Section 666 conviction. Salinas contended,

among other things, that "the Government must prove the

bribe in some way affected federal funds, for instance by

diverting or misappropriating them, before the bribe violates

§ 666(a)(1)(B)." 118 S. Ct. at 473. This Court disagreed:

"The prohibition [in Section 666] is not confined to a

business or transaction which affects federal funds." /bid. In

so holding, however, this Court was careful to leave open the

question whether - although the bribe itself need not directly

"affect" federal funds to create Section 666 liability - the

statute requires some "connection between a bribe and the

expenditure of federal funds[.]" /d. at 474.

27

This Court also rejected Salinas’ claim that applying

Section 666 to his case was unconstitutional, but here too it

was careful to limit its holding to the particular facts of

Salinas’ case: "Whatever might be said about [the statute’s]

application in other cases, the application of § 666(a)(1)(B)

to Salinas did not extend federal power beyond its proper

bounds." /d. at 475. As the Court emphasized several times,

in Salinas’ case, there was a "connection" between the bribes

and the federal government’s interest in the integrity of

program funds, because "the bribe was related to the housing

of a prisoner in facilities paid for in significant part by

federal funds themselves" and "[t]he preferential treatment . .

. was a threat to the integrity and proper operation of the

federal program." /bid. Thus, "Salinas may be read to

indicate that the ‘threat to the integrity and proper operation

of [a] federal program’ created by the corrupt activity is

necessary to assure that the statute is not unconstitutionally

applied." United States v. Santopietro, 166 F.3d 88, 93

(1999),”

C. The Court of Appeals’ Decision Extends the Reach of

Section 666 Beyond Constitutional Limits.

Article I of the Constitution gives Congress the power to

promote the "general Welfare of the United States," U.S.

Const. art. I, § 8, cl. 1, and to spend what it takes to do so.

"See also, e.g., United States v. LaHue, 998 F. Supp. at 1190

("The Supreme Court [in Salinas] most certainly was not implying that

section 666(b)’s jurisdictional clause should be read any more broadly

than its language and purpose permit."); United States v. Roberts, 28 F.

Supp. 2d 741, 745 (E.D.N.Y. 1998) ("Salinas . . . did not foreclose the

possibility that there is an outer boundary beyond which the

relationship between the bribe and the expenditure of federal funds is

too remote to support § 666 jurisdiction.").

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ee ee

This is an expansive, sweeping grant of authority. But the

Constitution also imposes meaningful limits on the federal

government’s ability to use the spending power as a vehicle

for expanding federal criminal jurisdiction over traditional

state crimes. These limits - like the Constitution’s other

"structural" provisions that balance the powers of separate

sovereigns — protect individual liberty in criminal cases by

constraining government no less than do the Fourth, Fifth,

and Sixth Amendments to the Constitution.

The Court of Appeals’ interpretation of Section 666(b)

undermines these liberty-protecting limits. Section 666

protects the integrity of federal programs by regulating the

activities of those who administer federal funds, but the

Court of Appeals read the statute as, in effect, federalizing all

corruption. Congress did not, and constitutionally could not,

enact such a law.

If the Court of Appeals were correct, Section 666 would

authorize federal prosecutions for bribes involving any

organization that in any way receives in a year more than

$10,000 from any source so long as those funds had at any

point passed through the bailiwick of a federal program. But

the "Constitution does not contemplate that federal

regulatory power should tag along after federal money like a

hungry dog." David E. Engdahl, "The Spending Power," 44

Duke L. J. 1, 92 (1994). This Court’s Dole decision,

specifically, and this Court’s federalism jurisprudence more

generally, require that the regulatory "strings" Congress

attaches to federal money be at least "related" to the federal

interest in the program or purpose that money is being spent

to support. The Eleventh Circuit’s interpretation of Section

666(b), and the Petitioner’s Section 666 conviction, are

inconsistent with this requirement.

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CONCLUSION

For the foregoing reasons, the judgment of the Court of

Appeals should be reversed.

Respectfully submitted,

Lisa Kemler Richard W. Garnett

Counsel of Record Of Counsel

National Association of Asst. Professor of Law

Criminal Defense Lawyers Notre Dame Law School

108 N. Alfred Street Notre Dame, IN 46556

Alexandria, VA 22314 (219) 631-6981

(703) 684-7900

December 1999

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