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United States v. Gilbert

United States District Court, N.D. Alabama, Southern Division

May 4, 2018




         The court has for consideration the Defendants' joint motion to dismiss the indictment. Doc. 55. The Defendants maintain that the alleged conduct-that they bribed a state legislator to take actions opposing the EPA's proposal to expand a Superfund site and add it to the National Priorities List-does not constitute honest services fraud or federal program bribery, and that the indictment violates the First Amendment and the rule of lenity. Doc. 55. For the reasons stated below, the motion is due to be denied.


         An indictment or information “must be a plain, concise, and definite written statement of the essential facts constituting the offense charged.” Fed. R. Crim. P. 7. It “must contain the elements of the offense intended to be charged, and sufficiently apprise the defendant of what he must be prepared to meet.” United States v. Bobo, 344 F.3d 1076, 1083 (11th Cir. 2003) (internal quotations omitted). Defendants may move to dismiss an indictment when the facts alleged “fail[] to state an offense” as a matter of law. Fed. R. Crim. P. 12(b)(3(B)(v). “In ruling on a motion to dismiss for failure to state an offense, a district court is limited to reviewing the face of the indictment and, more specifically, the language used to charge the crimes.” United States v. Sharpe, 438 F.3d 1257, 1263 (11th Cir. 2006) (emphasis in original). Courts must view the allegations “in the light most favorable to the government” and may not dismiss an indictment “on a determination of facts that should have been developed at trial.” United States v. Torkington, 812 F.2d 1347, 1354 (11th Cir. 1987).


         In September 2013, the EPA notified five companies[1] that it was investigating their role in pollution around the 35th Avenue Superfund Site. Doc. 1. A year later, the EPA granted a petition from an environmental advocacy group, GASP, to assess whether to expand the Site into surrounding areas. Id. The EPA also proposed adding the Site to the National Priorities List (“NPL”), [2] potentially subjecting the companies to millions of dollars in cleanup costs. Id. In response to these proposals, the Governor of Alabama designated the Alabama Department of Environmental Management (“ADEM”) as the state's representative on issues concerning the Site. Id. ADEM is a state agency charged with implementing and administering environmental programs, and it acts under the umbrella of the Alabama Environmental Management Commission (“AEMC”), which selects ADEM's director and develops the state's environmental policies.[3] Id. During the EPA's public comment period in January 2015, ADEM opposed adding the Site to the NPL and voiced its intent to request a formal review under the EPA's issue resolution process if the EPA did not withdraw its proposal. Id.

         The indictment alleges that a conspiracy began in 2014, when David Roberson, who was the Vice President of Government and Regulatory Affairs of one of the five companies under investigation, along with Joel Gilbert and Steven McKinney, partners at a local law firm and chief legal counsel for Roberson's employer on environmental matters, purportedly hatched a plan to avoid or reduce the company's potential exposure to EPA assessed cleanup costs. Id. Allegedly, the Defendants enlisted the help of then-Alabama state representative Oliver Robinson, who agreed to harness his influence and take specific actions opposing the EPA's proposal, in return for monthly payments of $7, 000 to his charitable organization, the Oliver Robinson Foundation. Id. To conceal the source and purpose of the money, the Defendants purportedly funneled many of the payments to the Foundation through a shell corporation they created, Alliance for Jobs and the Economy (“AJE”), which also received contributions from other entities involved in the EPA investigation. Id. In total, the Defendants allegedly facilitated $360, 000 in payments to Robinson's Foundation.

         Part of the alleged agreement entailed an ongoing communications campaign, whereby Robinson and his Foundation “communicated . . . opposition to [the] EPA's actions to the residents of north Birmingham as directed by [the Defendants] through an organization formed for that purpose called Get Smart Tarrant.” Id. Allegedly, the Defendants also instructed Robinson to meet with EPA officials and GASP, secretly record the meetings, and propound the Defendants' talking points. Id. The Defendants also allegedly directed Robinson to deliver a letter-ghostwritten by the Defendants and printed on Robinson's official Alabama House of Representatives letterhead-to the chair of AEMC requesting permission to appear before the agency to air his concerns with the EPA's proposal. Id. In private, however, Robinson expressed reservations to the Defendants about appearing before AEMC. Id. These reservations purportedly led the Defendants and Robinson to negotiate a formal written agreement between Robinson's Foundation and McKinney and Gilbert's law firm. Id. Allegedly, a few days after the Defendants directed the law firm to promptly issue a $14, 000 check to his Foundation, Robinson and the Defendants executed a final written agreement, which contained a provision requiring confidentiality. Id. The next day, Roberson's employer paid the law firm $14, 000, purportedly to reimburse the law firm for the money it had paid to Robinson's Foundation. Id.

         Allegedly, after multiple days of preparation with the Defendants, Robinson appeared before AEMC and ADEM on February 20, 2015. Id. During his presentation, Robinson purportedly stated that calls from his constituents caused him, “as the vice chairman of the Jefferson County House delegation, to do some research on the Superfund designations and the NPL listings” and that he had “yet to see any information that shows . . . that this area should be designated as a Superfund site, not to mention being put on the NPL listing.” Id. He also expressed concerns that the residents in and around the Site would not want “to live in a dump, ” with the attendant decline in property values, and warned of “decades of litigation” the proposal would create because “there have been no reports that these [five companies] are culpable in any way.” Id. Robinson accordingly requested that AEMC try to convince the EPA to narrow the list of potentially responsible parties. Id. Robinson followed up two weeks later when he wrote a second letter on his official letterhead-again ghostwritten by the Defendants-requesting information about the Site from the ADEM Director and AEMC members. Id. Robinson forwarded the ADEM Director's response to the Defendants. Id.

         Finally, the Government alleges that in May 2015 the Defendants drafted a joint resolution urging “the Attorney General and ADEM to combat the EPA's overreach.” Id. Robinson, then a member of the Alabama House of Representatives' Rules Committee, allegedly voted in committee to advance the joint resolution to the floor. The resolution was ultimately adopted by the House and the Senate, and signed by the Governor. Id.

         During the course of his advocacy against the EPA proposal, Robinson never disclosed the nature of his relationship with the Defendants. Id. Robinson was subsequently indicted and has pleaded guilty in this court to conspiracy, bribery, honest services wire fraud, three counts of wire fraud, and tax evasion. See United States v. Robinson, 2:17-cr-00267-AKK-TMP. Thereafter, the Government charged Roberson, Gilbert, and McKinney with (1) conspiracy in violation of 18 U.S.C. § 371 (Count One); (2) bribery in violation of 18 U.S.C §§ 666(a)(2) and 2 (Count Two); (3) honest services fraud in violation of 18 U.S.C. §§ 1343, 1346, and 2 (Counts Three-Five); and (4) money laundering conspiracy, in violation of 18 U.S.C. § 1956(h) (Count Six). See doc. 1. The Defendants now move to dismiss the indictment. Doc. 55.

         III. ANALYSIS

         Federal prosecutors enjoy a wide array of statutory options when filing bribery charges, including abstract crimes, such as honest services fraud, which prohibits “depriv[ing] another of the intangible right of honest services.” 18 U.S.C §§ 1343, 1346. Unlike the traditional understanding of fraud, “in which the victim's loss of money or property supplie[s] the defendant's gain, . . . the honest-services theory target[s] corruption [where] the betrayed party suffer[s] no deprivation of money or property; instead, a third party, who ha[s] not been deceived, provide[s] the enrichment.” Skilling v. United States, 561 U.S. 358, 400 (2010). To address vagueness concerns arising from such broad language, the Supreme Court has narrowed the scope of Section 1343 and other similar anticorruption laws over the years. In United States v. Sun-Diamond Growers of California, the Court interpreted the federal gratuities statute, 18 U.S.C. § 201(c), to require a “link” between the thing of value conferred and the official act. 526 U.S. 398, 406-14 (1999) (noting the “peculiar results” of a broader reading of § 201(c), such as criminalizing “token gifts to the President based on his official position and not linked to any identifiable act-such as the replica jerseys given by championship sports teams each year during ceremonial White House visits”). Subsequently, the Court limited Section 1343 to reach only “bribe-and-kickback” schemes. Skilling, 561 U.S. at 408-10 (rejecting the argument that “undisclosed self-dealing by a public official or private employee” constitutes honest services fraud under §§ 1343, 1346).

         Significant here, the Court further circumscribed the reach of bribery law in McDonnell v. United States, where it clarified the meaning of an “official act” for purposes of honest services fraud or Hobbs Act extortion. 136 S.Ct. 2355 (2016). There, Virginia Governor Robert McDonnell and his wife accepted roughly $175, 000 in gifts from an individual promoting a nutritional supplement. Id. at 2361-65. In exchange, McDonnell arranged meetings with various state officials, hosted events at the Governor's mansion promoting the product, and encouraged state university officials to study the product's nutritional benefits. Id. The parties agreed at trial that the Government had to show that, in return for the gifts, McDonnell performed, or agreed to perform, “official acts, ” as defined by a different bribery statute, Section 201(a)(3):

[T]he term “official act” means any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official's official capacity, or in such official's place of trust or profit.

18 U.S.C. § 201. The district court instructed the jury accordingly, and further defined “official acts” to include “actions that have been clearly established by settled practice as part of a public official's position, even if the action was not taken pursuant to responsibilities explicitly assigned by law, ” and “acts that a public official customarily performs, ” such as those “in furtherance of longer-term goals” or “in a series of steps to exercise influence or achieve an end.” 136 S.Ct. at 2373. The jury convicted McDonnell of honest services fraud and extortion, and the Fourth Circuit affirmed. Id. at 2366-67.

         The Supreme Court reversed, finding that the district court's definition of “official act” was too broad. The Court created a two-pronged definition of “official act” under Section 201. First, the Government must identify a specific “question, matter, cause, suit, proceeding or controversy” that involves a “formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee.” Id. at 2372-74. The identified question or matter must also be “specific and focused, ” and either currently “pending” or potentially “brought before a public official.” Id. (internal quotations omitted). Second, the Government must prove that the public official either made a decision or took an action “on” that concrete “question, matter, cause, suit, proceeding or controversy, ” or agreed to do so. Id. Such decisions or actions “may include using his official position to exert pressure on another official to perform an ‘official act, ' or to advise another official, knowing or intending that such advice will form the basis for an ‘official act' by another official.” Id. Ultimately, although the Court found McDonnell's conduct “distasteful, ” it held that “setting up a meeting, calling another public official, or hosting an event does not, standing alone, qualify as an ‘official act.'” Id. at 2368-75.

         Relying heavily on McDonnell, the Defendants assert that the indictment: (1) fails to state an offense for honest services fraud under Section 1343; (2) fails to state an offense for federal program bribery under Section 666; and (3) violates the First Amendment and the rule of lenity. Doc. 55. The court addresses these contentions below, viewing the allegations in the light most favorable to the Government. See Torkington, 812 F.2d at 1354.

         A. The indictment sufficiently alleges ...

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