Petition for Writ of Certiorari — Agostino v. United States

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1997

JOSEPH F. AGOSTINO, Petitioner

v.

UNITED STATES OF AMERICA, Respondent

On Petition For Writ of Certiorari to The

Seventh Circuit Court of Appeals

PETITION FOR WRIT OF CERTIORARI

CHARLES A. ASHER

400 Tnigon Building

224 West Jefferson Boulevard

South Bend, Indiana 46601-1824

(219)233-9341

Counsel of Record for Petitioner

Bibs aah 2 weet acid aside

QUESTIONS PRESENTED FOR REVIEW

I.

Whether an alleged bribe of an

employee of a state agency can be

prosecuted under 18 U.S.C. § 666

where no federal funds are or could be,

directly or indirectly, implicated by the

conduct of the employee.

Whether the $10,000 jurisdictional limit

of 18 U.S.C. § 666 applies at a fairly

specific agency level rather than in an

umbrella fashion so as to encompass all

State agencies, so long as one agency

receives federal funds.

Whether an indictment charging a crime

under 18 U.S.C. § 666 violates the Fifth

Amendment when it does not state what

transaction the alleged briber was

intending to influence.

LIST OF PARTIES

Petitioner: Joseph F. Agostino

21540 Elkton Drive

South Bend, Indiana 46628

Represented by: Charles A. Asher

Attorney at Law

400 Trigon Building

224 West Jefferson Boulevard

South Bend, Indiana 46601-1824

Respondent: United States of America

C/O Solicitor General

Department of Justice

Washington, D.C. 20530

TABLE OF CONTENTS

QUESTIONS PRESENTED

LIST OF PARTIES

TABLE OF CONTENTS

TABLE OF AUTHORITIES

REFERENCE TO THE OPINION

OF THE COURT BELOW

STATEMENT OF JURISDICTION

CONSTITUTIONAL AND

STATUTORY PROVISIONS INVOLVED

STATEMENT OF THE CASE

ARGUMENT IN SUPPORT OF WRIT

CONCLUSION

APPENDIX A

Opinion of Court Below

APPENDIX P

Text of 18 U.S.C. § 666

iit

25

Al

BI

TABLE OF AUTHORITIES

CASES

Bifulco v. United States, 13

447 U.S. 381, 100 S. Ct. 2247, 4

6§ L. Ed. 2d 205 (1980)

Brecht v. Abrahamson, 13

507 U.S. 619, 635, 113 S.Ct. 1710,

123 L.Ed.2d 353 (1993).

Dixson v. United States, 1

465 U.S. 482, 104 S. Ct. 1172,

79 L.. Ed. 2d 458 (1982)

Dowling v. United States, 13

473 U.S. 207, 105 S. Ct. 3127,

87 L. Ed. 2d 152 (1985)

Ex parte Bain, 23

121 U.S. 1, 735. Ct. 78,

30 L. Ed. 849 (1887)

Johnson v. Louisiana, 24

406 U.S. 356, 92 S. Ct. 1620,

32 L. Ed. 2d 152 (1972)

Rewis v, United States, 15

461 U.S. 808 (1971).

Russell v. United States, 7, 20

369 U.S. 749, 82S. Ct. 1038,

8 L. Ed. 2d 240 (1962).

Stirone v. United States, 23

361 U.S. 212, 80 S. Ct. 270,

4 L. Ed. 2d 252 (1960)

United States v. Bass, 13,17

404 U.S. 336, 92 S.Ct. 515,

30 L.Ed.2d 488, (1971).

United States v. Bowman, 10

260 U.S. 94 (1922)

Uni 5 ne, 18

4 F.3d 100 (2d Cir. 1993)

United States v. Delano, 18

55 F.3d 720 (2d Cir. 1995)

United States v. DelToro, 1]

513 F.2d 656 (2d Cir.), cert. denied,

423 U.S. 826, 96 S. Ct. 41, 46 L. Ed. 2d 42 (1975)

United States v. Foley, 7, 12, 13, 18

73 F.3d 484 (2d Cir. 1996)

Jnited States v, Frega, 17, 18

933 F. Supp, 1536 (S.D.Cal. 1996)

United States v. Hinkle, 20

637 F.2d 1154 (7th Cir. 1981)

United States v. Hinton,

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

United States v. Kimberlin,

81 F.2d 1247 (7th Cir. 1985)

948 F.2d 370 (7th Cir. 1991)

United States v. McDonnell,

696 F. Supp. 356 (N.D. Ill. 1988)

913 F.2d 1248 (7th Cir. 1990),

cert, denied, 510 U.S. 1013,

114 S. Ct. 604, 126 L. Ed. 2d 569 (1993),

United States v. Miller,

471 U.S. 130, 105 S. Ct. 1811,

85 L. Ed. 2d 99 (1985)

United States v. Moeller,

987 F.2d 1134 (Sth Cir. 1993)

UnitedStates v. Mosley,

659 F.2d 812 (7th Cir. 1981).

United States v. Murphy,

762 F.2d 1151 (Ist Cir. 1985)

v. Simas,

937 F.2d 459 (9th Cir. 1991)

vi

1]

24

21

20, 21, 23

7, 23

7, 15, 16, 18

United States v. Sorrell, 21

473 F.2d 1054 (7th Cir. 1973)

United States v, Stewart, 10

727 F. Supp. 1068, 1073 (N.D. Tex. 1988)

United States v. Valentine, 7, 16, 17, 18

63 F.3d 459 (6th Cir. 1995

United States v. Westmoreland, 17

841 F.2d 572 (Sth Cir. 1988)

United States v. Wyncoop, —7, 11

11 F.3d 119, 122 (9th Cir. 1993)

CONSTITUTIONAL PROVISIONS

Amendment V 7, 20, 23

Amendment VI 22

STATUTORY PROVISIONS

28 U.S.C. § 1254

18 U.S.C. § 666 Passim

28 U.S.C. § 1291 2

I8 U.S.C. § 641 10

18 US.C. § 201 10, 11

18 U.S.C. § 1512

IC. § 8-9.5-8-6(c)(4)

LLC.

LC

8-9.5-8-7(c)(4)

8-9,5-8-8(c)(7)

‘ 8-9.5-8-7(c)(1)

' 8-9.5-8-7(c)(6)

* 8-9.5-8-7(c)(5)

* 8-14-1-3(5)

* $-23-3-3

’, 4-21.5-1-3

, 8-23-1-10

», 8-15-2-5(9)

’, 8-23-3

’, 8-9.5-8-14

vill

20

9

9

MISCELLANEOUS

S.Rep. No. 98-225, 98th Cong., 10, 11, 12

2d Sess. (1984), reprinted in

1984 U.S.C.C.A.N. 3182, 3510-11.

Indiana Administrative Code (IAC), Title 135 16

Indiana Administrative Code., Title 105 16

Note to 120 LA.C. 6 16

Fed. R. Crim. P. 7(a) 23

Moore's Federal Practice Digest, 22, 24

3d ed., vol. 24, § 608.04[1}

n ee aie id ree ety

rere ee es Bory Teron hie a PI ah MR 0 a a

REFERENCE TO THE OPINION OF THE COURT

BELOW

The Court of Appeals Opinion can be found at 132 F.3d

1183 (7th Cir. 1997) and is reproduced in the Appendix A to

the Petition for Writ of Certiorari.

STATEMENT OF JURISDICTION

The Seventh Circuit rendered its opinion on December

22, 1997. The time for filing the Petition for Writ of Certiorari

expires on March 23, 1998. The Supreme Court has

jurisdiction over this petition pursuant to 28 U.S.C. § 1254.

The notification requirements of Rule 29.4 have been satisfied

as reflected in the Proof of Service.

CONSTITUTIONAL PROVISIONS AND STATUTES

INVOLVED

The Fifth Amendment provides as follows:

No person shall be held to answer for a capital

or otherwise infamous crime, unless on a

presentment or indictment of a Grand Jury,

except in cases arising in the land or naval

forces, or in the Militia, when in actual service

in time of War or public danger; nor shall any

person be subject for the same offense to be

twice put in jeopardy of life or limb; nor shall be

compelled in any criminal case to be a witness

against himself, nor be deprived of life, liberty,

or property, without due process of law; nor

shall private property be taken for public use,

without just compensation.

l

The text of 18 U.S.C. § 666 is set forth in Appendix B.

STATEMENT OF THE CASE

Joseph F. Agostino was charged on October 2, 1996

with one count of violating 18 U.S.C. § 666(a)(2) for allegedly

bribing his subordinate James Goetz, the Patron Services

Manager for the Indiana Toll Road, namely by corruptly

offering him $4,000 “with intent to influence and reward

[Goetz] in connection with the business, transaction, or series

of transactions” at the Toll Road.

Defendant was convicted on February 14, 1997 after a

jury trial. Defendant’s conviction was appealed to the Seventh

Circuit. Jurisdiction of the Seventh Circuit was premised on 28

U.S.C. § 1291. On December 22, 1997, the Court of Appeals

issued its opinion affirming the conviction. See Appendix A.

Defendant was the Administrative Services Manager at

the Toll Road Division. As Patron Services Manager for the

Toll Road Division. Goetz acted as a liaison between Toll

Road management and approximately 34 trucking companies

and vendors.

The Indiana Toll Road is owned by the Indiana

Transportation Finance Authority (ITFA). The Indiana

Department of Transportation (InDOT) operates the Toll Road

as a division pursuant to a lease with the ITFA.

The Toll Road is operated as an independent, self-

supporting, profit-making business, grossing revenues in excess

of $70,000,000 per year. For legal, accounting and budget

2

purposes, the Toll Road Division, by state law, is treated as a

separate agency. Toll Road funds are not interming!ed with any

other InDOT funds, and its financial performance is audited

separately from InDOT. Unlike any other InDOT division,

payroll funds for Toll Road employees are kept separate from

other InDOT funds.

While InDOT has received substantial amounts of

federal funding, neither the ITFA nor the Toll Road Division

has received any federal funding.

The Indictment did not give any indication of what

Goetz was allegedly bribed to do, whether it was to reward

Goetz for a past corrupt act or to influence him to commit a

future corrupt act, what vendor or trucking company (if any)

might be involved, or what part of the $70,000,000 annual

business of the Toll Road Division might be involved. It

recited only that defendant

_. . did knowingly and corruptly offer and give

[money to Goetz] with intent to influence and

reward [Goetz] in connection with the business,

transaction, or series of transactions of the

Indiana Department of Transportation, Toll

Road Division, involving something of value of

$5,000 or more.

Three times before trial, defendant moved to dismiss the

Indictment for its failure to specify anything as to how the

$4,000 could have constituted a bribe, including any indication

of what it was that the government claimed Goetz was being

bribed to do, whether Goetz was being influenced regarding a

future act or being rewarded for a past act, or how in any way

the payment was “corrupt” under the statute.

3

The government responded with a series of positions.

Its initial position was that there was no need to show that a

quid pro quo was intended by defendant, that the defense was

engaging in a “smoke screen” tactic by even raising the issue,

and that the concern was “much ado about nothing” In fact, the

government represented that this was the simplest of cases with

no quid pro quo to be concerned about:

This case is simple and it relates to a single

incident on a single date that the defense knows

exactly what is at stake, and it is beyond me why

they filed a motion for a bill of particulars, why

they filed a motion to dismiss, when they know

the exact time and incident and participants in

this particular offense.

This has to do with the offer of money by Mr.

Agostino to Mr. Goetz employed by the Toll

Road on a particular date in July. There is

nothing more to it. It can’t get simpler than this.

Tr. of 12/20/96 hr'g, p. S. ‘

On the basis of the government's representations of a

simple, no quid pre quo case, the initial defense motions to

dismiss and for a bill of particulars were denied.

A second government position emerged when it was

called upon to explain its Rule 16(a)(1)(E) pre-trial summary of

an expert report by one Fred Graessle containing a series of

calculations regarding the randomness ve/ non of the gas station

surveys to determine Toll Road fuel prices.

Upon receipt of the government's Rule 16(a)(1)(E) letter

4

to this effect, the defense renewed its motion to dismiss on the

grounds that no such theory was found in the Indictment (or

could even be squared with the government's eariier claims of no

intended quid pro quo for the $4,000 tender). The government

responded that the Indictment could suffice because Graessle's

testimony was simply going to “assist the government in proving

the defendant's intent to influence Mr. Goetz in connection with

INDOT, Toll Road Division business and transactions.” The

renewed motion was accordingly denied.

At trial, the government offered yet a third version of its

case in its opening statement. At that time, the government

claimed that the $4,000 was tendered to secure both (1) the

change in the gas survey selection process and (2) non-revenue

tanker passes for Gas City in its delivery of fuel to the Toll Road

stations. Neither of these was suggested by the Indictment, and

the latter was unaddressed even in any pre-trial pleading by the

government. It was the government's contention in its opening

statement that defendant could not accomplish these benefits for

Gas City alone and that he could not have done so without the

involvement of his subordinate Goetz. Goetz testified, however,

that he was not bribed or influenced in any way to be a part of

any changes in the administration of the Gas City contract; he

wasn’t even asked to be quiet about the changes that were

made

Goetz did not know what the $4,000 was for, and he

continued to speculate about it. In fact, he acknowledged that

while it could have been in connection with the fuel surveying or

the non-revenue passes, those matters were over and done with

well prior to the appearance ef the $4,000 in July 1995, and the

money could have been a test of his honesty. Goetz even

admitted to several reasons proffered for testing his honesty

(gambling, unauthorized favors)

5

Goetz vacillated among these three possible motivations

for defendant tendering to him the $4,000 (something to do with

the surveys, something to do with the non-revenue passes, and

a test of Goetz's honesty), and he did not know which of these

was the case.

Faced with this evidence (including the fact that the

money did not appear until the month after the fuel survey and

non-revenue passes matters), the government in closing

arguments abandoned the claim that defendant needed Goetz to

make any changes in the relation between the Toll Road and

Gas City. Instead the government argued a fourth version of

what the $4,000 tender had been meant to accomplish --

keeping Goetz quiet. Goetz reported nothing in his testimony

regarding any request by defendant that he remain quiet. A

number of people were aware of changes in pricing survey

process, including Goetz’ personal secretary, who had been

involved on a daily basis in administering the Gas City contract;

she was never asked to be quiet, let alone bribed.

Finally, a fifth government theory emerged at

sentencing. By that time, the government argued that in

addition to all of the other possible theories of the $4,000 as a

bribe, Goetz was also offered this bribe in an attempt to

compromise him so that he could be threatened with some

retaliation or blackmail if he should ever disclose or complain

about the improper benefits given to Gas City and the improper

and wrongful actions taken by Joseph Agostino and others

including John Piraccini in the second half of 1995.

ARGUMENT IN SUPPORT OF WRIT

Reasons for Granting Writ

The Seventh Circuit decision has decided an important

question of law regarding the scope of 18 U.S.C. § 666 which

has not been, but should be, settled by the Supreme Court; the

scope of 18 U.S.C. § 666 as determined by the Seventh Circuit

also conflicts with the scope as determined by the Second

Circuit-and the Ninth Circuit. United States v. Foley, 73 F.3d

484 (2d Cir. 1996); United States v. Wyncoop, 11 F.3d 119 (9th

Cir. 1993).

The Seventh Circuit decision is in conflict with decisions

of the Fifth, Second, and Sixth Circuits, in determining the

specific agency level at which the jurisdictional element of 18

U.S.C. § 666 must be satisfied. United States v. Moeller, 987

F.2d 1134 (Sth Cir. 1993); United States v. Foley, 73 F.3d 484

(2d Cir. 1996); United States v. Valentine, 63 F.3d 459 (6th

Cir. 1995).

The Seventh Circuit has also decided an important issue

regarding the U.S. Attorney’s usurpation of the Grand Jury's

Fifth Amendment role in a manner that conflicts with this

Court’s prior rulings in Russell v. United States, 369 U.S. 749,

82 S. Ct. 1038, 8 L. Ed. 2d 240 (1962) and United States v

Miller, 471 U.S. 130, 105 S. Ct. 1811, 85 L. Ed. 2d 99 (1985).

The Seventh Circuit’s holding also cannot be reconciled with the

decision in United States v. Murphy, 762 F.2d 1151 (1st Cir

1985) ~

The Seventh Circuit expanded the purview of 18

U.S.C. § 666 beyond its intended scope,

conflicting with the view taken by several other

Circuits.

The Indictment alleged and the evidence at trial showed

that Goetz was an agent solely of the Indiana Toll Road

Division. Although the Toll Road Division is under the

umbrella of the Indiana Department of Transportation, the Toll

Road Division is a separate state agency. Since the Toll Road

Division did not receive any federal funds, this case does not fit

within the scope of 18 U.S.C. § 666.

As Patron Services Manager for the Indiana Toll Road,

Goetz performed work duties related solely to the Toll Road,

not INDOT.

The responsibility for the well-being of the Toll Road

rested with the Indiana Transportation Authority (ITFA). The

financial performance and records of the Toll Road Division

were audited separately from INDOT. In audited financial

statements, it is represented that the Indiana Toll Road is a

component unit of the Indiana Transportation Finance

Authority. The Toll Road Division operates out of separate

facilities than does INDOT, has approximately 500 employees,

and has its own manager. Toll Road employees are paid from

a payroll fund exclusively established for Toll Road employees;

payroll funds for Toll Road employees are paid after a

requisition for funds is made by the general manager of Toll

Road Division, and the Trustee under the indenture approves

the payment. INDOT employees are paid by the Auditor of the

State.

A Trust Indenture Agreement between and among the

Indiana Transportation Finance Authority, the Indiana

Department of Transportation and a bank dictates the way the

Toll Road Division functions, not [nDot.

Indiana statutes create an impenetrable barrier between

the funding of InDOT and the funding of the Toll Road. InDOT

operates the Toll Road pursuant to a contract with the ITFA

whereby the Toll Road is to be managed as a unit separate and

apart from any other district or division of InDOT. I.C. § 8-9.5-

8-6(c)(4). Tolls and other revenues collected by the Toll Road

Division are segregated from all other funds under InDOT's

control. InDOT must make a separate accounting of all receipts

and disbursements for the Toll Road. I.C. 8-9.5-8-7(c)(4), 8-

9.5-8-8(c)(7). Toll collections are to be deposited to the

account of the ITFA or its trustee, not InDOT. I.C. 8-9.5-8-

7(c)(1). The ITFA is required to maintain a revolving fund

balance so that InDOT will not have to advance funds for Toll

Road costs. I.C. 8-9.5-8-7(c)(6). These costs include

construction, improvement, maintenance, repair, operation,

salaries, wages, and associated costs of department personnel.

I.C. 8-9.5-8-7(c)(5).

InDOT is prohibited by state law from using its funds

for the Toll Road. I.C. 8-14-i-3(5). Both I.C. 8-9.5-8-7(c)(5)

and (6) make it clear that the costs of any services provided to

the Toll Road Division by InDOT are to be paid from the

revolving fund established by ITFA for the operation of the Toll

Road. !

'The provision of services, when those services are

compensated, does not implicate federal funds, even where the

direct provider of funds is the federal government. See 18

9

Federal funds administered by InDOT are accessible

from InDOT only by application from an agency. I.C. 8-23-3-

3.2 The Toll Road Division has never applied for federal funds

from InDOT, nor received federal funds from any federal

program. Hence, the operation of the Indiana Toll Road simply

does not put any InDOT funds or federal funds at risk.

By its very terms, § 666 is a statute of limited

jurisdiction, and jurisdiction should not be attained through

strained or forced statutory interpretation. United States v.

Bowman, 260 U.S. 94, 102 (1922); United States v. Stewart,

727 F. Supp. 1068, 1073 (N.D. Tex. 1988) (construing § 666

and stating, “It is not up to the Court to stretch the statute to

encompass [an] offense.”).

In enacting § 666, Congress was attempting to fill two

gaps in existing legislation. First, under 18 U.S.C. § 641, which

proscribed the theft of property "belonging to the United

States," theft of money distributed under federal programs could

not be prosecuted if title to the funds had either passed to

another entity or became so commingled with other assets that

the "federal character" of the funds could not be shown. See

S.Rep. No. 98-225, 98th Cong., 2d Sess. (1984), reprinted in

1984 U.S.C.C.A.N. 3182, 3510-11. Second, the existing

federal bribery statute, 18 U.S.C. § 201, was inadequate to

ensure the integrity of federal programs because individuals

administering the funds but employed by other entities had not

U.S.C. § 666(c).

“The term agency is defined to include the term division.

See 1.C. 4-21.5-1-3, 4-22-2-3, 8-23-1-10.

10

been found to be "[flederal officials" as required under the

Statute.

The Senate Report specifically states that the new

statute, § 666, was intended to fill these gaps and "protect the

integrity of the vast sums of money distributed through federal

programs from theft, fraud, and undue influence by bribery."

Id, at 3511. The emphasis was on protecting federal funds. The

report lists three specific cases to which § 666 was intended to

apply.’ In each of these cases, there was an issue as to whether

an individual administering federal funds was a "federal

official" who could be prosecuted under § 201.

There is no indication in the history of § 666 that

Congress intended federal law enforcement agencies to police

the financial affairs of entities that do not administer federal

funds. United States v. Wyncoop, 11 F.3d 119, 122 (9th Cir.

1993).

The legislative history of 18 U.S.C. §666 makes it clear

that federal jurisdiction must be founded on a specific statutory

scheme, not on brochures, letters, or paychecks:

The term “Federal program” means that there

must exist a specific statutory scheme

*The cases mentioned were United States v. DelToro,

513 F.2d 656 (2d Cir.), cert. denied, 423 U.S. 826, 96 S. Ct. 41,

46 L. Ed. 2d 42 (1975); United States v. Hinton, 683 F.2d 195

(7th Cir.), aff'd sub nom., Dixson vy. United States, 465 U.S.

482, 104 S. Ct. 1172, 79 L. Ed. 2d 458 (1982); and United

States v. Mosley, 659 F.2d 812 (7th Cir. 1981). 1984

U.S.C.C.AN. at 3511.

1]

authorizing the Federal assistance in order to

promote or achieve certain policy objectives.

S. Rep. No. 98-225, at 369 (1984), reprinted in 1984

U.S.C.C.A.N. 3182, 3511. The specific statutory scheme for

allowing federal funds to reach the Indiana Toll Road requires

the Indiana Transportation Finance Authority to apply for the

funds‘, and applications for the federal funds must be made by

each agency separately, subject to approval of INDOT®. Under

the relevant, specific statutory scheme, federal funds received by

INDOT cannot be used for the Indiana Toll Road.°

In United States v. Foley, 73 F.3d 484, 490-91 (2d Cir.

1996), the Second Circuit held that the government is not

"required to trace the agent's corrupt expenditures to the federal

program funds; but .. . there was no violation [of 666(a)(1)(B)]

where the preservation of federal funds was not implicated by

the defendant's conduct."

Plainly some briberies of state officials may

come within the scope of Sec. 666(a)(1)(B), but

we infer from the legislative history that that

*1.C. 8-15-2-5(9) empowers the Transportation Finance

Authority to apply for federal funds.

°1.C. 8-23-3 requires each agency seeking federal

highway funds to submit such applications for approval from

INDOT.

°1.C. 8-14-1-3(5) provides: “Money in the [InDot

Highway funds] may not be used for any toll road or toll bridge

project.”

12

iO

section was not designed for the prosecution of

corruption that was not shown in some way to

touch upon federal funds.

United States v. Foley, 73 F.3d 484, 494 (2d Cir. 1996).

When evaluating the scope of a federal criminal statute,

the court must look to its language, history, and purpose.

Dowling v. United States, 473 U.S. 207, 214-18, 105 S. Ct.

3127, 3131-34, 87 L. Ed. 2d 152 (1985); Bifulco v. United

States, 447 U.S. 381, 387, 100 S. Ct. 2247, 2252, 65 L. Ed. 2d

205 (1980). The Supreme Court has directed the courts to use

restraint in interpreting federal criminal statutes based "on the

plain principle that the power of punishment is vested in the

legislative, not in the judicial department." Dowling, 473 U.S.

at 214, 105 S. Ct. at 3131.

It is undisputed that concerning criminal law in general

the States have primacy. "We have also spoken of comity and

federalism. ‘The States possess primary authority for defining

and enforcing the criminal law....'" Brecht v. Abrahamson, 507

U.S. 619, 635, 113 S.Ct. 1710, 123 L.Ed.2d 353 (1993). It

cannot be presumed that Congress intended in section 666 to

vastly expand federal criminal jurisdiction to reach virtually all

bribery involving state and local officials without any mention

in its text, statutory findings, or legislative history. Before

courts may construe a federal criminal statute to so

fundamentally alter the relationship between federal and state

governments, Congress must have clearly stated its intent to do

so. U.S. v. Bass, 404 U.S. 336, 349, 30 L.Ed.2d 488, 92 S.Ct.

515 (1971). Congress has made no such statement here.

Application of § 666 to the present situation would thus clearly

go beyond the scope Congress intended it to have and would

disrupt the balance of power between the states on the federal

13

government.

The manifest purpose of § 666 is to safeguard finite

federal resources from corruption and to police those with

control of federal funds. No federal funds were at stake as a

result of the alleged bribe. No one in control of federal funds

was involved with the alleged corrupt transaction. The funds of

InDOT, the agency that did receive federal funds, were in no

way affected due tq the statutorily imposed segregation of Toll

Road and InDOT funding. And because the Toll Road Division

received no federal funding, there was no direct involvement of

federal funds.

The Seventh Circuit has not exercised restraint in

interpreting 18 U.S.C. § 666, but rather has taken one of the

most expansive views possible. In doing so, the court below

has opened the door to letting the federal government police

conduct that was traditionally policed by the states. When, as

in this case, no federal funds can be implicated because the state

receiving the funds has gone to great lengths to segregate those

funds such that they could not be implicated, principles of

federalism require the federal government to stay away.

The Seventh Circuit Did Not Look to the Appropriate

State Agency in Determining Whether the Jurisdictional

Element of 18 U.S.C. § 666 Has Been Satisfied

The Seventh Circuit ignored the fact that the Toll Road

Division is a separate state agency, distinct from InDot, and

ignored the fact that Goetz performed duties only for the Toll

Road Division. In so doing, the Seventh Circuit failed to

determine that the jurisdictional limit of Section 666 was

satisfied at the level of the specific agency for which Goetz

worked. This approach is inconsistent with the approaches used

14

wry RGN

Ce ee rs

by the Fifth and Sixth Circuits.

The statute here, 18 U.S.C. § 666, requires receipt in

excess of $10,000 or more in federal benefits by the agency

__ whose agent is involved in the corrupt transaction. 18 U.S.C.

§ 666(b). “Agency” is defined to include a subdivision of the

executive branch of government. 18 U.S.C. § 666(d)(1). This

broad definition plainly encompasses InDOT and the Toll Road

Division, both of which are government agencies. However,

the Toll Road Division did not receive federal funds while

InDOT did. The statute does not specify how to select one

agency over the other in determining the question of

jurisdiction. Any ambiguity in construing this statute should be

resolved in favor of the defendant under the rule of lenity.

Rewis v. United States, 461 U.S. 808, 812 (1971).

Other courts, when faced with the issue of jurisdiction

where more than one agency was involved, have concluded that

the relevant inquiry must first focus on the agent, not the

interrelationship of the agencies. Both the Fifth and Sixth

Circuits make it clear that when two interrelated agencies are

involved, the court must determine which agency’s employee

the defendant was trying to influence.

In United States v. Moeller, 987 F.2d 1134 (Sth Cir.

1993), the court rejected the government’s argument that

jurisdiction could be determined by looking to the federal

assistance that the Texas Department of Agriculture (TDA)

received where officers of the Texas Federal Inspection Service

(TFIS) were indicted under 18 U.S.C. § 666. The TFIS was

supervised by TDA, but did not receive federal funding. The

Moeller court decided the issue of the relevant agency by

focusing on the role of the agent. 987 F.2d at 1137.

15

In finding that TFIS employees were agents of the TDA,

the court looked to the fact that TFIS employees enforced TDA

regulations and that TFIS funds could revert to the TDA. In

this case, regulations for InDOT and regulations for the Toll

Road, by state law, are deliberately set forth in entirely different

sections of the Indiana Administrative Code.’ Moreover, as

discussed above, funds of the Toll Road and funds of InDOT

are segregated. Thus, under the analysis in Moeller, the

relevant agency is the Toll Road Division because Goetz was an

agent solely of the Toll Road Division and performed no

functions for InDOT. The Toll Road Division did not receive

federal funds and § 666 should not apply.

In United States v. Valentine, 63 F.3d 459 (6th Cir.

1995), the court noted that the defendant was an agent of both

city government and the water department, in analyzing the

issue of jurisdiction. The court also stated that the government

must show that the elements of § 666(a)(1) occurred during a

time in which both the city and the water department received

in excess of $10,000 in any one year from a qualifying federal

assistance program. Yalentine at 462.

’The regulations for the Indiana Toll Road are set forth

in Title 135 of the Indiana Administrative Code, as part of the

regulations of the Indiana Transportation Finance Authority.

The regulations pertaining to the Indiana Department of

Transportation are set forth in Title 105 of the Indiana

Administrative Code. Effective April 1, 1983, all regulations

relating to toll roads were transferred to the Indiana toll finance

authority pursuant to P.L. 109, Section 3 (1.C. 8-9.5-8-14). See

Note to 120 IAC 6.

PRIME Ry He NTE TS, NG REGRET TIN YSN SPR aR. RO

ees

eR yee R Te meet

One persuasive case following the analysis employed in

Valentine is United States v. Frega, 933 F. Supp. 1536 (S.D.

Cal. 1996). Frega involved a number of charges, one of which

was a charge under 18 U.S.C. § 666(a)(2) against a lawyer who

gave former judges gifts with the intent of influencing them in

regard to cases in which they were presiding. The Frega court

dismissed the § 666 count of the indictment because the alleged

conduct did not appear to have threatened, either directly or

indirectly, federal funds. Frega at 1543. In reaching this

conclusion, the Frega court correctly identified the problem in

giving a broad scope reading to § 666:

[I]t would drastically change the balance of

power between federal and state governments by

bringing conduct that had previously been

entirely in the realm of the states within the

federal purview. Yet, “unless Congress conveys

its purpose clearly, it will not be deemed to have

significantly changed the federal-state balance.”

Bass, 404 U.S. at 349, 92 S.Ct. at 523.

Frega at 1540.

The Frega court went on to correctly proclaim, based on

its survey of published cases involving § 666, including

Valentine, that courts have required the $10,000 funding to be

shown to exist at a fairly specific level, and not at the general

governmental level. Frega at 1542. “This specificity is

significant in that it reinforces the view that § 666 was intended

to protect the integrity of federal funds, and not as a general

anti-corruption statute.” Frega at 1542.

This argument, moreover, is not the so-called tracing

argument rejected in United States v. Westmoreland, 841 F.2d

17

572 (Sth Cir. 1988), United States v. Simas, 937 F.2d 459 (9th

Cir. 1991), and United States v. Coyne, 4 F.3d 100 (2d Cir.

1993). In each of these cases, the corrupt transaction involved

an agent of an agency that did receive federal funds, but the

defendants argued that the government needed to show that

federal funds were involved in the corrupt transaction. The

courts in those cases rejected the tracing requirement because

the plain language of the statute merely required that the agency

whose agent was involved in the corrupt transaction receive

federal benefits in excess of $10,000.

In the present case, federal funds are not impinged in

any way because the agency for which Goetz was an agent,

namely the Toll Road Division, did not receive federal funds at

all. Moreover, the Indiana Toll Road is a project of the Indiana

Transportation Finance Authority, not InDOT. The Indictment

did not allege and the evidence did not show that the

Transportation Finance Authority received any federal funds.

Under the correct analysis employed by Moeller and

Valentizie, and relied upon by Frega, the Seventh Circuit should

have looked at the specific agency level, and not at the general

governmental level.* Instead, the Seventh Circuit wrongly

concluded that Goetz was an agent of InDot because InDot

"United States v. Delano, 55 F.3d 720 (2d Cir. 1995) did

not consider this issue, but rather focused on whether a jury

instruction amounted to a constructive amendment of the

indictment. A better summary of the Second Circuit’s view of

the scope of § 666 is set forth in United States v. Foley, 73 F.3d

484, 491 (“we have held that there was no violation . . . where

the preservation of federal funds was not implicated by the

defendant’s conduct... .”).

18

EEL AT COLLATE LS TIME EI ti NO

SRA NET Of mS THE

signed the lease between the ITFA and InDot. Such thinking

would also make Goetz an agent of the Indiana Attorney

General’s Office, which also signed the lease. The lease dealt

solely with the operation of the Toll Road and did not involve

any InDot funds. The contract principally provided revenues to

the Toll Road Division. In performing duties under the

contract, Goetz was in no way authorized to exercise control

over InDot or InDot funds. Thus, it can only be concluded that

Goetz was specifically an agent of the Toll Road Division. The

Toll Road Division received no federal funds and federal

jurisdiction cannot be invoked under § 666 given these

circumstances.

The indictment’s failure to specify what

transaction was involved in the attempted bribe

allowed the U.S. Attorney to amend the

indictment at will, usurping the role of the

Grand Jury.

The Indictment in this case failed to state the purpose of

the alleged bribe and merely parroted the intent language in the

statute. The Indictment also failed to identify what transaction

the defendant was trying to influence. As a result, the

Indictment left the government free to argue alternative theories

of the purpose of the bribe, and it took full advantage of this

opening, presenting at least five distinct and exclusive theories

of the purpose throughout the proceedings.

By allowing the government to continually change

theories, even in closing argument, the Indictment failed to

provide adequate notice of the charges against defendant so that

he could prepare his defense. It also provided no guarantee that

the offense found by the grand jury was the same offense for

19

which defendant was convicted, or that the petit jurors

unanimously agreed on the offense committed by defendant. In

effect, the lack of specificity allowed the Government the

opportunity to amend the indictment as it saw fit without

deference to the Fifth Amendment.

The mere tracking of the language of a statute is not

sufficient when additional information is required to apprise a

defendant of a specific charge against him. United States v.

Hinkle, 637 F.2d 1154, 1157 (7th Cir. 1981), citing Russell v.

United States, 369 U.S. 749, 763-64, 82 S. Ct. 1038, 8 L. Ed. 2d

240 (1962).

The flaw in the Seventh Circuit’s ruling regarding the

adequacy of the indictment is best exposed in its comment that

no one knows better than Agostino what his intent was. This

statement suggests that in the view of the court below, it is

sufficient to notify an accused that he has been charged with a

crime; there is no need to tell him what law he violated because

“he knows what he did.” The Fifth Amendment was meant to

protect against precisely this type of tyranny.

When an intent to influence another person is an

essential element of an offense, as is the case in § 666, United

States v. Medley, 913 F.2d 1248 (7th Cir. 1990), cert. denied,

510 U.S. 1013, 114 S. Ct. 604, 126 L. Ed. 2d 569 (1993), the

indictment must specifically allege what act or acts the

defendant intended to influence. In United States v. Murphy,

762 F.2d i151 (1st Cir. 1985), the court reversed a conviction

for threatening a witness under 18 U.S.C. § 1512 on the

grounds that the indictment did not specify what proceeding the

defendants intended to influence, only that they threatened

“Richard Watson, a witness in an official proceeding.” Id. at

1153. Since the person threatened in Murphy was a witness in

20

RC ORI RRR fe NEST

Pt DEAT RRO IE ELIS EE SAAT FO BNET

two official proceedings, the defendant had no way of knowing

which proceeding he allegedly sought to influence. As in the

present case, the court noted that the vagueness in the

indictment gave the prosecution an unfair advantage by

allowing it to change its theory during trial. Id. at 1154-55.

Likewise, in United States v. McDonnell, 696 F. Supp.

356 (N.D. Ill. 1988), the court dismissed a RICO count against

a judge based on a predicate act of bribery because the

indictment failed to identify the attorney who offered the bribe

or the case with which that attorney was affiliated.

In United States v. Sorrell, 473 F.2d 1054 (7th Cir.

1973), the Court found defective an indictment which alleged

that defendant failed to comply with instructions, rules, and

procedures prescribed for military registrant processing in

violation of 50 U.S.C. App. § 462 given the indictment's failure

to specify which instructions, rules, and procedures the

defendant failed to follow. Id. at 1056.

The indictment in United States v. Medley, 913 F.2d

1248 (7th Cir. 1990), cert. denied, 510 U.S. 1013, 114 S. Ct.

604, 126 L. Ed. 2d 569 (1993) illustrates, in stark contrast to the

Indictment in the case at bar, the type of factual allegations

necessary in an indictment charging a violation of § 666. In

addition to using the statutory language, the indictment in

Medley identified the specific transactions which defendant

intended to influence.

The failure to specify what acts defendant intended to

influence is not a mere technical flaw. On the contrary, the

requirement of specificity is a critical safeguard of many of

defendant's fundamental rights. The present case demonstrates

the many essential purposes of a specific indictment, some of

21

—

which closely parallel the purposes behind the prohibition

against duplicity in criminal charges:

1. [P]rotecting a defendant's right under the

Sixth Amendment and Rule 7(c) to notice of the

“nature of cause of the accusation” against a

defendant so that he or she may prepare a

defense;

2. [I]nsuring that if defendant is convicted, the

offense upon which he or she is convicted will

clearly appear from the verdict, so that

appropriate punishment may be imposed;

3. [A]voiding the situation in which a defendant

may be convicted without unanimous juror

agreement as to any of the offenses charged in

the count in question... .

Moore's Federal Practice Digest, 3d ed., vol. 24, § 608.04[1].

The Indictment in this case permitted the government to

rely on five different theories concerning what defendant

allegedly intended to influence Goetz to do (or reward Goetz for

having done).

The prosecution began with the government's pre-trial

defense of the adequacy in the Indictment by stating that the

case involved only a single transaction, on a single day, between

only Mr. Goetz and Mr. Agostino, “with nothing more to it,”

(Tr. of 12/20/96 hr'g, p. 5), and ended with the government

claiming that the actions were part of a conspiracy to cover up

unspecified “improper and wrongful actions” taken not just by

Joe Agostino but by John Piraccini and unidentified “others”

22

Over a six-month period in 1995 (Mot. of Def. for New Trial,

3/17/97, Ex. “A’).

The prosecution began with the government's flat

assertion that (notwithstanding United States v. Medley,

supra,)” there was no quid pro quo for the $4,000 tender and

ended with the government claiming that there was at least a

$250,000 quid pro quo and perhaps even a $2,000,000 quid pro

quo. (Tr. of sentencing hr'g, 4/22/97, p. 54.)

A variety of constitutional protections were sacrificed as

a consequence:

1. The case was submitted to the petit jury with no

assurance that any of the government's mercurial allegations

had been adopted by a majority vote of the grand jury, the only

body with the authorization to bring a federal felony charge.

See U.S. Const. amend. V; United States v. Miller, 471 U.S.

130, 105 S. Ct. 1811, 85 L. Ed. 2d 99 (1985); Stirone v. United

States, 361 U.S. 212, 80 S. Ct. 270, 4 L. Ed. 2d 252 (1960); Ex

parte Bain, 121 U.S. 1, 7S. Ct. 781, 30 L. Ed. 849 (1887); Fed.

R. Crim. P. 7(a).

2. The government enjoyed unlimited opportunities to

effectively amend its Indictment simply because the Indictment

carried no apparent shape or definition. See United States v.

Leichtnam, 948 F.2d 370 (7th Cir. 1991) (containing a

definitive discussion of the unconstitutionality of such a

“The essential element of a section 666 violation is a

‘quid pro quo’, that is, whether the payment was accepted to

influence and reward an official for an improper act.” Medley

at 1260.

23

practice). When defendant proved his innocence of one of the

government's theories, the government just moved on. Indeed,

since the government did not present its argument that the

$4,000 was hush money until closing argument (and did not

present its blackmail theory until sentencing), defendant was

denied the opportunity to cross-examine witnesses or present

evidence of his own regarding these theories. If defendant had

been on notice that this was going to be the government's

theory, defendant would have, at the least, presented evidence

that many other personnel at the Toll Road were aware of the

change in the surveying procedure or the issuance of the non-

revenue passes, and thus there was nothing to keep quiet.

3. A verdict was returned carrying with it no assurance

of jury unanimity; in fact, each of the government's theories

could have been rejected by a majority vote, and certainly not

adopted by a unanimous vote. See Johnson yv. Louisiana, 406

U.S. 356, 92 S. Ct. 1620, 32 L. Ed. 2d 152 (1972); United

States v. Kimberlin, 81 F.2d 1247, 1250 (7th Cir. 1985);

Moore's Federal Practice Digest, supra

4. To this day, no one is left with any remotely

confident sense of what defendant was convicted of -- with the

government initially claiming that there was no intended (or

actual) quid pro quo but by the time of sentencing arguing that

the loss in the case was “no less than $250,000,” but that “‘it

could reasonably be argued . . . that the amount of money is in

excess of $2,000,000 here.” (Tr. of sentencing hr'g, p. 54.)

(For sentencing purposes, the court held the government to its

earlier stated position that there had been no quid pro quo in the

case and found no loss to a victim, (Tr. of sentencing hr'g, p.

83), but, of course, the damage to defendant's trial rights was

complete.) See Moore's Federal Practice Digest, 3d ed., vol. 24,

§ 608.04[1], quoted above at pp. 16-17.

24

6. Finally, the government's ability to uodge any

requirement of alleging and proving a static claim allowed it to

effectively shift the burden to defendant to prove his innocence.

CONCLUSION

For the above stated reasons, the Petition for Certiorari

should be granted

Dated: March 19, 1998

Respectfully Submitted,

Charles A. Asher

400 Trigon Building

224 West Jefferson Boulevard

South Bend, Indiana 46601-1824

(219) 233-934]

Counsel of Record for Petitioner, Joseph F. Agostino

APPENDIX A

Opinion of the Court Below

Appendix A Al

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No.97-2105 & 97-2340

UNITED STATES OF AMERICA,

Plaintiff-Appellee

Cross-Appellant,

JOSEPH F. AGOSTINO,

Defendant-Appellant

C? oss-Appellee

Appeal from the United States District Court

for the Northern District of Indiana, South Bend Division

No.96 CR 42--Allen Sharp, Judge.

ARGUED SEPTEMBER 24, 1997--DECIDED DECEMBER

22, 1997

Before RIPPLE, MANION and KANNE, Circuit Judges

KANNE, Circuit Judge. A jury found Joseph F

Agostino guilty of corruptly giving a $4,000 payment to a

subordinate in the Toll Road Division of the Indiana

Appendix A A2

Department of Transportation in violation of 18 U.S.C. §

666(a)(2). He challenges his conviction and sentence on several

grounds. With respect to his conviction, Agostino argues that

the indictment was insufficient, that the prosecution violated his

nghts to due process by requesting that a key witness not speak

to defense counsel, that the evidence was insufficient to convict

him, and that the district court erred in failing to provide certain

information to the jury during jury instruction. He challenges

his sentence by arguing that the district court sentenced him

under an incorrect section of the United States Sentencing

Guidelines ("U.S.S.G.")

The Government instituted a cross-appeal challenging

the sentence imposed by the district court. Specifically, the

Government argues that the district court erred in concluding

that the defendant must benefit personally from the bribe in

order to merit an upward departure under U.S.S.G. § 2C]

l(b)(2)(A). The Government also contends that the district

court erred by failing to enhance Agostino's sentence for

obstruction of justice under U.S.S.G. § 3C1.1, and by

sentencing Agostino to a term below the applicable Guideline

range. Because we find ment in only the last of these claims, we

affirm Agostino's conviction and remand to the district court to

sentence him to a term consistent with the Guidelines.

I. HISTORY

Joseph Agostino was Administrative Services Manager

of the Toll Road Division of the Indiana Department of

Transportation ("INDOT") until January 1996. James Goetz,

Agostino's subordinate, was the Patron Services Manager. That

position required Goetz to act as a liaison between Toll Road

management and approximately thirty-four trucking companies

and vendors. Among the vendors was Gas City, the fuel

Appendix A A3

supplier to Toll Road gas stations since June 1995

Under the terms of the contract between INDOT Toll

Road Division and Gas City, the fuel prices Gas City charged

on the Toll Road were set pursuant to a specific procedure. Part

of the procedure required INDOT Toll Road Division to select

randomly a list of stations from a predetermined pool; Gas City

would then survey these stations and use a formula to set the

fuel prices on the Toll Road. This fuel pricing process was

intended to avoid pricing the fuel either too high or too low

The contract permitted periodic changes in the pool of stations

as part of an attempt to set a fair price. In addition to setting

forth the procedures for fuel pricing, the contract called for the

issue of "non-revenue passes"’ to certain Gas City management

personnel

Initially the random selection of stations and the

calculation of fuel prices proceeded in accordance with the

contract. Goetz supervised this process and was responsible for

the random selection of stations. In June or July 1995, Agostino

told Goetz that the process of setting the fuel prices was

cumbersome because it required Goetz to select the survey

stations and then fax the names of the selected stations to Gas

City for the fuel price calculation. Agostino instructed Goetz

that he was no longer responsible for randomly selecting the

survey stations and that Gas City would take over the selection

Goetz objected to this arrangement because significant effort

had gone into constructing the procedure outlined in the

contract. According to Goetz, allowing Gas City to select the

stations themselves represented a “substantial deviation" from

'"Non-revenue passes" are passes that enable the user to

travel the Toll Road without paying tolls.

Appendix A A4

the approved procedure. Despite Goetz's objections, Gas City

began to make the survey station selections in July 1995

At about the same time Agostino informed Goetz that

Gas City would receive non-revenue passes for all of its fuel

tankers. Goetz was surprised at this development because such

passes were expected only after Gas City completed its

obligations under the contract, and Gas City had only been

operating under the contract for approximately one month

In mid-July 1995, Goetz and Agostino met in Agostino's

office at the Toll Road Division. Agostino handed Goetz an

envelope containing $4,000 in cash. Agostino told Goetz he was

giving him the money because Goetz had been doing a good job

and did not make enough money. When Goetz asked where the

money came from, Agostino replied that it was "PAC money"

and from "Lenny," who Goetz understood to be Len McEnery,

the General Manager of Gas City

Goetz took the money to his office and partially counted

it. He then tried to return the money to Agostino, but Agostino's

office was locked and his secretary was gone for the day. The

next morning Goetz returned the money to Agostino. Agostino

claimed that if he returned the money it would simply go to the

Lieutenant Governor's campaign, but Goetz refused to keep it.

Agostino does not deny that he offered Goetz $4,000

cash in an envelope in July 1995. However, he disputes that this

money was for the purpose of influencing or rewarding Goetz

Instead, Agostino claims that the money was tendered to test

Goetz's honesty after concerns arose at the Toll Road Division

about Goetz's gambling habits and other activities. Agostino

asserts that the money was his own, borrowed from a personal

home-equity line of credit. Agostino also admits that he did not

Appendix A AS

contact any law enforcement agencies, INDOT legal counsel, or

Toll Road management prior to engaging in this "test" of

Goetz's honesty.

On October 2, 1996, a federal grand jury returned a one-

count indictment against Agostino charging him with Bribery

Concerning Programs Receiving Federal Funds in violation of

18 U.S.C. § 666(a)(2). Agostino pleaded not guilty on October

30, 1996. Agostino filed multiple pretrial motions including

motions to dismiss for lack of specificity in the indictment,

motions to dismiss for lack of jurisdiction, and motions to

dismiss for alleged governmental interference with a witness.

The district court denied all of Agostino's pretrial motions.

On February 14, 1997, after a five-day trial, a jury found

Agostino guilty of a violation of § 666(a)(2). Agostino filed

several post-trial motions, reiterating the arguments presented

in his pretrial motions and adding a motion for acquittal or new

trial based on insufficiency of the evidence. The district court

denied these motions. At sentencing, the court found that

U.S.S.G. § 2C1.2 applied, which set Agostino's base level at 10.

The court then imposed a one level upward departure for the

value of the bribe, pursuant to U.S.S.G. §§ 2F1.1(b)(1)(B) and

2C1.1(b)(2)(A). The court found that an additional increase for

obstruction of justice was not warranted. At the sentencing

hearing, the district court orally sentenced Agostino to four

months imprisonment, three years supervised release, $7,500 in

fines, and a $50 special assessment. In its sentencing

memorandum however the district court indicated a sentence

for Agostino of eight months imprisonment, four months to be

served in a prison and the remaining four to be included in the

term of supervised release. The remainder of the sentence

tracked the sentence imposed at the sentencing hearing: three

years supervised release, a $7,500 fine, and a special assessment

Appendix A A6

of $50. The judgment and commitment order issued to the U S.

Marshall describes a_ third sentence: eight months

imprisonment, four months to be served in a prison and the

remaining four in community confinement. According to the

judgment and commitment order, the three years of supervised

release begins after the imprisonment and community

confinement. The fines and special assessments remained the

same.

Il. ANALYSIS

A. Sufficiency of the Indictment

The Fifth Amendment provides that "[n]o person shall be

held to answer for a capital, or otherwise infamous crime,

unless on... indictment of a Grand Jury." U.S. Const. amend. V.

The Sixth Amendment then grants certain nghts to persons

accused of crimes by the federal government, including the

right "to be informed of the nature and cause of the accusation."

U.S. Const. amend. VI. The Federal Rules of Criminal

Procedure ("Fed. R. Crm. P.") explicate the requirements of an

indictment. Fed. R. Crm. P. 7(c)(l) requires that "(t]he

indictment. . . shall be a plain, concise and definite written

statement of the essential facts constituting the offense

charged."

An indictment is constitutionally sufficient and satisfies

Fed. R. Crim. P. 7(c)(1) if it states the elements of the crime

charged, informs the defendant of the nature of the charge so

she may prepare a defense, and enables the defendant to plead

the judgment as a bar against future prosecutions for the same

offense. See Hamling v. United States, 418 U.S. 87, 117 (1974);

United States v. Allender, 62 F.3d 909, 914(7th Cir. 1995), cert.

Appendix A A7

denied, --U.S.--, 116 S. Ct. 781 (1996). Indictments need not

exhaustively recount the facts surrounding the crime's

commission. See Bates, 96 F.3d at 979. “Generally, an

indictment is sufficient when it sets forth the offense in the

words of the statute itself, as long as those words expressly set

forth all the elements necessary to constitute the offense

intended to be punished." United States v. Hinkle, 637 F.2d

1154, 1157 (7th Cir. 1981). We review the sufficiency of an

indictment de novo. See United States v. Webster, 125 F.3d

1024, 1029(7th Cir. 1997); United States v. Bates, 96 F.3d 964,

967(7th Cir. 1996), aff'd --U.S.--, 118 S. Ct. 285(1997).

The specific portion of 18 U.S.C. § 666 with which

Agostino was charged provides:

(a) Whoever...

(2) corruptly gives, offers, or agrees to give

anything of value to any person, with intent to

influence or reward an agent... of a State...

government, or any agency thereof, in

connection with any business, transaction, or

series of transactions of such ... government, or

agency involving anything of value of $5,000 or

more;

shall be fined under this title, imprisoned not

more than 10 years, or both.

The indictment issued by the grand jury on October 2, 1996

tracks the language of the statute. The indictment reads as

follows:

In or around July 1995, in the Northern District

Appendix A A8

of Indiana, Joseph F. Agostino, defendant

herein, did knowingly and corruptly offer and

give something of value, specifically, monies, to

[James Goetz] with intent to influence and

reward [James Goetz] in connection with the

business, transaction, or series of transactions of

the Indiana Department of Transportation, Toll

Road Division, involving something of value of

$5,000 or more

In violation of Title 18, United States Code,

Section 666(a)(2).

Relying on United Slates v. Medley, 913 F.2d 1248 (7th

Cir. 1990), Agostino first argues that because quid pro quo is an

"essential element" of a violation of § 666, the indictment is

facially insufficient for failing to identify the specific act or acts

he was trying to influence by giving Goetz $4,000. In Medley,

we reviewed jury instructions concerning a violation of §

666(a)(1)(B). The offense in Medley was described in the issue

instruction "as a prohibition against the giving or receiving of

anything of value for the purpose of influencing or being

influenced in connection with any business transaction or series

of transactions." /d. at 1259. The charge failed to note that these

actions had to be done "corruptly" as required by § 666(a)(1)(B)

See id. The court found that in light of the instructions viewed

as a whole, "[n]o normal reasonable jury could have

misunderstood what the indictment charge was about and what

was required to find the defendant guilty." /d. at 1261.

The question of whether an indictment must contain

specific allegations of a quid pro quo was not before the Medley

court and it did not rule on this issue. The language upon which

Agostino wishes to rely appears in the court's discussion of the

Appendix A A9

distinction between a bribe or gratuity, "which are both illegal

under different parts of the statute," id. at 1260, and the

payment of a legitimate fee. The court stated, "[t]he essential

element of a section 666 violation is ‘quid pro quo’; that is,

whether the payment was accepted to influence and reward an

official for an improper act." /d. at 1260. it is clear from the

context that the Medley court was not positing an additional

element to the statutory definition of the crime, but instead was

explaining the sine qua non of a violation of § 666. The

elements of the offense remain those that are set forth in the

statutory language.

Additionally, it is important to note that Medley

involved a violation of 666(a)(1)(B), which criminalizes the

receipt of a bribe. The charge against Agostino involves §

666(a)(2), and focuses on the offer of a bribe. Therefore,

Medley is not controlling. We decline to import an additional,

specific quid pro quo requirement into the elements of §

666(a)(2). Section 666(a)(2), by its statutory language, requires

that the defendant act "corruptly... with intent to influence or

reward." This intent, and not any specific quid pro quo, is what

must be alleged in the indictment.’ Thus, Agostino's indictment

*In denying Agostino's motions to dismiss the

indictment for lack of specificity, the district court referred to

a recent case from the Eleventh Circuit. In United States v.

Castro, 89 F.3d-1443 (11th Cir. 1996), cert. denied--U.S.--, 117

S. Ct. 965 (1997), the Eleventh Circuit addressed whether,

under § 666(a)(2), the Government must show a direct quid pro

quo relationship between the defendant and the agent of the

agency receiving federal funds. In Castro, the person receiving

the bribes was a middleman, who then exerted influence over

an agent of the organization receiving federal funds. On the

Appendix A Al0

is not facially insufficient for failing to include an essential

element of the offense.

Agostino's second argument is that the indictment did

not sufficiently enable him to prepare a defense. See Hamiing,

418 U.S. at 117. The crux of Agostino's complaint is that, at the

time of the indictment, the Government did not reveal its theory

of intent--i.e. the Government did not set forth the specific

reason why Agostino offered something of value to Goetz.

Agostino asserts that he was unable to prepare a defense

without a specific reference to the "business, transaction, or

series of transactions of the Indiana Department of

Transportation, Toll Road Division, involving something of

value of $5,000 or more” involved.

This argument is unpersuasive. "The test for validity is

facts of that case, the charge would fail if § 666(a)(2) required

a direct quid pro quo between the defendant and the agent of

the organization receiving federal funds. The Eleventh Circuit

declined to import a "directness" requirement into § 666(a)(2),

stating that "the appellants’ narrow reading of the bribery statute

would belie the statute's purpose ‘to protect the integrity of the

vast sums of money distributed through federal programs from

theft, fraud, and undue influence by bribery.’” Jd. at 1454

(quoting S. Rep. No.225, 98th Cong., 2d Sess. 369-70(1984),

reprinted in 1984 U.S.C.C.A.N. 3182, 3510-11). While it is

useful to note the Eleventh Circuit's rejection of a direct quid

pro quo requirement, our case involves whether § 666(a)(2)

requires a statement in the indictment which sets forth the quid

pro quo action taken by the recipient of the alleged bribe,

regardless of whether the quid pro quo relationship was a direct

one or not.

Appendix A All

not whether the indictment could have been framed in a more

satisfactory manner, but whether it conforms to minimal

constitutional standards." Allender, 62 F.3d at 914. The

indictment clearly sets forth the relevant time, person, agency

and currency involved in the criminal transaction. This

information is sufficient to put Agostino on notice of the

conduct for which he was charged. Armed with this knowledge,

he had ample opportunity to develop a defense to that charge.

Put simply, neither the Constitution nor Fed. R. Grim. P. 7(c)(

I) requires the indictment to include the information Agostino

seeks. See United States v. Roya, 574 F.2d 386 (7th Cir. 1978)

(noting that indictment which sets forth elements of offense,

time and place of defendant's conduct that constitutes offense,

and citation to statute violated satisfies necessary requirements).

"The defendant's constitutional nght is to know the offense with

which he is charged, not to know the details of how it will be

proved." United States v. Kendall, 665 F.2d 126, 135 (7th Cir.

1981). ;

This is particularly true in cases where the information

requested is peculiarly within the defendant's own knowledge

Agostino would have liked the Government, at the grand jury

Stage, to have revealed more specific information about how it

planned to prove the intent element. Specifically, Agostino

wanted to know what business or transaction the Government

would allege he was trying to influence. If this information was

memorialized in the indictment, the Government would be tied

to that argument. No one knows why Agostino gave Goetz

$4,000 better than Agostino does. To require the Government

to articulate and be bound to a particular theory at this early

stage in the proceedings is neither constitutionally nor

statutorily required, and we decline to craft a judicial rule

imposing such a requirement.

Appendix A Al2

B. Governmental Interference with a Witness

Agostino next argues that his rights to due process were

violated by governmental interference with a key witness.

Agostino asserts that Assistant United States Attorney

("AUSA") Donald Schmid requested that Goetz refrain from

speaking with defense counsel about the case. The Government

counters that it never instructed Goetz not to speak with defense

counsel but instead simply informed Goetz of his right to

decline interviews with the defense.

"(T]he inability of a defendant to interview witnesses is a

constitutional problem only if the state artificially restricted the

defendant's ability to obtain evidence." United States v.

DeRobertis, 766 F.2d 270, 274 (7th Cir. 1985). Since a witness

is free to decide whether to grant an interview with defense

counsel, see United States v. Bowens, 318 F.2d 828, 829 (7th

Cir. 1963); see also United States v. Pinto, 755 F.2d 150, 152

(10th Cir. 1985); United States v. Fischel, 686 F.2d 1082, 1092

(Sth Cir. 1982), reversal on the ground of governmental

interference with a witness "requires a clear showing that the

government instructed the witness not to cooperate with the

defendant." United States v. White, 454 F.2d 435, 439 (7th Cir.

1971).

As identified by the district court. the "threshold

question" is whether Agostino has "clearly shown" the

Government instructed Goetz not to discuss the case with

defense counsel. In support of its claim, Agostino cites to a

letter dated November 26, 1996 from Goetz's counsel, David P.

Jones, to defense counsel. The letter states, in pertinent part:

"After Mr. Goetz's Grand Jury testimony, U.S. Attorney Schmid

asked Mr. Goetz, as a courtesy, not to discuss his testimony.

Appendix A Al3

Attorney Schmid made it clear that he had no authority to

command Mr. Goetz not to talk nor could he prevent Mr. Goetz

from speaking about what happened." Jones also testified

during a hearing on the issue in a manner that echoed the

statements in his letter of November 26, 1996. Defense counsel

argues that the letter and attorney Jones's testimony, coupled

with the fact that Goetz refused to participate in interviews with

defense counsel, establish that AUSA Schmid "instructed"

Goetz not to speak with defense counsel in contravention of

applicable case law.

The Government responds with a letter of its own,

written the day after the letter proffered by Agostino. On

November 27, 1996, the following statement was transmitted to

Goetz from AUSA Schmid:

You told me that you had indicated to your

lawyer that you did not wish to meet with

{defense counsel]. Let me reiterate what I told

you. I told you that it was up to you whether you

choose to meet with ... any of Mr. Agostino's

defense lawyers. While you are free to meet

with them, I told you that you had no obligation

to meet with them. The choice is entirely yours.

Even were we to credit Agostino's version of events,

however, he has not "clearly shown" that the Government

violated his rights to due process. The characterization of

__Schmid's actions in the November 26 Jones letter suggests that,

in the worst light, Schmid requested that Goetz not speak to

anyone about his testimony. Governmental interference occurs

when the Government instructs the witness not to speak, see

White, 454 F.2d at 439, or artificially restricts defense counsel!

access to the witness. See DeRobertis, 766 F.2d at 274. The one

eee eee

Appendix A Al4

line characterization of Schmid's actions in Jones's letter is a far

cry from the "clear showing that the government instructed the

witness not to cooperate with the defendant," White, 454 F.2d

at 439, that is required for reversal on the grounds of

governmental interference. Agostino has failed to make the

tequisite showing to establish a violation of his nghts to due

process.

C. Sufficiency of the Evidence

Agostino also attacks the weight of the evidence

presented at trial. First, he argues that the evidence was

insufficient to prove that he acted corruptly or with the intent to

influence or reward Goetz. Second, he asserts that the evidence

failed to establish the jurisdictional prerequisite to § 666.

Agostino bears a "heavy burden" in pursuing these sufficiency

of the evidence claims. See United States v. Briscoe, 65 F.3d

576, 586(7th Cir. 1995). The question in reviewing these claims

is whether “after viewing the evidence in the light most

favorable to the prosecution, amy rational trier of fact could

have found the essential elements of the crime beyond a

reasonable doubt." Jackson v. Virginia, 443 U.S. 307,

319(1979). An appellate court will overturn the verdict only if

the record contains no evidence, regardless of how it is

weighed, from which the jury could find guilt beyond a

reasonable doubt. See United States v. Hickok, 77 F.3d 992,

1002 (7th Cir.), cert. denied--U.S.--, 116 S. Ct. 1701(1996);

United States v. Crowder, 36 F.3d 691, 695 (7th Cir. 1994).

1. Sufficiency of the Evidence with Respect to Intent Element

It is undisputed that Agostino offered Goetz $4,000 in

cash in July 1995. The issue centers around his intent in

offering the cash payment. While the Government asserts that

Appendix A AlS

the payment was made in an attempt to influence or reward

Goetz, the defense argues that Agostino was simply engaging

in a test of Goetz's honesty. If there is any evidence from which

a reasonable jury could have found that Agostino was

attempting to influence or reward Goetz, then the verdict must

stand. See Hickok, 77 F.3d at 1002.

The Government presented sufficient circumstantial

evidence for a reasonable jury to conclude that Agostino

corruptly offered the money to Goetz in an attempt to influence

or reward him in connection with Toll Road business. The

Government established that the money was passed at

approximately the same time as Agostino in violation of the

contract, turned over to Gas City the responsibility for selecting

the survey stations for fuel pricing on the Toll Road. Agostino

also offered the money to Goetz shortly after he informed Goetz

that Gas City would receive non-revenue passes for all of its

fuel tankers. While not in violation of the contract, Gas City

received these passes much earlier than Goetz had expected

they would. The Government presented evidence that

established that Goetz had objected and expressed surprise at

these developments, and shortly thereafter, Agostino offered

him $4,000 in cash for "doing a good job." A reasonable jury

could have found that this timing provided circumstantial

evidence that Agostino offered Goetz the money with the

requisite corrupt intent to establish a violation of § 666(a)(2).

The jury also has the choice to disbelieve the defendant's

testimony regarding his intent. Agostino testified that he used

his own money to test Goetz's honesty, did not discuss this test

with anyone else, and performed this test without any

consultation with the appropriate INDOT or Toll Road

personnel. Yet Agostino gave Goetz a glowing annual review

at approximately the same time he claimed to be having doubts

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Appendix A Al6

about Goetz's trustworthiness. Agostino also did not document

his suspicions until December 1995, nearly six months after the

incident, but only two days after INDOT Toll Road Division

was subpoenaed for documents involving the $4,000 payment

and the benefits passed to Gas City around the time of the

payment. A reasonable jury could have found, on the basis on

this evidence, that Agostino's explanation was not credible and

that the money was to influence or reward Goetz in connection

with the Gas City transactions.

2. Sufficiency of the Evidence with Respect to the Federal

Funding Element

Agostino also challenges the sufficiency of the evidence

regarding the $10,000 funding element. Section 666 requires

that the person bribed be an "agent" of an organization,

government, or agency that receives in excess of $10,000 from

the federal government within a one year period. See 18 U.S.C.

§ 666(a)(2). (b). Under the statute, an "agent" is "a person

authonzed to act on behalf of another person... and ... includes

a servant or employee, and a partner, director, officer, manager,

and representative." /d § 666(d)(1). If the Government produced

any evidence from which a reasonable jury could conclude that

Goetz was an agent of an organization that received the

requisite federal funding, we will not disturb the verdict. See

Hickok, 77 F.3d at 1002: Crowder, 36 F.3d at 695.

It is undisputed that INDOT receives more than $10,000

from the federal government in any one year period. Agostino

argues, however, that Goetz was an agent solely of INDOT Toll

Road Division and not an agent of INDOT. We reject this

contention. The evidence presented to the jury was sufficient for

a reasonable jury to conclude that as an agent of INDOT Toil

Road Division, Goetz was also an agent of INDOT

Appendix A Al?

First, the Government produced evidence that the Toll

Road Division is simply a subpart of INDOT, not an

independent organization. Government Exhibit 14 is an

Organizational chart that clearly identifies the Toll Road

Division as a subdivision of INDOT. Both the Commissioner of

INDOT and the Interim Toll Road Division Manager testified

that the Toll Road Division was a subdivision of INDOT.

Additionally, Toll Road Division employees are counted as part

of the INDOT workforce when INDOT establishes how many

people it employs.

Second, the Government presented evidence that

established INDOT exercises management authority over the

Toll Road Division. The INDOT Commissioner conducts

meetings with heads of the divisions within INDOT, including

the Toll Road Division, every four to six weeks. There was also

evidence to suggest that INDOT exercises control over Toll

Road personnel decisions. In regard to the Gas City contract at

issue in this case, the INDOT Commissioner testified that he

was personally involved in the bid preparation for the fuel

supplier on the Toll Road as were INDOT's legal staff, Chief

Financial Officer, Chief Engineer, and Public Relations Officer.

The Gas City contract, under which Goetz was responsible for

selecting survey stations, is signed by the INDOT

Commissioner. Additionally, several witnesses testified that the

INDOT Commissioner gave directions, orders and advice

regarding the implementation of the Gas City contract

Third, the Toll Road Division receives support from

other INDOT divisions. INDOT's Internal Affairs Division

deals with problems at the Toll Road. The Toll Road Division

goes to INDOT for labor management and labor relations

advice and receives support from INDOT's Public Affairs and

Procurement Divisions

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teat wy

om ste uk

Appendix A Als

In sum, the Government produced sufficient evidence to

establish that Goetz, as an employee of the Toll Road Division,

was also an employee of INDOT and therefore an agent of

INDOT under the statutory definition. Accord United States v.

Moeller, 987 F.2d 1134 (Sth Cir. 1993) (finding that employees

of Texas Federal Inspection Service (TFIS) were agents of

Texas Department of Agriculture (TDA) because TDA

supervised TFIS, and TFIS performed discretionary functions

for TDA and enforced regulations promulgated by TDA).

D. Challenge to Jury Instructions

Agostino next challenges the court's instructions to the jury

regarding the federal funds element, arguing that the district

court erred by not providing the jury with the text of allegedly

relevant Indiana statutes set forth in defendant's tendered

instruction number four. The defense contends that the statutes

were necessary to enable the jury to determine whether Goetz

was an agent of an agency that received the requisite federal

funding. We review jury instructions as a whole, asking

whether they were “sufficient to inform the jury correctly of the

applicable law." Wilson v. Williams, 83 F.3d 870, 874(7th Cir.

1996): see also Maltby v. Winston, 36 F.3d 548, 560(7th Cir.

1994). "In this review we avoid fastidiousness and inquire only

whether the correct message was conveyed to the jury

reasonably well." Wilson, 36 F.3d at 874; see also United States

v. Perez, 43 F.3d 1131, 1137(7th Cir. 1994). We will reverse

only if, "considering all the instructions, the evidence and the

arguments,’ it appears that ‘the jury was misled... [and its]

understanding of the issues was seriously affected to the

prejudice of the complaining party.” Roggow v. Mineral

Processing Corp., 894 F.2d 246, 248 (7th Cir. 1990) (alteration

in original) (quoting Simmons v. Pinkerton's, Inc., 762 F.2d

591, 597 (7th Cir. 1985)); see also United States v. Hall, 109

Appendix A Al9

F.3d 1227, 1237(7th Cir.), cert. denied--U.S.--, 113 S. Ct. 153

(1997); Perez, 43 F.3d at 1137.

The district court instructed the jury as follows:

In order to establish the offense of bribery, the

government must prove the following elements

beyond a reasonable doubt:

First, that the defendant offered,

gave, or agreed to give anything

of value to another person;

Second, that the defendant did

so corruptly with intent to

influence or reward an agent of a

state agency in connection with

any business, transaction or

series of transactions of that

agency involving a thing of

value of $5,000 or more; and

Third, that the state agency

involved must have received, in

a one-year period, in excess of

$10,000 in federal funds or

benefits.....

It is not required that each division or subpart of a state

agency receive any federal funds or benefits. All that is required

is that the state agency have received at least $10,000 in federal

funds or benefits in any one-year period.

This last paragraph is an accurate statement of law if the

Peer eee Tet

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a it ta tl

Appendix A A20

agent in question is an agent of the state agency itself and not

just an agent of a division or subpart of that agency. See

Moeller, 987 F.2d at 1137 ("[S]o long as the agency received

$10,000 per year from a federal assistance program, its agents

are subject to section 666.") The uncontroverted evidence in

this case established that Goetz was an employee of INDOT,

and therefore under the statutory definition, he was an agent of

INDOT.? The jury instruction therefore was "sufficient to

inform the jury correctly of the applicable law." Wilson, 83 F.3d

at 874. Agostino's challenge to the jury instruction is therefore

denied.

E. Application of U.S.S.G. § 2C1.1 to Calculate Agostino's

Base Level

Agostino's final argument on appeal is that the district

court erred in sentencing him under U.S.S.G. § 2C1.1 instead

of U.S.S.G. § 2C1.2. Appendix A to the Sentencing Guidelines

directs that either U.S.S.G. § 2C1 .1 or § 2C1 .2 is applicable to

convictions under 18 U.S.C. §666(a)(2). "When the statutory

index lists more than one potentially applicable guideline, the

district court is charged with choosing from among the

*While the defense submitted evidence that the Toll

Road Division was operated as a separate entity from INDOT

in accordance with Indiana state statutes, the defense did not

present evidence controverting that INDOT had management

authority over the Toll Road Division, that Goetz implemented

the Gas City contract which was signed by the Commissioner

of INDOT, or contradicting any of the other evidence from

which a reasonable jury could have concluded that Goetz was

an agent of INDOT.

Appendix A A2\

guidelines specified the one that is most appropriate based on

the nature of the offense conduct." United States v. Moeller, 80

F.3d 1053, 1061(Sth Cir. 1996) [hereinafter Moeller //).

The commentaries to the relevant sections explain that

"{Section 2C 1.1] applies to a person who offers or gives a bribe

for a corrupt purpose, such as inducing a public official to

participate in a fraud or to influence his official actions,"

U.S.S.G. § 2C1 .1, comment. (backg'd), while "[Section 2C1.2]

applies to the offering, giving, soliciting, or receiving of a

gratuity to a public official in respect to an official act. A

corrupt purpose is not an element of this offense." U.S.S.G. §

2C1.2, comment. (backg'd). In choosing between these two

guidelines, the issue before the district court was esseniially

whether Agostino's actions were more akin to providing a

gratuity than to passing a bribe. U.S.S.G. § 2C1.2 would apply

to the former case while U.S.S.G. § 2C1.1 would apply to the

latter. As this is a factual determination, we review for clear

error. See United States v. Emerson, --F 3d--, No.96-3166, 1997

WL 643634, at *4 (7th Cir. Oct.20, 1997); United States v.

Yoon, --F.3d--, No.96-2943, 1997 WL 634185, at *13 (7th Cir.

Oct.15, 1997)

The distinction between a bribe and a gratuity is

sometimes difficult to discern. This difficulty arises because the

distinction, in many cases, will turn on the intent of the payer.

If the payer's intent is to influence or affect future actions, then

the payment is a bribe. If; on the other hand, the payer intends

the money as a reward for actions the payee has already taken,

or is already committed to take, then the payment is a gratuity

See United States v. Mariano, 983 F.2d 1150, 1159 (1st Cir

1993). In the present case, Goetz was unable to say with

certainty what Agostino's intent was. Goetz testified that he did

not know what he was supposed to do for the money offered to

Rika. Paawmets «

Appendix A A22

him by Agostino. Goetz himself did not know if he was being

rewarded for something he did in the past or if he was being

bribed to do something in the future. The Government

hypothesized that he may have been bribed nos to do something

in the future--specifically, to not cause any trouble with regard

to the benefits being passed to Gas City.

Given the somewhat confused state of evidence

regarding Agostino's intent, we cannot conclude that the district

court committed clear error in sentencing Agostino under

U.S.S.G. § 2C1.1. The district court was privy to the testimony

and argument regarding Agostino's intent first hand, and it is

therefore more appropriate for it to determine whether the

money was offered with a corrupt purpose. See Moel/er I], 80

F 3d at 1062 ("We decline to substitute our own more detached

assessment of the extensive evidence presented by both parties

for the judgment of the district ...... "). In addition, the jury must

have believed that Agostino acted corruptly because the statute

under which Agostino was convicted requires a corrupt

purpose. See 18 U.S.C. § 666(a)(2) (requiring that defendant

“corruptly gives, offers, or agrees to give anything of value")

(emphasis added). Considering this requirement for conviction

under the statute as well as the district court's privileged

position with regard to the testimony and arguments, the district

court's application of U.S.S.G. § 2C1.1 was not clearly

erroneous. Accord Mariano, 983 F.2d at 1159 (holding that

district court did not commit clear error in sentencing

defendants under U.S.S.G. § 2C1.1 because defendants sought

to receive quid pro quo and "since the offenses to which they

pleaded guilty [violations of 18 U.S.C. § 666(a)(2)] involved

corrupt intent").

E. Government's Cross-Appeal

Appendix A A23

We review a sentencing court's factual determinations

for clear error and its application of the Sentencing Guidelines

de novo. See Emerson, 1997 WL 643634, at *4; Yoon, 1997 WL

634185, at *13.

|. Upward Departure for Benefit of Bribe

Sentencing Guideline § 2C1.1(b)(2)(A) provides:

If the value of the payment, the benefit received

or to be received in return for the payment, or

the loss to the government from the offense,

whichever is greatest, exceeded $2,000, increase

[the base offense level] by the corresponding

number of levels from the table in §2F1.1

(Fraud and Deceit)

U.S.S.G. § 2C1.1 (1))(2)(A). The district court, finding that "the

defendant did not receive any benefit, nor did he intend to

receive a benefit," used the value of the payment, $4,000, to

impose a one-level increase in the base offense level. The

Government makes two closely-related arguments. First, the

Government suggests that the district court should have

considered the benefit to Gas City. Second, the Government

argues that the district court made an error of law in holding

that the defendant must have personally received the benefit in

order to merit an upward departure.

The Government first argues that the benefit that

accrued to Gas City should be considered in the calculation of

benefit. Agostino counters that the Sentencing Guidelines did

not contemplate benefits accruing to third parties in factual

situations like the present case. Agostino cites to the

background section of U.S.S.G. § 2C1 .1, which he claims is

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sal ain Peru at Pee iene

5 Set iy A OER: re a

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Appendix A A24

"very telling" as to what the Guideline Commission had in

mind. In discussing whether the value of the bribe itself should

be deducted from the benefit received, the background section

states, "for deterrence purposes, the punishment should be

commensurate with the gain to the payer or the recipient of the

bribe, whichever is higher." U.S.S.G. § 2C 1.1, comment.

(backg'd) (emphasis added). Accordingly, the defense asserts

that for the purpose of the enhancement, the court can only look

to the benefits to the payer or the recipient. Since Gas City is

neither a payer nor a recipient, the defense argues, the court

cannot consider any benefits accruing to it.

There is some precedent suggesting that the sentencing

court may consider benefits flowing to third parties in

determining benefit/loss under U.S.S.G. § 2C1.1. See United

States v. Pretty, 98 F.3d 1213 (l0th Cir. 1996), cert. denied --

U.S.--, 117 5. Ct. 2436(1997); see also United States v.

Muldoon, 931 F.2d 282 (4th Cir. 1991) (by implication).‘

However, these cases are factually distinguishable from the

present case. In Pretty, the defendants, Pretty and Whitehead,

were charged with engaging in a bribery scheme in violation of

18 U.S.C. § 666, as well as conspiring to engage in this scheme

‘The other cases cited by the Government in its brief are

inapplicable to the present case. One of the cases allows for

enhancement for benefit to the payer, even if the defendant is

someone other than the payer himself. See United Stales v.

Hang, 75 F.3d 1275 (8th Cir. 1996) (defendant was payee).

Since in the present case the defendant was the payer, and no

benefit to him was shown, this case is not helpful. The other

case cited by the Government is similarly unhelpful. See United

States v. Falcioni 45 F.3d 24 (2d Cir. 1995) (decided based on

loss to government; court does not reach issue of benefit).

Appendix A A25

in violation of 18 U.S.C. § 371. See id. at 1216. The jury

convicted the defendants on all charges in the indictment. See

id. at 1217. One of the conspirators, Kuhse, was not before the

court in the case. In determining the appropriate base level, the

sentencing court considered the benefit to Kuhse, a conspirator.

See /d. at 1222. The court found that the relevant question was

“whether_the amount received by Kuhse was reasonably

foreseeable to the defendants," citing U.S.S.G. § IBI.3(a)(1)(B).

See id.

Sentencing Guideline § 1B1.3(a)(1)(B) states that

specific offense characteristics shall be determined on the basis

of the following:

in the case of a jointly undertaken criminal

activity (a criminal plan, scheme, endeavor, or

enterprise undertaken by the defendant in

concert with others, whether or not charged as a

conspiracy)! all reasonably foreseeable acts and

omissions of others in furtherance of the jointly

undertaken criminal activity, that occurred

during the commission of the offense of

conviction, in preparation for that offense, or in

the course of attempting to avoid detection or

responsibility for that offense.

This section clearly requires "a jointly undertaken criminal

activity," although it matters not whether such activity is

formally charged as a conspiracy. This requirement makes the

section inapplicable to Agostino. Unlike Prefty, in the case

before us the Government did not provide evidence that

Agostino was part of a jointly undertaken criminal activity."

The only evidence to suggest such an endeavor is Goetz's

testimony that Agostino told him the $4,000 was from Len

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Appendix A A26

McEnery, Gas City's General Manager. Agostino contradicted

this testimony in asserting that the money was his private

money from a home equity line-of-credit. There is no additional

evidence on the question of whether Agostino was involved in

a jointly undertaken criminal activity, therefore this section and

the precedent applying it is irrelevant.’

Other circuits have allowed sentencing courts to

consider benefits flowing to organizations where the defendant

is shown to be an agent of such organization. See United States

v. Dijan, 37 F.3d 398 (8th Cir. 1994) (defendant was payer;

court used benefit to payer-owned corporation, in whose

interest payer acted); United States v. Jackson, 876 F.Supp.

1208 (D. Kan. 1994) payer-defendants were high-level

employees of hospital; court found government failed to meet

burden in proving benefit to hospital), aff'd sub. nom. United

States v. Martinez, 76 F.3d 1145 (10th Cir. 1996). In the instant

case, the Government asks the court to enhance the defendant-

‘While the court in Muldoon did not explicitly reference

this section, the facts of the case are similar to Pretty. In

Muldoon, the defendant acted as a middleman, passing bribes

from one corporation to a government agent. See 931 F.2d at

284-85. The defendant was charged and convicted of the

substantive offense, as well as conspiracy to commit the

substantive offense. See id. at 284. The evidence clearly

established that the defendant was acting on behalf of the

corporation in passing the bribes. See id. at 288. Therefore the

case is distinguishable and inapplicable for the same reasons

stated above. Additionally, the court in Mu/doon used the value

of the bribe, not the value of the benefit received, because it

found that the evidence did not disclose the value of the benefit.

See id. At 289

Appendix A A27

payer's base level based on benefits to an unrelated third party.

If the Government had shown that Agostino acted as Gas City's

agent in this transaction, these cases may be relevant. However,

as above, the only evidence on that count is Goetz's testimony

that when prodded, Agostino told him the $4,000 was from Len

McEnery of Gas City. Agostino contradicts this claim by

asserting that the money was his own that he kept in his home.

Thus, this theory fails as well. In sum, the precedent establishes

that benefits to third parties may be considered in certain factual

circumstances, but the Government did not establish the

necessary circumstances in this case.

The flip-side of the Government's argument that the

benefits to Gas City should have been considered is its

argument that the district court erred as a matter of law in

holding that the defendant must have personally benefitted in

order to merit an enhancement. It is true that some of our cases

establish the proposition that the defendant need not receive the

benefit in order to have his sentence enhanced. See United

States v. Muhammad, --F .3d--, No.96-2434, 1997 WL 406304

(7th Cir. July 21, 1997) (holding that benefit to payer may be

considered in enhancing sentence of defendant-payee). The

Government’s contention that the district court erred as a matter

of law is unpersuasive, however, as it is based on an erroneous

interpretation of the reach of the conclusion embodied in the

district court's sentencing memorandum. Although the district

court did not explicitly analyze the third party question, its

statement of the law as it relates to the facts of this case was

correct. In the present case, where there is no established link

between the defendant and the third party that received the

benefit, the appropriate measure of the benefit is the amount of

personal benefit to the defendant. Because the Government did

not establish that Agostino received a. benefit, the district court

correctly declined to use any benefit as the measure for

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Appendix A A28

enhancement under U.S.S.G. § 2C1.1 (b)(2)(A). We therefore

find that under the unique facts of this case, the district court

did not err in using the value of the bribe, and not the value of

the benefit to Gas City, to determine the upward enhancement

under U.S.S.G. § 2C1 .1(b)(2)(A).

2. Enhancement for Obstruction of Justice

The Government argues that the district court erred in

failing to impose a two-level increase in Agostino's sentence

under the obstruction of justice guideline, U.S.S.G. § 3C1.1.°

Sentencing Guideline § 3C11 states that a sentencing court shall

increase the defendant's base offense level by two if he

“willfully obstructed or impeded, or attempted to obstruct or

impede, the administration of justice during the investigation,

prosecution, or sentencing of the instant offense." Perjury can

be the basis for such an enhancement. See U.S.S.G. § 3C1.1,

comment. (n.3(b)). A defendant commits perjury for the

purpose of this provision if he "gives false testimony

concerning a material matter with the willful intent to provide

false testimony, rather than as a result of confusion, mistake. or

faulty memory." United States v. Dunnigan, 507 U.S. 87, 94

(1993)

The district court's determination regarding whether the

defendant willfully committed perjury, and therefore deserves

the sentence enhancement, is a factual finding we review for

°While at sentencing the Government offered several

reasons for an obstruction of justice enhancement, in its appeal

the Government focuses on the claim of perjury. We therefore

devote our discussion to the perjury issue

Appendix A A29

clear error. See Emerson, 1997 WL 643634, at *4; Yoon, 1997

WL 634185, at *13. "Special deference is given to findings

based upon credibility determinations, which ‘can virtually

never be clear error."" Hickok, 77 F.3d at 1007 (quoting

Anderson v. City of Bessemer City, 470 U.S. 564, 575 (1 985)).

At the outset we note that the district court is "in the best

position to evaluate [Agostino's] truthfulness," United States v.

Easley, 977 F.2d 283, 286 (7th Cir. 1992), and we are reluctant

to overturn the district court's finding on this issue.

Although Agostino did not testify at trial, portions of his

grand jury testimony were read into the record. While there are

statements within the proffered grand jury testimony that were

contradicted by other witnesses and circumstantial evidence, the

district court determined that "there are no facts in the record

that prove the defendant committed perjury." Specifically, the

district court found that there was "no proof of the requisite

‘willfulness.’”

The Government asserts that Agostino lied by testifying

to the following things: (1) that he did not state to Goetz that

the $4,000 was PAC money or from “Lenny,” (2) that it was

Goetz's idea to give nonrevenue passes to Gas City, (3) that the

day after giving Goetz the $4,000, he told Goetz that the $4,000

was his (Agostino's) personal money, and finally (4) that the

money was given as a test of Goetz's honesty. With respect to

issues (1) through (3), the testimony breaks down to a “he

said/he said" credibility battle. Agostino testified as outlined

above, while Goetz testified to the opposite. The mere fact that

Agostino's testimony before the grand jury conflicted with the

testimony of other witnesses at trial does not require a finding

of obstruction of justice, however. The obstruction of justice

enhancement requires a finding of willfulness, and, as the

Supreme Court noted in Dunnigan, “an accused may give

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Appendix A A30

inaccurate testimony due to confusion, mistake. or faulty

memory." Dunnigan, 507 U.S. at 95. Thus not all inaccurate

testimony necessarily reflects a willful attempt to obstruct

justice. Because the district court has the best perspective to

judge issues of credibility, the district court's refusal to find

Agostino's testimony perjurious is not clearly erroneous

Additionally, while the question of intent (issue (4)) was

central to the trial, Agostino's testimony with regard to his

intent in giving Goetz the $4,000 is not so clearly perjurious

that we will overturn the district court's determination Agostino

testified before the grand jury that

[Mly intent was that, when I presented him with

the envelope, that he would come forward.

either, one, feel guilty and automatically tell me

if he was up to anything, or two, that when he

suggested various companies, et cetera, narrow

down the possible field, give me something

further that I could look into basically at that

point to go forward

It is at least possible that Agostino did have this intent when he

passed the money to Goetz in addition to a corrupt intent to

influence or reward Goetz. The circumstantial evidence tending

to show corrupt purpose, combined with the jury's verdict,

which required a finding a corrupt purpose, do not conclusively

establish that Agostino committed perjury. See Dunnigan, 507

U.S. at 94 ("[N]ot every accused who testifies at trial and is

convicted will incur an enhanced sentence under § 3C1 .1 for

committing perjury."); United States v. Buchannan, 115 F.3d

445, 451(7th Cir. 1997) (finding that "[t]o the extent that [prior]

cases affirmed sentencing enhancements merely on the basis of

a verdict that was inconsistent with the defendant's testimony.

Appendix A A3]

they are no longer authoritative after Dunnigan"). While we

recognize this scenario is unlikely, and admit that the facts of

this case present a close call, we cannot say that we have "the

definite and firm conviction that a mistake has been

committed.”” United States v. Hassan, 927 F.2d 303, 309 (7th

Cir. 1991) (quoting Anderson, 470 U.S. at 573). Therefore, we

cannot conclude that the district court committed clear error in

refusing to enhance Agostino's sentence for obstruction of

justice

3. Discrepancy Between the Oral Sentence Pronounced

and that Directed by the Sentencing Memorandum

At sentencing, the district court set Agostino's offense

level at eleven, which placed him in Zone C of the sentencing

table. The sentencing range for a total offense level of eleven

and a Criminal History Category I is from eight to fourteen

months. Under U.S.S.G. § 5C1.1 (d)(2)

If the applicable guideline range is in Zone C of

the Sentencing Table, the minimum term may

be satisfied by --

a sentence of imprisonment that includes a term

of supervised release with a condition that

substitutes community confinement or home

detention according to the schedule in

subsection (e), provided that at least one-half of

the minimum term is satisfied by imprisonment

The district court then orally announced the following sentence

in the defendant's presence: "four months imprisonment in a jail

located in Indiana or Illinois, to be designated by the United

States Marshall or by the United States Bureau of Prisons

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Appendix A A32

This confinement is to be followed by three years of supervised

release and the standard conditions are to apply." A fine and a

special assessment was also imposed

As noted by AUSA Schmid at the sentencing hearing,

the orally announced sentence does not conform to the

Guidelines because it imposes only four months confinement

rather than the eight month minimum required by the

Guidelines. While the sentence imposes three years of

supervised release, it does not contain the necessary "condition

that substitutes community confinement or home detention

according to the schedule in subsection (e)" for the remaining

four months of the minimum sentence. U.S.S.G. § 5C1.1(d)(2)

The sentencing memorandum does bring the sentence

within the appropriate sentencing range:

This court hereby sentences this defendant to

eight (8) months, four (4) months of which will

be served, in a jail located in Illinois or Indiana

to be designated by the United States Marshall

or the United States Bureau of Prisons. The

remaining four (4) months will be included in

the term of supervised release pursuant to §5C

1.1 (d)(2). . The confinement is to be

followed by three (3) years supervised release

it still does not specify, however, whether the "remaining four

(4) months" are to be spent in community confinement or home

detention. Additionally, this description seems to include the

remaining four months within the three years of supervised

release

Finally, in the judgment and commitment order issued

Appendix A A33

to the U.S. Marshall, the sentence imposed is described as

follows:

The defendant is hereby committed to the

custody of the United States Bureau of Prisons

to be imprisoned for a term of Eight (8) months

imprisonment, 4 months served in a prison and

the remaining 4 months in community

confinement... Upon _ release from

imprisonment and community confinement, the

defendant shall be on supervised release for a

term of Three (3) years.

This version of the sentence clarifies that the remaining four

months will be spent in community confinement but seems to

state that the three years of supervised release begin after the

four months of community confinement (as opposed to the

sentencing memorandum, which indicated that the four months

of community confinement would "be included in the term of

supervised release").

When a discrepancy exists between an oral and written

sentence, the oral sentence controls. See United States v.

Daddino, § F.3d 262, 266 & n.5 (7th Cir. 1993) (collecting

cases); United States v. Makres, 851 F.2d 1016, 1019(7th Cir.

1988). This result is demanded by Fed. R. Crim. P.43(a), which

has as its source the Confrontation Clause of the Sixth

Amendment and the Due Process Clause of the Fifth and

Fourteenth Amendments See United States v. Gagnon, 470 U.S.

§22 (1985); see also Fed. R. Crim. P.43(a) ("The defendant

shall be present... at the imposition of sentence....”). In this case

the oral sentence imposed is contrary to the Sentencing

Guidelines because it provides only for four months of

confinement--four months less than the minimum eight months

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Appendix A A34

dictated by the applicable Guideline range. From the sentencing

memorandum and judgment and commitment order it appears

that the district court's intent was to impose the minimum eight

months of confinement--but something got lost in the

translation. Because the district court departed below the

applicable guideline range in its orally pronounced sentence we

are required to remand the case for resentencing.’ Because we

remand for resentencing, we need not address the questions

presented by the discrepancy between written sentences. but we

are confident consistency will be achieved on remand

G. Conclusion

We reject Agostino's appeals, and therefore his

conviction is AFFIRMED. With regard to the sentencing issues,

we find that the district court did not err in the application of

the Sentencing Guidelines or in the determination regarding

enhancements. However, because the orally announced was

below the minimum set by the Sentencing Guidelines, we

REMAND for resentencing consistent with this opinion

"Because the defendant has a constitutional right to be

present for sentencing, we cannot allow the sentencing

memorandum or judgment papers to control. Were we to allow

such a result, the defendant would effectively be sentenced in

absentia

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APPENDIX B

Text of 18 U.S.C. § 666

Appendix B BI

18 U.S.C. § 666. Theft or bribery concerning programs

receiving Federal funds

(a) Whoever, if the circumstance described in

subsection (b) of this section exists--

(1) being an agent of an organization, or of a

State, local, or Indian tribal government, or any

agency thereof--

(A) embezzles, steals, obtains by fraud,

or otherwise without authority

knowingly converts to the use of any

person other than the rightful owner or

intentionally misapplies, property that--

(i) is valued at $5,000 or more, and

(ii) is owned by, or is under the care,

custody, or control of such organization,

government, or agency; or

(B) 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

transactions of such _ organization,

government, or agency involving

anything of value of $5,000 or more; or

(2) corruptly gives, offers, or agrees to give

anything of value to any person, with intent to

influence or reward an agent of an organization

Appendix B B2

or of a State, local or Indian tribal government,

or any agency thereof, in connection with any

business, transaction, or series of transactions of

such organization, government, or agency

involving anything of value of $5,000 or more:

shall be fined under this title, imprisoned not

more than 10 years, or both.

25 a eR LSE SI

(b) The circumstance referred to in subsection

3 (a) of this section is that the organization,

: government, or agency receives, in any one year

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

Federal program involving a grant, contract,

subsidy, loan, guarantee, insurance, or other

form of Federal assistance.

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(c) This section does not apply to a bona fide

salary, wages, fees, or other compensation paid,

or expenses paid or reimbursed, in the usual

course of business.

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(d) As used in this section--

(1) the term “agent” means a person

authorized to act on behalf of another

person or a government and, in the case

of an organization or government,

includes a servant or employee, and a

partner, director, officer, manager, and

representative;

(2) the term “government agency”

means a subdivision of the executive,

legislative, judicial, or other branch of

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Appendix B

B3

government, including a department,

independent establishment, commission,

administration, authority, board, and

bureau, and a corporation or other legal

entity established, and subject to control,

by a government or governments for the

execution of a governmental or

intergovernmental program;

(3) the term “local” means of or

pertaining to a political subdivision

within a State;

(4) the term “State” includes a State of

the United States, the District of

Columbia, and any commonwealth,

territory, or possession of the United

States; and

(5) the term “in any one-year period”

means a continuous period _ that

commences no earlier than twelve

months before the commission of the

offense or that ends no later than twelve

months after the commission of the

offense. Such period may include time

both before and after the commission of

the offense.

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