No Swords, But an Absolute Shield: India’s Over-broad Judicial Immunity Against Corruption Prosecutions

Over the past four decades, India’s “activist” higher judiciary (the state High Courts and the federal Supreme Court) has significantly altered the balance of power between branches of government. This has been done by liberalizing the rules on who can petition the court for relief, as well as expanding the scope of the judicial relief that can be provided. Today it is entirely normal for the Court to take up the task of monitoring the execution of government policies as well as the progress of criminal investigations. But this expansion of judicial power has not been matched by a coequal expansion of oversight mechanisms to ensure that judicial power is not abused—a significant problem given the serious corruption problem in India’s courts (see also here). Certain problems with the court system have attracted the attention of both commentators and the Parliament, including the Chief Justice’s unfettered power to assign cases to different judges and the system for appointments and impeachment. Surprisingly, far less attention has been paid to another instance of no oversight over the judicial branch: the doctrine of judicial immunity.

Across countries, judicial officers are conferred broad judicial immunity to allow courts to fearlessly perform their functions. Significantly though, in most countries this protection applies only to acts in furtherance of the “judicial function”; for acts outside that scope, judges are subject to the law just like ordinary citizens. Not so in India. In 1991, the Indian Supreme Court created a rule that no criminal investigation whatsoever could begin against a member of the higher judiciary without first “consulting” the Chief Justice of India (or, if allegations are against the Chief Justice, consulting with any other Supreme Court Justice). According to the Court, this rule was needed to protect judges from “frivolous prosecution and unnecessary harassment.”

Such a broad judicial immunity rule makes no sense, either generally or in the Indian context. While it’s reasonable to prevent a judge from being prosecuted for how she decided a case, it makes no sense to protect her for having murdered somebody, or for taking a bribe. Indeed, in addition to its other obvious problems, this broad judicial immunity rule creates serious difficulties for efforts to fight endemic judicial corruption in India. Continue reading

India’s 2G Spectrum Case: The Scam That Wasn’t?

It all started in May 2009 with a report filed by an NGO, Telecom Watchdog, with India’s Central Vigilance Commission. The NGO claimed that there were gross irregularities, likely due to corruption, in the allocation of licenses to operators for the 2nd Generation mobile communication standard spectrum (2G spectrum for short). By October 2009, India’s premier investigating agency, the Central Bureau of Investigation (CBI), had opened an investigation into the allegations, and in November 2010, the Comptroller and Auditor General of India estimated the losses to the government from the alleged misconduct at a whopping US$29 billion. Indian media called it the “biggest scam in the history of Independent India.” Time Magazine put it just behind Watergate as the second worst case of abusing executive power.

Petitions were filed in the Supreme Court of India pressing for cancelling the allocation and making sure that those behind the corruption would be held responsible. In 2012, the Supreme Court obliged, canceling all 122 licenses and imposing huge fines. The Court declared that the then-Minister for Communications and Information Technology, A. Raja, had used an inappropriate allocation procedure (first-come-first-served rather than an auction) to “favor some of the applicants … at the cost of the exchequer.” In an unprecedented move, the Court also ordered the creation of a “Special Court” to try the cases, and modified regular criminal procedure by curbing intermediate challenges, in order to ensure a speedy trial. The first case was instituted against the former Minister, senior bureaucrats, and prominent businessmen for conspiring to rig the allocation process and cheat the government of revenue.

On December 21, 2017, the Special Court announced its verdict—and it was not what many had expected: The Special Court acquitted all the accused, declaring that “a huge scam was seen by everyone when there was none,” and that “some people created [the perception of] a scam by artfully arranging a few selected facts and exaggerating things beyond recognition to astronomical levels.” The Court also found that, notwithstanding the earlier 2010 report (which others had already suggested was methodologically problematic), the actual losses to the government were marginal at most.

Many commentators were stunned and dismayed by the Special Court’s decision, denouncing it as “shocking” and “flawed.” But after reading the Special Court’s decision, I find myself in agreement with the Special Court’s reasoning. While it’s impossible, in a short blog post, to wade through the merits of the Special Court’s analysis for each of its conclusions, here I want highlight some of the most important arguments in support of the Special Court’s controversial decision. Continue reading

Thoughts from the Menendez Trial: Preventing Corruption from the Start

Last fall’s corruption trial of U.S. Senator Robert Menendez (D-NJ) ended rather anticlimactically, with the presiding judge declaring a mistrial after the jury announced that it couldn’t reach a decision, and the Department of Justice eventually deciding not to retry him. Senator Menendez had been accused of taking donations and gifts from Florida ophthalmologist Salomon Melgen in exchange for advocating for visas for Melgen’s foreign girlfriends, the award of a government contract, and the resolution of a Medicare billing dispute. Plenty of digital ink has already been spilled on the broader implications of the Menendez case for other bribery prosecutions (on this blog here, and elsewhere here and here).

But putting aside the specifics of the case, what caught my eye about the allegations against Senator Menendez was a background feature of U.S. law that seems to have gone largely undiscussed: It’s perfectly legal (and normal) for non-constituents to contribute to political candidates. In other words, even if you are barred from voting for a candidate because you live outside that candidate’s district, you can still express your support by pulling out your checkbook. That lack of constraint on donations seems to invite the very kind of corruption the government alleged in the Menendez case, because it allows a wealthy donor to find and purchase his or her own “personal United States senator.”

I’m certainly not the first person to voice the concern that allowing non-residents to contribute to political candidates may facilitate corruption. Two states—Alaska and Hawaii—have recognized the risk posed by allowing non-residents to contribute to political candidates. They’ve responded by limiting those donations. But in the Lower 48 and in all federal elections, there are no differential limits on contributions from people residing outside the state, so long as they are American citizens or permanent residents. (Alaska’s law is currently facing a First Amendment challenge from an aspiring donor whose gift was returned because the candidate he supported had already reached the out-of-state contribution limits. A federal judge upheld the law as a “closely drawn” effort by the state to prevent “quid pro quo corruption or its appearance,” but the would-be donor has appealed.) Putting aside the constitutional defenses of the sorts of laws that Alaska and Hawaii have adopted (which you can find in the amicus briefs filed in the Alaska case here, here, and here), there are strong policy reasons for limiting contributions by people living outside a state or district—not least because such limits, as the judge in the Alaska case noted, can be a useful tool for preventing corruption or its appearance:

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Is It Time to Amend U.S. Domestic Anti-Bribery Statutes?

Last month’s hung jury in the trial of New Jersey Senator Robert Menendez, coming hard on the heels of appellate court decisions to vacate the convictions of former U.S. Congressman William Jefferson and New York state legislators Dean Skelos and Sheldon Silver, has increased public attention to domestic U.S. anti-bribery laws—and the Supreme Court’s interpretation of those laws. As Professor Zephyr Teachout puts it, the Court, beginning in the 1999 case Sun-Diamond Growers and continuing up through last year’s decision in McDonnell, has steadily “hollowed out” U.S. anti-bribery laws, making it much more difficult to convict “anyone but the most inept criminals.”

Now, some of the recent commentary, particularly on the impact of the McDonnell case, may overstate things a bit. As Maddie pointed out in a recent post, the fact that the Skelos and Silver convictions (and, she might have added, the Jefferson conviction) were vacated in light of McDonnell doesn’t necessarily imply that the conduct alleged in those cases is now legal. Rather, the appellate decisions held that the jury instructions were improperly phrased, and left the door open for a retrial (which will occur in these other cases, even though the government declined to retry McDonnell). And we don’t really know how much of an effect the Supreme Court’s decision in McDonnell or other cases affected the jury’s inability to reach a verdict in Menendez; it’s possible that even with a jury instruction identical to the one found deficient in McDonnell, some of the Menendez jurors would have voted to acquit. All that said, there are certainly good reasons for concern about the seemingly narrow scope of U.S. anti-bribery law.

Some of this blame, as Professor Teachout persuasively argues, can be laid at the feet of the Supreme Court. Indeed, I argued that McDonnell’s conviction should have been affirmed, and criticized the Court’s unanimous decision to vacate it. That said, I do think there’s an argument in favor of the Supreme Court’s ruling in McDonnell, at least if the holding is read narrowly as concerning the phrasing of the jury instructions. Likewise, in Sun-Diamond Growers, the Court’s holding is actually quite plausible as a reading of the unlawful gratuities statute. (The Court held that a conviction under this statute, which prohibits corruptly giving anything of value to a public official “because of any official act” performed by that official, requires the government to show a connection between the gift and a specific official act, rather than relying on the more general claim that the recipient is in a position to make decisions that affect the giver’s welfare. The Court’s interpretation of the statutory language, while contestable, is certainly reasonable.)

Moreover, if we’re looking for an institution to blame for the current state of U.S. anti-bribery law—or to lobby for improvements in that law—the Supreme Court is perhaps not the only target. There’s also the U.S. Congress, which could, and arguably should, amend the hodge-podge of anti-bribery laws to fill some of the gaps that we find in current law, as interpreted by the Supreme Court. After all, though the Court has dropped occasional troubling hints about possible constitutional concerns with a broad reading of the anti-bribery statutes, most of the Court’s rulings in this area, in contrast to the related but distinct campaign finance context, are statutory rather than constitutional. And that means that Congress could conceivably step in to fix the problem. Continue reading

Does the First Amendment Protect Payment for Access?

 As many readers of this blog know, U.S. law on whether (or when) campaign donations can be proscribed by criminal anticorruption statutes is quite complicated, and to some degree unsettled. On the one hand, the Supreme Court has held that campaign contributions are constitutionally protected “speech” under the First Amendment of the U.S. Constitution. On the other hand, U.S. criminal law can and does prohibit campaign donations that are the “quid” in a classic quid pro quo bribery transaction. In other words, it would unconstitutional for the U.S. to prohibit campaign donations to politicians even if such a prohibition is motivated by the generalized worry that politicians might show special solicitude to the interests of their big donors. But it is perfectly constitutional for Congress to prohibit quid pro quo transactions in which a private interest offers a campaign donation as the “quid” in exchange for some “quo.”

It remains an open question, however, what can qualify as the “quo.” Certainly passing legislation, directing federal funding, and securing special regulatory benefits and exceptions would suffice. But what about mere access — an understanding between the donor and elected official that a campaign contribution will get the donor special access to the official? Two recent Supreme Court opinions — Citizens United v. FEC and McCutcheon v. FEC — contain language suggesting that it might be unconstitutional for U.S. law to prohibit an explicit quid pro quo agreement in which a politician offers access in exchange for campaign contributions. According to Citizens United, “[i]ngratiation and access . . . are not corruption,” while McCutcheon cautioned that “government regulation may not target the general gratitude a candidate may feel toward those who support him or his allies or the political access such support may afford” (emphasis added).

Despite this suggestive language, the Supreme Court has not yet had to confront head-on the question of whether the First Amendment protects quid pro quo payment-for-access. The closest it came was last year in United States v. McDonnell (discussed on the blog here, here, and here). In that case, Governor McDonnell helped to arrange meetings between businessman Jonnie Williams and government officials, and accepted personal gifts from Mr. Williams in exchange. By a vote of 7-0, the McDonnell Court reversed the governor’s conviction and construed the federal bribery statute at issue not to cover the governor’s conduct.

But this doesn’t resolve the constitutional question. McDonnell turned on the construction of the existing federal anti-bribery statute, which requires that the “quo” be an “official act,” which the Court construed narrowly as excluding provision of mere access. Moreover, McDonnell was not a First Amendment case, as the alleged bribes were not campaign contributions. Nonetheless, the Court did discuss the concept of corruption in a manner reminiscent of its opinions in Citizens United and McCutcheon. According to McDonnell: “[C]onscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. . . . The Government’s position [that McDonnell violated the law] could cast a pall of potential prosecution over these relationships if [a donor] had given a campaign contribution in the past . . . . Officials might wonder whether they could respond to even the most commonplace requests for assistance, and citizens with legitimate concerns might shrink from participating in democratic discourse.” Furthermore, McCutcheon — which was a First Amendment case — defined the sort of corruption that could justify restrictions on campaign donations as “a direct exchange of an official act for money” (emphasis added), which might imply that, at least in the campaign donation context, McDonnell’s reading of the anti-bribery statute is constitutionally required.

But is that right? Separate from the question of whether Congress should criminalize payment-for-access, and from the question of whether Congress has in fact done so in the existing federal anti-bribery statutes, is the question of whether Congress could criminally proscribe payment-for-access if it wanted to. In other words, is payment-for-access constitutionally protected? Though some of the Supreme Court’s recent language has suggested such a conclusion, I believe that proposition is wrong, for three reasons:

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Cash Crunch: How Will India’s Supreme Court Respond to Modi’s Radical Move?

Last November 8th, the same day the United States elected a kleptocrat to its highest office, an executive on the other side of the world—Indian Prime Minister Narendra Modi—launched what Larry Summers called “the most sweeping change in currency policy that has occurred anywhere in the world for decades.” Prime Minister Modi’s surprise “demonetization” drive gave citizens fifty days to exchange all 500 and 1000 rupee notes (valued at about 8 and 15 USD respectively). Modi’s radical move, which will remove approximately 86% of all currency in circulation, is an attempt to combat endemic petty corruption, money laundering, terrorist financing, and tax   evasion (only 2% of Indians pay income tax). Prime Minister Modi was elected on an anticorruption platform in 2014, and pledged during his campaign to target hidden cash (so-called “black money”). Yet the demonetization campaign came as a surprise. Indeed, it probably had to be a surprise, lest those hiding fortunes in cash would have been able to prepare for the policy change.

While the Indian public generally supports aggressive anticorruption efforts, it would be hard to exaggerate the disruption resulting from demonetization. The real estate and wedding industries run largely on cash, as do most small businesses. And the demonetization program has hit regular citizens hard: People have been waiting in lines for hours to exchange their cash, which can be especially difficult for the four-fifths of women who don’t have a bank account. In the short term, consumption, the stock market, and growth forecasts have all plummeted and the agricultural sector is expected to suffer as well. Prime Minister Modi acknowledged the campaign would cause pain for many honest people, but believed it was worth it, stating that black money and “corruption are the biggest obstacles in eradicating poverty.” (Since then, the official justification for the campaign appears to have shifted to an attack on the cash economy as a whole, rather than a campaign against black money specifically.)

The fate of the demonetization program now lies with India’s judiciary: Continue reading

Guest Post: Fixing the Federal Definition of Bribery–From “Intent to Influence” to “Illegal Contract”

Albert W. Alschuler, the Julius Kreeger Professor Emeritus at the University of Chicago Law School, contributes the following guest post:

In the United States, the principal federal criminal statute prohibiting the bribery of federal officials, 18 U.S.C. § 201(b), forbids “corruptly” offering or giving anything of value to an official “with the intent to influence any official act.” Yet, as I argue in a recent article, defining bribery primarily in terms of the payer’s “intent to influence” is overbroad. The phrase “intent to influence” not only seems on its face to reach common and widely accepted practices; it also invites speculation about motives and may produce prosecutions and convictions based on cynicism.

There’s an alternative: The American Law Institute’s 1962 Model Penal Code defines bribery as offering, giving, soliciting or accepting any pecuniary benefit as “consideration” for an official act. As a Texas court said of a state statute modeled on this provision, the Code “requir[es] a bilateral arrangement—in effect an illegal contract to exchange a benefit as consideration for the performance of an official function.” More than two-thirds of the states now embrace an “illegal contract” definition of bribery; the federal government and the remaining states should follow suit. Continue reading