US Anticorruption Policy in a Trump Administration Revisited: An Evaluation of Last Year’s Doom-and-Gloom Predictions

Almost exactly one year ago, the day after the U.S. presidential election, I published a deeply pessimistic post about the likely future of U.S. anticorruption policy under a Trump presidency. As I acknowledged at the time, “the consequences of a Trump presidency are potentially so dire for such a broad range of issues–from health care to climate change to national security to immigration to the preservation of the fundamental ideals of the United States as an open and tolerant constitutional democracy–that even thinking about the implications of a Trump presidency for something as narrow and specific as anticorruption policy seems almost comically trivial.” That statement is, alas, still true. But what about the impact on anticorruption specifically? In my post last year, I made a bunch of predictions about the likely impact of a Trump presidency on corruption, anticorruption, and related issues. What did I get right and where did I go wrong?

This may seem a bit self-indulgent, but I think it’s often useful to go back and assess one’s own forecasts, not only in the interests of accountability and self-criticism, but also because examining where we got things right and, more importantly, where we went wrong can help us do a better job in the future. Of course, one difficulty in assessing my own predictions is that many of them concerned longer-term effects that we can’t really assess after one year (really 9+ months). And in some cases the predictions concern things that it’s hard to assess objectively. But it’s still a useful exercise. So, here goes: Continue reading

Did the McDonnell Decision Legalize Putting Public Officials on Retainer? Menendez’s Challenge to the “Stream of Benefits” Theory

In my post two weeks ago, I argued that in order to assess whether the U.S. Supreme Court’s decision in the McDonnell case would have a major impact on public corruption prosecutions—and in the slightly-hyperbolic words of some commentators, whether the decision “legalized public corruption”—the case to watch is the trial of New Jersey Senator Bob Menendez. Since most of the case law coming out of the McDonnell decision has focused on the definition of “official acts” in the context of quid pro quo bribery, many of those watching the Menendez trial expected it to center on how the court interpreted “official acts,” and whether Menendez’s actions qualified. But the case took an unexpected twist: the same day I published my post, Judge William Walls zeroed in on McDonnell’s effect on the prosecution’s stream of benefits theory of corruption—a key part of the government’s case.

According to the “stream of benefits” theory of corruption, prosecutors can establish an implicit quid pro quo by showing that a series of bribes were made to keep an official “on retainer,” so the donor can benefit from the official’s service as needed. In other words, on this theory, the government does not need to connect a specific individual gift to a specific individual act. Instead, the government can show that the private party provided a series of payments or gifts to the public servant over time, in exchange for the public servant being “on call” to perform official acts in return as needed. On this theory, the specific official act (the “quo”) doesn’t need to be known or contemplated at the time of the bribe (the “quid”). In Menendez, prosecutors invoked that theory, and attempted to show that the many favors Dr. Salomon Melgen did for Senator Menendez over a period of several years—such as rides on his private plane and trips to luxury resorts in the Caribbean—were offered in exchange for a series of actions Menendez took to lobby the executive branch on Dr. Melgen’s behalf. (The government alleges other charges against Menendez, such as making false statements on financial disclosure forms related to the bribery, but the stream-of-benefits bribery allegations are the heart of the case.)

Senator Menendez’s defense team—drawing on an argument developed in a Cato Institute reportmoved to dismiss the case, arguing that McDonnell narrowed the scope of “official act” so much so that the public official must agree to perform a “specific and focused” act rather than a “broad policy objective,” meaning that the theory that a public official is kept “on retainer” in exchange for a series of favors cannot stand. Judge Walls said he was not sure that the stream of benefits theory was still viable after the McDonnell ruling, and asked the parties to brief the issue over the weekend, even saying to the DOJ lawyers that “if stream of benefits still lives, then you’ve got a chance.” Commentators accordingly rang the alarm bells, worried what extending McDonnell this far would mean for public corruption cases (see here and here).

Judge Walls eventually ruled last Monday that McDonnell did not prevent prosecutors from arguing a stream of benefits theory, concluding instead that the issue of whether there was a quid pro quo was a question of fact for the jury to decide. This was the right decision. Indeed, it’s troubling that the judge took the issue as seriously as he seemed to, as the idea that a fair reading of McDonnell requires outright rejection of the stream of benefits theory seems farfetched. Continue reading

To Gauge McDonnell’s Impact, Menendez—Not Skelos or Silver—Is the Case To Watch

In June 2016, the United States Supreme Court vacated the conviction of former Virginia Governor Bob McDonnell. McDonnell had been convicted for accepting loans, gifts, vacations, and other valuable items from a businessman. In return, Governor McDonnell allegedly promised or performed a number of “official acts,” mostly in connection with trying to help the businessman get state government support for a nutritional supplement his company was developing. The Supreme Court vacated the conviction on the grounds that the trial court improperly instructed the jury on what conduct could count as an “official act” (the “quo” in a quid pro quo) under the federal bribery statute. In particular, the trial court had instructed the jury that “official acts” could include things like helping the businessman by arranging meetings with state government decision-makers, hosting an event to promote his business, or suggesting that subordinates speak to him. The Supreme Court ruled that this definition of “official act” was too broad, since it encompassed almost any act a government official takes.

How much did McDonnell change the landscape for federal corruption prosecutions in the United States? Some worry that it has already had a large and unfortunate impact, and point to recent developments in New York: Last July, a little over a year after the McDonnell decision, a federal appeals court relied on McDonnell as the basis for vacating the conviction of Sheldon Silver, the former New York State Assembly Speaker who was found guilty in 2015 for taking millions in payments in return for supporting legislation and directing grants that helped the payers. And just last month, another panel of that appellate court also relied on McDonnell in vacating the conviction of former New York State Senate Majority Leader Dean Skelos, who was convicted in 2015 (along with his son Adam) for bribery, extortion, and conspiracy. According to prosecutors, Skelos had promised votes and taken actions benefitting three companies in exchange for providing his son with consulting fees, a job, and direct payments.

Skelos’ and Silver’s convictions were seen as a victory for federal prosecutors, and a much-overdue effort to clean up the notoriously corrupt New York state government. Many commentators pointed to the recent appellate court rulings vacating those convictions as evidence of McDonnell’s broad and malign effects on efforts to clean up corruption (see, for example here , here, and here). But while the vacations of these convictions are a setback for anticorruption advocates, they do not actually reveal much about the reach of McDonnell, nor are they likely to materially change the fates of Skelos and Silver. The much more important case to watch—the one that will be a better indicator of McDonnell’s long-term impact— is the trial of New Jersey Senator Robert Menendez. Continue reading

Guest Post: What the McDonnell Ruling Means for Future Corruption Prosecutions

Ziran Zhang, an associate at Burnham & Gorokhov, PLLC, a Washington D.C. law firm, contributes the following guest post:

The Supreme Court’s decision last month in United States v. McDonnell has raised questions about the continued vitality of public corruption prosecutions in the United States. Some observers, including Professor Stephenson, pointed out that the decision itself was cast in narrow terms, and may not make a big difference to most public corruption cases.  I respectfully disagree: McDonnell created an important substantive rule of law that will have a lasting impact, and this impact is apparent when one applies McDonnell’s holding to another high-profile public corruption case—the prosecution of former New Jersey Senator Robert Menendez.

To prove a bribery offense, the government must show (among other things) that the public official promised an official act, defined further as a “decision or action” on a “question or matter” (or cause, proceeding, or suit). A “question or matter,” the McDonnell opinion holds, must be a “formal exercise of government power” that is “specific” and “concrete.” As for a “decision” or “action,” it can be direct (such as when an official issues an order or makes a decision) or indirect (such as when an official “exerts pressure” or “gives advice” to another official.) McDonnell left substantial uncertainty over what counts as “exerting pressure” or “giving advice.”  As Professor Stephenson’s post points out, pressure is inherent from any kind of contact between a subordinate and an official in high office, but in McDonnell the Supreme Court quite clearly rejected that view, indicating that something more is required.

So, how does the McDonnell holding affect the prosecution of Senator Menendez? The facts of the Menendez prosecution are remarkably similar to those of the McDonnell case. According to the indictment, Senator Menendez had a longstanding friendship with Dr. Salomon Melgen. Melgen gave Menendez gifts, such as free flights, luxury hotel stays, and money to various political campaigns benefiting Menendez; Menendez returned the favors in various ways: Continue reading

Senator Menendez and the Great Speech or Debate Clause

The corruption allegations against Senator Robert Menendez (D-NJ) have the hallmarks of a classic Capitol Hill scandal. The Department of Justice’s Public Integrity Section indicted Senator Menendez last spring for allegedly using his official position to promote the business and personal interests of his friend and long-time donor Dr. Salomon Melgen, a Florida ophthalmologist. According to the allegations, Dr. Melgen provided Senator Menendez with lavish trips to Florida, Paris, and the Dominican Republic, as well as political contributions to allies. In exchange, Senator Menendez allegedly interceded with immigration authorities to help Dr. Melgen secure visas for his foreign girlfriends, sought to influence an administrative enforcement action against Dr. Melgen for $8.9 million in Medicare overbilling, and pressured the Executive Branch to intervene in Dr. Melgen’s contract dispute with the Dominican Republic.

Unsurprisingly, this legal fight has been ugly. Senator Menendez and his legal team have accused the prosecution of gross misconduct in the grand jury investigation, of “misapplying” and “making up from whole cloth” certain legal standards, and “disparaging defendants’ motives and defense counsel.” The prosecution, for its part, has accused the Senator’s camp of deploying “vituperation” instead of substance and of advancing “false factual premises and specious legal reasoning.”

The latest iteration of this saga is taking place at the appellate level, where the Third Circuit recently heard oral arguments on Senator Menendez’s assertion that his actions on behalf of Dr. Melgen are entitled to immunity under the U.S. Constitution’s “Speech or Debate” Clause (an argument the trial court rejected). The Speech or Debate Clause provides that “for any Speech or Debate in either House, [Members of Congress] shall not be questioned in any other Place.” Like many legislative immunity clauses in other countries, the Speech or Debate Clause was born in part out of a desire to protect legislators from political prosecution for the views they express when legislating, and to encourage free and informed debate.

U.S. courts have interpreted the Clause quite generously over the years, reading it to cover not only actual speeches and debates, but also other “legislative acts” (such as voting on legislation, authorizing an investigation by a Congressional Committee, preparing reports, and holding hearings). Senator Menendez, however, argues for an even broader understanding of the conduct that qualifies as “legislative acts” shielded by the Clause. These arguments should be rejected. Not only are Senator Menendez’s claims legally dubious under existing precedents, but, if accepted, they would also hamstring the prosecution of classic quid pro quo corruption.

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