On June 29, 2010, the United States Supreme Court vacated the judgment in which former Alabama Governor Donald Siegelmand and former HealthSouth CEO Richard Scrushy were convicted on multiple counts and remanded the case to the Eleventh Circuit Court of Appeals “for further consideration in light of Skilling v. United States“. Oral arguments relating to this further consideration were held Wednesday in Jacksonville, Florida, in a thirteenth floor courtroom of the Bryan Simpson United States Courthouse there.
The gallery, which holds sixty to seventy people, was full by the time arguments commenced just before 2:00 p.m., and it turned out that I was seated next to Governor Siegelman during the proceedings.
Aligned left to right, across the front of the courtroom were Judges J. L. Edmondson, Gerald Tjoflat and the Senior Judge, James C.. Hill. A table on Edmondson’s side of the courtroom held three counsel for the defense, includeing Bruce Rogow, who argued for Scrushy and Sam Heldman, who argued for Siegelman. A table of three counsel for the Department of Justice on Hill’s side of the courtroom included John-Alex Romano, who argued for DOJ.
The proceedings were orderly and without dramatic confrontation. Heldman and Rogow split the time allotted to the defense, with Heldman leading off. Heldman addressed much of his argument to the ways in which the decision in Skilling (pdf) narrows the range of actions that can be construed as bribery and how this should negate all of the counts against Siegelman. Rogow took a similar tack on Scrushy’s convictions, paying considerable attention to what he considered to be flawed jury instructions in the original trial. Romano then presented the government’s case, arguing that the findings in Skilling are not as directly applicable to this case as the defense wants, and that the convictions should stand. After short rebuttals from Heldman and then Rogow, court was recessed.
Because the Eleventh Circuit Court of Appeals allows no electronic devices in the courtroom, I was reduced to taking notes with pen and paper and then attempting to transcribe the rapidly scrawled notes into something readable. That transcription is after the jump, and the experience of trying to follow and note the rapid exchanges taking place in the courtroom gives me a new-found respect for the live-blogging Marcy Wheeler and others from Firedoglake did in the Scooter Libby trial and that bmaz and Teddy Partridge did in the Proposition 8 trial.
For further reading, I see stories already filed by John Schwartz of the New York Times and George Talbot of the Mobile Press-Register, both of whom were present. Talbot did a better job than I did getting Heldman’s comment after the proceedings recessed; from his story:
“I believe the court was engaged with the concept that what we do here, in terms of criminal law, has real ramifications for the First Amendment,” he said. “We’d like to see a judgement of acquittal. We’ve said for years that what the governor did was not a crime. But a retrial would be a victory, too.”
Heldman for Siegelman
Heldman led off by addressing the issues raised by the Supreme Court remanding the case in light of Skilling. He said that while the Skilling decision addresses the issue of “honest services” directly, it also has a holding on how to approach the process of criminal prosecution and the issue of “fair warning”, in that the Skilling decision results in a reduction of prosecutorial discretion, moving toward more concrete guidelines.
Edmondson interrupted to say that rather than a holding on prosecutorial discretion, the decision addresses it in a point of instruction.
Heldman then went on to discuss the screening process that lower courts have used in the past as they relate to the concepts of fair warning and due process. The argument moved to a comparison to qualified immunity, at which point Edmondson interrupted again. After a brief exchange, Edmondson said “Innovation and originality are not virtues in prosecutors.”
[This is a very important point, since the briefing filed by Siegelman places much emphasis on the fact that this was the first and only known prosecution where the “payment” in the “bribe” was a contribution to an issue campaign rather than a candidate.]
Heldman then went on to make the point that where there is doubt on the issues of fair warning and due process, there is non-liability.
Moving on to discuss the appointment of Scrushy to the Certificate of Need Board, Heldman re-iterated that neither 18 USC 1346 or 18 USC 666 apply where the alleged payment is a contribution to issue advocacy. Only personal enrichment can qualify as bribery. Heldman says that even for the broader 666 section, the “corruptly” does all the work and the issue advocacy contribution cannot qualify.
Edmondson then interjected that Skilling is the “honest services” case and the Supreme Court pegged the definition of honest services back to a pre-McNally definition. But he suggested there is an alternative argument that the facts in this case are too different to get to honest services (1346) fraud, but that Skilling does not address bribery (666), so that the convictions could still stand as a legal hypothetical.
Tjoflat then asked whether the Supreme Court would have reversed the convictions if this case had been the “honest services” case they considered. He stated that the challenges to the conviction based on “notice” would hold if affirmed by the Supreme Court and entered into a discussion with Heldman relating to how the “vague” charge in Skilling relates to notice.
Rogow for Scrushy
Rogow then presented his arguments, starting from the position that Skilling negates prosecution for simple self-dealing, but self-dealing and bribery were intermingled in both the indictments and the jury instructions. The jury was told that they could convict on bribery or honest services and yet the previous opinion from this panel stated that this was self-dealing,which is now set aside by Skilling.
Edmondson and Rogow then discussed which counts Rogow felt should be reversed based on Skilling and which should be re-tried with clearer instructions. Rogow wanted counts 8 and 9 gone and counts 4 through 7 re-tried.
Rogow then went on to point out that the jury instructions left out a requirement of finding a quid pro quo in order to convict. He then also hit on the impossibility of an issue advocacy contribution qualifying as a bribe.
Tjoflat then pointed out that the involvement of a campaign contribution in this case means that it affects the First Amendment.
Rogow then went on to say that there is no evidence Scrushy knew that Siegelman had guaranteed the loan to the lottery campaign fund.
Hill interjected that Scrushy knew that the second $250,000 went to the lottery campaign fund at Siegelman’s request.
Rogow pointed out that there is no way to know whether Scrushy made the donation to help education or to please the Governor.
Tjoflat then stated that Scrushy didn’t know from the discussion with Siegelman where the funds would wind up, but that it was explicit that the fund were for getting the seat on the Board.
Rogow countered that there was no explicit quid pro quo and that to accomplish that there would need to be proof of an explicit statement to Scrushy from Siegelman to that effect.
Rogow closed by saying that the conflation of self-dealing and bribery in the jury instructions makes the original verdict on counts 4-7 wrong, because it can’t be known if the jury made the decision on these counts solely on bribery.
Romano for DOJ
Romano started his argument by stating that the defense was not entitled to base its appeal on the fact that an issue-advocacy contribution can’t be honest services fraud now because they essentially waived on that claim in their initial appeal. He then clarified that there was a “perfunctory” mention of it, to which Hill responded that the court appreciates “perfunctory” points at times (presumably as opposed to long-winded discussions).
Romano then went on to state that Skilling has no basis in relation to campaign contributions.
Hill then addressed the point that a contribution can still be bribery if the money eventually gets to the official.
Romano then stated that it isn’t necessary for the official to benefit from the funds.
Hill then asked Romano whether, in the “core cases” cited in Skilling relating to bribery and kickback, there were any where there was no personal enrichment. After a few aborted responses from Romano, Hill then stated that all of those core cases cited by the Supreme Court did involve personal enrichment.
Tjoflat then got into the issue of how it can be inferred that there is personal enrichment if the one paying doesn’t know whether there is enrichment. He then stated that the seller wouldn’t be selling if there were no personal enrichment, and so that is how the inference is made. He then asked Romano whether this is a permissible inference, but goes on to state that the law says the money doesn’t have to go directly to the pocket if there is an inference of benefit.
Tjoflat seemed to show some frustration here that Romano wouldn’t understand that the crime is as bad no matter where the money goes because of the permissible inference. He then states that the Siegelman side says the inference is not permissible.
Edmondson then offered that a section 666 violation is bribery and is good enough to trigger honest services as well. He then went on to say that the Supreme Court tried to cure the vague part of the statute, so that now the government must show a pre-McNally consensus bribe or kickback. He said that he is concerned that the government has a good bribery case but can’t get to honest services because it doesn’t fit pre-McNally bribery. He then asked Romano if you can get a good conviction for bribery under 666 but not on honest services.
Romano replied that there may be a sliver of space in the mens rea requirement. He said the intent to deceive is stronger for bribery.
Tjoflat then quoted this passage from the Skilling opinion “As to fair notice, ‘whatever the school of thought concerning the scope and meaning of’ §1346, it has always been ‘as plain as a pikestaff that’ bribes and kickbacks constitute honest-services fraud” and used that to state that the common law sense of bribery and kickbacks “come through the statute” (see page 48 of the Skilling decision pdf).
Romano essentially continued the quotation , where it goes on to state “the statute’s mens rea requirement further blunts any notice concern”.
Edmondson then broke in to observe that Scrushy’s counts 8 and 9 are implicated by this portion of Skilling, and that this is strong for Scrushy.
Romano said something about how in these counts we get self-dealing and then bribes, but I was distracted by a distinct giggle from a member of the defense team sitting behind me in the gallery.
Edmondson asked if there should be a new trial on counts 8 and 9 since they weren’t tied to bribery only.
Romano replied that the jury could have convicted on bribery alone since they were given instruction to find intent to alter official action in order to convict. He said the jury had to find that the mailings were undertaken for the reason to defraud and that the subsequent approval of the hospital project gave strong evidence of bribery.
Edmondson asked if this is bringing in another bribe at another time, still in the case but not involving Siegelman. Is this using two alternative bribes to find guilt where one might not be good?
Romano’s reply referred the panel to the jury instructions.
Tjoflat asked if was mentioned to the jury in final arguments.
Romano replied that they argued bribe in the closing arguments. Counts 6 and 7 not based on bribery theory. CON Board seat influential to HealthSouth in subsequent meetings of board. Counts 3 and 4: Skilling has no impact here, section 1346 only; from Supreme Court discussion, Skilling says section 666 for scope of bribery.
Edmondson stated that the cases cited by DOJ were personal campaign contributions, and not issue advocacy contributions and that worries him. He then launched into a long hypothetical where a governor gets elected, says we must have better education and it will take a lottery to fund it. Governor says he knows that is offensive to some, but he will push for it. He then puts out word that he has the ability to make a number of appointments and that in doing so, he will take into account who stands by him. He states that you must send money to get a position. Money flows in and people get positions.
Romano replied that that isn’t a crime, that there has to be a specific agreement to exchange things of value.
Hill asked if it is required that the Governor get a personal pecuniary benefit.
Romano replied that it was shown because of the loan guarantee.
Hill then reminded that the first payment was before the loan guarantee. He also said that the agreement is the crime, but there is no loan or guarantee at the time the agreement was made. He then asked if there were any other contributions for bribery.
Romano said no, but it doesn’t matter.
Hill said Siegelman wasn’t still looking for votes when the agreement was made. He then said “This whole field runs smack into the First Amendment”, and that he could not convict under Edmondson’s hypothetical above.
Romano replied that the hypothetical is a far cry from the evidence in this case.
Heldman opened rebuttal time by going into detail of the conversation between Baily and Siegelman after the July 99 meeting between Scrushy and Siegelman.
Tjoflat asked if Heldman was now making the argument that the evidence is not sufficient to show an agreement.
Hill joined in, asking if this is a “wink, wink, nudge, nudge” level of agreement. He then calls the agreement “pretty explicit”.
Heldman responded that Hill was using the “wink, wink, nudge, nudge” as a metaphor to get around the lack of evidence. He went on to note that the discussion between Siegelman and Scrushy was months before the lottery referendum and months before the loan guarantee and therefore it can’t be bribery, but the government says that doesn’t matter.
Heldman continues that getting section 666 coverage for these actions has the same problem as honest services because never has Congress dealt with campaign contributions and so the “line” is not defined. Congress should be driving this, not the courts.
Heldman then stated that he read in the Washington Post that ambassadorships are getting more expensive, that it takes bundling of a million dollars to get one, and yet in this courtroom we are told that is probably criminal.
Rogow started his rebuttal time by saying that we can’t speculate on what the jury would have done with proper instructions.
He also called for Scrushy’s release from jail; he has been in prison 43 months and has 18 months left on his sentence. He said Scrushy would no longer be a flight risk.