U.S. v. SIEGELMAN No. 07-13163.
561 F.3d 1215 (2009)
UNITED STATES of America, Plaintiff-Appellee, v. Don Eugene SIEGELMAN, Richard Scrushy, Defendants-Appellants.
United States Court of Appeals, Eleventh Circuit.
March 6, 2009.
David A. Sifre, Stroock & Stroock & Lavan, LLP, New York, NY, for Amicus Curiae.
Before EDMONDSON, Chief Judge, and TJOFLAT and HILL, Circuit Judges.
Don Eugene Siegelman is the former Governor of Alabama. Richard Scrushy is the founder and former Chief Executive Officer of HealthSouth Corporation, a major hospital corporation with operations throughout Alabama. The defendants were convicted of federal funds bribery, in violation of 18 U.S.C. § 666(a)(1)(B), and five counts of honest services mail fraud and conspiracy, in violation of 18 U.S.C. §§ 1341, 1346, and 18 U.S.C. § 371. Siegelman was also convicted of obstruction of justice, in violation of 18 U.S.C. § 1512(b)(3).
The defendants' bribery convictions were based on allegations that they made and executed a corrupt agreement whereby Scrushy gave Siegelman $500,000 in exchange for Siegelman's appointing him to Alabama's Certificate of Need Review Board (the "CON" Board). The honest services mail fraud convictions incorporated the same bribery allegations, but also alleged that Scrushy used the CON Board seat obtained from Siegelman to further HealthSouth's interests. Siegelman's obstruction of justice conviction is based on allegations that he corruptly influenced another to create a series of sham check transactions to cover up a "pay-to-play" payment to him.
This is an extraordinary case. It involves allegations of corruption at the highest levels of Alabama state government. Its resolution has strained the resources of both Alabama and the federal government.
But it has arrived in this court with the "sword and buckler" of a jury verdict. The yeoman's work of our judicial system is done by a single judge and a jury. Twelve ordinary citizens of Alabama are asked to sit through long days of often tedious and obscure testimony and pore over countless documents to decide what happened, and, having done so, to apply to these facts the law as the judge has explained it to them. And they do. Often at great personal sacrifice. Though the popular culture sometimes asserts otherwise, the virtue of our jury system is that it most often gets it right. This is the great achievement of our system of justice. The jury's verdict commands the respect of this court, and that verdict must be sustained if there is substantial evidence to support it. Glasser v. United States,
Furthermore, to the extent that the jury's verdict rests upon their evaluations of the credibility of individual witnesses, and the reasonable inferences to be drawn from that testimony, we owe deference to those decisions. In our system, the jury decides what the facts are, by listening to the witnesses and making judgments about whom to believe. This they have done, and, though invited to do so,
This is not to say that the judgment below is inviolable. Our duty as an appellate
Don Siegelman was elected Governor of Alabama in 1998 on a campaign platform that advocated the establishment of a state lottery to help fund education in Alabama. After his election, he established the Alabama Education Lottery Foundation (the "Foundation") to raise money to campaign for voter approval of a ballot initiative to establish a state lottery. Darren Cline, the Foundation's fundraising director, testified that Siegelman "called the shots" on the lottery campaign. The lottery initiative was eventually defeated in a referendum held in October of 1999.
On March 9, 2000, the Foundation borrowed $730,789.29 from an Alabama bank in order to pay down debt incurred by the Alabama Democratic Party for get-out-the-vote expenses during the lottery campaign. This note was personally and unconditionally guaranteed by Siegelman.
Richard Scrushy, the CEO of Health-South had served on the CON Board under three previous governors of Alabama. The CON Board is an arm of the State Health Planning and Development Agency and exists to prevent unnecessary duplication of healthcare services in Alabama. The Board determines the number of healthcare facilities in Alabama through a process that requires healthcare providers to apply for and obtain a certificate of a healthcare need before opening a new facility or offering a special healthcare service. The CON Board decides which healthcare applications will be approved for an announced healthcare need, choosing between competing applications and ruling on objections filed by an applicant's competitor. The Governor of Alabama has sole discretion to appoint the members of the CON Board, who serve at his pleasure.
Nick Bailey was one of Siegelman's closest associates and had worked on Siegelman's campaign for governor. Cline testified that "whatever [Bailey] told me that the Governor wanted was what the Governor said." Cline also testified that "if the Governor wanted to get something done, then [Bailey] went ahead—blindly went ahead and did it."
Bailey testified that, after Siegelman's election in 1998, Siegelman met with Eric Hanson, an outside lobbyist for Health-South, and told Hanson that because Scrushy had contributed at least $350,000 to Siegelman's opponent in the election, Scrushy needed to "do" at least $500,000 in order to "make it right" with the Siegelman campaign. Bailey testified that Siegelman was referring to the campaign for the lottery initiative, and that Hanson was to relay this conversation to Scrushy. Bailey also testified that, in another conversation, Hanson told Bailey that Scrushy wanted control of the CON Board.
Bailey testified that lobbyist Hanson "made it clear to him that if Mr. Scrushy gave the $500,000 to the lottery campaign that we could not let him down" with respect to the CON Board seat. Bailey also testified that he "reminded the Governor periodically of the conversations that [Bailey] had with Eric Hanson and the conversations that the Governor had with Eric Hanson about what Mr. Scrushy wanted for his contributions, and that was the CON Board."
Martin also testified that Scrushy told him that HealthSouth could not make the payment to the lottery campaign, nor could he do it personally because "we [Health-South] had not supported that and that his wife, Leslie, was against the lottery, and it would just look bad if HealthSouth made a direct contribution to the lottery, so we needed to ask—he instructed me in particular to ask our investment banker, Bill McGahan, from [the Swiss bank] UBS, to make the contribution."
Bill McGahan did not want to make such an "out of the norm" donation and hoped the matter would "go away." Over the next two weeks, Martin called McGahan at least once a day to ask him about the status of the UBS donation, and told McGahan that Scrushy was going to fire UBS if it did not make the contribution. Finally, Martin testified, Scrushy himself called McGahan to "put more pressure" on him to make the contribution.
McGahan testified that he did not want UBS to make such a large contribution directly, so he told Martin that he would get Integrated Health Services ("IHS") of Maryland to make the donation to the lottery campaign in exchange for UBS reducing an outstanding fee that IHS owed UBS. IHS agreed to this arrangement and donated $250,000 to the Foundation in exchange for a reduction of $267,000 in the fee it owed UBS.
The IHS "donation" was in the form of a check dated July 19, 1999, made payable from itself to the Foundation. Martin testified that Scrushy told him it was important that he, Scrushy, hand deliver the IHS check to Siegelman, so Martin delivered the check to Scrushy so that he could do so.
Some time later,
Siegelman appointed Scrushy to the CON Board on July 26, 1999—one week after the date on the IHS check.
Darren Cline, the Foundation's fundraising director, testified that Siegelman gave him the IHS check and told him it was from Scrushy. Cline was concerned about the amount of the donation from one person, and Siegelman told him to hold the check. In November of 1999, however, at Siegelman's direction, Bailey retrieved the check and opened a new checking account in the Foundation's name at a Birmingham bank. Bailey made an initial deposit of $275,000—the $250,000 IHS check and a $25,000 check from another company. Cline was never told.
On March 9, 2000, the Foundation borrowed, from the same Birmingham bank, $730,789.29 to repay the Alabama Democratic Party's debt in connection with the lottery initiative and Siegelman guaranteed the loan. At that time, the Foundation had over $447,000 in its checking account at the bank, $250,000 of which had come from the IHS check deposited in November of 1999. On March 13, 2000, $440,000 was debited from the account to pay down the Foundation's loan.
In May, Siegelman and Bailey traveled to HealthSouth's headquarters in Birmingham, where Siegelman met privately with Scrushy in Scrushy's office. At that meeting, Scrushy gave Siegelman a check issued by HealthSouth for $250,000 payable to the Foundation.
The Foundation was required to disclose contributions received and expenditures made in statements filed with the Alabama Secretary of State. It failed to file timely any disclosure regarding any funds received until July of 2002, after Alabama newspapers questioned whether the financial dealings between the Foundation and the Alabama Democratic Party had been properly reported and the Secretary of State's Office had written a letter to the state Attorney General's Office about the Foundation's non-disclosure of the payoff of the Democratic Party's campaign loan. All funds received were then reported.
Lanny Young was a long-time business associate of Siegelman's who testified that he was part of a "pay-to-play" arrangement with Siegelman existing over many years. He testified that he would provide money, campaign contributions, and other benefits in return for official action, as needed, that benefited Young's business interests. He testified that in January of 2000, Siegelman asked him for $9,200 to buy a motorcycle. The evidence was that Siegelman had already purchased the motorcycle. Young testified that he and Bailey worked out the details for the transaction.
Bailey testified that he did not want Young to give the money directly to Siegelman, so Bailey told Young to write the check to him, Bailey, which he deposited into his own account. He then wrote a check to Lori Allen, Siegelman's wife,
By June of 2001, Siegelman was well-aware of the federal-state investigation into the Foundation's finances and Siegelman's dealings with Young. Bailey and Young each testified that, in an effort to cover up Young's $9,200 payment to Siegelman, Bailey gave Young a check for $10,503.39, on which he noted "repayment of loan [the $9,200] plus interest" in order to make it appear that he had borrowed the $9,200 from Young. Bailey also wrote a check to Siegelman for $2,973.35 with the notation "balance due on m/c" to provide a reason for his borrowing money from Young, which was to purchase the motorcycle from Siegelman. Bailey testified that he did not borrow the money to buy the motorcycle, but that Young's $9,200 had gone through him to Siegelman and "we used the motorcycle to cover it up." Bailey testified that Siegelman was aware of and approved Bailey's writing of the $10,503.39 check to Young.
Bailey testified that he gave Siegelman the $2,973.35 check at the office of Siegelman's attorney, who, along with Bailey's own attorney, was present for the transfer. Neither lawyer was told that the purpose of the transaction was part of the coverup of the $9,200 payment from Young to Siegelman. Siegelman accepted the check, and provided Bailey with a bill of sale for the motorcycle, which the attorneys helped finalize. Bailey testified that he lied about the transaction to the lawyers, that he and Siegelman knew that the federal investigation was going on, and that he later lied to federal investigators about the transaction to protect himself and Siegelman.
On December 12, 2005, a grand jury returned a second superseding indictment against Siegelman and Scrushy and two other defendants.
Trial on the indictment began on May 1, 2006. On June 29, 2006, the jury convicted Siegelman and Scrushy on the bribery, conspiracy and honest services mail fraud counts, and Siegelman was convicted of one count of obstruction of justice. The jury acquitted Siegelman on the remaining twenty-two counts. The other two defendants were acquitted on all counts against them.
Siegelman and Scrushy were each sentenced to approximately seven years in federal prison.
On appeal, Siegelman and Scrushy together allege nine errors in the trial proceedings below. With respect to the bribery, conspiracy and honest services mail
1. Bribery, Conspiracy and Honest Services Mail Fraud Counts.
A. Jury Instructions
The bribery statute under which defendants were convicted makes it a crime for a state official to corruptly agree to accept anything of value from another person "intending to be influenced" in that person's favor in an official action. 18 U.S.C. § 666(a)(1)(B). The honest services mail fraud statute criminalizes the use of the mails to execute a scheme to defraud another of the right to a public official's honest services. 18 U.S.C. §§ 1341, 1346. The conspiracy statute prohibits two or more persons from conspiring to commit a federal offense. 18 U.S.C. § 371.
The bribery, conspiracy and honest services mail fraud convictions in this case are based upon the donation Scrushy gave to Siegelman's education lottery campaign.
The Supreme Court has sought to protect against this possibility by requiring more for conviction than merely proof of a campaign donation followed by an act favorable toward the donor. McCormick v. United States,
Id. at 272, 111 S.Ct. 1807.
To avoid this result, the Court made clear that only if "payments are made in return for an explicit promise or undertaking by the official to perform or not to perform an official act, are they criminal." Id. at 273, 111 S.Ct. 1807 (emphasis added). The Court quoted the Court of Appeals for the Fifth Circuit, which had said that:
Id. (quoting United States v. Dozier,
While the Court has not yet considered whether the federal funds bribery, conspiracy or honest services mail fraud statutes require a similar "explicit promise," the Seventh Circuit Court of Appeals has observed that extortion and bribery are but "different sides of the same coin." United States v. Allen,
The district court agreed to instruct the jury that they could not convict the defendants of bribery in this case unless "the defendant and the official agree that the official will take specific action in exchange for the thing of value." (emphasis added). This instruction was fashioned by the court in direct response to defendants' request for a quid pro quo instruction, and was given in addition to the Eleventh Circuit's pattern jury instruction for federal funds bribery cases. So, whether or not a quid pro quo instruction was legally required, such an instruction was given.
Defendants, however, assert that the instruction was inadequate under McCormick. Defendants assert that the instruction failed to tell the jury that not only must they find that Siegelman and Scrushy agreed to a quid pro quo, the CON Board seat for the donation, but that this agreement had to be express. We disagree that McCormick requires such an instruction.
McCormick does use the word "explicit" when describing the sort of agreement
But McCormick does not impose such a stringent standard. One year after McCormick, the Supreme Court approved the following jury instruction:
Evans v. United States,
The instruction approved in Evans required that the acceptance of the campaign donation be in return for a specific official action—a quid pro quo.
But there is no requirement that this agreement be memorialized in a writing, or even, as defendants suggest, be overheard by a third party. Since the agreement is for some specific action or inaction, the agreement must be explicit, but there is no requirement that it be express. To hold otherwise, as Justice Kennedy noted in Evans, would allow defendants to escape criminal liability through "knowing winks and nods." 504 U.S. at 274, 112 S.Ct. 1881 (Kennedy, J. concurring). See also United States v. Blandford,
Furthermore, an explicit agreement may be "implied from [the official's] words and actions." Evans, 504 U.S. at 274, 112 S.Ct. 1881 (Kennedy, J., concurring). As Justice Kennedy explained:
Id. See also United States v. Massey,
In this case, the jury was instructed that they could not convict the defendants of bribery unless "the Defendant and official agree that the official will take specific action in exchange for the thing of value." This instruction required the jury to find an agreement to exchange a specific official action for a campaign contribution. Finding these facts would satisfy McCormick's, requirement for an explicit agreement involving a quid pro quo. Therefore, assuming a quid pro quo instruction was required in this case, we find no reversible error.
B. Evidence on the Bribery, Conspiracy and Honest Services Mail Fraud Convictions
1. The Bribery, Conspiracy and Related Mail Fraud Counts
Defendants argue that the sole evidence of any explicit quid pro quo in connection with Siegelman's appointment of Scrushy to the CON Board was Bailey's testimony regarding the conversation he had with Siegelman following the meeting at which Scrushy delivered the first $250,000 check to Siegelman, and that this evidence was legally insufficient to support the jury's finding of a quid pro quo. We disagree.
Bailey testified that after the meeting, Siegelman showed him the check, said that it was from Scrushy and that Scrushy was "halfway there." Bailey asked "what in the world is he going to want for that?" Siegelman replied, "the CON Board." Bailey then asked, "I wouldn't think that would be a problem, would it?" Siegelman responded, "I wouldn't think so."
Defendants assert that this conversation shows that there was not an explicit or express agreement at this time between Siegelman and Scrushy. They argue that the conversation on its face indicates that, at best, there was only some vague expectation about the future. Defendants assert that Bailey's testimony shows at most that:
According to defendants, even if the conversation between Bailey and Siegelman took place exactly as Bailey recounts, "no one can `infer' from the alleged conversation recounted by Bailey that a true explicit promise or agreement had happened behind closed doors."
What is missing in this record, according to defendants, is any evidence of a discussion between Governor Siegelman and Scrushy to the effect of "I will make this contribution, and in exchange for this contribution you will appoint me. Are we agreed on that?" "Yes we are."
We disagree. Inferring actors' states of mind from the circumstances surrounding their conversation, from their actions, and from their words spoken at the time is precisely the province of the jury. As we noted above, "the [jury] is quite capable of deciding the intent with which words were spoken or actions taken as well as the reasonable construction given to them by the official and the payor." See Evans, 504 U.S. at 274, 112 S.Ct. 1881 (Kennedy, J., concurring). In making these judgments, jurors are presumed to use their common sense and are free to choose among reasonable constructions of the evidence. See United States v. Mosquera,
Furthermore, this was not the sole evidence that Scrushy bribed Siegelman. The jury was entitled to construe this conversation in the context of the substantial additional testimony they had heard regarding Scrushy's donation to the lottery campaign fund.
For example, Bailey repeatedly testified, without qualification, that Siegelman and Scrushy had an explicit agreement to exchange money for a seat on the CON Board.
Martin corroborated Bailey's testimony when he stated that "[h]e [Scrushy] told me that if we raised that money, then we would have a spot on the CON Board," and "We were making a contribution . . . in exchange for a spot on the CON Board." Martin also testified that Hanson bragged about getting HealthSouth a seat on the CON Board with the help of the IHS check.
Cline testified that Siegelman told him that Scrushy was responsible for the first $250,000 check and that "there was another $250,000 that would be coming." Cline also testified that the receipt of the checks by the Foundation was not reported until after newspaper articles questioning the Foundation's finances.
McGahan's testimony regarding Scrushy's solicitation of him to make the donation also supported an inference that the donation was illicit. Loretta Skeleton, HealthSouth's lawyer, testified that, although she was responsible for Health-South political contributions, she was told nothing about the $500,000 donations.
Finally, the close relationship in time between the first check and Siegelman's
In sum, the evidence was sufficient such that a reasonable juror could have concluded that Siegelman and Scrushy explicitly agreed to a corrupt quid pro quo, thereby proving the bribery, conspiracy and the two related mail fraud counts (Counts 6 and 7).
2. The Honest Services Mail Fraud Counts 8 and 9
Siegelman separately challenges his mail fraud convictions on Counts 8 and 9 of the indictment, each of which charged that he caused a mailing that helped to execute a scheme between himself and Scrushy to deprive the State of Alabama of its right to their honest services as the Governor and as a member of the CON Board. Counts 8 and 9 alleged that the scheme included not only the exchange of the seat on the CON Board for the $500,000 lottery campaign, but also that Scrushy "would and did use his seat on the CON Board to attempt to affect the interests of HealthSouth and its competitors," and that Scrushy "would and did offer things of value to another Board member to attempt to affect the interests of HealthSouth and its competitors." Although Scrushy was not on the Board when the alleged self-dealing occurred, the indictment charged that it was part of the scheme that Siegelman and Scrushy "orchestrated Scrushy's replacement on the Board by another person employed by HealthSouth." The mailings charged in connection with these allegations were letters sent by the Board to HealthSouth, notifying it that it had been awarded Certificates of Need in connection with the rehabilitation hospital (Count 8) and the PET scanner (Count 9). Siegelman claims that the evidence at trial was insufficient to support his knowing participation in this alleged scheme.
The evidence at trial was that Scrushy resigned from his seat on the Board in January of 2001 and that, the next day, Siegelman appointed Thom Carman, HealthSouth vice-president, to the remainder of the term. When Scrushy's term expired in July, Siegelman reappointed Carman.
While on the Board, Carman employed another member of the Board, Tim Adams, to prepare the application for the PET scanner, paying him $8000 to do so.
Six months later, the PET scanner application was also approved. At this meeting, Adams' presence was not necessary to the quorum. Carman recused himself, and Adams abstained from voting. The application was unopposed and passed unanimously.
Alva Lambert, the Executive Director of the Board, testified that unopposed applications were routinely approved, and that both these applications were consistent
Siegelman challenges the sufficiency of this evidence to establish that he caused the Board letters to be mailed to Health-South, informing it of the award of Certificates of Need in connection with the PET scanner or the rehabilitation hospital. Since there was no evidence that Siegelman participated in the events forming the basis for the charges in Counts 8 and 9, nor even that he had any knowledge of these events, Siegelman argues he cannot be held liable for this conduct on a theory of respondeat superior or vicarious liability. In view of our holding that the jury's finding of an explicit agreement between Siegelman and Scrushy to exchange money for a seat on the CON Board is supported by the evidence, we shall address whether the law permits Siegelman to be held liable for Scrushy's subsequent conduct on the Board.
It is the law of this circuit, as well as others, that all who with criminal intent join themselves to the principal scheme may be guilty of a violation of the mail fraud statute. United States v. Toney,
Recently, in United States v. Ward,
Id. at 1222.
It may be assumed, then, that Siegelman did not sign or cause to be mailed either of the letters set out in Counts 8 and 9, or even that he participated in the events generating those letters. He may, nevertheless, be held criminally liable for Scrushy's conduct on the Board if he was a knowing party to a scheme that included that conduct.
The question regarding these counts is whether the criminal scheme charged in the indictment was broader than the initial pay-to-play agreement between Siegelman and Scrushy, but also included agreement on the broader objective of permitting or promoting Scrushy's self-dealing while on the Board. If so, it is immaterial that Siegelman may not have known about each particular success in that scheme or caused to be mailed the CON Board letters that furthered that scheme. "A partnership in crime being established against both appellants, the acts of [Scrushy] in furtherance of the common criminal enterprise were in law the acts of [Siegelman]
Just as in Ward, where the defendant denied knowledge of both the mailing and the circumstances prompting it, Siegelman's lack of involvement in causing a specific mailing and the circumstances prompting it are immaterial so long as there is sufficient evidence to show that he was a knowing participant in the broader fraudulent scheme, which involved the use of the mails. See Ward, 486 F.3d at 1223 (citing United State v. Bright,
Counts 8 and 9 charge a scheme broader than the initial pay-for-play agreement. These counts alleged that Siegelman and Scrushy agreed not only to exchange money for a seat on the Board, but also that Scrushy "would and did use his seat on the CON Board to attempt to affect the interests of HealthSouth and its competitors," and that Scrushy "would and did offer things of value to another Board member to attempt to affect the interests of HealthSouth and its competitors." The government argues in its brief that not only did Siegelman know that Scrushy wanted the seat in order to self-deal on the CON Board, but that "it was certainly foreseeable to Siegelman that Scrushy would bribe another Board member to further HealthSouth's interests" since "[a]fter all, Scrushy paid Siegelman $500,000 to get HealthSouth a seat on the Board in the first place." Thus, the indictment charges a broader scheme that would subject Siegelman to criminal liability for Scrushy's actions on the Board so long as Siegelman was a knowing participant in that broader scheme.
The final question, then, is whether the government proved that scheme. In order to uphold Siegelman's convictions on Counts 8 and 9, the evidence must have been sufficient for the jury to conclude both that Siegelman knew that Scrushy intended to defraud Alabama of his honest services while on the Board and that Siegelman personally intended to participate in this fraud. We hold that it was not.
The testimony in support of the government's allegation of a pay-to-play scheme whereby Scrushy paid Siegelman for a seat on the CON Board came principally from Bailey, Martin, Young, McGahan, and Skelton. Of these witnesses, only Skeleton, HealthSouth's lawyer in charge of certificates of need, had any knowledge about Scrushy's subsequent alleged self-dealing while on the CON Board. Her testimony, however, did not mention Siegelman. Alva Lambert, the Executive Director of the CON Board during the relevant time and the other primary government witness in support of the allegations of Scrushy self-dealing, testified that the Siegelman CON Board was an "extremely well-balanced" Board, that CON Boards had never to his knowledge turned down an application for a PET scanner, and that he never saw Siegelman exert any influence or try to exert any influence whatsoever over a Board decision.
Neither in its brief nor at oral argument did the government point to any testimony in support of its allegation that Siegelman and Scrushy agreed to a broader scheme in which Scrushy would self-deal on the Board. Nor has our independent and careful review of record revealed any.
Rather, the government's brief argues that Siegelman's knowing participation in the broader self-dealing scheme may be inferred from three facts proven at trial: first, that Siegelman and Scrushy agreed to exchange the CON Board seat for money; second, that the amended Foundation financial statements that disclosed the Scrushy donations, which were filed around the time of the mailings, did not list Scrushy as the ultimate source of the IHS check; and third, that Siegelman was
In view of this absolute lack of any evidence whatsoever from which the jury could infer that Siegelman knowingly agreed to or participated in a broader scheme that included Scrushy's alleged subsequent self-dealing while on the Board, we shall reverse Siegelman's convictions on these counts.
2. Bribery Counts and the Statute of Limitations
Defendants claim that their bribery convictions are time-barred because the statute of limitations began to run no later than the date of Siegelman's receipt of the IHS check or Scrushy's appointment and the indictment was returned more than five years after that. They did not, however, raise this argument before the district court, either in a pretrial motion or at trial. It is, therefore, waived.
Defendants do not dispute that they first raised this limitations claim in motions for judgment of acquittal under Fed.R.Crim.P. 29(c), over one month after the jury rendered its verdict. We have previously rejected such attempts to challenge the sufficiency of the indictment after the trial. United States v. Ramirez,
Even where the facts are at issue regarding the limitations period, this court and its predecessor have long held that "the statute of limitations is a matter of defense that must be asserted at trial by the defendant" and that failure to do so results in a waiver. United States v. Najjar,
Requiring the defendant to assert a limitations defense at trial gives the prosecution a fair opportunity to rebut the defense through additional evidence or during summation. See United States v. Arky,
Allowing a defendant to raise a limitations defense for the first time in a post-verdict Rule 29 motion "is inconsistent with the characterization of the statute of limitations as an affirmative defense and would unfairly sandbag the government." United States v. Thurston,
The defendants apparently made a strategic decision not to present a statute of limitations defense at trial. Such a defense would have required them to make an argument to the jury that assumed their guilt on the bribery charges. While defendants are free to make the strategic decision not to do so, they may not later be
3. Sufficiency of the Evidence of Obstruction of Justice
Siegelman was charged with two counts of obstruction of justice.
Count 16 alleged that Siegelman corruptly persuaded Bailey to write a check for $10,503 to Young with the notation "repayment of loan plus interest." Count 17 alleged that Siegelman corruptly persuaded Bailey to write and give him a check for $2973.35 with the notation on it that it was the "balance due on m/c." Count 17 also alleged that Siegelman engaged in misleading Bailey's attorney with the intent to hinder or prevent the attorney's communication of information regarding these transactions to the FBI.
The jury acquitted Siegelman of Count 16, but convicted him on Count 17. Siegelman contends that the evidence was insufficient to show that he persuaded Bailey to write the check charged in Count 17 or that he misled Bailey's attorney. We turn now to the evidence.
At trial, Young testified that in January of 2000, Siegelman asked him for $9200 to buy a motorcycle and that he gave it to Siegelman as part of the pay-to-play, on-going agreement he had with Siegelman. He also testified that, eighteen months later, after the federal-state corruption investigation began, he and Bailey had the following conversation:
Bailey testified that the coverup began when:
Bailey gave the following testimony regarding Siegelman's involvement in this first step in the coverup:
Young's testimony regarding the purported repayment was:
Bailey testified that the final step in the coverup was to give Siegelman a $2,793.35 check with the notation on it that it was "balance due on m/c" to make it appear that the check was Bailey's final payment for the motorcycle. His testimony about Siegelman's involvement in this step of the coverup was:
Finally, Bailey testified regarding his interview with the FBI regarding this meeting:
The jury considered all of this testimony and found Siegelman guilty of the obstruction of justice charged in Count 17, but not in Count 16. This means that the jury decided, as a matter of fact, that Siegelman persuaded Bailey to write the check for $2973.35, but not the initial check for $10,500.
In evaluating the sufficiency of the evidence to support the jury's verdict, we are required to "view the evidence in the light most favorable to the government and resolve all reasonable inferences and credibility evaluations in favor of the jury's verdict." United States v. Robertson,
A reasonable juror could have concluded that Siegelman persuaded Bailey (he asked and Bailey agreed) to take the final step in the cover up by giving him a $2793.35 check with the notation that it was final payment for the motorcycle. See United States v. Tocco,
The jury's acquittal on Count 16 shows that it was not convinced beyond a reasonable doubt that Siegelman instigated the coverup by directing Bailey to "pay back" Young with the initial $10,500 check. But by the time Bailey wrote the check to Siegelman for $2793.35, just over four months later, as a final step in the coverup, the jury's conviction on Count 17 indicates that it concluded Siegelman not only knew what Bailey was doing to coverup Young's corrupt payment, but that he was directing the coverup by persuading Bailey to write the check to him.
This sort of split verdict is itself evidence that the jury considered the charges carefully and individually, addressed the strength of the evidence on each charge, and reached a reasoned conclusion. See United States v. Dominguez,
Siegelman's argument against the sufficiency of this evidence mirrors that he made against his convictions on virtually all the other counts—that the evidence in this case was not perfect, that it relied too heavily on circumstances and required the jury to draw inferences from those circumstances that might have been drawn differently by different jurors.
But this is far too academic a view of trial by jury. In the absence of a defendant's confession or observation of his wrongdoing by a third person, proof by circumstantial evidence and the fair inferences to be drawn therefrom is both necessary and permissible. Siegelman's contention throughout his brief that "there was no evidence" to support a particular inference too often meant merely that there was no evidence other than Bailey or Young's testimony. While Siegelman may not approve that the testimony of coconspirators was sufficient to support the jury's findings of fact, the jury was free to disregard or disbelieve it. They believed it.
With respect to the "misleading" prong of the statute, the evidence was more than sufficient to support the jury's finding that the delivery of the final check in the presence of the two lawyers and the use of the lawyers to "finalize" the sale of the motorcycle to Bailey was an attempt to "create witnesses as part of a cover-up and to use unwitting third parties or entities to deflect the efforts of law enforcement agents in discovering the truth," United States v. Veal,
4. Admission of a Co-conspirator's Statement
Defendants challenge the admission of Hanson's out-of-court statement to Martin at a HealthSouth retreat in the fall of 1999. Martin testified that Hanson "was bragging about the fact that he was able to get [HealthSouth] a spot on the CON Board with the help of the [IHS] check."
Under Fed.R.Evid. 801(d)(2)(E), a court has the discretion to admit coconspirator statements made during and in furtherance of the conspiracy. The court's admission of such statements is an abuse of its discretion to do so if the statements do not meet this legal standard. United States v. Magluta,
This court applies a liberal standard in determining whether a statement was in furtherance of a conspiracy. United States v. Santiago,
Hanson's statement at the HealthSouth retreat furthered the conspiracy. We agree with the government that, given Martin's own involvement in the conspiracy (obtaining the IHS check), Hanson's bragging to him about purchasing the CON Board seat "with the help of" the IHS check informed Martin that their plan had worked and that Martin's involvement had helped. This alone is sufficient to permit its introduction under Ammar, 714 F.2d at 252. Additionally, however, the statement is easily seen to affect the coconspirators future dealings because Martin's assistance might be needed in connection with the second $250,000 donation and Hanson knew this. Thus, Hanson's statement easily meets the Caraza standard. 843 F.2d at 436 (approving statement admitted after several acts of conspiracy helping to ensure final acts). The district court did not abuse its discretion in admitting this evidence.
5. Juror Misconduct
Defendants filed a joint motion for a new trial under Fed.R.Crim.P. 33(a), alleging juror misconduct by way of both juror exposure to extraneous information as well as by improper juror deliberation
A. Juror Exposure to Extraneous Information
The Sixth Amendment to the United States Constitution guarantees the right to trial by an impartial jury. U.S. Const. amend. VI. To protect the right to an impartial jury, the Supreme Court has recognized that "[d]ue process means a jury capable and willing to decide the case solely on the evidence before it, and a trial judge ever watchful to prevent prejudicial occurrences and to determine the effect of such occurrences when they happen." Smith v. Phillips,
We presume, however, that the jury has been impartial. United States v. Winkle,
If the district court concludes the exposure to the extrinsic evidence was harmless to the defendant, on appeal, we review this conclusion for an abuse of discretion. Id. at 1296 n. 33. In doing so, we look at all the circumstances and we consider: (1) the nature of the extrinsic evidence; (2) the manner in which it reached the jury; (3) the factual findings in the district court and the manner of the court's inquiry into the juror issues; and, (4) the strength of the government's case. Id. at 1299-1300.
Defendants attached several exhibits to their motion regarding juror misconduct, including news articles after the trial and
Finding that the defendants had made a colorable showing of extrinsic influence on the jury, the district court held a hearing to which all twelve jurors were summoned and told to bring with them any material related to outside information that they or any other juror considered during trial or deliberations. At the hearing, the court asked each juror a series of twelve questions designed to reveal the nature and extent of any extrinsic evidence to which the jurors were exposed.
Based upon this testimony, the district court found that there was credible evidence establishing that during deliberations some of the jurors were exposed to the following extrinsic evidence: (1) a copy of the Second Superseding Indictment obtained from the district court's own website; and (2) juror information from the website concerning the foreperson's obligation to preside over the jury's deliberations and to give every juror a fair opportunity to express his views.
1. Exposure to a Book About the Role of the Foreperson
As a matter of fact, and based upon the testimony given by the jurors in the hearing, the district court found that the extrinsic evidence accessed from the district court's own website by Juror 7 and mentioned by him in jury deliberations did not pertain to any substantive issue in defendants' trial. It concerned only the process of deliberation. Furthermore, it did not contradict any instruction given by the court, was consulted and discussed for only a few moments of a more than five-day deliberation. It was discussed to encourage full participation by all the jurors. The district court concluded that the exposure of the jury to this extrinsic information was harmless to the defendants.
We agree. In substantially similar circumstances, we affirmed a district court's decision that a new trial was not required in a case where the jury foreman went to the library and checked out a book entitled What You Need to Know for Jury Duty, and then exposed the jury to it. United States v. De La Vega,
The district court did not abuse its discretion in concluding that the introduction of similar information in this case was harmless beyond a reasonable doubt. The district court carefully investigated this matter. Its factual findings that this information was unrelated to the charges or any evidentiary matter in the case, and that it was introduced by a juror, not an outside influence, are not clearly erroneous. Furthermore, the district court held, and we agree, that the government's case was strong on the counts of conviction. In view of these findings, we conclude that the district court did not abuse its discretion in holding that there was no reasonable possibility of prejudice to the defendants arising out of the exposure of the
2. Exposure to the Unredacted Second Superseding Indictment
During trial, the district court granted the government's motion to cure what the court had determined was mutiplicitous charging of the federal funds bribery counts by removing reference to Siegelman in Count 4 and to Scrushy in Count 3 of the Second Superseding Indictment.
Based upon its questioning of the jurors, the district court found that Juror 7 and Juror 40 accessed a copy of the unredacted Second Superseding Indictment early during the jury's deliberations. They each obtained the indictment from the court's website in order to be able to review the allegations outside of the jury deliberation room. Additionally, some other members of the jury became aware that Jurors 7 and 40 had spent time outside of the jury room reviewing the content of this document. While the jury did not discuss this fact at length, it did discuss it. There was no evidence, however, that any members of the jury other than Jurors 7 and 40 actually read the unredacted Second Superseding Indictment, or that either Juror 7 or Juror 40 ever realized that there was any difference between the two indictments.
The district court found that the two jurors had been exposed to the unredacted indictment, which was extrinsic information, and that other jurors had been exposed to the fact that those jurors had obtained a copy of the document from the internet. Considering the totality of the circumstances, including the substantial evidence of defendants' guilt on the counts of conviction, the district court concluded that the jury's exposure to this extrinsic information was harmless beyond a reasonable doubt and it denied them a new trial.
We agree. This extrinsic evidence was the charging document itself. The district court specifically found that, prior to the redaction, the jurors had been repeatedly exposed to comment by the court and all the parties on the contents of the Second Superseding Indictment. Exposure to the original indictment, including the duplicitous charging, was, therefore, innocuous and cumulative of information properly before the jury. The district court specifically found that the exposure of any juror to the unredacted indictment would not have provided that juror with factual information to which the juror did not already properly have access, nor would it have provided that juror with any legal knowledge different from that provided to the jury as a whole.
Furthermore, the jury was repeatedly instructed that the indictment was not evidence of guilt, and that it must decide the case solely on the evidence properly admitted during the trial. The jury is presumed to follow the district court's instructions. See United States v. Shenberg,
3. Exposure to Limited Portions of Media Coverage
During the hearing, Jurors 7, 22, and 40 revealed that they had inadvertently experienced limited exposure to some media coverage during the trial. These jurors testified that, despite their best efforts, they had overheard snippets of television coverage or seen headlines regarding the case in newspapers or online. The court found that such limited, inadvertent exposure was not surprising given the intense media scrutiny of the trial. The court further found that the jurors' testimony was especially credible since it was clear to it that the jurors felt compelled to disclose even the most incidental and inadvertent exposure to extrinsic information. Juror 22 testified that she would leave the room or mute the television when the news came on, and Jurors 7 and 40, who saw headlines, testified that they did not read the accompanying stories prior to the verdict. The court also found that there was no evidence that the jury discussed any media reports prior to the verdict.
Our review of the record supports these findings and the district court's conclusion that the exposure of these jurors to media reports about the trial was harmless. In view of the limited and incidental nature of this exposure and the substantial evidence of defendants' guilt on the counts of conviction, we hold that the district court did not abuse its discretion in denying the defendants a new trial for this reason.
B. Juror Deliberations
Defendants rely upon purported emails allegedly exchanged between jurors during trial and deliberations. Documents said to be copies of such exchanges were mailed anonymously to the defense, to argue that there was both premature jury deliberation and deliberation by fewer than all the jurors in this case, and that this improper deliberation denied the defendants of their Sixth Amendment right to an impartial jury.
These allegations posed a very different problem for the district court from those suggesting that the jury had been subject to external influences. District courts are subject to very stringent limitations on their authority to question jurors about their deliberations, and to use one or more juror's testimony to impeach the verdict of all. In fact, for nearly a century, the Supreme Court has recognized a near-universal and firmly established common-law rule flatly prohibiting the use of juror testimony to impeach a verdict. Tanner v. United States,
The Court has repeatedly emphasized the important policy considerations that require the shielding of juries from public scrutiny of their deliberations. Williams v. Florida,
Tanner, 483 U.S. at 120-21, 107 S.Ct. 2739 (internal citations omitted).
Permission to attack jury verdicts by postverdict interrogations of jurors would allow defendants to launch inquiries into jury conduct in the hope of discovering something that might invalidate the verdicts against them. "Jurors would be harassed and beset by the defeated party in an effort to secure from them evidence of facts which might establish misconduct sufficient to set aside a verdict." Id. at 119-20, 107 S.Ct. 2739 (quoting McDonald, 238 U.S. at 267-68, 35 S.Ct. 783). Such events would result in "the destruction of all frankness and freedom of discussion" in the jury room. Id. And, as early as 1892, the Supreme Court expressed concern that such postverdict investigation would "induce tampering with individual jurors subsequent to the verdict." Mattox v. United States,
In an effort to protect the jury system, the Federal Rules of Evidence enshrine the common law rule against the admission of a juror's testimony to impeach the jury's verdict. Rule 606(b) provides:
By disallowing a juror to impeach the jury's verdict by testimony about their deliberations, the rule operates to protect jurors from postverdict investigation and to protect the verdict from endless attack.
The district court said that it had serious reservations about the authenticity of these purported emails, but concluded that the law barred it from questioning the jurors about their deliberations, or about the emails purporting to suggest that the jurors deliberated improperly.
The court based this conclusion upon its factual findings that some of the emails might relate to discussion of the case prior to the submission of the case to the jury, that others might indicate limited deliberation by fewer than all the members of the jury, and that some indicate possible consideration of penalties faced by the defendants. According to the district court, this was the most that the emails showed.
The court concluded that, while "it is unquestionably clear that such discussions constitute misconduct, it is not the sort of conduct that this Court can or should directly inquire into by interrogating jurors, nor is it in this Court's view grounds for granting a new trial." Considering the totality of the circumstances, the strength of the government's case, the length of jury deliberations, and the court's instructions to the jury, including the instructions not to decide or discuss the case prematurely, the district court held that there was no reasonable possibility that the defendants suffered prejudice from any premature deliberations, discussion of penalty, or deliberation with fewer than all the members of the jury present.
We agree. Additionally, we note that the verdict in this case was split in that Siegelman was acquitted of many of the charges.
We conclude, therefore, that the district court did not abuse its discretion in deciding that the purported emails, assuming they are authentic, do not entitle defendants to a new trial. The district court applied the relevant factors to the email evidence, and was well within its discretion to conclude that they did not demonstrate
6. District Court Failure to Recuse
Scrushy contends that he is entitled to a new trial because Chief Judge Fuller should have disclosed his "extraordinary extrajudicial income from business contracts with the United States Government pursuant to 28 U.S.C. § 455(a)." This claim is predicated upon Chief Judge Fuller's ownership interest in two aviation companies that engage in business with agencies of the United States government. This claim was raised over nine months after trial and incorporated information learned from the internet and from Chief Judge Fuller's Financial Disclosure Reports.
A motion for recusal based upon the appearance of partiality must be timely made when the facts upon which it relies are known. The untimeliness of such a motion is itself a basis upon which to deny it. Phillips v. Amoco Oil Co.,
Scrushy's recusal motion was untimely, based upon information readily available to him prior to trial, and has all the earmarks of an eleventh-hour ploy based upon his dissatisfaction with the jury's verdict and the judge's post-trial rulings. It has no merit.
7. Jury Selection Procedures
Federal criminal defendants have both a statutory and a constitutional right to a grand and a petit jury selected at random from a fair cross-section of their community. Juror Selection and Service Act of 1968, 28 U.S.C. §§ 1861-1869 (the "JSSA"); U.S. Const. amend. VI. By its terms, the JSSA provides remedies for only a "substantial failure to comply" with its requirements for jury selection procedures that are random, objective, and that produce a jury that is a fair-cross section of the community. 28 U.S.C. § 1861 and 1867(d). Mere technical deviations from the JSSA's requirements do not violate the JSSA if they do not result in impermissible discrimination in the jury selection process. United States v. Gregory,
Before their trial, both Siegelman and Scrushy filed virtually identical motions, alleging that the Middle District of Alabama committed substantial violations of the JSSA in constructing its Qualified Jury Wheels in 2001 and 2005, and in the selection from those wheels of both their grand and petit juries. Defendants claimed that these violations resulted in their juries being not a fair-cross section of their community. Specifically, Scrushy and Siegelman challenged the Middle District's liberal deferral policy and its procedures for summoning previously deferred jurors, claiming that they resulted in juries that under-represented African-Americans. The district court denied these challenges. Defendants appeal this denial.
In his brief, which Siegelman adopted, Scrushy acknowledges the identity between the claims presented in Carmichael and his claims presented here, conceding that "[b]ut for the fact that only the petit jury which was drawn from the 2001 jury wheel was challenged there [the petit jury was drawn from the 2005 wheel here], the issues presented overlap." This is not surprising since the same expert who opined in Carmichael about alleged violations of the JSSA and the Constitution is relied upon here, using the same evidence in support of those claims. At the time defendants filed their pre-trial motion, however, Carmichael had not yet been decided. Now that it has, it disposes of their claims as to the 2001 jury wheel.
With respect to the 2005 wheel, the district court in this case held that defendants were not entitled to any relief because the challenged objectivity and randomness practices did not apply to that wheel. Additionally, the district court found that defendants had not shown the absolute racial disparity between the composition of his juries and the community at-large of over 10% that is required to establish a statutory or constitutional violation. See Carmichael, 560 F.3d at 1280; see also United States v. Grisham,
Defendants' claims regarding the Middle District of Alabama's jury selection procedures are without merit and do not entitle them to any relief.
8. Siegelman's Sentence
Siegelman contends that the district court's decision to grant an upward departure under U.S.S.G. §§ 2C1.1 cmt. n.5, 5K2.0 (2002) violated the First Amendment and 18 U.S.C. § 3553(a) because it was allegedly based on Siegelman's statements criticizing the prosecutors in and the prosecution of this case. If this were true, we might agree.
In both its written motion for an upward departure and its arguments at sentencing, the government maintained that Siegelman's criminal conduct reflected such a systematic and pervasive corruption of the office of Governor and Lieutenant Governor, as well as various state agencies, such as the CON Board, as to cause a loss of public confidence in the government of the State of Alabama. The government's motion focused on this allegation of systematic and pervasive corruption of state government. The government contended that Siegelman "for over six years abused the Executive Branch of the state of Alabama."
The statute permits and the cases relied upon by the government uphold upward
Although the government did refer at sentencing to Siegelman's very public criticisms of the federal criminal justice system, including complaints of selective prosecution, there is no indication that the court based its upward departure decision on these attacks. In replying to Siegelman's counsel statement about saving the issue of alleged selective prosecution for another day, the court responded, "Then let's do that."
In considering the request for an upward departure "as set forth in the Government's motion," the district court found that Siegelman's conduct resulted in a loss of public confidence in the executive branch of Alabama government. The district court took judicial notice of the "plethora of media attention" to the case by the local and national media, and relied on this in finding that the case had severely undermined public confidence in Alabama state government.
Siegelman does not contend that an upward departure for his systematic and pervasive corruption of state government was inappropriate, and even his attorney at sentencing conceded that "certainly the argument could be made, in all candor, that there could be some question as to public confidence in this case."
The district court expressly stated that it was upwardly departing in order to "preserve the integrity of the judiciary and the confidence of the people of the state of Alabama in its elected officials." We find no abuse of discretion in the district court's upward departure in sentencing Siegelman.
For the foregoing reasons, we conclude that Scrushy's convictions and sentence are due to be AFFIRMED. Siegelman's convictions on Counts 8 and 9 are due to be REVERSED. Siegelman's remaining convictions are due to be AFFIRMED. Siegelman's sentence is due to be VACATED in the light of our reversal of his convictions on Counts 8 and 9 of the indictment, and his case is remanded for resentencing.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. All pending motions in this case are DENIED.
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