United States v. Roland Pugh Construction, Inc. ( 2010 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
Nos. 07-11476, 07-11644, ELEVENTH CIRCUIT
MAY 12, 2010
08-10428, 08-10433
JOHN LEY
________________________
CLERK
D. C. Docket Nos. 05-00544-CR-LSC-TMP
05-00061-CR-2-RBP-TMP
05-00542-CR-2-RDP-PWG
05-00545-CR-LSC-PWG
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JEWELL C. “CHRIS” MCNAIR,
JACK W. SWANN,
BOBBY J. RAST,
DANIEL B. “DANNY” RAST,
RAST CONSTRUCTION, INC.,
FLOYD W. “PAT” DOUGHERTY,
F.W. DOUGHERTY ENGINEERING & ASSOCIATES, INC.,
GRADY R. “ROLAND” PUGH, SR., and
ROLAND PUGH CONSTRUCTION, INC.,
Defendants-Appellants.
________________________
Appeals from the United States District Court
for the Northern District of Alabama
_________________________
(May 12, 2010)
Before CARNES, HULL and ANDERSON, Circuit Judges.
HULL, Circuit Judge:
This consolidated appeal arises from five bribery and public corruption cases
relating to the $3 billion repair and rehabilitation of a sewer and wastewater
treatment system in Jefferson County, Alabama. A 127-count Second Superseding
Indictment (the “Indictment”) charged sixteen defendants (eleven individuals and
five corporate firms) with conspiracy to commit bribery, substantive offenses of
bribery, honest services mail fraud, mail fraud, and obstruction of justice. Nine
defendants appeal their convictions here. Three of those nine defendants appeal
their sentences.
Specifically, the nine defendant-appellants are: two former County officials,
three corporate contractors, and four individuals who owned these respective
contractors. The two defendant County officials were in charge of the sewer
program and received hundreds of thousands of dollars worth of bribes from the
defendant contractors. In many cases, the contractors disguised these payments by
2
altering invoices or hiding costs within their accounting systems. In turn, the
defendant contractors obtained hundreds of millions of dollars worth of payments
on construction and engineering contracts with the County. The County officials
approved the contractors’ pay requests, change orders, time extensions, and/or
requests for field directives, all of which financially benefitted the defendant
contractors.
After review and oral argument, we conclude the evidence at the trials
overwhelmingly established the defendant-appellants’ guilt, and they have shown
no reversible error in the district courts’ rulings, pre-trial or in the trials, in the
cases consolidated on appeal. Thus, we affirm all of the defendant-appellants’
convictions except Roland Pugh Construction, Inc.’s conviction on Count 75,
which is barred by the statute of limitations. We also affirm Jewell C. “Chris”
McNair’s sentence in full. We affirm Jack W. Swann’s sentence in part but
remand for further proceedings as to the amount of the fine. As to the sentence of
Roland Pugh Construction, Inc., we (1) affirm the district court’s findings of fact
as supported by the record; and (2) conclude there was no error in the district
court’s calculations under the sentencing guidelines; but (3) in light of the reversal
of its Count 75 conviction, we vacate its sentence and remand for resentencing
without Count 75.
3
I. BACKGROUND
A. Jefferson County Officials
The defendant County officials implicated in the bribery scandal are:
Defendant McNair: Jewell C. “Chris” McNair (“McNair”) was a Jefferson
County Commissioner. McNair was responsible for overseeing the operation of
the Jefferson County Environmental Services Division (“JCESD”), which included
the sewer system.1
Defendant Swann: Jack W. Swann (“Swann”) was the Director of the
JCESD.
Defendant Wilson: Ronald K. Wilson (“Wilson”) was Chief Civil Engineer
for the JCESD and served on the Product Review Committee (“PRC”).2 After
leaving the JCESD in 1999, Wilson formed his own firm, Civil Engineering
Design Services, Inc. (“CEDS”).
1
The repair and rehabilitation project, which is the subject of this appeal, was required
under the terms of a consent decree between Jefferson County and the U.S. Environmental
Protection Agency. The consent decree was entered into as a settlement of claims brought by the
U.S. Justice Department in 1994 against Jefferson County for violations of the Clean Water Act,
and it required Jefferson County to repair and upgrade dilapidated sewer lines and wastewater
treatment plants that were overflowing and leaking sewage into local watersheds. The JCESD
initially estimated the work would cost County ratepayers $1.2 to 1.5 billion over the next
decade. The actual costs were closer to $3 billion.
2
The PRC was a technical committee that reviewed materials, specified the products that
could be used on the sewer project, and qualified contractors for certain kinds of work on the
project. During the relevant time period, the PRC had between 10 and 11 members. Among
them were defendants Wilson and Barber, and co-conspirators Harry Chandler, Donald Ellis, and
Larry Creel.
4
Defendant Barber: Clarence R. Barber (“Barber”) was Chief Construction
Maintenance Supervisor for the JCESD and served on the PRC.
B. Contractors
These defendant corporate firms and individuals had either construction or
engineering contracts with the JCESD and were implicated in the bribery scandal.
Pugh defendants: Roland Pugh Construction, Inc. (“PUGH”); Grady Roland
Pugh, Sr. (“Roland Pugh”), founder, board chairman, and 70% owner of PUGH;
and Joseph E. “Eddie” Yessick (“Yessick”), President and 10% owner of PUGH.
PUGH had $178 million in sewer construction contracts with Jefferson County
between August 1999 and January 2002. PUGH was a “dig-and-replace”
contractor.3
Rast defendants: Rast Construction, Inc. (“RAST”); Bobby J. Rast (“Bobby
Rast”), President and co-owner of RAST; and his brother Daniel B. Rast (“Danny
Rast”), Vice President and co-owner of RAST. RAST had about $100 million in
sewer construction contracts with Jefferson County during the same period. RAST
was another “dig-and-replace” contractor.
3
A “dig-and-replace” contractor traditionally digs up broken sewer pipes, replaces them,
and paves over the repair. Some dig-and-replace contractors have the capacity to perform
“cured-in-place” work. The “cured-in-place” process involves the relining of cracked pipes with
a cement product that cures inside the pipes and seals the cracks from within. None of the
defendants here performed cured-in-place work. However, PUGH and Defendant Rast
Construction, Inc. entered into joint ventures with contractors who could perform cured-in-place
work, as discussed later.
5
Dougherty defendants: F. W. Dougherty Engineering & Associates, Inc.
(“FWDE”) and Floyd W. “Pat” Dougherty (“Dougherty”), President and owner.
FWDE received $11.4 million in no-bid engineering contracts with Jefferson
County during the same period.
USI defendants: US Infrastructure, Inc. (“USI”); Sohan Singh (“Singh”),
President of USI; and Edward Key (“Key”), Vice President of USI. USI received
about $50 million in engineering contracts with Jefferson County between 1999
and 2003.
C. Co-conspirators
Five other individual co-conspirators pled guilty and testified for the
government in one or more of the five trials:
Grady Pugh: Grady Roland Pugh, Jr. (“Grady Pugh”) was CEO and 10%
owner of PUGH. He is the defendant Roland Pugh’s son.
Chandler: Harry T. Chandler (“Chandler”) was Assistant Director of the
JCESD and served on the PRC.
Ellis: Donald R. Ellis (“Ellis”) was an engineer for the JCESD and Chairman
of the PRC.
Creel: Larry P. Creel (“Creel”) was a Maintenance Supervisor for the
JCESD and served on the PRC.
6
Dawson: William H. Dawson (“Dawson”) was the owner of Dawson
Engineering, Inc. (“Dawson Engineering”), which received at least $20 million
worth of no-bid engineering contracts from Jefferson County.
While the Indictment alleges certain conduct by these five individuals as co-
conspirators, they are not named defendants in the Indictment at issue in this
appeal.
D. The Indictment
The Indictment contained 127 counts.4 Six of the counts charged a bribery
conspiracy. Specifically, Counts 1 (against McNair and the Pugh, Rast, and
Dougherty defendants), 32 (against McNair and the USI defendants), 50 (against
McNair and the USI defendants), 51 (against Swann and the Pugh, Rast, and
Dougherty defendants, except for Roland Pugh), 75 (against Wilson and PUGH),
and 78 (against Barber and the Pugh defendants) charged conspiracy to commit
bribery under 18 U.S.C. §§ 371 and 666.
Counts 2-31, 33-49, 52-74, 76-77, and 79-89 charged one or more
defendants with substantive bribery offenses (or aiding and abetting bribery) under
4
The original indictment was filed on February 7, 2005, and the Superseding Indictment
was filed on July 13, 2005. After the five co-conspirators listed above pled guilty over a period
of several months, the government submitted the Second Superseding Indictment on August 26,
2005, dropping the defendants who had pled guilty. The counts referenced in this opinion are as
numbered in the Second Superseding Indictment.
7
18 U.S.C. § 666. For the most part, these substantive bribery offenses were the
overt acts charged in the conspiracy counts.
Counts 90-101 charged honest services mail fraud under 18 U.S.C. §§ 1341and 1346 against defendants Swann, Yessick, and PUGH. Counts 102-121
charged honest services mail fraud under 18 U.S.C. §§ 1341 and 1346 against
defendants Swann, Wilson, CEDS, FWDE, and Dougherty. Counts 122-124
charged mail fraud under 18 U.S.C. § 1341 against the Dougherty defendants.
Counts 125-127 charged obstruction of justice against certain defendants under 18
U.S.C. § 1503.
Some of these counts were dismissed before trial, and other counts were
dismissed prior to jury deliberations. And some defendants, such as Roland Pugh,
were dismissed from some of the counts that went to the jury. This opinion
addresses only the counts that were actually submitted to the jury.
E. Five Trials
The 127-count Indictment was severed into five separate cases for trial:
McNair (05-061), Swann (05-544), Barber (05-542), Wilson (05-545), and USI
(05-543).5 The McNair trial involved bribes by the Pugh, Rast, and Dougherty
5
Grady Pugh, Chandler, Ellis, Dawson, and Creel testified for the government in the
McNair trial. Chandler, Ellis, and Wilson testified for the government in the Swann trial. Grady
Pugh, Chandler, and Yessick testified for the government in the Barber trial. Grady Pugh and
Chandler testified for the government in the Wilson trial. Chandler, Ellis, and Dawson testified
8
defendants primarily to McNair but also to Chandler and Ellis. The USI trial
involved bribes to McNair by the USI defendants. The other trials involved bribes
to Swann, Barber, and Wilson, respectively.
In the USI trial, defendants USI, Key, and Singh were convicted of, among
other things, conspiracy to commit bribery and substantive bribery offenses for
making payments to defendant Commissioner McNair and the JCESD’s Chandler
and Ellis. This Court affirmed defendants USI, Key, and Singh’s convictions and
sentences in United States v. US Infrastructure, 576 F.3d 1195 (11th Cir. 2009),
cert. denied, __ S. Ct. __, 78 U.S.L.W. 3540 (U.S. Mar. 22, 2010) (No. 09-967).
Defendant McNair entered a conditional guilty plea to Count 32 (conspiracy to
accept a $140,000 bribe from the USI defendants).6 McNair reserved the right to
appeal the district court’s denial of his motion to dismiss Count 32. McNair’s
appeal in the USI case has been consolidated with the present appeal.
F. Nine Parties to This Appeal
This present consolidated appeal involves not only defendant McNair’s
appeal in the USI case but also these defendants’ appeals in the other four trials:
(1) McNair trial: defendants McNair, PUGH, Roland Pugh, RAST, Bobby
for the government in the USI trial.
6
McNair’s motion to dismiss sought dismissal of Counts 32 and 50 (both counts of
conspiracy to commit bribery), arguing under “Wharton’s Rule” that a conspiracy cannot exist as
an offense separate from the substantive offense of bribery (charged in Counts 33-37).
9
Rast, Danny Rast, FWDE, and Dougherty. Defendant Yessick (President of
PUGH) was convicted at trial and does not appeal.
(2) Swann trial: defendants Swann, PUGH, RAST, Bobby Rast, FWDE, and
Dougherty. Defendant Yessick was convicted at trial and does not appeal.
(3) Barber trial: defendant PUGH. Defendants Barber and Yessick pled
guilty and do not appeal.
(4) Wilson trial: defendant PUGH. Defendant Wilson was convicted at trial
and does not appeal.
Albeit from five separate cases, the defendant-appellants raise many of the
same issues. We discuss (1) the evidence in the McNair, Swann, Barber, and
Wilson trials, and (2) the issues commonly raised by the defendants, followed by
(3) certain issues pertaining to particular defendants.
II. THE McNAIR TRIAL (05-061)
The McNair trial, held from April 6 to 21, 2006, involved over $350,000 in
bribes the Pugh, Rast, and Dougherty defendants paid to Commissioner McNair
and $6,600 in bribes they paid to County employees Chandler and Ellis. The
government called 36 witnesses, including Chandler, Ellis, Dawson, Creel, and
Grady Pugh. The defense called 23 witnesses. No named defendant testified.
The government’s witnesses described in great detail the bribes to McNair,
10
Chandler, and Ellis, and how those three County officials financially helped the
Pugh, Rast, and Dougherty defendants in their contracts with and payments from
Jefferson County. Because the defendant contractors in the McNair trial claimed
they paid McNair only out of a long-time friendship and lacked corrupt intent, the
district court admitted certain evidence, under Federal Rule of Evidence 404(b),
about how these same defendants bribed Swann and other County employees in
order to show the defendants’ corrupt intent and common plan. Thus, our
recitation of evidence in the McNair trial covers bribes given not only to McNair
but also to Swann and other County employees.
A. McNair Helps Contractor-Defendants
Jefferson County was governed by five elected Commissioners, each of
whom had a different area of responsibility. Defendant McNair held office as a
County Commissioner from 1996 until his retirement in March 2001. McNair was
responsible for overseeing the JCESD, which included the sewer systems. McNair
had authority to approve pay requests from the sewer construction contractors, to
approve change orders7 increasing the contract price paid to those contractors, to
approve change orders modifying the contract terms in favor of those contractors,
to approve emergency payments to contractors, to select consulting engineers
7
Change orders are contract modifications in the Jefferson County Commission’s Agenda
items.
11
through a no-bid process, and to approve the engineers’ contracts and payments.
Although final approval required the vote of the entire Commission, there was no
evidence that the Commission questioned or disapproved of any pay request or
change order approved by McNair or any selection or award of a contract
recommended by McNair. McNair’s nickname among the contractors was “Big
Man.”
McNair approved payments (in the hundreds of millions of dollars) to the
Pugh, Rast, and Dougherty defendants (the “contractor-defendants”), approved
change orders (in the millions of dollars) benefitting PUGH and RAST, and
approved no-bid engineering contracts (in the millions of dollars) to FWDE, all
while these defendants were paying for materials and labor to expand and renovate
McNair’s photography studio. Each item requiring Commission approval, such as
contract awards or modifications, needed McNair to approve it first and then to put
it on the Commission’s agenda for further approval.8 The sewer construction
contracts were awarded through a sealed bid process and would go to the lowest
8
For example, the December 1999 Commission Agenda shows a modification adding
$1,081,621 (about 28% of the contract value) to a PUGH contract, and a $112,600 contract
award to FWDE. The January 2000 Agenda indicates a modification adding $489,133 to a
PUGH contract. The February 2000 Agendas indicate a modification adding $400,724 to a
RAST contract, a $721,132 contract award to FWDE, and a modification adding $1,377,267 to a
PUGH contract. The March 2000 Agenda indicates a $5,289,002 contract award to PUGH. The
April 2000 Agenda indicates contract awards of $994,640 and $348,103 to FWDE, a
modification adding $439,722 to a RAST contract, and a modification adding $850,264 to a
PUGH contract.
12
bidder. But the prospective contractors had to satisfy technical standards set by the
PRC before they would be eligible to bid.
Once a new contract was awarded and in place, Chandler and other
supervisors, such as Ellis, could approve changed or additional work as “field
directives.” If a requested change exceeded the original contract amount, Chandler
and Ellis could recommend “change orders” (requests for additional funds), which
McNair would then approve and place on the Commission’s agenda, without
further competitive bidding. The JCESD also could award “emergency” work to
construction contractors without competitive bidding. For emergency jobs, Barber
typically selected the contractor, negotiated the price, and then sent the pay
requests to McNair, Swann, and Chandler for approval. Together, McNair, Swann,
and Chandler approved a variety of contracts for the sewer project.9
The construction contractors’ work was supervised by independent
consulting engineers, whose jobs were to make sure the contractors performed
according to specifications and to sign off on payments and requests for change
orders. This supervision was provided by engineering firms such as FWDE, USI,
9
For example, Chandler, Swann, and McNair approved a $1,168,788.02 payment to
PUGH for work done in January 2001. Chandler, Swann, and McNair approved a $2,652,820
payment to PUGH for work done in June 2000. Chandler, Swann, and McNair approved a
$1,000,000 payment to RAST in October 2000. Swann and McNair approved — in one day on
an emergency basis without Chandler’s or the County engineer’s usual approval — a $1,152,888
payment to RAST for work done in October 2000.
13
and Dawson Engineering. The engineering consultant contracts were awarded
without bidding. Swann and Chandler selected engineering firms, negotiated their
contracts, and recommended them to McNair for final approval.
The County’s PRC initially decided to qualify only three contractors to do
“cured-in-place” work: W.L. Hailey (“Hailey”), Insituform, and Reynolds.
Because the traditional “dig-and-replace” work was grouped with “cured-in-place”
work for all the major construction contracts, this PRC decision effectively limited
the “big jobs” to only three bidders: a RAST-Hailey joint venture, a
PUGH-Insituform joint venture, and Reynolds, which did its own dig-and-replace
work. In late 1999, the PRC changed the criteria, making it more difficult for other
contractors to pre-qualify for “cured-in-place” work, and potentially delaying by
two years the qualification of otherwise qualified contractors.10
Contractor PUGH’s CEO Grady Pugh admitted to receiving a “general
benefit” from giving McNair “envelopes of cash,” in that “Jefferson County treated
us real well. We had an opportunity to do a tremendous amount of work there.
The work that we did there generated huge profits . . . [I]t took our company
[PUGH] from a normal struggling contracting company in [the] mid to late ‘90s, to
a thriving, wealthy, strong construction company.”
10
The PRC and its requirements are discussed more later in the Wilson trial section.
14
During the relevant period, PUGH dedicated about 70% of its work to the
Jefferson County sewer rehabilitation and received tens of millions of dollars in
revenue from that sewer work. In 1996 and 1997, at the sewer rehabilitation’s
outset, PUGH made gross profits of 10%, and as the project continued and
payments were made to JCESD officials, the company’s sewer rehabilitation
profits increased to 50% in 1999, 40% in 2000, and 45% in 2001, making PUGH
tens of millions of dollars each of these years.
RAST also received tens of millions of dollars in revenue per year from its
Jefferson County sewer work. And the engineering firms, including FWDE,
received revenue in millions of dollars per year from their work on the sewer
rehabilitation. McNair made the decision every time FWDE or Dawson
Engineering was selected as the outside consulting engineer and awarded a
professional service contract. After electrical contractor Gus Henson did some
work for McNair without charge, McNair had Swann arrange a County contract for
him, even though the County did not normally hire electrical engineers for sewer
work.
In total, from August 1999 to January 2002, Jefferson County paid $178
million to PUGH, $100 million to RAST, $11.4 million to FWDE, and $8 million
to Dawson Engineering.
15
B. Bribes of McNair
McNair owned a small photography business called McNair Frame & Photo
Art, Inc. (“McNair’s studio”). Between 1999 and early 2002, McNair started a
major expansion and renovation of the studio, which would more than double its
size. McNair’s expansion included adding extras to the studio, such as an
apartment for his daughter, a second-story deck, external stairs, a “guard shack,”
and a security gate.
All contractor-defendants in this case generously contributed to the
renovation and expansion of McNair’s studio. In 1999, FWDE’s President
Dougherty sent Bill Bailey, an FWDE employee initially hired as an inspector for
County jobs, to work as the construction superintendent for the studio’s
renovation. FWDE paid Bailey for the approximately 18 months he spent working
at McNair’s studio. During that time, FWDE paid Bailey $74,240. Although some
of his time was charged to “administration,” FWDE President Dougherty charged
some of Bailey’s studio time to a JCESD sewer project. McNair was not charged
for Bailey’s work. As superintendent, FWDE’s Bailey oversaw construction at
McNair’s studio by numerous other contractors, including PUGH and RAST.11
11
As 404(b) evidence, the government showed that in addition to paying $74,240 to
Bailey, FWDE paid the salaries of its employees, Wayne Hendon and John Stanger, while they
acted as construction superintendents overseeing renovation of JCESD Director Swann’s home.
FWDE paid Hendon $94,090 and Stanger $28,839 for that work.
16
RAST excavated for the expansion’s footings for McNair’s studio. In July
1999, PUGH ordered concrete and for four weeks had a four-man crew pour
concrete walls and do other work on the studio, paying the crew $11,709. PUGH’s
crew supervisor talked to McNair while the concrete work was in progress, but
McNair did not question why he was there or where he was from, nor did McNair
offer to pay for this work.
In late 1999, FWDE’s Bailey asked Barry Mosley of Mosley Construction to
do wood framing and other finish work at McNair’s studio. McNair initially paid
Mosley, first with a check and then with cash, but eventually McNair stopped
paying. Bobby Rast then told Bailey that “McNair was running out of funds” and
that RAST would begin paying Mosley directly. From July 2000 to December
2000, RAST wrote 20 checks totaling $52,990 to Mosley as his work at the studio
progressed, and, at Bobby Rast’s direction, coded these payments as expenses on a
JCESD sewer project. Either Bailey or someone from RAST’s office, such as
Danny Rast, brought Mosley the checks.
In January 2002, RAST gave Mosley two more checks totaling $7,200 for
work he and his crew did on the studio’s “guard shack,” a two-story, 12 x 12
building designed by defendant Dougherty, and built, in part, by defendants RAST
and FWDE. Bobby Rast caused these payments to be coded as expenses on the
17
“Upper Valley Rehab” or Kilsby contract, a JCESD sewer project. For tax
purposes, all payments to Mosley were deducted as business expenses on sewer
projects. Mosley did no work on those projects. After a local newspaper reported
RAST’s construction work at JCESD Director Swann’s home, RAST amended its
tax returns for 1998-2000 and 2002 to eliminate these and other deductions. The
deductions, which totaled over $140,000, were based on expenditures for McNair’s
studio and Swann’s home that had been cost-coded to sewer projects and treated as
business expenses.
After the publicity, Bobby Rast told his bookkeeper in “effect that we really
didn’t need any document invoices in the files with Jack Swann’s or Chris
McNair’s shipping address on them.” The bookkeeper then located and discarded
several invoices related to work at McNair’s studio and Swann’s home.
RAST furnished the labor and PUGH furnished the materials to construct a
second-story deck for the rear of McNair’s studio. Bailey handwrote a list of
materials and ordered the necessary steel. When Besco Steel Supply (“Besco”)
delivered the steel, its delivery tickets identified PUGH and Yessick as its
customers and indicated some of the steel was for the Valley Creek Treatment
Plant, a JCESD sewer job on which PUGH was the contractor and FWDE the
consulting engineer. In September 2000, PUGH paid Besco and charged the
18
JCESD for $3,773 worth of steel with FWDE’s approval, and RAST poured the
concrete deck and stairs, set the handrails, and built the steps.
Around September 2000, FWDE employee Dave Bechtel ordered two sets of
aluminum handrails for the studio deck and a staircase from Thompson
Fabricating, which was directed to bill PUGH. The $5,500 invoice for the first set
of handrails charged the work as performed on the Valley Creek Treatment Plant
and falsely indicated that the handrails were shipped there. In February 2001, an
$11,700 invoice for the second set of handrails referenced “CHRIS MC.” as the
customer, but also falsely indicated that the handrails were shipped to Valley Creek
when in fact they were shipped to McNair’s studio. PUGH paid both invoices and
billed the County for the first set of handrails after adding a markup and charges
for labor and equipment. RAST installed the handrails.
In May 2000, at McNair’s request to Roland Pugh, Grady Pugh flew
McNair’s daughter and FWDE’s Bailey on PUGH’s airplane to Georgia, where
they picked out carpet for McNair’s studio. Before take-off, Roland Pugh told his
son Grady Pugh that “McNair has called [again] and says that he’s broke and he
doesn’t have enough money to leave for the deposit on the carpet” and “[s]o, if you
would, write a check for the deposit.” Grady Pugh paid the deposit with a $4,820
PUGH check made out to the Mill Store and had it treated on PUGH’s books as an
19
expense on the “last rehab contract.”12
FWDE’s Bailey hired subcontractor Clint Gilley to install the carpet at
McNair’s studio. In October 2000, FWDE’s Bailey called RAST to request checks
for subcontractor Gilley. After Bobby Rast was consulted, RAST gave Gilley two
checks totaling $5,301 for his work at McNair’s studio.
In addition to paying for materials and providing work crews, PUGH also
made other contributions to McNair’s studio. When the project began in 1999,
Roland Pugh told PUGH’s other three owners, Grady Pugh, Andy Pugh, and
Yessick, they had to give money to McNair because he was building a studio and,
as 10% owners of the PUGH company, they had to “kick in” their share. Grady
Pugh gave approximately $1,500 in cash to Roland Pugh’s secretary that time.13
12
The Indictment alleges as an overt act on Count 1: “On or about May 24, 2000,
Defendant ROLAND PUGH instructed Grady Pugh to fly an airplane owned by Defendant
PUGH, INC. to LaGrange, Georgia, to buy carpet and flooring material for the benefit of
Defendant McNAIR. . . . On or about May 24, 2000, Defendant ROLAND PUGH caused Grady
Pugh to pay $4,820 to The Mill Store, Inc. for carpet and tile for installation at McNair Studio
for the benefit of Defendant McNAIR.”
13
The government also presented evidence of cash allegedly given to McNair. Roland
Pugh collected money from the other owners to give to McNair. On July 18 and 19, 2000,
Roland Pugh, Grady Pugh, and Yessick wrote checks to cash (totaling $9,000) in proportion to
their ownership interests. Roland Pugh gave Grady Pugh an envelope of money and asked him
to give it to McNair. Grady Pugh took the envelope to the studio where he saw Bailey and told
him he was there to help McNair. Grady Pugh stated the money was “financial help” that
McNair needed at that time. Grady Pugh then met with McNair for a few minutes and left the
envelope with McNair.
When the studio needed an air conditioning system, McNair again called Roland Pugh
asking PUGH to pay for it. Roland Pugh told Grady Pugh that McNair needed $40,000, but that
“y’all don’t have to put up any money this time, I’m going to do it in a different way.” Roland
Pugh gave a $10,000 check dated December 22, 2000 to Grady Pugh’s wife, Genae Pugh, who
20
McNair also wanted a security gate for the studio. In August 2000, Danny
Rast hired subcontractor Master Access Controls (“MAC”) to install an electronic
gate and agreed that RAST would provide the electrical conduit, wiring, and
concrete pad for the gate’s motor. MAC met with FWDE’s Bailey at McNair’s
studio site, installed the gate, and sent its invoices to the attention of Danny Rast.
RAST paid the subcontractor $5,866.92. McNair paid nothing.
Also in December 2000, at Danny Rast’s request, RAST gave Bailey &
Sons’ Bobcat Service, owned by Danny Bailey, a $5,500 check for landscaping at
McNair’s studio. However, RAST’s records indicated Danny Bailey was working
on a JCESD sewer project. Although Danny Bailey had done work for RAST
before, he did not send the invoice for the studio work through regular billing, as
he normally would, but instead sent it “Atten Dan Rast.”14
cashed it and gave the money to Roland Pugh. That same day, Roland Pugh wrote a $10,000
check to Angie Pugh (Andy Pugh’s wife) and a $9,750 check to cash. A week earlier Roland
Pugh had written a $9,000 check to cash. Around Christmas 2000, at Roland Pugh’s request,
Grady Pugh picked up another envelope containing cash from Roland Pugh’s secretary, went to
McNair’s house, spoke with him for a few minutes, and put the money down on a couch with
McNair watching.
It appears from the closing arguments that all of the above cash and checks relate to
Counts 4, 13 and 14 (on which the defendants were acquitted).
14
Huffman Electric was hired to do electrical work at McNair’s studio by FWDE but was
told to bill RAST. When Huffman sent an $11,252 invoice to RAST in November 1999 without
making it to the attention of Bobby or Danny Rast, RAST’s vice president, Roy Weaver,
responded that they “have no job at this location.” Huffman then began billing McNair directly.
At first McNair paid the bills, but he eventually fell behind in his payments and owed
approximately $45,000 by July 2000. Around this time, Grady Pugh allegedly made a delivery
of cash to McNair, and RAST took over paying for Mosley’s wood framing services.
21
In November 2000, McNair asked Dawson Engineering to contribute to the
studio’s renovation. After McNair called William Dawson, the founder of Dawson
Engineering, the two met at McNair’s studio. McNair handed Dawson a brochure
for an audiovisual system and told Dawson that, while McNair had “never asked
[Dawson] for anything before,” he needed to ask Dawson to “help [him] with
something.” McNair opened the brochure to a specific page, showed it to Dawson,
and indicated he wanted Dawson to pay for the equipment and its installation.
Dawson went to Holt Audio Video (“Holt”) and purchased the equipment for
$16,400. Dawson testified he would not have done this for McNair if McNair had
not been associated with the sewer rehabilitation process. When Dawson saw the
invoice indicated the bill was for Dawson Engineering but the shipment was for
McNair’s studio, he became “uncomfortable with the whole situation” and asked
Holt to alter the shipping information by putting a sticker over the McNair studio’s
address, which Holt did. Dawson later pled guilty to conspiring to commit bribery.
Work at the studio continued after Commissioner McNair retired in March
2001. FWDE’s Bailey hired Buchanan Plumbing and Sewer Service (“Buchanan”)
to plumb the “guard shack.” In November 2001, FWDE employees signed
Buchanan’s $1,775 in invoices and sent them to RAST, which paid them. RAST
recorded the payments as “Plumbing Work at Kilsby Circle,” a sewer project, even
22
though Buchanan never did any work there.
After McNair’s retirement, Roland Pugh told Grady Pugh “that GD [sic]
McNair has called again, and he wants us to do some work over in Arkansas” and
“surely this is the last time we’ll have to do anything for him since he’s out of
office.” Grady Pugh flew with McNair to Arkansas to look at the site and plans.
Following this visit, PUGH’s Yessick hired George Word, an Arkansas building
contractor, in August 2001 to build a 3,000-square-foot retirement home for
McNair. Both PUGH and FWDE paid for its construction.15 PUGH’s checkbook
carried the notation “Gift per Eddie [Yessick]. No job.” After McNair’s
retirement, RAST also continued to perform work at McNair’s studio and paid
$8,135.78 for McNair and his wife to take a cruise to Alaska in September 2001.16
C. Bribes of Chandler and Ellis
The Pugh, Rast, and Dougherty defendants also gave, at no charge, goods,
15
After McNair’s retirement, PUGH paid George Word $44,192.75 in the first half of
October 2001, and, at Yessick’s instruction, internally charged the expense to miscellaneous
jobs/construction materials. McNair told George Word that FWDE would make the next
payment. On October 24, 2001, after FWDE’s bookkeeper Rick Brinson saw Dougherty
speaking with McNair in FWDE’s parking lot, Dougherty asked the bookkeeper to write a
$50,000 check to a construction company. About 20 to 30 minutes later, George Word’s
$50,000 invoice, dated a day earlier, arrived by fax. The bookkeeper wrote the check, gave it to
Dougherty, and made an extra copy of the paperwork and kept it at home. Upon being
subpoenaed for these records later, the bookkeeper searched FWDE’s records, but could not find
the invoice. The only copy he found was the extra one he kept at home.
16
After McNair’s retirement, on May 14 and 15, 2001, PUGH, FWDE, and Bobby Rast
each gave McNair a check for $5,000 (totaling $15,000). Bobby Rast’s check was for a
“retirement gift” and FWDE’s was for a “motor home.”
23
services, labor, materials, and other things of value to (1) JCESD Assistant
Director Chandler, and (2) JCESD Engineer and PRC Director Ellis. At a lunch,
PUGH’s President Yessick offered to landscape Chandler’s home. Chandler at
first refused, but weeks later Yessick offered again, and Chandler accepted. PUGH
provided crews and paid for the materials for the extensive landscaping, including
grading, drainage work, and new sod, as well as construction of a patio, walkway,
and retaining walls. Chandler paid nothing for that work.
In October 2001, Yessick arranged and paid for a $610 condo rental for the
Chandler family vacation at the Pelican Beach Resort in Destin, Florida.17
Chandler asked for, and PUGH delivered, a load of sand for Chandler’s house for
free.
In the spring of 2002, Chandler asked Bobby Rast to help with his expenses
for a trip to Europe to attend technical conferences. Ellis planned to attend too. At
RAST’s office, Bobby Rast gave Chandler an envelope containing $5,000 in cash
and told Chandler to split the money with Ellis. Chandler had expected $250 to
$500 and was “uncomfortable and thought about giving it back, but [he] didn’t.”
17
The government also presented evidence that in April 2000, PUGH’s Yessick invited
Chandler on a fishing trip to Bienville Plantation in Florida, where the trip was paid for by
PUGH. Grady Pugh arranged to have Yessick and Chandler fly to Florida in the PUGH
company’s airplane. The jury acquitted PUGH and Yessick on Count 70, which referenced this
trip.
24
Instead, Chandler “eventually gave half” to Ellis.18 The Dougherty defendants also
gave Chandler tickets to Disney World and a trip to San Antonio.
D. The Defense
For the most part, the defendants did not dispute that they provided, at no
charge, these goods, services, labor, materials, and other things of value to
Commissioner McNair.19 Instead, the defendants argued they lacked the “corrupt”
intent necessary for bribery and that the government had failed to prove the
required quid pro quo for the benefits provided to McNair. The defendants also
asserted they helped McNair based on their friendship with him or for goodwill. In
support, defense witnesses testified to McNair’s decades-long friendship with
Roland Pugh, Dougherty, and the Rast family, and described how the contractor-
defendants frequently performed work for McNair at no charge. The contractor-
defendants also contended their experience, skills, and business reputation were
strong enough so that they did not need to resort to bribery to win County
contracts.
The defense spent considerable time attacking the credibility of Grady Pugh,
18
Other JCESD employees also received cash from the contractors. Danny Rast gave
$1,500-$2,000 in cash to JCESD Field Supervisor Larry Creel, who sometimes awarded
emergency work. PUGH gave $500 in cash to Creel for airplane tickets after Creel asked for a
flight on PUGH’s company airplane.
19
Roland Pugh is the only defendant to dispute that he gave anything to McNair.
25
including inconsistencies in his testimony. The defense suggested he was lying out
of hatred for his father Roland Pugh and to obtain a favorable sentence
recommendation from the government.
The government countered the defendants’ corrupt-intent arguments by
offering 404(b) evidence of similar items of value the same contractors had
provided for Swann, Wilson, and Barber (who were not defendants in the McNair
trial). The government argued the large scale and overall pattern of these payments
were inconsistent with the defendants’ claims that they were favors undertaken
merely out of friendship for McNair. The government also presented evidence that
McNair made numerous unexplained cash deposits.20
E. Jury’s Verdicts
Before sending the case to the jury, the district court dismissed several
substantive counts that charged bribes to McNair after his retirement in March
2001, and struck the corresponding overt acts from the conspiracy count (Count 1),
reasoning that 18 U.S.C. § 666 (the bribery statute) could not apply when McNair
was no longer a public official.
In the McNair trial, the jury convicted defendants McNair, PUGH, Roland
20
In the McNair trial, the government did not explain the source of the cash deposits. But
in the USI case, the government showed these cash deposits corresponded with cash withdrawals
from USI, Singh, and Key. See US Infrastructure, 576 F.3d at 1206.
26
Pugh, Yessick, RAST, Bobby Rast, Danny Rast, FWDE, and Dougherty on Count
1 of conspiring to bribe McNair. Count 1 alleged 54 overt acts originally. Several
overt acts were dismissed pre-trial, but Count 1, as submitted to the jury, charged
39 overt acts in furtherance of the conspiracy.
As to bribes by the Pugh defendants, the jury convicted defendant McNair
on these substantive bribery counts: 2 ($5,500 for hand railings) and 3 ($11,700 for
hand railings). The jury convicted defendant PUGH on Count 15 (same hand
railing facts as Counts 2 and 3). The jury convicted defendants PUGH and Yessick
on Count 71 ($610 for Chandler condominium rental).
As to bribes by the Rast defendants, the jury convicted defendant McNair on
these substantive bribery counts: 5 ($52,990 for carpentry work by Barry Mosley),
6 ($5,866 for security gate installation by Master Access Controls), 7 ($5,300 for
carpet installation by Clint Gilley), 8 ($5,500 for landscaping work by Bailey &
Sons), 9 (several thousand dollars for fabrication and construction of stairs), and 10
(several thousand dollars for concrete deck construction). The jury also convicted
defendants RAST and Bobby Rast on Counts 19-22 (same facts as Counts 5-8,
respectively), 72 ($2,500 cash to Chandler by RAST and Bobby Rast), and 87
($1,000 cash to Ellis by RAST and Bobby Rast). RAST was also convicted on
Counts 23 (same facts as Count 9) and 24 (same facts as Count 10). The jury
27
convicted defendant Danny Rast on Counts 19, 20, and 22 (same facts as Counts 5,
6, and 8).
Defendant McNair was also convicted on Counts 11 ($27,434 by the
Dougherty defendants for project management and supervision by Bailey) and 12
($16,400 by Dawson for installation of audio visual system). The jury convicted
defendants FWDE and Dougherty on Count 28 (same facts as Count 11).21
In summary, the jury convicted defendant McNair on the bribery conspiracy
count and ten substantive bribery counts. The jury convicted defendants PUGH,
Roland Pugh, and Yessick on the bribery conspiracy count; defendant PUGH on
two substantive bribery counts; and defendant Yessick on one substantive bribery
count. The jury convicted defendants RAST, Bobby Rast, and Danny Rast on the
bribery conspiracy count; defendant RAST on eight substantive bribery counts;
defendant Bobby Rast on six substantive bribery counts; and defendant Danny Rast
on three substantive bribery counts. The jury convicted defendants FWDE and
Dougherty on the bribery conspiracy count and on one substantive bribery count
21
In the McNair trial, the jury acquitted defendant McNair on Count 4 ($30,000 cash from
the Pugh defendants), defendants PUGH and Yessick on Count 13 ($20,000 cash to McNair) and
on Count 70 ($1,000 trip for Chandler to Bienville Plantation, Florida), and defendants PUGH
and Roland Pugh on Count 14 ($10,000 cash to McNair). The $30,000 in Count 4 appears to
consist of the cash in Counts 13 and 14.
The McNair jury also acquitted defendant Danny Rast on Count 21 ($5,300 bribe of
McNair for carpet installation through Clint Gilley), defendants RAST and Danny Rast on Count
89 ($1,000 cash to JCESD employee Larry Creel), and defendants RAST and Bobby Rast on
Count 126 (obstruction of justice in connection with withholding items from the grand jury).
28
each. All defendants but Yessick appeal all conviction counts.
III. THE SWANN TRIAL (05-544)
The Swann trial, held from September 19 to October 2, 2006, involved more
than $330,000 in bribes paid to County employee Swann by the Pugh, Rast, and
Dougherty defendants. The government called 25 witnesses, including Wilson,
Chandler, and Ellis. The defense called 20 witnesses, including Grady Pugh. No
named defendants testified except for Swann.
The government’s witnesses described in great detail the bribes to Swann
and how Swann financially helped the Pugh, Rast, and Dougherty defendants in
their contracts with and payments from Jefferson County. And to counter the
defendants’ lack-of-corrupt-intent defense, the government introduced 404(b)
evidence describing bribes that the same Pugh, Rast, and Dougherty defendants
gave to McNair, Barber, Wilson, and Chandler.22
A. Swann Helps Contractor-Defendants
JCESD Director Jack Swann reported directly to Commissioner McNair. It
was Swann’s responsibility to implement the EPA consent decree, which included
recommending engineering firms to McNair and negotiating the scope and price of
22
For example, in the Swann trial, the government presented evidence about how RAST
bought Barber a piece of land. This evidence is outlined later in this opinion under the Barber
trial evidence. Defendant Barber pled guilty to this charge.
29
no-bid engineering contracts, such as with FWDE. Swann supervised the sewer
work and made recommendations to McNair for payment approvals and change
orders. Swann also was able to grant time extensions and field directives that
greatly benefitted RAST and PUGH.
For example, in May 1998, the JCESD awarded the Vestavia Trunk Sewer
Replacement project to PUGH. PUGH’s failure to meet the project’s May 17,
2000 completion date would trigger a liquidated damages clause, obligating PUGH
to pay $1,000 per day. In March 2000, PUGH was running far behind schedule on
this project and requested a 120-day extension to the May 17 completion date.
Swann initially denied PUGH’s request.
On June 13, 2000, PUGH renewed its request, this time for a 180-day
extension. On July 10 — five days after PUGH’s Yessick hired Guthrie
Landscaping (“Guthrie”) to landscape Swann’s property — Swann granted
PUGH’s request for a 180-day extension to the May 17 completion date. Swann’s
extension saved PUGH $180,000 in potential liquidated damages.
In July 2000, the JCESD awarded the Valley Creek Trunk Relief Tunnel
project (designed by FWDE) to RAST and its joint venture partner W.L. Hailey.
In December 2001, during the first phase of the project, RAST’s tunnel-boring
machine became stuck in the ground. An independent engineer concluded the
30
machine became stuck because RAST may have discounted certain information in
a geotechnical survey. And the JCESD’s supervising engineer faulted RAST for
using “the wrong machine.” Nevertheless, Swann authorized RAST to remove the
machine at a cost of $2.6 million to Jefferson County.
Further, Swann declined to invoke the performance bond against RAST,
which would have guaranteed the project’s completion at the original contract
price of $27.8 million. Instead, RAST won a re-bid for an additional contract
worth $23.8 million. Consequently, the County effectively paid RAST over $50
million for work RAST was obligated to perform under the original $27.8 million
contract.
Swann also approved a lucrative field directive that benefitted PUGH
($827,417) and three that benefitted RAST ($2,020,367). Although in the
County’s internal accounting system Swann recorded the County’s payments to the
RAST-Hailey joint venture for each of these field directives as payments for the
Valley Creek Tunnel Relief project, none of the field directives involved work on
that project. Swann also exercised great influence over the selection of engineers,
like FWDE.
B. Bribes of Swann
In 1998, Swann and his wife Nila purchased a house two doors down from
31
their own residence. The Swanns lived in their residence while they renovated
their new home. Between September 1998 and June 2002, the Swanns put over
$600,000 worth of additions and improvements into their new home. FWDE,
RAST, and PUGH provided Swann, at no charge, more than $330,000 in goods,
services, labor, and materials for that work. For certain improvements paid for by
FWDE, Swann admitted he did not reimburse FWDE or Dougherty. As they had
done for the McNair studio project, the contractor-defendants worked together on
Swann’s new home. While the work was going on, Swann periodically came over
to observe the work at the new home. While Swann was recommending and
approving JCESD actions worth millions of dollars, the contractor-defendants were
providing hundreds of thousands of dollars in materials and services to renovate
and expand Swann’s new home.
Specifically, in the fall of 1998, Dougherty sent FWDE supervisors Wayne
Hendon and Bill Bailey to meet with Swann and his wife about plans to remodel
their new home. Over the course of the three-year project, FWDE employees
continually supervised the remodeling of the new home. From about October 1999
to March 2001, FWDE paid employee John Stanger $28,839 for his work at
Swann’s home. During that time period, FWDE’s Hendon spent half of every
work day supervising other contractors at Swann’s home and billed his time as a
32
nonpaying job. FWDE paid Hendon $94,090 for his work at Swann’s home. In
the fall of 1998, FWDE hired subcontractor Dudley Davis for framing, costing
over $28,000. Dougherty visited the site periodically.
In the winter of 1999, Bobby Rast sent RAST superintendent Luke Cobb to
supervise RAST crews who did demolition work and poured concrete for Swann’s
new home. Bobby Rast had RAST employee Derek Houston serve as a point of
contact for RAST’s suppliers and subcontractors for Swann’s home and paid
Houston $6,300 for his work there. In 2000, RAST paid its employees $18,867.20
in miscellaneous labor costs for their work on Swann’s home and McNair’s studio.
RAST avoided using Swann’s name on invoices, delivery tickets, and internal
accounting reports, instead using his nickname, “Little Big Man.”
RAST also bought bricks and other materials, and paid different
subcontractors for installation of hardwood floors and stairs and exterior
brickwork, plumbing work, and painting. RAST paid $3,535 for flooring and
stairs installation that Don’s Carpet One performed at Swann’s new home in 2000
or 2001. In the fall of 1999, RAST paid $1,964 for brick and mortar work by
Alabama Brick Delivery. In the fall of 2000, RAST paid Kimro Painting &
Services, Inc. (“Kimro Painting”) $9,733 for painting work at Swann’s new home.
In May 2001, RAST paid $4,441.50 to Sherman International for concrete work.
33
The delivery ticket for ready-mix concrete RAST purchased from Sherman
International directed delivery to the Swann address but identified it as the “Rast
Residence.” In October 2001, RAST paid Brown Mechanical Contractors, Inc.
(“Brown Mechanical”) for $9,540 worth of plumbing work performed at Swann’s
new home. Bobby Rast had the payments to Brown Mechanical coded as expenses
to RAST’s Jefferson County contracts for “Annual Rehab” and “Minor Pump
Station.”
In the summer of 2000, PUGH began contributing to Swann’s new home
remodeling. PUGH’s President Yessick hired subcontractor Aquatic Gardens to
install a waterfall and koi pond at a cost of $7,422. Yessick told Aquatic Gardens
to send its invoices to PUGH and not mention Swann by name.
Yessick hired other subcontractors for various work after Swann claimed to
have overpaid for the remodeling. Yessick hired Guthrie to help landscape
Swann’s new home, and in July 2000 Guthrie gave an initial estimate of $40,000.
PUGH’s book entries and invoices for Guthrie’s work on Swann’s home were
never kept in Swann’s name, but always under some other code. Yessick had
PUGH’s accountant charge Guthrie’s expenses to “Metro Park Roadway,” a
Jefferson County job. By December 2001, PUGH had paid Guthrie $93,680 for its
landscaping work at the Swann home, which included $1,200 a month for ongoing
34
weekly yard maintenance.
In January 2002, PUGH’s President Yessick asked Guthrie to stop
submitting invoices to PUGH, and instead PUGH advanced Guthrie $47,000 for
three years worth of landscaping and maintenance on Swann’s new home; and
Guthrie performed about $10,000 worth of work. Although PUGH’s manager of
accounts testified she filed Guthrie’s invoices regularly and that PUGH kept these
records for 5 to 7 years, the invoices were not found during the government’s
investigation.23 In December 2001, Yessick used a PUGH check to buy $1,000
worth of bookstore gift certificates for Swann.24
In August 2002, after Grady Pugh and Yessick heard rumors of a
government investigation, Guthrie was asked to stop working on Swann’s
property, even though there was a balance remaining on the advance Yessick had
given to Guthrie. At that time, Yessick directed his assistant to send an invoice to
Swann’s mother-in-law for $12,572 for tree removal and “remodeling work.” In
23
Count 101 ($47,000 check from Guthrie) was dismissed on the government’s motion
during the third day of trial. On that trial day, Paul Guthrie (the owner of Guthrie) testified that,
even though Guthrie received a $47,000 check from PUGH’s Yessick for Guthrie’s work at
Swann’s home, Guthrie to date had done about $10,000 worth of work on Swann’s home, not
$47,000. Swann was convicted on Count 52, which charges him with receiving approximately
$100,000 in work done by Guthrie.
24
The government also presented evidence that Bobby and Danny Rast used at least
$4,000 of RAST’s funds to pay for Swann’s expenses on two trips to England. Swann and the
Rast defendants were acquitted on Counts 59 (Swann accepted $3,015 trips to England and
Scotland) and 68 (Rast defendants paid Swann for those trips).
35
September 2002, Yessick instructed his assistant to create an invoice, this time to
Swann’s mother, for $46,684 of landscaping work. In November 2002, the
Swanns paid PUGH this amount with checks drawn from joint checking accounts
the Swanns had taken out with their mothers, after taking out two home equity
loans in each of their mothers’ names.25
C. The Defense
In the Swann trial, the defense basically was that the defendants lacked the
corrupt intent to commit bribery and acted at all times in good faith. The
contractor-defendants contended they performed work on Swann’s home out of
goodwill and without expecting anything in return. Swann argued he did not have
an intent to be influenced by the things the contractor-defendants gave him.
In addition, the defendants presented evidence showing that Nila Swann
(Swann’s wife) had an engineering background, acted as her own general
contractor, hired and supervised subcontractors, and initially paid the bills for the
work on the Swann home. Swann testified that Nila handled all of the couple’s
financial matters and that he assumed she was paying for the work. According to
Swann, Nila frequently changed her mind, was not a good manager, and disputed
the cost and scope of the work with the subcontractors. Dougherty and the Rast
25
The plan all along had been for the Swanns’ mothers to move into the old home after
the new home was built.
36
brothers were longtime friends of Nila and Jack Swann. Swann stated that
Dougherty and the Rast brothers stepped in only to offer advice and take over
supervision to make the work go more smoothly. The contractor-defendants
claimed that they paid several of these disputed bills to preserve their own business
relationships with the subcontractors and their expectation was that the Swanns
would eventually reimburse them. However, with the sole exception of PUGH’s
belated invoices to Swann for landscaping and remodeling work, there was no
evidence that the Swanns paid the contractor-defendants for the work at their new
home.
As to the conspiracy charge, the defendants also claimed that the
government had not presented sufficient evidence to show an unlawful agreement
between Swann and any of the contractor-defendants.
In the Swann trial, the government presented 404(b) evidence about similar
items of value the same contractor-defendants had provided to McNair for his
studio, their help with McNair’s home in Arkansas, and other benefits they
provided for McNair, Barber, and Chandler.
D. Jury’s Verdicts
The jury convicted defendants Swann, PUGH, Yessick, RAST, Bobby Rast,
FWDE, and Dougherty of conspiring to bribe Swann (Count 51).
37
The jury convicted Swann on these substantive bribery counts: 52 ($100,000
from PUGH through subcontractor Guthrie Landscaping), 53 ($7,422 from PUGH
through subcontractor Aquatic Gardens), and 54 ($1,000 in gift certificates to
Alabama Book Smith from PUGH). The jury convicted defendants PUGH and
Yessick on Counts 61-63 (same facts as 52-54, respectively).
The jury convicted defendants Swann, PUGH, and Yessick on Counts
90-100 (honest services mail fraud involving PUGH’s paying $93,680 in checks to
Guthrie for landscaping work performed for Swann).
The jury also convicted defendant Swann on Counts 57 ($9,733 in painting
by Kimro Painting from RAST) and 58 ($8,940 in plumbing by Brown Mechanical
from RAST) and defendants RAST and Bobby Rast on Counts 66 and 67 (same
facts as Counts 57 and 58, respectively).26
The jury also convicted defendant Swann on Count 60 ($24,176 for
construction supervision by FWDE’s Stanger) and defendants FWDE and
26
In the Swann trial, the jury acquitted defendant Danny Rast on Count 51 (conspiracy to
bribe Swann), on Count 66 ($9,733 in painting work for Swann by Kimro Painting) and on
Count 67 ($8,940 in plumbing work for Swann by Brown Mechanical).
The jury also acquitted defendant Swann on Count 59 ($3,015 bribe received by Swann
from the Rast defendants in the form of England and Scotland trips); defendants RAST, Bobby
Rast, and Danny Rast on Count 68 ($3,015 bribe given to Swann in the form of England and
Scotland trips); and defendant PUGH on Count 125 (obstruction of justice).
38
Dougherty on Count 69 (same facts as Count 60).27
In summary, the jury convicted defendant Swann on the bribery conspiracy
count, six substantive bribery counts, and eleven honest services mail fraud counts.
The jury convicted defendants PUGH and Yessick on the bribery conspiracy count,
three substantive bribery counts, and eleven honest services mail fraud counts. The
jury convicted defendants RAST and Bobby Rast on the bribery conspiracy count
and two substantive bribery counts. The jury convicted FWDE and Dougherty on
the bribery conspiracy count and one substantive bribery count. Defendants
Swann, PUGH, RAST, Bobby Rast, FWDE, and Dougherty appeal all conviction
counts.
27
When the Indictment was severed into the five separate cases for trial, Counts 107-121
of the Indictment were scheduled to be tried in the Wilson trial (05-545). The government later
dismissed Counts 107-121 and re-filed them essentially as Counts 1-17 in a new indictment
docketed as case number 06-084. This case (06-084) was consolidated for trial with the Swann
trial (05-544).
The Swann jury heard evidence on these 17 counts of honest services mail fraud under 18
U.S.C. §§ 1341 and 1346. In November 1999, Wilson resigned from the JCESD and formed his
own engineering consulting firm, CEDS. With Swann’s help, Wilson immediately obtained two
no-bid engineering contracts ($483,000 and $350,000) from the County worth a total of
$833,000. To get around “revolving door” provisions in Alabama’s ethics law that prohibited
former employees from doing business with the County for two years, Wilson made
arrangements for his firm to operate as FWDE’s “subcontractor.” FWDE was awarded the
contracts. Even though Wilson’s firm performed the work, FWDE passed Wilson’s invoices on
to the County under FWDE’s own name. These 17 counts of honest services mail fraud related
to money paid to CEDS.
Wilson and CEDS pled guilty to one count each and are not defendant-appellants in the
Swann appeal. The Swann jury acquitted Swann, FWDE, and Dougherty on these 17 counts
involving money paid to CEDS through FWDE. This evidence was introduced only in the
Swann trial, not in the Wilson trial.
39
IV. THE WILSON TRIAL (05-545)
In the Wilson trial, held from June 1 to 13, 2006, defendants Wilson and
PUGH were charged with conspiring to commit bribery (Count 75). Defendant
Wilson was charged with accepting from PUGH a $4,500 bribe in the form of a
scholarship for his son to attend the University of Alabama at Birmingham
(“UAB”) (Count 76). The defense argued that the scholarship was not intended as
a bribe.
The government called 9 witnesses, including Chandler, Grady Pugh, and
Roland Pugh’s secretary Janice Kuykendall. The defense called 3 witnesses.
A. Wilson Helps PUGH
Defendant Wilson was the Chief Civil Engineer for the JCESD and served
on the PRC. As Chief Civil Engineer, Wilson was in charge of all sewer line work.
Wilson was also the project engineer on several construction contracts, including
some of PUGH’s. As project engineer, defendant Wilson approved all sewer
contractor pay requests, which were submitted monthly, before sending them on to
Chandler, the JCESD’s Assistant Director. Project engineers also approved
requests for extensions of time to complete contracts. Contractors were subject to
a penalty of $1,000 per day if they failed to complete a contract on time.
On July 26, 1999, PUGH submitted to USI — the outside consulting
40
engineer for the “Village East 3” contract — a request for a 175-day extension to
complete work on the project. The completion date was May 11, 1999. On July
27, 1999, USI forwarded the request to defendant Wilson. When PUGH requested
the 175-day extension on July 26, it was already 76 days overdue. PUGH was at
risk for a $76,000 penalty — $1,000 in liquidated damages for each of the 76 days.
On August 20, 1999, defendant Wilson faxed Grady Pugh a letter instructing
him to send $4,500 to UAB for Wilson’s son. On August 23, defendant Wilson
approved the extension. This saved PUGH not only the $76,000 penalty for the
delay from May 11 to July 26 but also $1,000 per day for each day until PUGH
completed the job. On August 24, 1999, PUGH sent a $4,500 check to UAB for
Wilson’s son.
In addition, defendant Wilson served on the PRC, which set technical
standards for construction firms who bid on contracts for the County’s sewer
project. Some of the projects called for “cured-in-place” (“CIP”) or “trenchless”
techniques for replacing existing sewer lines. In the late 1990s, this was a
relatively new technology, and only a handful of contractors had the expertise to
do it properly. Like other municipalities, Jefferson County required contractors to
meet specified minimum requirements for prior experience before they were
permitted to bid on CIP work.
41
In September 1999, the PRC significantly tightened these requirements,
making it more difficult for new contractors to pre-qualify. However, the three
contractors who were already doing CIP work in Jefferson County were
grandfathered in and did not have to go through the pre-qualification process. Two
of those three CIP contractors were joint venture partners with RAST and PUGH.
Although the three contractors did compete against each other in a sealed bidding
process, Jefferson County’s qualification requirements cut down the number of
competitors and enabled these CIP contractors to charge Jefferson County higher
prices than they could charge other municipalities for similar work. When two
non-local competitors finally qualified to join the bidding in 2001, prices quickly
dropped from over $50 per linear foot to about $28.
The government also offered 404(b) evidence showing certain items of value
that PUGH provided for McNair, Chandler, and Barber, and that RAST provided
for Wilson,28 and the favorable decisions PUGH obtained from the JCESD. Grady
Pugh offered similar testimony, and, as in the McNair trial, the defense again
attempted to impeach Grady Pugh by pointing out inconsistencies in his testimony,
his hatred of his father (Roland Pugh), and his efforts to obtain a favorable
sentencing recommendation from the government.
28
RAST paid for Wilson to spend a week in London and a weekend in Paris with his wife.
42
B. Bribes of Wilson
Sometime in mid-1999, defendant Wilson complained to Grady Pugh over
lunch about the cost of college and that he might not be able to afford to send his
son Justin to UAB for the upcoming semester (fall 1999). Grady Pugh responded
that PUGH “had done a lot” for “colleges and education” and suggested PUGH
might “sponsor a scholarship,” but wanted to make sure “we couldn’t get in any
trouble for it.” Sometime in August 1999, Wilson called Grady Pugh to accept the
scholarship offer.
As noted above, on August 20, 1999, defendant Wilson used a JCESD fax
machine to send Grady Pugh a letter expressing his gratitude and instructing him to
send a $4,500 check to UAB to credit Wilson’s son’s account. PUGH sent the
check to UAB four days later. There was no evidence that the son ever sent PUGH
an application for the scholarship. Grady Pugh’s secretary typed the letter and
signed Grady Pugh’s name. Grady Pugh never met nor spoke with Wilson’s son
before sending the $4,500 check to UAB on August 24, 1999. The accompanying
letter simply asked UAB to credit the payment to Wilson’s son’s account and gave
no other instructions. Although PUGH had made charitable contributions to
schools and colleges, including UAB, it had never previously awarded a
scholarship to an individual student. Grady Pugh thought the money would go
43
toward “books and tuition” but could not remember exactly what Wilson had said
to him.
Grady Pugh was unaware that FWDE had already paid Wilson’s son’s
tuition and fees for the 1999-2000 school year.29 UAB applied PUGH’s
scholarship money to Wilson’s son’s account in four quarterly installments of
$1,125 per installment, as was its standard practice for scholarships when a donor
did not instruct otherwise. UAB took about one third of the PUGH money to cover
the son’s housing and other fees, and disbursed the remainder of the PUGH money
directly to the son each quarter. The installments were disbursed to the son in
September 1999, December 1999, March 2000, and June 2000. Wilson’s son
signed a receipt each time. Grady Pugh testified that he never did anything after
August 1999 to follow up on the “scholarship” and he did not know that UAB
would defer full payment into the following year. The government did not present
any evidence that Wilson was aware of UAB’s payment arrangements.
Grady Pugh explained his intent in giving the scholarship to Wilson’s son:
When you offer somebody something like that . . . you expect them to
help you if they can. And when I did that for [Wilson], I felt like if he
got a chance to help us, he would.
Grady Pugh explained that giving things of value to County employees provided
29
The government did not allege there was anything improper about the FWDE
scholarship.
44
PUGH with the “general benefit” of “hav[ing] preferential treatment and, you
know, if we had problems it would help resolve the problems. Numerous ways
that things could be made easier.”
C. Jury’s Verdicts
The jury convicted defendants Wilson and PUGH on Count 75 and
defendant Wilson on Count 76. Wilson has not appealed. PUGH appeals as to
Count 75.30
V. THE BARBER TRIAL (05-542)
In the Barber trial, held from January 8 to 17, 2007, defendants Barber,
PUGH, Roland Pugh, and Yessick were charged with conspiring to bribe Barber
by, among other things, PUGH’s paying and Barber’s accepting $47,927 in real
property and nearly $1,200 in trips to casinos and beaches (Count 78). Defendants
PUGH and Roland Pugh were also charged with bribing Barber by giving him that
$47,927 property (Count 83), and defendant PUGH was charged with paying for
these trips (Counts 84-86).31
Defendants Barber and Yessick pled guilty to Count 78. Only PUGH and
30
Count 77 charged PUGH with the substantive offense of bribing Wilson with the
scholarship, but was dismissed before trial on the government’s motion.
31
The trips were to Isle of Capri Casino, Vicksburg, Mississippi ($148), Beau Rivage
Resort & Casino, Biloxi, Mississippi ($546), and Phoenix III Condominiums, Gulf Shores,
Alabama ($481).
45
Roland Pugh went to trial. The government called 7 witnesses, including
Chandler, Grady Pugh, and Yessick. The defense called 7 witnesses, including
Barber.
A. Barber Helps PUGH
Barber supervised the JCESD’s twenty-six job-site County inspectors.
Barber was responsible for hiring sewer contractors to do no-bid emergency work,
approving contractors’ paperwork, and certifying their expenses before sending the
expenses to JCESD Assistant Director Chandler.
In January 2000, Barber determined the sewer pipes in the Paradise Lake
subdivision should be replaced on an emergency basis instead of being repaired.
On January 7, Barber told City Inspector Hodges that Barber had chosen a
contractor who could do the job in about 45 days. PUGH’s President Yessick sent
Barber a letter, dated January 27, 2000, offering that PUGH could do the job for
about $1.2 million. That same day, Yessick also sent Hodges a letter, dated
January 27, 2000, stating that PUGH would be performing the job. Given that
emergency work contracts were limited to $50,000 or less, PUGH eventually
received a no-bid field directive in the amount of $857,000, on which PUGH made
a 50% profit. However, because Barber had classified the work as an emergency,
there was no contract for Paradise Lake on which to put the field directive. The
46
emergency work contract therefore was placed on the unrelated multi-million-
dollar Cahaba River project.
B. Bribes of Barber
Beginning in 1997 and continuing through 2001, PUGH’s President Yessick
caused PUGH to pay to send Barber on an annual beach resort or casino vacation
in locations including Orange Beach, Alabama and Biloxi and Vicksburg,
Mississippi. PUGH paid $148 for Barber’s stay in Vicksburg, $546 for his stay in
Biloxi, and $481 for his stay at the Phoenix III Condominiums in Orange Beach,
Alabama. PUGH recorded the payments for the trips to Orange Beach and Biloxi
in PUGH’s books as sewer “rehab” projects.
In the spring of 2000, Barber asked PUGH’s Yessick if he would find and
purchase a piece of property in McCalla, Alabama on which Barber could retire.
Yessick consulted a realtor for this purpose, visited several properties himself, and,
in November 2000, signed a contract to purchase land in the name of “Roland
Pugh” for $47,500. The next week, Yessick gave the realtor a check for $1,000,
signed by PUGH’s CFO Lorelei Heglas. In anticipation of the cost PUGH would
incur for the land purchase, Yessick instructed PUGH CFO Heglas to charge
$45,000 to the Paradise Lake project.
However, days before closing, Roland Pugh’s administrative assistant Janice
47
Kuykendall told Yessick that PUGH no longer intended to buy the land in PUGH’s
name but instead planned to give Barber a cashier’s check to buy the land in his
own name. PUGH assistant Kuykendall told Yessick to travel to Tuscaloosa to get
the check and then take back from the realtor all documents referring to PUGH.
PUGH’s Yessick got the check, which was made out to the settlement
attorney for $46,877, and on which the “NAME OF REMITTER” line was left
blank. Yessick then gave Barber the check. Barber closed on the land contract in
his own name on December 18, 2000. Yessick also gave Barber a cashier’s check
for $1,050 to replace the check he gave to the realtor. The realtor prepared papers
to refund PUGH’s deposit.
In September 2002, a newspaper article revealed an investigation into PUGH
and Barber. Six months later, over a seven-week period, Barber sent PUGH a
series of checks amounting to $46,877. Yet Barber paid no interest, and there was
no evidence of any document indicating a loan.
At trial Yessick testified that he paid the charged bribes in the hope that
Barber, who supervised the JCESD’s job-site inspectors, would assist if PUGH
were to have a problem with an inspector being “irrational.” Counsel for PUGH
and Roland Pugh argued that they did not provide things to Barber with the intent
48
to influence him.32 The government presented 404(b) evidence showing that
PUGH’s Yessick paid for Chandler to go on a fishing vacation, that Grady Pugh
bought a carpet for McNair, that Grady Pugh made cash payments to McNair, and
that PUGH worked on McNair’s home in Arkansas.
C. Jury’s Verdicts
The jury convicted PUGH on Counts 78 (bribery conspiracy), 83 ($47,927
in real property), and 84-86 (trips). Roland Pugh was acquitted on Counts 78 and
83, the only counts against him in the Barber trial. PUGH appeals all conviction
counts.
VI. QUID PRO QUO ISSUES
All defendant-appellants argue that their bribery convictions under 18
U.S.C. § 66633 must be vacated because the Indictment failed to allege, and the
government failed to prove, the contractor-defendants gave specific benefits to
County employees in exchange for, and with the intent that, the employees perform
32
Defendant Roland Pugh called Barber to testify that he (Barber) never met Roland Pugh
until after the relevant time period and that Barber did not have an intent to be influenced by the
trips that PUGH bought for him.
33
The defendant-appellants’ § 666 convictions are: (1) McNair, Counts 1-3, 5-12, 32; (2)
Swann, Counts 51-54, 57, 58, 60; (3) PUGH, Counts 1, 15, 51, 61-63, 71, 75, 78, 83-86; (4)
Roland Pugh, Count 1; (5) RAST, Counts 1, 19-24, 51, 66, 67, 72, 87; (6) Bobby Rast, Counts 1,
19-22, 51, 66, 67, 72, 87; (7) Danny Rast, Counts 1, 19, 20, 22; (8) FWDE, Counts 1, 28, 51, 69;
and (9) Dougherty, Counts 1, 28, 51, 69.
49
a specific official act, termed a quid pro quo.34 The defendant-appellants also
argue the district court erred, at a minimum, by refusing to charge the jury that the
government must prove a specific quid pro quo. We begin by reviewing the
relevant parts of § 666.35
A. 18 U.S.C. § 666
Section 666 proscribes theft and bribery in connection with programs of
local governments receiving federal funds.36 Section 666(a)(1)(B) criminalizes a
local government employee’s “corruptly” soliciting or accepting a bribe:
(a) Whoever . . .
34
Black’s Law Dictionary defines quid pro quo as follows: “An action or thing that is
exchanged for another action or thing of more or less equal value; a substitute.” Black’s Law
Dictionary 1367 (9th ed. 2009). Defendants argue the government must prove a specific or
identifiable thing of value was exchanged for a specific or identifiable official act.
35
The interpretation of a statute is a question of law we review de novo. United States v.
Searcy, 418 F.3d 1193, 1195 (11th Cir. 2005); United States v. Mazarky, 499 F.3d 1246, 1248
(11th Cir. 2007). Whether an indictment is sufficient is also a question of law reviewed de novo.
United States v. Steele, 178 F.3d 1230, 1233 (11th Cir. 1999). “An indictment is sufficient if it:
(1) presents the essential elements of the charged offense, (2) notifies the accused of the charges
to be defended against, and (3) enables the accused to rely upon a judgment under the indictment
as a bar against double jeopardy for any subsequent prosecution for the same offense.” Id. at
1233-34 (quotation marks omitted).
36
A predicate to a § 666 offense is that the defendant must be an agent of an
“organization, government, or agency [that] receives, in any one year period, benefits in excess
of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee,
insurance, or other form of Federal assistance.” 18 U.S.C. § 666(b). It is undisputed that
Jefferson County received the requisite amount of federal funds and that McNair, Swann,
Wilson, Barber, Chandler, Ellis, and Creel were employees and thus agents of Jefferson County.
50
(1) being an agent[37 ] of [a] local . . . government, or any agency
thereof--
....
(B) corruptly solicits or demands for the benefit of any person,
or accepts or agrees to accept, anything of value from any
person, intending to be influenced or rewarded in connection
with any business, transaction, or series of transactions of such
. . . government, or agency involving anything of value of
$5,000 or more; or
shall be fined . . . , imprisoned not more than 10 years, or both.
18 U.S.C. § 666(a)(1)(B). Defendants McNair, Swann, Wilson, and Barber, as
Jefferson County employees, violated § 666(a)(1)(B) if: (1) they solicited or
accepted anything of value; (2) with the corrupt intent to be influenced or
rewarded; (3) in connection with any business, transaction, or series of transactions
of Jefferson County involving anything of value of $5,000 or more.38 Id. The
37
As to “agent,” the district court in the McNair trial charged the jury: “The term ‘agent’
means a person authorized to act on behalf of a local government and includes an employee,
officer, manager or representative of a local government. Jefferson County, Alabama is a local
government of Alabama.” In the Swann, Barber, and Wilson trials, the district court charged the
jury: “The term ‘agent’ as relevant to this case means any employee, officer, director, manager
or representative of a local government. Jefferson County, Alabama, is a local government of
Alabama.”
38
The $5,000 in § 666(a)(1)(B) and (a)(2) refers to the value of the “business, transaction,
or series of transactions,” not the value of the bribe. See United States v. Zimmermann, 509
F.3d 920, 927 (8th Cir. 2007) (concluding a benefit of more than $5,000 received for less than
$5,000 in bribes was sufficient for a § 666(a)(1)(B) conviction); see also Salinas v. United
States, 522 U.S. 52, 57, 118 S. Ct. 469, 473 (1997) (“Subject to the $5,000 threshold for the
business or transaction in question, the statute forbids acceptance of a bribe by a covered official
. . . .”); United States v. Castro, 89 F.3d 1443, 1454 (11th Cir. 1996) (describing in dicta the
$5,000 element in § 666(a)(2) as “in connection with any business transaction [sic] or series of
transactions”); but see United States v. Abbey, 560 F.3d 513, 521 (6th Cir.) (stating in dicta that
“§ 666 contains . . . a requirement that the illegal gift or bribe be worth over $5,000”), cert.
denied, 130 S. Ct. 739 (2009). Where the bribe-giver receives an intangible benefit, some courts
51
counts in the Indictment as to McNair and Swann track the language of the statute.
Section 666(a)(2) also criminalizes “corruptly” offering or giving a bribe to
a local government employee:
(a) Whoever . . .
....
(2) corruptly gives, offers, or agrees to give anything of value to
any person, with intent to influence or reward an agent of [a] . . .
local . . . government, or any agency thereof, in connection with any
business, transaction, or series of transactions of such organization,
government, or agency involving anything of value of $5,000 or
more;
shall be fined . . . , imprisoned not more than 10 years, or both.
Id. § 666(a)(2). The contractor-defendants — PUGH, Roland Pugh, RAST, Bobby
Rast, Danny Rast, FWDE, and Dougherty — violated § 666(a)(2) if: (1) they gave
to a County employee anything of value; (2) with the corrupt intent to influence or
reward them; (3) in connection with any business, transaction, or series of
transactions of Jefferson County involving anything of value of $5,000 or more.
Id. The counts in the Indictment as to these contractor-defendants also track the
language of § 666(a)(2).
have used the bribe amount as a proxy to stand for the value of the business or transaction. See
United States v. Marmolejo, 89 F.3d 1185, 1194 (5th Cir. 1996) (using, under § 666(a)(1)(B), the
more than $5,000 paid to sheriff to determine the value of conjugal visits received by prisoner);
United States v. Fernandes, 272 F.3d 938, 944 (7th Cir. 2001) (using the value of bribes to
prosecutor, under § 666(a)(1)(B), where prosecutor received bribes in exchange for his
expunging the bribe-givers’ DUI convictions). Here, the parties do not dispute that the $5,000
level was met.
52
It is well established in this Circuit that an indictment is sufficient if it tracks
the language of the statute and provides a statement of facts that gives notice of the
offense to the accused. See United States v. Jordan, 582 F.3d 1239, 1246 (11th
Cir. 2009); United States v. Walker, 490 F.3d 1282, 1296 (11th Cir. 2007); United
States v. Sharpe, 438 F.3d 1257, 1263 (11th Cir. 2006); United States v. Ndiaye,
434 F.3d 1270, 1299 (11th Cir. 2006). By listing the items of value received or
given by the defendants, each count of the Indictment provides sufficient facts and
circumstances to give adequate notice of the charges to be defended against. Thus,
we readily determine the Indictment itself was not defective for failure to allege a
specific quid pro quo.
B. Paradies and US Infrastructure Decisions
Nonetheless, this does not resolve whether the language in § 666(a)(1)(B) or
(a)(2) effectively requires the government to prove a specific quid pro quo to
obtain a § 666 conviction. This question has been before this Court twice before
but only under plain error review, and even then, we did not squarely answer it.
See United States v. US Infrastructure, 576 F.3d at 1212-14; United States v.
Paradies, 98 F.3d 1266, 1289 (11th Cir. 1996).
In Paradies, the defendant claimed that the district court erred in failing to
charge the jury that a quid pro quo was an element required to convict under § 666
53
Id. at 1289. This Court did not decide if quid pro quo was an element but
concluded there was no reversible jury charge error because the jury charge tracked
the statutory language of § 666 and the defendant did not object to the charge. Id.
The Paradies Court also rejected a challenge to the sufficiency of the
evidence. Id. The Paradies Court stated: “the evidence at trial was sufficient for a
jury to find that Jackson [the official] accepted payments for his votes and his
influence upon the City Council and the administration,” and “[s]uch a finding
would satisfy any quid pro quo requirement under the statute.” Id. In other words,
Paradies concluded that even if § 666 requires a quid pro quo, that requirement is
satisfied by showing a series of payments intended generally to influence the
official’s decisions.
Subsequently, our United States v. US Infrastructure decision involved an
appeal from the fifth trial (the USI trial, 05-543) that arose out of the Indictment
here. US Infrastructure, 576 F.3d at 1202-03. The defendants in US Infrastructure
argued the jury charges on the § 666 counts were erroneous because they did not
include their proposed instruction that the jury must find a specific quid pro quo to
convict under § 666. Id. at 1213. This Court concluded that the district court “did
not commit plain error by refusing [defendants’] quid pro quo [jury] instruction.”
Id. at 1214. As its sole basis for this conclusion, US Infrastructure stated this
54
Court had already rejected this argument in two prior cases: “This Court has
rejected the argument that the government must ‘show a direct quid pro quo
relationship between [the defendants] and an agent of the agency receiving federal
funds.’” US Infrastructure, 576 F.3d at 1214 (quoting United States v. Castro, 89
F.3d 1443, 1454 (11th Cir. 1996), and citing Paradies, 98 F.3d at 1289). However,
as shown above, Paradies did not actually make a holding to that effect. Neither
did United States v. Castro.39 Nonetheless, US Infrastructure itself holds a specific
quid pro quo is not required for a § 666 conviction. Because US Infrastructure was
only plain error review, we now make the same holding but under de novo review.
We begin with the statutory language itself.40 Importantly, § 666(a)(1)(B)
and (a)(2) do not contain the Latin phrase quid pro quo. Nor do those sections
39
In Castro, the issue was whether § 666(a)(2) required that the bribe-givers intended to
enter into a direct exchange with an agent of an entity receiving the federal funds, or if it was
sufficient that they offered the bribe to a third-person middleman with the intent to influence that
agent by having that middleman authorize that agent to issue payments to the defendants.
Castro, 89 F.3d at 1453-54. The Castro Court concluded that “influence” under § 666 could be
exercised indirectly and that it was sufficient that the defendants intended to influence the agent
by causing a middleman to authorize the agent to issue payments. Id. Although in reaching this
conclusion the Castro Court stated, “[w]e reject appellants’ suggestion that the government had
to show a direct quid pro quo relationship between [the defendants] and an agent of the agency
receiving federal funds,” id., Castro was addressing whether there was a “directness”
requirement between the bribe-giver and the agent and did not answer the question before us
here.
40
“When construing a criminal statute, [this Court] begin[s] with the plain language;
where ‘the language Congress chose to express its intent is clear and unambiguous, that is as far
as we go to ascertain its intent because we must presume that Congress said what it meant and
meant what it said.’” United States v. Browne, 505 F.3d 1229, 1250 (11th Cir. 2007) (quoting
United States v. Steele, 147 F.3d 1316, 1318 (11th Cir. 1998) (en banc)).
55
contain language such as “in exchange for an official act” or “in return for an
official act.” In short, nothing in the plain language of § 666(a)(1)(B) nor
§ 666(a)(2) requires that a specific payment be solicited, received, or given in
exchange for a specific official act. To accept the defendants’ argument would
permit a person to pay a significant sum to a County employee intending the
payment to produce a future, as yet unidentified favor without violating § 666.
The requirement of a “corrupt” intent in § 666 does narrow the conduct that
violates § 666 but does not impose a specific quid pro quo requirement. In all the
trials consolidated in this appeal, the district court’s jury charge, with slight
variations, defined “corruptly” as follows: “An act is done ‘corruptly’ if it is
performed voluntarily, deliberately and dishonestly for the purpose of either
accomplishing an unlawful end or result or of accomplishing some otherwise
lawful end or lawful result by an[y] unlawful method or means.” It is acting
“corruptly” — dishonestly seeking an illegal goal or a legal goal illegally — that
separates permissible from criminal. The addition of a corrupt mens rea avoids
prosecution for acceptable business practices.41
41
We do not read the definitional language of “corrupt” to impose a quid pro quo
requirement. In any event, the district court charged that definition. It also has been suggested
that § 666’s language — a thing of value given with corrupt intent to influence — effectively
constitutes a quid pro quo in that the payment is made for influence. This at best would be
“quid pro quo light.” Even if one views § 666 this way, the district court charged the language
of the § 666 statute.
56
For all of these reasons, we now expressly hold there is no requirement in
§ 666(a)(1)(B) or (a)(2) that the government allege or prove an intent that a
specific payment was solicited, received, or given in exchange for a specific
official act, termed a quid pro quo.
As to the defendant County employees, the government must show only
what § 666(a)(1)(B) says: that a County employee “corruptly” accepted “anything
of value” with the intent “to be influenced or rewarded in connection with any
business, transaction, or series of transactions” of the County. And as to the
contractor-defendants, the government must show only what § 666(a)(2) says: that
the defendant “corruptly” gave “anything of value” to a County employee with the
intent “to influence or reward” that person “in connection with any business,
transaction, or series of transactions” of the County.
To be sure, many § 666 bribery cases will involve an identifiable and
particularized official act, but that is not required to convict. Simply put, the
government is not required to tie or directly link a benefit or payment to a specific
official act by that County employee. The intent that must be proven is an intent to
corruptly influence or to be influenced “in connection with any business” or
“transaction,” not an intent to engage in any specific quid pro quo.42
42
The defendant-appellants rely on United States v. Siegelman, 561 F.3d 1215 (11th Cir.
2009), petition for cert. filed, 78 U.S.L.W. 3083 (U.S. Aug. 10, 2009) (No. 09-167), 78
57
C. Other Circuits
In concluding § 666 does not require a specific quid pro quo, we align
ourselves with the Sixth and Seventh Circuits. See United States v. Abbey, 560
F.3d 513, 520 (6th Cir.), cert. denied, 130 S. Ct. 739 (2009) (stating “the text says
nothing of a quid pro quo requirement to sustain a conviction” and “while a quid
pro quo of money for a specific legislative act is sufficient to violate
[§ 666(a)(1)(B) or (a)(2)], it is not necessary”) (quotation marks omitted); United
States v. Gee, 432 F.3d 713, 714-15 (7th Cir. 2005) (holding that “[a] quid pro quo
of money for a specific legislative act” is not necessary under § 666(a)(1)(B) and
that an exchange of money for the official’s “influence” was enough); United
States v. Agostino, 132 F.3d 1183, 1190 (7th Cir. 1997) (“We decline to import an
U.S.L.W. 3090 (U.S. Aug. 10, 2009) (No. 09-182), and United States v. Massey, 89 F.3d 1433(11th Cir. 1996), but neither case answers the question here. In Siegelman, the district court
gave a quid pro quo instruction in response to the defendant’s request. The district court
instructed the jury that they could not convict unless “the defendant and official agree that the
official will take specific action in exchange for the thing of value.” Siegelman, 56 F.3d at 1225.
This Court stated “[s]o, whether or not a quid pro quo instruction was legally required, such an
instruction was given,” and “[t]herefore assuming a quid pro quo instruction was required in this
case, we find no reversible error.” Id. at 1225, 1227.
In Massey, “[t]he jury convicted [attorney] Massey of one count of bribery in violation of
18 U.S.C. § 666(a)(2) finding that Massey purchased [Judge] Sepe’s lunches at Buccione in
exchange for court appointments.” Massey, 89 F.3d at 1439. This Court rejected Massey’s
claim that the government was required to produce direct evidence of a verbal or written
agreement to this effect and stated “inferences drawn from relevant and competent
circumstantial evidence” were sufficient. Id. (quotation marks omitted). The quid pro quo issue
here was not raised or discussed in Massey. The fact that the evidence of a specific exchange
was sufficient to sustain the § 666(a)(2) bribery conviction in Massey does not mean one is
required to obtain a § 666(a)(2) conviction here.
58
additional, specific quid pro quo requirement into the elements of § 666(a)(2).”);
but see United States v. Jennings, 160 F.3d 1006, 1014 (4th Cir. 1998) (concluding
the “corrupt intent” element in § 666 requires the government to prove a quid pro
quo, but stating the “quid pro quo requirement is satisfied so long as the evidence
shows a ‘course of conduct of favors and gifts flowing to a public official in
exchange for a pattern of official actions favorable to the donor’” and “the intended
exchange in bribery can be ‘this for these’ or ‘these for these,’ not just ‘this for
that’” (citations omitted)).
The Second Circuit’s decision in United States v. Ganim, 510 F.3d 134 (2d
Cir. 2007), also supports our analysis to some extent.43 The defendant “Ganim’s
challenges to the jury charge primarily relate[d] to a single issue: namely, whether
proof of a government official’s promise to perform a future, but unspecified,
official act is sufficient to demonstrate the requisite quid pro quo for a conviction”
under § 666(a)(1)(B). Id. at 141-42. Although accepting a quid pro quo
requirement for a bribery conviction, the Second Circuit rejected Ganim’s claim
43
The defendant in Ganim was convicted of these “bribery-related crimes”: “(1) extortion
in violation of the Hobbs Act, 18 U.S.C. § 1951; (2) ‘honest services mail fraud’ in violation of
18 U.S.C. §§ 1341 & 1346; (3) federal programs bribery in violation of 18 U.S.C. § 666(a)(1)(b)
[sic]; and (4) bribe receiving in violation of Connecticut General Statutes section 53a-148
(collectively, the ‘bribery-related crimes’).” Ganim, 510 F.3d at 141. The Ganim opinion first
analyzed the quid pro quo issue collectively as to the bribery-related crimes. Id. at 141-42. It
later discussed the jury charges under an “Extortion” subheading, but much of that discussion
related to all bribery-related crimes in the case. Id. at 142-47. Because Ganim discussed the
bribery-related crimes collectively, it did not focus on the language of § 666(a)(1)(B).
59
that “a direct link must exist between a benefit received and a specifically
identified official act.” Id. at 142. The Second Circuit held “that the requisite quid
pro quo for the crimes at issue [which included § 666(a)(1)(B)] may be satisfied
upon a showing that a government official received a benefit in exchange for his
promise to perform official acts or to perform such acts as the opportunities arise.”
Id. (emphasis added). The Second Circuit added that “so long as the jury finds that
an official accepted gifts in exchange for a promise to perform official acts for the
giver, it need not find that the specific act to be performed was identified at the
time of the promise, nor need it link each specific benefit to a single official act.”
Id. at 147.
The Second Circuit also explained that “requiring a jury to find a quid pro
quo . . . ensures that a particular payment is made in exchange for a commitment to
perform official acts to benefit the payor in the future,” and “[o]nce the quid pro
quo has been established, however, the specific transactions comprising the illegal
scheme need not match up this for that.” Id. at 147. The Second Circuit’s analysis
lies somewhere beyond a no-quid pro quo requirement, as adopted by the Sixth,
Seventh, and now the Eleventh Circuits, and the Fourth Circuit’s requirement.
While the Second Circuit requires a quid pro quo, that requirement is satisfied by a
quid (thing of value) in exchange for a promise to perform an unidentified, official
60
act at some point in the future. Id. at 142-47. In other words, in the Second Circuit
the quo need not be specific or even identifiable at the time of the quid, and to that
extent the Second Circuit arguably supports our conclusion. And to some extent,
confusion reigns in this area because courts often use the term quid pro quo to
describe an exchange other than a particular item of value for a particular action.
D. Sun-Diamond and § 201
Because there is no support for the defendant-appellants’ quid pro quo
argument in the text of § 666, they rely on how the Supreme Court interpreted a
different criminal statute, 18 U.S.C. § 201, in United States v. Sun-Diamond
Growers of California, 526 U.S. 398, 119 S. Ct. 1402 (1999). However, Sun-
Diamond does not address § 666, and there are significant differences in the text of
the two statutes (§§ 201 and 666).
The defendant Sun-Diamond was a trade association convicted of providing
“illegal gratuities” under 18 U.S.C. § 201(c)(1)(A) for having given tickets, meals,
and other items to the federal Secretary of Agriculture. Id. at 401, 119 S. Ct. at
1404-05. Section 201(c)’s illegal gratuity provision prohibited Sun-Diamond
from: “giv[ing] . . . anything of value to any public official . . . for or because of
any official act performed or to be performed by such public official . . . .” 18
61
U.S.C. § 201(c)(1)(A) (emphasis added).44 In Sun-Diamond, the district court
charged the jury it could convict if it found “Sun-Diamond provided [the
Secretary] with unauthorized compensation simply because he held public office,”
and that “[t]he government need not prove that the alleged gratuity was linked to a
specific or identifiable act or any act at all.” Id. at 403, 119 S. Ct. at 1405(emphasis added). The “point in controversy” was that the jury instructions
suggested that an illegal gratuity “did not require any connection between
[defendant’s] intent and a specific official act.” Id. at 405, 119 S. Ct. at 1406.
The Supreme Court in Sun-Diamond concluded that § 201(c) did require a
link between the gratuity and a specific “official act” because the statutory text
prohibited gratuities given or received “for or because of any official act performed
or to be performed” and then defined “official act” as “any decision or action on
any question, matter, cause, suit, proceeding or controversy . . . .” Id. at 406, 119
S. Ct. at 1407 (quoting § 201(c)(1)(A) and (a)(3)). And it was specifically this text
of the illegal gratuity statute — “for or because of any official act” — that the
Supreme Court in Sun-Diamond found to be “pregnant with the requirement that
some particular official act be identified and proved.” Id. at 406, 119 S. Ct. at
1407 (emphasis added). In stark contrast, none of these phrases are used in
44
There is no threshold monetary requirement in §§ 201(b) or 201(c)(1)(A).
62
§§ 666(a)(1)(B) or 666(a)(2).
We recognize that the Supreme Court in Sun-Diamond also distinguished
between a § 201(b) bribery crime and a § 201(c) illegal gratuity crime. Id. at 404-
05, 119 S. Ct. at 1406. The Supreme Court pointed out that bribery in § 201(b)
“requires a showing that something of value was corruptly given, offered, or
promised to a public official (as to the giver) or corruptly demanded, sought,
received, accepted, or agreed to be received or accepted by a public official (as to
the recipient) with intent, inter alia, ‘to influence any official act’ (giver) or in
return for ‘being influenced in the performance of any official act’ (recipient).” Id.
at 404, 119 S. Ct. at 1406 (quoting 18 U.S.C. § 201(b)). The Supreme Court
explained that “[t]he distinguishing feature of each crime is its intent element.” Id.
at 404, 119 S. Ct. at 1406. The Supreme Court explained further that in § 201:
Bribery requires intent “to influence” an official act or “to be influenced”
in an official act, while illegal gratuity requires only that the gratuity be
given or accepted “for or because of” an official act. In other words, for
bribery there must be a quid pro quo – a specific intent to give or receive
something of value in exchange for an official act. An illegal gratuity,
on the other hand, may constitute merely a reward for some future act
that the public official will take (and may already have determined to
take), or for a past act that he has already taken.
Id. at 404-05, 119 S. Ct. at 1406 (emphasis added).45 The Supreme Court also
45
A bribe under § 201(b) is punishable by up to 15 years’ imprisonment, while the lesser
crime of illegal gratuity under § 201(c) is punishable by up to 2 years’ imprisonment. 18 U.S.C.
§ 201(b), (c).
63
stated: “The District Court’s instructions in this case, in differentiating between a
bribe and an illegal gratuity, correctly noted that only a bribe requires proof of a
quid pro quo.” Id. at 405, 119 S. Ct. at 1406.
Although § 201(b) requires that a bribe be given or received to influence an
“official act” or “in return for” an “official act,” § 666 sweeps more broadly than
either § 201(b) or (c). Section 666 requires only that money be given with intent to
influence or reward a government agent “in connection with any business,
transaction, or series of transactions.” 18 U.S.C. § 666(a)(1)(B) & (a)(2). Section
666 does not say “official act” but says “any business, transaction, or series of
transactions.” Id. Section 666 does not say “in return for” or “because of” but says
“in connection with.” Id.More importantly, the Supreme Court in Sun-Diamond was concerned with
accidentally criminalizing legal gratuities under § 201(c), such as giving a ball cap,
a sports jersey, or token gift to the Secretary of Agriculture “based on his official
position and not linked to an identifiable act.” Id. at 406-07, 119 S. Ct. at 1407;
see Ganim, 510 F.3d at 146 (“Undergirding the [Supreme] Court’s decision in Sun-
Diamond was a need to distinguish legal gratuities (given to curry favor of an
official’s position) from illegal gratuities (given because of a specific act).”). That
concern is diminished here because § 666 contains a corrupt intent requirement. In
64
any event, as reasoned by the Second Circuit, “there is good reason to limit
Sun-Diamond’s holding to the statute at issue in that case, as it was the very text of
the illegal gratuity statute — ‘for or because of any official act’ — that led the
Court to its conclusion that a direct nexus was required to sustain a conviction
under § 201(c)(1)(A).” Ganim, 510 F.3d at 146. “Nor is there any principled
reason to extend Sun-Diamond’s holding beyond the illegal gratuity context.” Id.E. Rule of Lenity
We also reject defendant-appellants’ argument that the rule of lenity requires
us to read a specific quid pro quo requirement into § 666. The rule of lenity may
apply in a number of different circumstances. For example, “[t]he rule of lenity is
applied when a broad construction of a criminal statute would ‘criminalize a broad
range of apparently innocent conduct.’” United States v. Svete, 556 F.3d 1157,
1169 (11th Cir. 2009) (en banc) (quoting Liparota v. United States, 471 U.S. 419,
426, 105 S. Ct. 2084, 2088 (1985)), cert. denied, __ S. Ct. __, 78 U.S.L.W. 3546(U.S. Mar. 22, 2010) (No. 09-7576). However, “[t]he simple existence of some
statutory ambiguity . . . is not sufficient to warrant application of that rule, for most
statutes are ambiguous to some degree.” Muscarello v. United States, 524 U.S.
125, 138, 118 S. Ct. 1911, 1919 (1998). The mere possibility of a narrower
statutory construction by itself does not make the rule of lenity applicable. Svete,
65
556 F.3d at 1169. Application of the rule requires a “grievous ambiguity.”
Muscarello, 524 U.S. at 138-39, 118 S. Ct. at 1919 (“The rule of lenity applies only
if, ‘after seizing everything from which aid can be derived,’ . . . we can make ‘no
more than a guess as to what Congress intended.’”) (citation omitted).
The rule of lenity does not apply here because defendant-appellants fail to
identify a “grievous ambiguity” in § 666(a)(1)(B) or (a)(2), or to show that the
statutory language criminalizes innocent behavior. Section 666(a)(1)(B) and (a)(2)
criminalize only those acts done “corruptly,” and, indeed, § 666 provides a defense
for “bona fide salary, wages, fees, or other compensation paid, or expenses paid or
reimbursed, in the usual course of business.” 18 U.S.C. § 666(c).
F. Defendants’ Proposed Jury Charges
In the McNair, Swann, Barber, and Wilson trials, all defendant-appellants
requested jury charges that included a quid pro quo requirement.46
46
For example, in the McNair trial, PUGH requested this instruction:
In order for you to find defendant [PUGH] guilty, you must find beyond a reasonable
doubt that [PUGH] gave something of value to Defendant McNair with the specific
intent of obtaining a quid pro quo, that is, that [PUGH] gave the item of value with
the specific intent to improperly cause Defendant McNair to commit a specific act
in favor of [PUGH], or with the specific intent of illegally rewarding Defendant
McNair for having previously committed such an act. In other words, the United
States must show that [PUGH] provided the item of value either (1) with the
expectation that Defendant McNair would improperly provide something specific in
return or (2) for the purpose of rewarding McNair for something improper that
Defendant McNair had previously done.
In the Swann trial, Bobby Rast, for example, requested this instruction:
[Y]ou must find beyond a reasonable doubt that Bobby Rast gave something of value
to Defendant Swann with the specific corrupt intent of obtaining a quid pro quo, that
66
In the McNair trial, the district court rejected the proposed quid pro quo
instructions, gave the Eleventh Circuit’s pattern jury instructions for § 666 as to
corruptly giving bribes, telling the jury:
As I’ve said, the defendants, other than Jewell C. “Chris” McNair, are
charged in various counts of violating a portion of Title 18, Section 666,
which makes it a federal crime or offense for anyone to corruptly give,
offer or agree to give anything of value to anyone who is an agent of a
local government receiving significant benefits under a federal assistance
program intending to reward or influence that agent in connection with
any business, transaction, or series of transactions of such local
government involving anything of value of $5,000 or more.
....
Fifth: And this is another thing that the government would have to prove
beyond a reasonable doubt.
That each such gift, offer or agreement to give, that by each of those
gifts, offer or agreement to give, the Defendant [] corruptly intended to
reward or influence Jewell C. “Chris” McNair in connection with a
transaction, or series of transactions, with Jefferson County, Alabama,
which transaction or series of transactions involved something of value
of $5,000 or more.
Sixth: That in doing so, the Defendant [] acted corruptly.
An act is done “corruptly” if it is performed voluntarily, deliberately, and
dishonestly, for the purpose of either accomplishing an unlawful end or
result or of accomplishing some otherwise lawful end or lawful result by
is, that Bobby Rast gave the item of value with the specific corrupt intent to
improperly influence Defendant Swann to commit a specific official act in favor of
Bobby Rast, or with the specific corrupt intent of illegally rewarding Defendant
Swann for having previously committed such an act. In other words, the United
States must show that Bobby Rast corruptly provided the item of value either (1)
with the expectation that Defendant Swann would improperly provide some official
specific act or acts in return or (2) for the purpose of rewarding Jack W. Swann for
some specific improper official act or acts that Defendant Swann had previously
done.
67
an unlawful method or means.47
The district court also gave the pattern § 666 jury charge, with slight variations, as
to corruptly receiving bribes. The judges in the subsequent trials (Swann,48
Barber,49 and Wilson50 ) agreed with the district
47
See Eleventh Circuit Pattern Jury Instructions (Criminal Cases) at 180-81 (Offense
Instruction 24) (2003). The district court instructed the jury the government must prove all
elements of a § 666 crime, such as that McNair had to be an agent and the County had to receive
over $10,000 in federal funds. We quote in the text only the part of the pattern charge about the
corrupt intent element.
48
In the Swann trial, the district court instructed the jury as to corruptly accepting bribes:
As to [the § 666 substantive bribery] counts the defendant Jack W. Swann can be
found guilty of [§ 666 bribery] only if all the following facts are proved beyond a
reasonable doubt.
....
The fifth element which is common to all of those counts as the first four were, that
. . . by such acceptance or agreements, the defendant Jack W. Swann intended as to
the count under consideration to be influenced or rewarded in connection with a
transaction or series of transactions of Jefferson County, Alabama which transactions
or series of transactions involve something of value of $5,000 or more.
And six, that in so doing the defendant Jack W. Swann acted corruptly.
An act is done corruptly if it is performed voluntarily and deliberately and
dishonestly for the purpose of either accomplishing an unlawful end or result or of
accomplishing some otherwise lawful end or lawful result by any unlawful method
or means.
The court gave a similar pattern § 666 jury charge as to corruptly giving bribes.
49
In the Barber trial, the district court instructed the jury as to only PUGH’s corruptly
giving bribes because Barber, the acceptor, pled guilty:
The defendant Roland Pugh Construction, Inc., can be found guilty of the offense
charging a violation of [§ 666(a)(2)] only if all the following facts are proved beyond
a reasonable doubt:
....
Fifth, that by giving, offering, or agreeing to give things of value to Clarence R.
Barber, defendant Roland Pugh Construction, Inc., intended to influence or reward
Clarence R. Barber in connection with any business transaction or series of
transactions which involve something of $5,000 or more.
And, sixth, that in doing so, the defendant Roland Pugh Construction, Inc., acted
corruptly.
68
court’s ruling in the McNair trial and gave jury instructions that did not include
defendant-appellants’ requested quid pro quo instructions.51
Given our conclusion that § 666(a)(1)(B) and (2) do not require proof of a
specific quid pro quo, defendant-appellants’ proposed jury instructions containing
that requirement were incorrect statements of law. Thus, the district courts did not
....
An act is done corruptly if it is performed voluntarily, deliberately, and
dishonestly for the purpose of either accomplishing an unlawful end or result, or
of accomplishing some otherwise lawful end or result by any unlawful method or
means.
50
Because in the Wilson case only PUGH appeals, we quote the “corruptly giving” part of
the court’s jury charge:
The purpose of the plan alleged by the government in the indictment was also for the
defendant, Pugh Incorporated, through Grady R. Pugh, Jr., to corruptly give, offer,
and agree to give things of value to defendant Ronald K. Wilson with the intent of
influencing and rewarding him for supporting their interests in connection with the
J.C.E.S.D. sewer rehabilitation construction program in violation of [18 U.S.C.
§ 666(a)(2)].
....
Title 18 of the United States Code section 666(a)(2) makes it a federal crime or
offense for any person to corruptly give, offer, or agree to give anything of value to
any person with the intent to influence or reward an agent of a local government or
local governmental agency receiving significant benefits under a federal assistance
program, in connection with any business, transaction or series of transactions of
such local government or government agency involving anything of value of $5,000
or more.
....
An act is done corruptly if it is performed voluntarily, deliberately, and
dishonestly for the purpose of either accomplishing an unlawful end or result or
of accomplishing some otherwise lawful result by any unlawful method or means.
51
“In considering the failure of a district court to give a requested instruction, the
omission is error only if the requested instruction is correct, not adequately covered by the
charge given, and involves a point so important that failure to give the instruction seriously
impaired the party’s ability to present an effective case.” Svete, 556 F.3d at 1161 (quotation
marks omitted). The district court’s refusal to give a requested instruction is reviewed for abuse
of discretion. Id.69
abuse their discretion in refusing them. See US Infrastructure, 576 F.3d at 1213(determining omission of a specific quid pro quo requirement in § 666 jury
instruction was not plain error); Paradies, 98 F.3d at 1289 (same).
In the McNair trial, all defendant-appellants also requested that the jury be
instructed that if a thing of value was given out of friendship or merely to foster
goodwill and not to corruptly influence or reward, then a not-guilty verdict is
required. After that request, the district court in the McNair trial supplemented the
pattern instructions with this:
Section 666 . . . does not prohibit all gifts by or to a public official, does
not prohibit all receipts -- does not prohibit receipt of all gifts by or to a
public official, but only gifts received with the corrupt intent to be
influenced or rewarded by that governmental official in connection with
a business or transaction or series of transactions of that governmental
entity involving $5,000 or more.[52]
After the defendant-appellants insisted the district court specifically identify
friendship and goodwill gifts as legal gratuities, the court responded “if it’s corrupt
and dishonest, it’s not for good will, is it?” The district court explained that giving
defendant-appellants’ instruction would “carr[y] with it some sort of suggestion
52
In the Swann, Barber, and Wilson trials, PUGH also requested the same jury charge.
The Rast and Pugh defendants either requested this jury instruction or adopted PUGH’s request,
in the Swann trial. And in the Swann, Barber, and Wilson trials, the district court gave similar
supplemental jury charges expressly advising the jury that § 666 does not prohibit all gifts to a
public official, but only those gifts with the corrupt intent to influence or reward specified
government officials in connection with the business or transaction or series of transactions of
that governmental entity.
70
that I’m adopting that idea that that’s what these payments were.” This exchange
then took place:
THE COURT: What if it’s good will and corrupt?
[ROLAND PUGH’S COUNSEL]: It can’t be.
THE COURT: Okay. That’s your answer.
A finding that a gift was made or accepted with corrupt intent necessarily excludes
friendship and goodwill gifts. There is no reversible error in the court’s charge in
this regard.53
VII. SUFFICIENCY OF THE EVIDENCE
A. Conspiracy and Corrupt Intent
All defendant-appellants challenge the sufficiency of the evidence to support
their convictions on various counts.54 Defendants’ primary arguments are the
government failed to prove a conspiracy among the defendants (as to Counts 1, 51,
53
We also find no merit to defendant-appellants’ claims on appeal as to any other
proposed jury instructions because they were either incorrect, too argumentative or flawed in
some way, not necessary, or already adequately covered by the court’s charge as a whole. In
particular, we conclude the court’s charge adequately covered defendants’ theory of defense that
the payments were gifts made out of friendship or to foster good will and adequately charged the
jury on the honest services mail fraud counts (90-100) as discussed later.
54
“This Circuit reviews the sufficiency of the evidence de novo, examining the evidence
in the light most favorable to the government and resolving all reasonable inferences and
credibility issues in favor of the guilty verdicts.” US Infrastructure, 576 F.3d at 1203. We “will
not overturn a conviction on the grounds of insufficient evidence unless no rational trier of fact
could have found the essential elements of the crime beyond a reasonable doubt.” United States
v. Wright, 392 F.3d 1269, 1273 (11th Cir. 2004) (quotation marks omitted).
71
75, and 78) or any corrupt intent as to all the bribery counts.55
To sustain the conspiracy convictions, the government must prove (1) “the
existence of an agreement to achieve an unlawful objective, here, giving things of
value” to County employees with the corrupt intent to influence or reward them;
(2) “the defendant[s’] knowing and voluntary participation in the conspiracy;” and
(3) “an overt act in furtherance of the conspiracy.” US Infrastructure, 576 F.3d at
1203; see also United States v. Jennings, 599 F.3d 1241, 1250-51 (11th Cir. 2010).
Defendants argue the government failed to present any evidence of an agreement
among them.
The problem for defendants is direct evidence of an agreement is
unnecessary; the existence of the agreement and a defendant’s participation in the
conspiracy may be proven entirely from circumstantial evidence. Id.; United
States v. Massey, 89 F.3d 1433, 1439 (11th Cir. 1996). “A defendant may be
found guilty of conspiracy if the evidence demonstrates he knew the ‘essential
objective’ of the conspiracy, even if he did not know all its details or played only a
55
Defendants PUGH, Roland Pugh, Yessick, RAST, Bobby Rast, Danny Rast, FWDE,
and Dougherty were convicted on Count 1 for participating in a conspiracy to bribe defendant
McNair. Defendants PUGH, Yessick, RAST, Bobby Rast, FWDE, and Dougherty were
convicted on Count 51 of participating in a conspiracy to bribe defendant Swann. Defendants
PUGH and Wilson were convicted on Count 75 of participating in a conspiracy (between PUGH,
Grady Pugh, and Wilson) to bribe Wilson. Defendant PUGH was convicted on Count 78 of
participating in a conspiracy (between PUGH, Roland Pugh, Barber, and Yessick) to bribe
Barber.
72
minor role in the overall scheme.” United States v. Guerra, 293 F.3d 1279, 1285
(11th Cir. 2002). The government need not show “each defendant had direct
contact with each of the other alleged co-conspirators.” Id. “It is not necessary for
the government to prove that a defendant knew every detail or that he participated
in every stage of the conspiracy.” United States v. Jones, 913 F.2d 1552, 1557
(11th Cir. 1990). “For a wheel conspiracy to exist those people who form the
wheel’s spokes must have been aware of each other and must do something in
furtherance of some single, illegal enterprise.” United States v. Fernandez, 892
F.2d 976, 986 (11th Cir. 1989) (quotation marks omitted). “[A] common purpose
or plan may be inferred from a development and collocation of circumstances.”
US Infrastructure, 576 F.3d at 1205 (quotation marks omitted).
Extensive witness and documentary evidence firmly established that the
things of value described in the conviction counts were given by the contractor-
defendants and accepted by McNair, Swann, Barber, Wilson, and other County
employees. The defendants in the McNair and Swann trials mainly dispute
whether the government proved they acted (1) with corrupt intent (versus for
friendship), and (2) in agreement (versus independently). The government
presented more than sufficient evidence of both corrupt intent and a conspiracy
agreement.
73
First, ample evidence showed that the contractor-defendants worked together
on McNair’s studio and Swann’s home and that they did so with a common
purpose of providing sizable benefits to influence McNair and Swann in the
billion-dollar sewer rehabilitation program. There was no evidence of gifts to
these “friends” before the sewer projects began. Instead, the gifts to McNair and
Swann and other County employees were made during the same time period of the
sewer projects. The large sums — both in bribes and sewer payments — indicate a
common scheme of all defendant-appellants to receive County sewer money
through illegal means. The jury was free to disbelieve the defendants’ claims of
gifts for friendship and to find corrupt intent to influence McNair and Swann in
connection with the County’s massive sewer payments to the contractor-
defendants. The juries could readily believe the gifts worth hundreds of thousands
of dollars to McNair and Swann after the sewer work began were actually bribes
intended to make sure the contractors profited excessively from the work. In fact,
the evidence recounted above showed pervasive and entrenched corruption.
Second, the evidence of how the contractor-defendants divided up and
coordinated their work on the same personal projects for McNair (his studio) and
Swann (his home) during the same time frame is strong evidence of a conspiracy.
For example, FWDE’s Bailey supervised the construction of McNair’s studio
74
while PUGH and RAST provided labor and materials. RAST furnished the labor
to build the deck, and PUGH furnished the materials. RAST excavated for the
footings, and PUGH ordered the concrete and poured concrete walls. FWDE paid
Mosley Construction for the wood framing initially, and then RAST began paying
Mosley. FWDE ordered the aluminum handrails, PUGH paid for them, and RAST
installed them. The same pattern of dividing up the work was followed for the
Swann home. For example, an FWDE employee supervised the work at Swann’s
home. PUGH’s Yessick hired a company to install a koi pond for Swann, and
PUGH listed Danny Rast as a point of contact.56
Third, the extent to which the parties went to conceal their bribes is powerful
evidence of their corrupt intent. For example, evidence in the McNair trial showed
FWDE employed Bailey as a full-time construction superintendent for the McNair
studio renovation and reported Bailey’s time as purportedly performed on a JCESD
sewer project. FWDE concealed a $50,000 payment Dougherty made to
subcontractor George Word Construction for building McNair’s Arkansas
retirement home.57 FWDE has no record of the transaction at all. The only
56
In addition, after McNair’s retirement, PUGH, FWDE, and Bobby Rast each gave
McNair a check for the same amount — $5,000 — all within a two-day period.
57
Earlier, PUGH had paid Word $44,192.75 in the first half of October 2001, and, per
Yessick’s instruction, internally charged the expense to miscellaneous jobs/construction
materials. McNair told George Word that FWDE would make the next payment.
75
existing record of this transaction was made by a bookkeeper, who copied the
invoice and check and kept them at home because of his suspicions. FWDE also
supplied a construction superintendent, Hendon, for Swann’s home remodel. For
nearly two years, Hendon was on FWDE’s payroll but actually spent half of every
workday at Swann’s home. FWDE’s Stanger replaced Hendon for an additional
nine months. Dougherty was aware of this work at Swann’s home. FWDE paid a
subcontractor over $28,000 — with checks signed by Dougherty — to frame the
addition to Swann’s home.
Likewise, RAST paid nearly $77,000 for materials and subcontractors for
McNair’s studio. RAST also supplied significant amounts of labor for McNair’s
studio, including excavating for the footings and constructing its deck and metal
steps. RAST hid these expenses by coding them to JCESD projects.
After a newspaper article revealed RAST’s work on Swann’s home, Bobby
Rast told his bookkeeper that they “didn’t need any document invoices in the files
with Jack Swann’s or Chris McNair’s shipping address on them,” causing her to
discard these invoices. Before the article, RAST had treated its payments to
McNair and Swann as business expenses, deducting them on its tax returns. After
the article, RAST amended several years’ returns to eliminate more than $140,000
76
of those deductions.58
Similarly, RAST crews performed demolition work and poured concrete for
the basement, walls, stairs, and elevator pit at Swann’s home. RAST also spent
more than $28,000 purchasing concrete and bricks and paying subcontractors to
repair the plumbing, paint Swann’s home, and install hardwood floors and stairs.
As with McNair, RAST concealed its work for Swann, in particular avoiding the
use of Swann’s name on invoices, delivery tickets, and accounting reports, and
coding the work and expenses either to miscellaneous or JCESD projects.
PUGH also concealed its work on McNair’s studio. For example, when
Besco delivered steel to McNair’s studio, Besco’s delivery tickets identified PUGH
and Yessick as its customer and indicated that some of the steel was for the Valley
Creek Treatment Plant, a JCESD sewer job on which PUGH was the contractor
and FWDE the consulting engineer.
Defendants claim they could not have intended to corruptly influence
McNair because his authority was purely “ministerial,” since he only ratified what
JCESD officials below him (such as Swann) had already approved. Given
58
Sufficient evidence also supports the Rast defendants’ convictions for bribing Chandler
and Ellis. First, Chandler asked Bobby Rast for money to attend technical conferences that Ellis
was also planning to attend. Instead of giving Chandler a check for $250-$500 as Chandler
expected, Bobby Rast gave Chandler an envelope containing $5,000 cash and told Chandler to
split it with Ellis.
77
McNair’s ultimate authority and responsibility, a jury could infer McNair became a
“rubber-stamp” for the defendants’ pay requests, field directives, and contract
modifications that crossed his desk because of the large sums in goods and services
he received from the contractor-defendants. And because he was responsible for
placing sewer items on the County Commission’s weekly agenda, McNair
controlled every sewer matter requiring Commission approval.59
B. PUGH’s Challenges to Counts 75 and 78
PUGH challenges the sufficiency of the evidence as to its bribery conspiracy
convictions on Count 75 (the Wilson scholarship) and Count 78 (land and
vacations for Barber). However, ample evidence supports both convictions.
The evidence established that when Grady Pugh gave Wilson’s son the
scholarship, he expected Wilson to return the favor. Grady Pugh testified that
when he provided the Wilson scholarship, he “felt like if [Wilson] got a chance to
59
Defendants also contend the government failed to prove any specific payment (or work
on McNair’s studio or Swann’s home) was given or done in exchange for a specific official act
by McNair or Swann. Because a specific quid pro quo is not an element of a § 666(a)(1)(B) or
(a)(2) crime, there was necessarily no failure of proof as to that element.
Alternatively, even assuming these § 666 crimes require, as the Second Circuit concluded
in Ganim, that the government prove payments or such work were given or done in return for a
promise of as yet unidentified future conduct favorable to the contractor-defendants in their
County sewer projects, the evidence overwhelmingly established such facts and thus any error in
the jury charge was harmless. And even under the Fourth Circuit’s approach in Jennings, which
requires a “course of conduct of favors and gifts flowing to a public official in exchange for a
pattern of official actions favorable to the donor,” the evidence here was sufficient, and thus any
jury charge error was harmless. Jennings, 160 F.3d at 1014.
78
help us and return the favor, he would.” Only three days after Wilson faxed Grady
Pugh information as to where PUGH should send the scholarship check — and the
day before Grady Pugh sent it — Wilson approved PUGH’s request for a time
extension that had been sitting on Wilson’s desk for four weeks. When PUGH
submitted its extension request, PUGH was already exposed to liability of $76,000
in liquidated damages. The amount of exposure exceeded $100,000 by the time
Wilson actually granted PUGH’s request.
The evidence also supports the verdict that PUGH and Yessick conspired to
bribe Barber. Barber oversaw all of the JCESD inspectors and awarded the no-bid
emergency work contracts. In 1997, 1998, 1999, and 2001, PUGH paid for
Barber’s vacations, but hid the payments in the company’s books. PUGH readily
agreed to Barber’s June 2000 request to buy him a lot for a retirement home.
PUGH’s Yessick contracted for the lot in Roland Pugh’s name but charged
$45,000 to the Paradise Lake project to pay for it. Then, just before the closing,
PUGH instead gave Barber a cashier’s check to buy the lot in his own name. The
remitter’s name was left blank on that check. Yessick was told to retrieve all
evidence that PUGH was ever involved. This required the realtor to fabricate a
fictitious house sale to refund the original $1,000 deposit.
Moreover, just months before Barber solicited PUGH for the purchase of the
79
lot, Barber designated the Paradise Lake project as an emergency. Because the
cost of the project — $827,417.75 — greatly exceeded Barber’s $50,000
emergency work approval limit, and because there was no Paradise Lake contract
on which to grant a field directive, the work was performed as a field directive on
the unrelated multimillion dollar Cahaba River project. PUGH netted a profit of
more than $400,000.
PUGH argues the Wilson scholarship and Barber land transaction are not
bribery conspiracies, but merely “buyer-seller” transactions. PUGH relies
primarily on two drug cases, United States v. Mercer, 165 F.3d 1331, 1335 (11th
Cir. 1999) (cash for drugs), and United States v. Dekle, 165 F.3d 826, 830-31 (11th
Cir. 1999) (sex for drugs), for the proposition that there is no conspiracy where
there is merely a “buy-sell transaction” without an “agreement to join together to
accomplish a criminal objective beyond that already being accomplished by the
transaction.” Mercer, 165 F.3d at 1335 (quotation marks omitted). PUGH argues
that there was nothing agreed upon with Wilson or Barber outside of the one gift or
one buy-sell transaction. The drug cases of Mercer and Dekle are materially
different from § 666 bribery conspiracy cases. In a drug deal, once the sale is
complete, there is no further criminal objective. In § 666 cases, once the gift is
made, the defendant typically intends to corruptly influence the County employee’s
80
future actions. See United States v. Tilton, 610 F.2d 302, 307 (5th Cir. 1980)60
(bribee conspired with briber in part because of common goal of increasing their
personal wealth). In § 666 cases, the defendants share both an anticipation of
future action and a common goal of increasing their wealth illegally.61
C. Swann and PUGH’s Challenges to Counts 90-100
In the Swann trial, Swann, PUGH, and Yessick were convicted of eleven
counts (90-100) of honest services mail fraud under §§ 1341 and 1346. The
convictions involve Swann’s receiving landscaping services worth $140,000 from
PUGH and Yessick. On appeal, Swann and PUGH claim the evidence was
insufficient to support their convictions.62
To establish a violation of § 1341, the government must show the defendant
“(1) intentionally participates in a scheme or artifice to defraud another of money
or property, and (2) uses or ‘causes’ the use of the mails . . . for the purpose of
executing the scheme or artifice.” United States v. Ward, 486 F.3d 1212, 1222
60
This Court adopted as binding precedent all Fifth Circuit decisions prior to October 1,
1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
61
To the extent defendant-appellants make sufficiency of the evidence arguments as to
any other § 666 conviction counts, we reject them as without merit.
62
Yessick does not appeal. On appeal, Swann and PUGH do not challenge the
constitutionality of the honest services statute. Instead, Swann raises two claims: (1)
insufficient evidence to sustain his §§ 1341, 1346 convictions, and (2) the district court erred by
refusing to give a “good faith” instruction to the jury. PUGH adopted Swann’s claim of
insufficient evidence.
81
(11th Cir. 2007).63
Section 1346 adds “honest services” language to the § 1341 offense,
providing that “the term ‘scheme or artifice to defraud’ includes a scheme or
artifice to deprive another of the intangible right of honest services.” 18 U.S.C.
§ 1346. “To prove ‘honest services’ mail fraud, the Government must show that
the accused intentionally participated in a scheme or artifice to deprive the persons
or entity to which the defendant owed a fiduciary duty of the intangible right of
honest services, and used the United States mails to carry out that scheme or
artifice.” United States v. Browne, 505 F.3d 1229, 1265 (11th Cir. 2007). When a
public official “secretly makes his decision based on his own personal interests —
as when an official accepts a bribe or personally benefits from an undisclosed
conflict of interest — the official has defrauded the public of his honest services.”
United States v. Lopez-Lukis, 102 F.3d 1164, 1169 (11th Cir. 1997).
Here, Swann received approximately $100,000 in landscaping and lawn
63
Section 1341 provides in pertinent part:
Whoever, having devised or intending to devise any scheme or artifice to defraud,
. . . places in any post office or authorized depository for mail matter, any matter or
thing whatever to be sent or delivered by the Postal Service, or deposits or causes to
be deposited any matter or thing whatever to be sent or delivered by any private or
commercial interstate carrier, or takes or receives therefrom, any such matter or
thing, or knowingly causes to be delivered by mail or such carrier according to the
direction thereon, or at the place at which it is directed to be delivered by the person
to whom it is addressed, any such matter or thing, shall be fined under this title or
imprisoned not more than 20 years, or both.
18 U.S.C. § 1341.
82
maintenance from a company (PUGH) that he had the power to favor in the sewer
rehabilitation program. In the summer of 2000, after Swann told PUGH’s Yessick
he had overspent in remodeling his house, Yessick hired Guthrie Landscaping to
landscape Swann’s two properties. By December 2001, PUGH had paid Guthrie
more than $93,000, including $1,200 per month in 2001 for lawn maintenance. In
January 2002, Yessick asked Guthrie to stop submitting invoices to PUGH and
instead advanced Guthrie $47,000 for three years of landscaping and maintenance.
PUGH paid a total of approximately $140,000 to Guthrie for landscaping work for
the Swanns.64
Although Swann contends there was “no bribe” and none of this was “done
in secrecy,” the evidence shows PUGH and Swann took steps to conceal any
record of the services provided to Swann. Guthrie mailed its invoices to PUGH
and, at Yessick’s request, identified the work by job number only. Yessick
directed PUGH’s controller to charge the expense to the Metro Park Roadway, a
County job. Guthrie’s invoices were never found in PUGH’s files.
After Swann and Yessick learned of the investigation, Guthrie was abruptly
asked to stop working at Swann’s home, even though there was a balance
64
In addition to the substantive bribery counts against Swann (Count 52) and PUGH
(Count 61) for these landscaping services, both defendants were convicted of separate counts
(Counts 90-100) of honest services mail fraud for payments PUGH made by mail to Guthrie.
83
remaining on its $47,000 advance. In August and September 2002, approximately
two years after hiring Guthrie, Yessick directed his assistant to create invoices to
Swann’s mother and mother-in-law for landscaping, tree removal, and “remodeling
work.” The Swanns then took out home equity loans in the names of their
mothers, and wrote two checks to PUGH totaling approximately $59,000 on joint
accounts they held with their mothers. Yessick gave these checks directly to
PUGH’s controller, telling her they were partial payment for $105,000 in
landscaping work PUGH had done, which work he had previously directed her to
record as “miscellaneous AR.” Yessick told the controller to credit the $59,000 in
checks to PUGH as “miscellaneous income” and “to write off” the approximately
$46,000 that remained.
Swann contends that PUGH merely located the landscaping contractor and
that he always intended to reimburse PUGH for payments to Guthrie. However,
PUGH and Swann concealed the landscaping arrangement. The concealment itself
is strong evidence that Swann accepted these services not as a loan, but as a bribe.
See United States v. Hunt, 521 F.3d 636, 646-47 (6th Cir. 2008), cert. denied, 129
S. Ct. 2157 (2009); United States v. Dial, 757 F.2d 163, 170 (7th Cir. 1985).
Swann also claims he was unable to, and did not, assist PUGH in any way.
Yet, five days after PUGH’s President Yessick hired Guthrie to landscape Swann’s
84
two properties, Swann granted a 180-day extension for PUGH’s joint venture on
the Vestavia Trunk project. That extension saved PUGH’s joint venture $180,000
in potential liquidated damages. Two months earlier, Swann had denied a 120-day
extension request on the same project, noting that timely completion of the project
was “a requirement of the specifications.” And in 2000, Swann approved a
$827,417.75 field directive for PUGH’s Paradise Lake project and caused it to be
charged to the unrelated Cahaba River project. As noted earlier, Barber had
designated the project as an emergency, and then Swann later approved this field
directive.
The evidence fully supports the jury’s guilty verdict on Counts 90-100 as to
Swann and PUGH.65
D. Roland Pugh’s Arguments
Roland Pugh challenges the sufficiency of the evidence to support his
conviction for conspiracy to commit bribery of McNair (Count 1). Roland Pugh
65
Swann also claims the district court erred by refusing his proposed jury instruction that
good faith is a complete defense to mail fraud. The district court instructed the jury that to
convict, it must find beyond a reasonable doubt that defendants “knowingly devised or
participated in a scheme to fraudulently deprive the public of an intangible right of honest
services” and did so willfully with intent to defraud. The court defined “intent to defraud” as “to
act knowingly and with the specific intent to deceive someone.” Because a finding of specific
intent to defraud necessarily excludes a finding of good faith, Swann’s requested instruction was
“substantially covered by other instructions that were delivered,” and Swann has shown no error
in the refusal to give his requested good faith charge. United States v. Opdahl, 930 F.2d 1530,
1533 (11th Cir. 1991) (quotation marks omitted).
85
also argues the government failed to prove a “wheel” or “hub and spoke”
conspiracy because there was no evidence he knew the Rast and Dougherty
defendants (the other “spokes”) were bribing McNair (the “hub”).
This ignores the fact that Roland Pugh directed Grady Pugh to fly McNair’s
daughter and FWDE’s superintendent Bill Bailey (who was overseeing
construction at McNair’s studio) on the PUGH company airplane to Georgia to
pick out carpet for McNair’s studio. Before take-off, Roland Pugh told Grady
Pugh that “McNair has called now and says that he’s broke and he doesn’t have
enough money to leave for the deposit on the carpet. So, if you would, write a
check for the deposit.” Grady Pugh paid the deposit with a $4,820 PUGH check
and had it treated on the company’s books as an expense on the “last rehab
contract.”66
Roland Pugh also gave McNair money in connection with the project to
develop McNair’s studio. When the project began, Roland Pugh told PUGH’s
other three owners, Grady Pugh, Andy Pugh, and Yessick, that they had to give
money to McNair because he was building a studio and, as ten percent owners,
they had to “kick in” their ten percent. Grady Pugh gave approximately $1,500 in
66
Grady Pugh’s testimony in this regard was corroborated by Bill Bailey’s testimony.
86
cash to Roland Pugh’s secretary that time to give to McNair.67
On another occasion, Roland Pugh collected money from the three other
PUGH owners to give to McNair for his studio. On July 18 and 19, 2000, three of
them wrote checks to cash in proportion to their ownership interests. (Roland
Pugh: $7,000, Andy Pugh: $1,000, Yessick: $1,000). Roland Pugh gave Grady
Pugh an envelope of money and asked him to give it to McNair. Grady Pugh took
it to McNair’s studio where he saw FWDE’s Bailey and told Bailey he (Grady
Pugh) was there to help McNair, and that it was “financial help” that McNair
needed at that time. Grady Pugh then visited with McNair for a few minutes and
set the envelope down between the seats of the van they were in as McNair
watched. After McNair retired, Roland Pugh complained to Grady Pugh about
McNair’s demand for help building a retirement home, saying that “surely this is
the last time we’ll have to do anything for him since he’s out of office.”68
67
We reject Roland Pugh’s claim that his conspiracy conviction falls outside of the statute
of limitations because no member of the “Pugh spoke” committed an overt act after August 26,
2000. The Rast and Dougherty defendants took actions in furtherance of the conspiracy well
within the statute of limitations. “[A]n individual conspirator need not participate in the overt
act in furtherance of the conspiracy. Once a conspiracy is established, and an individual is
linked to that conspiracy, an overt act committed by any conspirator is sufficient.” United States
v. Thomas, 8 F.3d 1552, 1560 n.21 (11th Cir. 1993). Because Roland Pugh had joined the
conspiracy to bribe McNair and because that conspiracy continued into the statute of limitations
period, Roland Pugh’s conviction stands even if he took no actions within that period. The
district court properly instructed the jury that it could convict Roland Pugh if any co-conspirator
committed an act after August 26, 2000.
68
Roland Pugh cites the drug case of United States v. Mercer, 165 F.3d at 1335-36, for
the proposition that there is no conspiracy where there is merely a “buy-sell transaction.” As
87
Later, after McNair asked Roland Pugh to pay for the studio’s $40,000 air
conditioning system, Roland Pugh gathered funds by writing checks to his
daughters-in-law and to cash. Once again, Grady Pugh delivered an envelope of
cash to McNair, this time at his house.
As a result, there was sufficient evidence for the jury to convict Roland Pugh
and to find that he was aware of at least some of the other co-conspirators, such as
FWDE and FWDE’s Bailey, given that they were working on separate parts of a
larger project. Accordingly, we reject Roland Pugh’s sufficiency of the evidence
challenge to his conviction on Count 1.
The cases Roland Pugh relies on are inapposite. In United States v.
Chandler, 388 F.3d 796, 807-08 (11th Cir. 2004), the “hub” of the conspiracy
ensured “there was no connection whatsoever between the various spokes,” and the
spokes “knew nothing about each other.” The evidence here shows that Roland
Pugh was aware not only of PUGH, Yessick, and Grady Pugh’s involvement in the
McNair project, but also that of the Dougherty and Rast defendants’ involvement.
For the same reason, United States v. Glinton, 154 F.3d 1245 (11th Cir. 1998), is
not on point. Id. at 1251 n.5 (concluding “hub and spoke” conspiracy must have
explained earlier, Mercer is materially different from § 666 bribery conspiracy cases. In any
event, Roland Pugh’s argument lacks merit as to Count 1 because there is ample evidence that
persons other than Roland Pugh and McNair were involved in the transactions in the bribery
conspiracy.
88
“some interaction between those conspirators who form the spokes of the wheel as
to at least one common illegal object”) (quotation marks omitted).
E. McNair’s Arguments Regarding Dawson
The evidence at the McNair trial showed McNair’s conviction for accepting
a bribe from Dawson is adequately supported. Dawson’s firm received millions of
dollars in no-bid engineering contracts from McNair, and the vast majority of
Dawson’s work was on JCESD contracts. McNair solicited the studio’s $16,400
audio-video system from Dawson. Dawson “was uncomfortable with the whole
situation” and would not have agreed if McNair was not part of the sewer
rehabilitation process, so he had the store conceal the delivery address on the
invoice.
VIII. 404(B) EVIDENCE
All defendant-appellants challenge the admission of other bad acts evidence
under Federal Rule of Evidence 404(b).69 Specifically, they contend the district
courts erred by admitting, for example, Swann-bribe evidence in the McNair trial
and McNair-bribe evidence in the Swann trial.
69
A district court’s evidentiary rulings under Federal Rule of Evidence 404(b) are
reviewed only for “a clear abuse of discretion.” US Infrastructure, 576 F.3d at 1208. “[T]his
Court ‘will not hold that the district court abused its discretion where it reached the correct result
even if it did so for the wrong reason.’” Id. (quoting United States v. Samaniego, 345 F.3d 1280,
1283 (11th Cir. 2003)).
89
Federal Rule of Evidence 404(b) provides:
Evidence of other crimes, wrongs, or acts is not admissible to prove the
character of a person in order to show action in conformity therewith.
It may, however, be admissible for other purposes, such as proof of
motive, opportunity, intent, preparation, plan, knowledge, identity, or
absence of mistake or accident . . . .
Fed. R. Evid. 404(b). This Court uses a three-part test to determine whether other
bad acts are admissible under Rule 404(b):
First, the evidence must be relevant to an issue other than the defendant's
character; Second, the act must be established by sufficient proof to
permit a jury finding that the defendant committed the extrinsic act;
Third, the probative value of the evidence must not be substantially
outweighed by its undue prejudice . . . .
United States v. Matthews, 431 F.3d 1296, 1310-11 (11th Cir. 2005) (quotation
marks omitted). “[I]n every conspiracy case, a not guilty plea renders the
defendant’s intent a material issue. Evidence of such extrinsic evidence as may be
probative of a defendant’s state of mind is admissible unless the defendant
affirmatively takes the issue of intent out of the case.” Id. at 1311 (alterations and
internal quotation marks omitted).
Moreover, Rule 404(b) does not exclude evidence that is “inextricably
intertwined” with evidence of the charged offense. United States v. Wright, 392
F.3d 1269, 1276 (11th Cir. 2004); United States v. Aleman, 592 F.2d 881, 885 (5th
Cir. 1979). Rule 404(b) does not exclude evidence that is “linked in time and
90
circumstances with the charged crime” or that “forms an integral and natural part
of an account of the crime to complete the story of the crime for the jury.” Wright,
392 F.3d at 1276 (quotations omitted); United States v. Edouard, 485 F.3d 1324,
1344 (11th Cir. 2007).
We conclude the contested evidence was admissible for three reasons. First,
the evidence was inextricably intertwined with evidence of the charged bribery
offenses. Second, even if not inextricably intertwined, this evidence was relevant
to show corrupt intent and admissible under 404(b). Defendant-appellants
expressly argued they lacked corrupt intent and gave gifts to McNair and Swann
out of friendship and good will.70 Evidence that the contractor-defendants gave
things of value to Swann in McNair’s trial and to McNair in Swann’s trial was
highly probative of the contractor-defendants’ intent. See Edouard, 485 F.3d at
1345 (concluding extrinsic evidence is relevant “where the state of mind required
for the charged and extrinsic offenses is the same”). Moreover, evidence of similar
conduct that occurs during the same time period has “heightened” probative value.
Jones, 913 F.2d at 1566. Indeed, the district court judge, in the McNair trial,
explained in a pre-trial order:
70
Roland Pugh does not stress lack of corrupt intent because he claims he was not
involved at all in any gift. Other than Roland Pugh, defendants do not argue things of value
were not given by them to County officials, but they claim they were gifts, not bribes.
91
While the jury might conceivably find that the defendant felt such a
strong sense of friendship with McNair that they would give him
substantial gifts or make him substantial loans, the fact that they gave
alleged “gifts” or made “loans” to others involved with the same or
similar projects would certainly be relevant to the issues of “motive” and
“intent.” It could also bear on “plan” . . . [and i]f the projects are the
same or similar, they may well be a part of the same “series of
transactions.” . . . [W]hat might arguably be a “gift” to one person
becomes less likely a gift if the “gifts” are widespread to others involved
with the same or similar projects.[71]
Similarly in the Swann trial, another district court judge found that this sort of
evidence of intent is “exactly what 404(b) testimony is here for.”
Third, the evidence was admissible under 404(b) to show the contractor-
defendants’ common plan and motive. Specifically, the evidence showed a
common plan of bribing County officials controlling the sewer projects by
providing them with work on their personal homes or businesses and working
together to do so during the same time frame of the sewer projects. For example,
in the McNair trial, evidence showed — just as FWDE’s Bailey was supervising,
and RAST and PUGH were providing labor and materials for the McNair studio
expansion — FWDE’s Stanger was supervising and using a RAST credit card to
purchase materials for Swann’s separate home renovation. Similarly, in the Swann
trial, the evidence showed that RAST sent Luke Cobb to pour a concrete
71
The McNair judge stated in a subsequent order, “[t]he offenses were similar and
temporally close. The 404(b) evidence was clearly appropriate to meet the government’s
requirement to prove intent.”
92
foundation for McNair’s studio, just as he had done for the expansion of Swann’s
home, and that PUGH had provided Chandler with landscaping, just as it did for
Swann. Indeed, the evidence recounted at length above gives repeated examples of
how the 404(b) evidence was relevant to show both corrupt intent and a common
plan and motive.
Furthermore, the district courts in both the McNair and Swann trials gave
limiting instructions for the 404(b) evidence several times during the trials. See
United States v. Diaz-Lizaraza, 981 F.2d 1216, 1225 (11th Cir. 1993) (concluding
prejudice could be mitigated by giving a cautionary instruction on the limited use
of such evidence). In the McNair trial, for example, after testimony of
Dougherty’s contributions to Swann’s remodeling, the court instructed in part:
This evidence is being allowed for the limited purpose, with respect to
Mr. Dougherty, as to what Mr. Dougherty’s intent may have been at the
time that he may have made payments, or contributions, or gifts, to Mr.
McNair. Not that Mr. McNair is charged with receiving anything in
connection with Mr. Swann’s house.
But the evidence is allowed for the purpose of your considering that if
Mr. Dougherty was making some sort of payments, or contributions, or
gifts, on behalf of Mr. McNair; and if he was also making some sort of
gifts, or payments, or contributions on behalf of Mr. Swann, you can
consider that combination with regard to your determination, which will
be a necessary determination for you to make, as to what Mr. Dougherty
and his company’s intent was, and the nature of that intent, whether it be
corrupt or otherwise, at the time he made gifts, or contributions, or
payments, on behalf of Mr. McNair.
93
In the Swann trial, the court gave similar limiting instructions several times.72
And the jury acquitted some defendants on some counts while convicting
them on others. This further demonstrates the jury was not confused and could
segregate the 404(b) evidence from other evidence. United States v. Prosperi, 201
F.3d 1335, 1346 (11th Cir. 2000) (“A discriminating acquittal also can signal that
the jury was able to sift through the evidence properly.”); United States v. Coy, 19
F.3d 629, 635 (11th Cir. 1994) (concluding that a split verdict demonstrates
“absence of confusion” for 404(b) purposes).73
72
In the Barber and Wilson trials, the district courts admitted 404(b) evidence but gave
similar limiting instructions several times.
For the first time on appeal, Swann contends that the limiting instructions were not
specific enough because they did not always identify by name the defendant against whom the
404(b) evidence was not being offered. We review this issue for plain error. See infra section
XII.D. Where, as here, the district court’s instructions accurately reflect the law, this Court
gives “wide discretion as to the style and wording employed . . . .” United States v. Starke, 62
F.3d 1374, 1380 (11th Cir. 1995). Moreover, at several times during trial, the district court
specifically offered to name defendants against whom the evidence was not offered, and
appellants — including Swann — declined:
COURT: I have asked y’all that every single time we have
given a limiting instruction if you want me to use
specific names and I have been told no up to this
point. . . . I want you to know I am willing to sit here
and tell you the names. I think it would be
appropriate, but you are asking me not to; is that
right?
[SWANN’S COUNSEL]: Yes, sir.
Swann has not shown reversible error, plain or otherwise, in any of the jury instructions.
73
For example, in the Swann trial, the jury convicted Swann of bribery conspiracy, 6
substantive bribery counts, and 11 fraud counts, but acquitted him of one bribery count and 17
fraud counts. In the McNair trial, the jury convicted and acquitted different defendants on the
same charges. In McNair, the jury convicted McNair on Counts 1-3 and 5-12 but acquitted him
on Count 4. In both the McNair and Swann trials, the jury convicted Bobby Rast but acquitted
Danny Rast on some of the same counts. In the Barber trial, the jury convicted PUGH but
94
Defendant-appellants’ claim that the 404(b) evidence should have been
excluded under Rule 403 lacks merit too. Under Federal Rule of Evidence 403,
evidence must be excluded if its probative value “is substantially outweighed by
the danger of unfair prejudice.” Wright, 392 F.3d at 1276. “Rule 403 is an
extraordinary remedy that must be used sparingly because it results in the
exclusion of concededly probative evidence.” US Infrastructure, 576 F.3d at
1211. This Court in US Infrastructure rejected defendant USI’s argument that
certain 404(b) evidence of a non-party’s bribes of McNair was inadmissible on
Rule 403 undue prejudice grounds, stating “in cases where this Court has found
other acts evidence inextricably intertwined with the crimes charged, the Court has
refused to find that the evidence should nonetheless be excluded as unduly
prejudicial . . . .” Id. “[T]he test under Rule 403 is whether the other acts evidence
was ‘dragged in by the heels’ solely for prejudicial impact.” Id. (quoting United
States v. Veltmann, 6 F.3d 1483, 1500 (11th Cir. 1993)). Because the other acts
evidence was inextricably intertwined with the charged crimes, it was not
excludable under Rule 403. In any event, its probative value substantially
acquitted Roland Pugh on the same counts.
Moreover, in the Swann and Wilson trials, the district court charged the jury to consider
each defendant “separately and individually” and reminded them that “each defendant is on trial
only for the specific offenses or offense charged against such defendant in the indictment.” In
the McNair and Barber trials, the district court gave the same instruction with slight variations.
Such jury instructions substantially mitigate the risk of spillover prejudice. United States v.
Cross, 928 F.2d 1030, 1039 (11th Cir. 1991).
95
outweighed any undue prejudice.
Appellant McNair also points out that the government did not introduce any
evidence that McNair knew about, condoned, arranged, or otherwise sanctioned
any of the transactions constituting 404(b) bribe evidence against Swann.
However, the Swann evidence was inextricably intertwined with the case against
McNair because sewer rehabilitation decisions went through two or three stages of
review in some situations, and thus the evidence showed the contractor-defendants
were giving things of value to County employees at every level of the JCESD.
For example, pay requests, contract modifications, and change orders were
sometimes approved at the lower levels by the JCESD’s assistant director and
engineers or by private engineers (like FWDE and Dougherty), and then, when
necessary, sent to Swann as the JCESD’s director — and then passed on to McNair
for approval or submission to the County Commission with McNair’s
recommendation. The bribery of other County employees shown in the McNair
and Swann trials was an integral part of the overall bribery scheme because it
showed a common plan and motive of the contractor-defendants and completed the
story. The government amply showed linkage between contractor-defendants’
bribes to McNair and those to Swann and other County employees and vice versa.
While the USI trial considered in US Infrastructure involved 404(b) testimonial
96
evidence by electrical contractor Henson, which is not at issue in this appeal, this
Court’s analysis in US Infrastructure is apt here: “Henson’s testimony was
relevant to the chain of events surrounding the charged crimes, including context
and setup . . . .” US Infrastructure, 576 F.3d at 1211.74
Finally, defendant-appellants point out that the two trials were severed and
that “[s]everance under Rule 14 of the Federal Rules of Criminal Procedure is
warranted only when a defendant demonstrates that a joint trial will result in
‘specific and compelling prejudice’ to his defense.” Defendant-appellants argue
that, because the district court severed the case, it “must have found that the jury
would be unable to consider the evidence separately as it pertained to individual
defendants.”
This argument is unavailing. The district judge who severed these cases
stated in a later telephone conference that, “perhaps some of [these cases] didn’t
even call for severance, but I leaned toward trying to avoid as much confusion as I
74
The district court also did not err in admitting evidence of cash deposits to McNair’s
studio’s construction account. See United States v. Lattimore, 902 F.2d 902, 903 (11th Cir.
1990) (stating “[w]here the charged crime involves pecuniary gain and the Government presents
other evidence of the defendant’s guilt, evidence of the sudden acquisition of money by the
defendant or his or her spouse is admissible, even if the Government does not trace the source of
this new wealth.”). This evidence was highly relevant to McNair’s intent to accept goods and
services bribes, especially since these cash deposits were to the McNair studio account and the
goods and services bribes involved the same McNair studio. The cash deposits also were listed
as overt acts in Count 50. The defendants also have not shown reversible error as to their claim
of untimely notice under 404(b).
97
could.” In the same teleconference, the district court ruled that 404(b) evidence of
other bribes was relevant and that jury instructions would prevent improper use of
that evidence. (“I’m going to assume that if I tell them three or four times, they’ll
understand it.”) At the beginning of the McNair trial, the court stated the cases
were severed because it would be “cumbersome to try” them together, but “[t]hat
doesn’t necessarily mean that evidentiarily, they’re not related.” During the
McNair trial, the district court again rejected defendant-appellants’ argument that
severance of the counts meant that evidence related to the severed counts was
irrelevant, stating:
But that doesn’t have anything to do with whether or not something is or
is not relevant evidence to some other situation. That’s like saying, they
indicted them for a bank robbery thing but you can’t show that they
spent some of the cash over here in another deal or something.
Defendant-appellants cite no legal support for their argument that severance per se
means other bribe evidence cannot be admitted. That the district court gave the
defendants the benefit of trying McNair and the contractor-defendants in one trial,
and then Swann and the contractor-defendants in a separate trial, does not mean all
evidence about bribes to Swann could not be introduced in the McNair trial and
vice versa.
IX. PROSECUTORIAL MISCONDUCT IN MCNAIR TRIAL
As to their convictions in the McNair trial, defendants PUGH and Roland
98
Pugh argue that the prosecutor engaged in misconduct by (1) failing to correct
Grady Pugh’s false testimony, and (2) eliciting additional false testimony from
Grady Pugh, thereby violating their due process rights.75 Specifically, these
defendants argue that at trial Grady Pugh falsely denied having previously said he
delivered cash bribes to McNair before a May 24, 2000 trip to buy carpet and
falsely testified that he delivered the money after that May 24, 2000 trip.
These cash bribes were part of Counts 13 and 14. During the McNair trial,
the time line of these events was at issue because it determined whether Counts 13
and 14 were barred by the statute of limitations.76 The jury acquitted PUGH and
Roland Pugh on Counts 13 and 14.77 While the acquittal moots the statute of
limitations issue, the time line of the cash bribes remains relevant only as to Count
1 (bribery conspiracy) and only because those cash bribes were alleged as overt
75
PUGH’s brief specifically adopts Roland Pugh’s prosecutorial misconduct arguments,
and Roland Pugh adopts all relevant portions of PUGH’s brief as to all issues. McNair, RAST,
Bobby Rast, Danny Rast, FWDE, and Dougherty adopt all arguments of all defendants as to all
issues.
76
The parties referenced the five-year limitations period for Counts 13 and 14 as from
August 26, 2000 to August 26, 2005, the date the Second Supseding Indictment was submitted,
which added Roland Pugh as a defendant. 18 U.S.C. § 3282. Count 13 charged PUGH and
Yessick with giving McNair $20,000 in cash. Count 14 charged PUGH and Roland Pugh with
giving McNair at least $10,000 in cash in January 2001. However, if the cash bribes occurred
before the May 24, 2000 carpet purchase in Georgia, the defendants argued Counts 13 and 14
would be barred by the five-year statute of limitations.
77
While PUGH was convicted on multiple counts, Roland Pugh was convicted on only
Count 1, the bribery conspiracy count. Other than some documentary evidence, Grady Pugh was
the only witness testifying against Roland Pugh as to Count 1.
99
acts in furtherance of the overall conspiracy to bribe McNair, for which PUGH and
Roland Pugh were convicted. On appeal PUGH and Roland Pugh argue Grady
Pugh’s false testimony about the time line goes to his credibility and that if the jury
knew he was lying, this could have affected the guilty verdict on Count 1.78
To establish prosecutorial misconduct for the use of false testimony, a
defendant must show the prosecutor knowingly used perjured testimony, or failed
to correct what he subsequently learned was false testimony, and that the falsehood
was material.79 See United States v. Woodruff, 296 F.3d 1041, 1043 n.1 (11th Cir.
2002); United States v. Dickerson, 248 F.3d 1036, 1041 (11th Cir. 2001); United
States v. Alzate, 47 F.3d 1103, 1110 (11th Cir. 1995); see also Napue v. Illinois,
360 U.S. 264, 270-71, 79 S. Ct. 1173, 1177-78 (1959). Perjury is defined as
testimony “given with the willful intent to provide false testimony and not as a
result of a mistake, confusion, or faulty memory.” United States v. Ellisor, 522
F.3d 1255, 1277 n.34 (11th Cir. 2008).
“When a government lawyer elicits false testimony that goes to a witness’s
credibility, we will consider it sufficiently material to warrant a new trial only
78
For the conspiracy charged in Count 1, it did not matter whether the cash deliveries
were within the statute of limitations because there was ample evidence of other overt acts
within the five-year statute of limitations period. See United States v. Arias, 431 F.3d 1327,
1340 (11th Cir. 2005).
79
We review a claim of prosecutorial misconduct de novo because it is a mixed question
of law and fact. United States v. Duran, 596 F.3d 1283, 1299 (11th Cir. 2010).
100
when the estimate of the truthfulness and reliability of the given witness may well
be determinative of guilt or innocence.” United States v. Cole, 755 F.2d 748, 763
(11th Cir. 1985) (quotation marks and alteration omitted). In other words, “[t]he
materiality element is satisfied if the false testimony could reasonably be taken to
put the whole case in such a different light as to undermine confidence in the
verdict.” Dickerson, 248 F.3d at 1041 (quotation marks omitted). The false
testimony is deemed material if there is a reasonable likelihood the false testimony
could have affected the judgment of the jury. Alzate, 47 F.3d at 1110; United
States v. Barham, 595 F.2d 231, 242 (5th Cir. 1979).
In addition, a prior statement that is merely inconsistent with a government
witness’s testimony is insufficient to establish prosecutorial misconduct. United
States v. Michael, 17 F.3d 1383, 1385 (11th Cir. 1994) (“We refuse to impute
knowledge of falsity to the prosecutor where a key government witness’[s]
testimony is in conflict with another’s statement or testimony.”); Hays v. Alabama,
85 F.3d 1492, 1499 (11th Cir. 1996) (determining there was no due process
violation where “there has been no showing that [the witness’s] later, rather than
earlier, testimony was false”); United States v. Gibbs, 662 F.2d 728, 730 (11th Cir.
1981) (“Though knowing prosecutorial use of false evidence or perjured testimony
violates due process . . . it is not enough that the testimony . . . is inconsistent with
101
prior statements.”); United States v. Brown, 634 F.2d 819, 827 (5th Cir. 1981)
(“[D]ue process is not implicated by the prosecution’s introduction or allowance of
false or perjured testimony unless the prosecution actually knows or believes the
testimony to be false or perjured; it is not enough that the testimony is challenged
by another witness or is inconsistent with prior statements.”).
A. Grady Pugh’s Testimony About Cash Deliveries
The false testimony claim stems from notes the prosecutor made during
Grady Pugh’s two meetings with the prosecutor for plea negotiations on June 17
and 21, 2005. An FBI agent, counsel for Grady Pugh, and separate corporate
counsel for PUGH were also present. The prosecutor’s 2005 notes refer to Grady
Pugh’s two cash deliveries to McNair and his trip to Georgia where Grady
purchased carpet for McNair on May 24, 2000 (for which Grady signed a PUGH
company check bearing that date). The government disclosed the prosecutor’s
notes to defense counsel several months before trial.
At the McNair trial, Grady Pugh testified he delivered two envelopes of cash
to McNair — the first at McNair’s studio and the second at McNair’s home at
Christmas 2000 — both after he (Grady Pugh) took a flight to Georgia to purchase
the carpet on May 24, 2000. In response, PUGH’s counsel sought to impeach
Grady Pugh using the prosecutor’s 2005 notes, attempting to show the notes
102
reflected Grady Pugh gave both cash envelopes to McNair before Grady Pugh
purchased the carpet on May 24, 2000. PUGH’s counsel showed Grady Pugh the
notes of the June 17, 2005 meeting indicating Grady delivered two cash envelopes
to McNair:
[GRADY PUGH]: It says in here that I delivered money to the studio
and to his house, in these notes. . . .
[PUGH’S COUNSEL]: Does it not say, the next time that Roland [Pugh]
asked Grady [Pugh] to deliver an envelope of
money, it was to McNair, was at McNair’s studio?
[GRADY PUGH]: It says that, yes, sir.
[PUGH’S COUNSEL]: Okay. Despite that, that does not refresh your
recollection?
[GRADY PUGH]: Despite what it says, it’s not true.80
PUGH’s counsel then showed Grady Pugh the prosecutor’s notes from the June 21,
2005 meeting and asked if he recalled that he told the prosecutor the two cash
80
The June 17, 2005 meeting notes state:
–Roland Pugh asked Grady to deliver the money to McNair
–One Roland money [sic]
–Grady recalls being at Northport and having to take the envelope, which was a half inch
thick, to McNair’s house
–Grady and McNair sat down together in the house and chatted and then Grady left the
envelope there between the two of them where McNair saw him put it
–The next time that Roland asked Grady to deliver an envelope of money it was to
McNair was at McNair Studio
–McNair was late and Grady had to wait for him
–When McNair showed up, Grady and McNair went to the van where they chatted and
then Grady left the envelope there where McNair saw him put it down
–This delivery of money was after the shell of the studio had been erected
–Roland Pugh called Grady and told him that “McNair needs to look at some carpet” (or
words to that effect) and that McNair needed RPC [PUGH] to make the deposit on the
carpet
–Grady got the company plane to Birmingham and took McNair’s daughter and Bill
Bailey to LaGrange, Georgia to pick out the carpet
103
deliveries were before the carpet trip, but Grady replied he did not recall saying it
in that order as follows:
[PUGH’S COUNSEL]: I want to direct you to the portion of [the
prosecutor’s] notes which read, Grady [Pugh]
delivered the second envelope of cash to McNair at
the studio.
....
[PUGH’S COUNSEL]: And after that, I want to direct your attention to the
portion of [the prosecutor’s] notes that say, Bill
Bailey was there. And it continues, quote “best I
recall” close quote, this was the first time Grady
[Pugh] met Bill Bailey; and then it continues.
Months later, Grady [Pugh] flew to Georgia for the
carpet. . . . Does this refresh your memory that when
you met with [the prosecutor and an FBI agent], that
the sequence you provided was that the first delivery
was to the house, the second delivery was to the
studio, and they were both done months before you
flew to Georgia for the carpet?
[GRADY PUGH]: I don’t recall saying it in that order. The order that
I remember it in, is the order that I told you Friday.
I went to the studio first, then I went to the carpet,
and then I went to Mr. McNair’s house; and that’s
the way I remember it. That’s the way it
happened.[81]
81
The June 21, 2005 meeting notes state:
–Grady thinks the RPC [PUGH] office was still in Northport when he delivered the first
envelope to McNair
–Grady had to drive from Northport
–Grady thinks the second McNair envelope was when RPC’s office was in the trailers in
Avondale
....
–Grady delivered the second envelope of cash to McNair at the studio
–He and McNair had already spoken inside the studio and then went to McNair’s van
–Bill Bailey was there when Grady delivered the cash to McNair Studio but Grady does
not appear to recall talking to Bailey about the money he was giving to McNair
104
PUGH’s counsel suggested to the district court that he might call the
prosecutor as a witness. The Court responded: “I think whatever you’d be calling
him for doesn’t amount to a hill of beans, and I’m not going to let it be done just to
cause friction or embarrassment or whatever. So my strong inclination will be not
to allow it.” The defense did not call the prosecutor to testify.
In closing argument, PUGH’s counsel argued Grady Pugh lied about the
time line of these events, that his cash deliveries occurred outside the statute of
limitations, and that the prosecutor’s notes supported this argument. PUGH’s
counsel also recited portions of the prosecutor’s notes.82
–‘Best I recall’ this was the first time Grady met Bill Bailey
–The weather was sunny but not cold
–Months later, Grady flew to Georgia for the carpet
82
In closing argument, PUGH’s counsel stated:
And then you heard on Monday, I finally got to show in Mr. Dillon’s notes of that
very interview. And he read to you from Mr. Dillon’s own notes of the June 17th
meetings. And he read to you, where they were talking chronologically in the June
17th, the first meeting, where he said that he delivered a note, an envelope to Mr.
McNair’s house, and the next time he was asked to deliver the envelope to the studio,
and that then he was talking chronologically about going to look for carpet. And it
was even clearer when he got into the notes of the second interview where he said
he delivered the second envelope of cash to McNair at the studio, the best he could
recall. Remember I even got him -- I think it was in quotes. Best I recall, this was
the first time Grady met Bill Bailey. The next line, months later, Grady flew to
Georgia for the carpet. Those are from Mr. Dillon’s own notes of that meeting and
that’s what you heard the testimony was. Those do not establish any payment in
July, whatsoever. They don’t establish any payment that’s been alleged in this case
whatsoever. . . .
He gave even another story while on the stand. I was asking about the sequence and
I was asking him whether these notes from his meeting refreshed his memory and he
said I don’t recall saying it in that order. The order that I remember it in is the order
that I told you Friday. I went to the studio first, then I went to the carpet, and then
105
We conclude defendants PUGH and Roland Pugh have not met their burden
to show Grady Pugh’s testimony was actually false, much less that the government
knew it was false. First, the notes themselves are in bullet form and contain no
dates nor any explicit indication that they were necessarily intended to be read in
chronological order. At trial Grady Pugh agreed he had a “clear recollection” of
what he said during the meetings. At trial Grady Pugh reviewed the notes on
defense counsel’s instruction and stated that the notes were “not laid out in the
order that things happened,” that he did not “recall saying it in that order,” and,
“[d]espite what it says, it’s not true.”83
Importantly, the documentary evidence is consistent with Grady Pugh’s trial
testimony that he delivered the money after the carpet purchase. The government
introduced these checks: on May 24, 2000, Grady Pugh signed a $4,820.81 PUGH
check made out to the carpet store; on July 18-19, 2000, Grady Pugh, Roland
Pugh, and Yessick signed checks to cash totaling $9,000; and from December 15 to
22, 2000, Roland Pugh signed $38,750 in checks to Roland Pugh’s
daughters-in-law and to cash. Further, other witnesses corroborated Grady Pugh’s
I went to Mr. McNair’s house, that’s the way I remember it; and that’s the way it
happened.
83
Nothing in the record indicates that after the 2005 meetings, Grady Pugh checked or
adopted the prosecutor’s notes.
106
trial testimony. For example, Bill Bailey testified he flew with Grady to pick out
carpet and saw him “again” at the studio, where they “talked about airplanes for a
second” before Bailey asked Grady “if he was here to help Chris McNair again,” to
which Grady answered yes.
Even assuming that Grady Pugh’s denials of prior inconsistency were false
or his time line of events was false, defendants, at a minimum, have not shown the
prosecutor knew Grady Pugh’s testimony was false, especially given how the
documents and other witnesses corroborated his testimony.
In any event, defendants have shown no reversible error. The jury heard the
relevant portions of the notes read into the record when PUGH’s counsel was
cross-examining Grady Pugh. During closing arguments, PUGH’s counsel argued
that the prosecutor’s notes contradicted Grady Pugh’s trial testimony and again
recited relevant portions of the notes. Defense counsel thoroughly and
exhaustively cross-examined Grady Pugh. Defense counsel pointed out other
inconsistencies within Grady Pugh’s trial testimony and in his grand jury
testimony. The jury was also well aware Grady Pugh had made a plea deal and
that the government’s assessment of his cooperation would impact his eventual
sentence. The jury had the information it needed to make an informed decision as
to Grady Pugh’s credibility. See United States v. Calderon, 127 F.3d 1314, 1325
107
(11th Cir. 1997) (“[C]redibility determinations are the exclusive province of the
jury.”) (quotation marks omitted). “Therefore, because we find that the
uncorrected, allegedly perjurious statements do not ‘undermine confidence in the
verdict,’” we reject defendants’ prosecutorial misconduct claims. Dickerson, 248
F.3d at 1042 (citations omitted).84
B. Grady Pugh’s Testimony About Note-Taking
Defendants PUGH and Roland Pugh also claim the prosecutor intentionally
elicited from Grady Pugh the false testimony that “everyone was taking notes” at
the 2005 meetings, even though the prosecutor knew he had instructed the FBI
agent not to take notes.85
At trial the prosecutor asked Grady Pugh about the note-taking:
Q: And when you signed that plea agreement, Mr. Pugh, had you
already met with us on two occasions at the FBI office?
A: Yes, sir.
Q: And when you met with the FBI and myself, was your lawyer
there?
A: Yes, sir.
Q: And was the company lawyer there?
A: Yes, sir.
84
We note the defense did not call others present at the 2005 meetings as to what Grady
Pugh said. And regardless of whether others at the 2005 meetings were taking notes, defense
counsel still could have called them to elicit their personal recollection of what Grady Pugh said.
However, we need not rely on this fact as it is abundantly clear counsel effectively cross-
examined Grady Pugh.
85
The prosecutor acknowledged he told the FBI agent not to take notes during the 2005
meetings.
108
Q: And was everybody taking notes?
A: Yes, sir.
On cross-examination, the defense attempted to clarify this assertion, but Grady
Pugh stated that it “looked to me like everybody was taking notes.” PUGH’s
corporate counsel asked Grady Pugh, “[a]nd do you remember that I objected and I
indicated that I would take notes?”
The foregoing colloquy is ambiguous as to whether the prosecutor was
referring to the lawyers in the room or also to the FBI agent. Grady Pugh
reasonably could have taken “everybody” to mean the two lawyers about whom the
defense had just asked. Moreover, while the record shows the FBI agent was not
taking notes, defendants submitted no evidence that Grady Pugh’s counsel or
PUGH’s counsel were not taking notes.86 In sum, the defense has not met its
burden to show the prosecutor believed or knew Grady Pugh’s note-taking
testimony was false. In any event, the defendants have not shown a reasonable
likelihood that correction on this particular point, even if it did constitute “false
testimony,” could have changed the jury’s evaluation of Grady Pugh’s overall
86
The government stresses it would have been remarkable had Grady Pugh’s counsel not
taken notes during his own client’s debriefings and plea negotiations in these two meetings. The
prosecutor also points out that there is a reference in a December 2005 hearing before the
magistrate judge that there was note-taking by Grady Pugh and PUGH’s counsel at these
meetings. We need not rely on that reference because it is enough to say defendants submitted
no evidence that Grady Pugh or PUGH’s counsel were not taking notes and have not carried
their burden to show Grady Pugh’s testimony was false.
109
credibility. Therefore, it does not undermine confidence in the verdict. See
Dickerson, 248 F.3d at 1041.
X. STATUTE OF LIMITATIONS IN WILSON TRIAL
In the Wilson case, defendant PUGH claims the district court erred by
denying its motion to dismiss Count 75 as time-barred under the five-year statute
of limitations. See 18 U.S.C. § 3282.87 Count 75 charged that from about August
1999 and continuing though June 2000, defendants PUGH and Wilson (as the
JCESD’s Chief Engineer) entered into a bribery conspiracy whereby Wilson
corruptly solicited and accepted, and PUGH corruptly gave, a $4,500 payment (in
the form of a bogus scholarship for Wilson’s son) with the intent of influencing
and rewarding Wilson for supporting PUGH’s interests in connection with the
JCESD sewer rehabilitation reconstruction program. Count 75 alleged that an
object of the conspiracy was for Wilson to enrich himself and that PUGH and
Wilson conspired to conceal PUGH’s payment to Wilson by having it disguised as
a bogus scholarship to UAB.
PUGH argues that Count 75 falls outside of the five-year limitations period
because the latest overt act by a co-conspirator charged in the Indictment — Grady
87
“We review a district court’s denial of a motion to dismiss the indictment for an abuse
of discretion.” United States v. Clarke, 312 F.3d 1343, 1345 n.1 (11th Cir. 2002). “We review
the district court’s interpretation and application of statutes of limitations de novo.” Id.110
Pugh’s sending a $4,500 check to UAB — was committed no later than August 24,
1999, which was outside the limitations period of February 7, 2000 to February 7,
2005.88 The government responds that the Indictment charged Wilson’s receipt of
the benefit of UAB’s four quarterly disbursements to his son as four separate overt
acts, and the last two disbursements (March 17 and June 7, 2000) were made to the
son within five years of PUGH’s indictment on February 7, 2005. In reply, PUGH
stresses that it is undisputed that UAB and Wilson’s son were not members of the
bribery conspiracy, and thus there was no overt act by a co-conspirator within the
limitations period.
“In a conspiracy prosecution brought under § 371 the government in order to
avoid the bar of the limitation period of § 3282 must show the existence of the
conspiracy within the five years prior to the return of the indictment, and must
allege and prove the commission of at least one overt act by one of the conspirators
within that period in furtherance of the conspiratorial agreement.” United States v.
Davis, 533 F.2d 921, 926 (5th Cir. 1976); see Grunewald v. United States, 353
U.S. 391, 396, 77 S. Ct. 963, 969-70 (1957) (addressing a three-year limitations
period and concluding the government must prove that conspiracy was still in
88
In this statute of limitations calculation, the parties use the February 7, 2005 date of the
initial indictment. While the initial indictment itself bears the dates of February 3 and February
7, we use what the parties use.
111
existence at beginning of limitations period and that at least one overt act was
performed after that date); United States v. Dynalectric Co., 859 F.2d 1559, 1564
n.6 (11th Cir. 1988) (stating if an overt act is necessary for the commission of the
conspiracy, then “the indictment must charge and the evidence at trial must show
that an overt act in furtherance of the conspiracy was made within the limitations
period”).
By contrast, for “conspiracy statutes that do not require proof of an overt act,
the indictment satisfies the requirements of the statute of limitations if the
conspiracy is alleged to have continued into the limitations period.” United States
v. Gonzalez, 921 F.2d 1530, 1548 (11th Cir. 1991) (citation and quotation marks
omitted) (determining RICO conspiracy statute, unlike the general federal
conspiracy statute, does not require an overt act). Unlike conspiracy statutes that
do not require proof of an overt act,89 the conspiracy statute PUGH was charged
under, 18 U.S.C. § 371, does require proof of an overt act. See 18 U.S.C. § 371(requiring that “one or more [co-conspirators] do any act to effect the object of the
conspiracy”).
As recounted above, Wilson solicited the bribe to help pay his son’s college
89
For example, neither a drug conspiracy under 21 U.S.C. § 846 nor a RICO conspiracy
under 18 U.S.C. § 1962(d) requires proof of an overt act. See United States v.
Terzado-Madruga, 897 F.2d 1099, 1121 (11th Cir. 1990) (drug conspiracy); United States v.
Coia, 719 F.2d 1120, 1124 (11th Cir. 1983) (RICO conspiracy).
112
expenses in mid-1999, and Grady Pugh mailed a $4,500 check to UAB on August
24, 1999. Because the tuition had already been paid by FWDE, Wilson did not
actually receive the full benefit of the $4,500 check until UAB disbursed the final
installment to Wilson’s son in June 2000. The money disbursed to the son was a
benefit to Wilson because he would otherwise have paid his son’s expenses
himself. Furthermore, where enrichment is an object of a conspiracy, the
conspiracy continues until the conspirators receive the full economic benefits
anticipated by their scheme, and a conspirator’s receipt of a benefit can be
considered an overt act. See United States v. Anderson, 326 F.3d 1319, 1328 (11th
Cir. 2003); United States v. Girard, 744 F.2d 1170, 1171-74 (5th Cir. 1984). For
example, in Anderson, the defendants conspired to obtain contracts by rigging bids
in violation of antitrust laws and § 371. Id. at 1323. Although the bid-rigging
contracts were beyond the limitations period, the final payment on one of the
contracts came within it. Id. at 1328. The defendant Anderson contended that the
final “payment was not an overt act in furtherance of the conspiracy but merely the
result of the conspiracy.” Id. This Court held that a conspirator’s acceptance of
payment on the illegally obtained contract constituted an overt act in furtherance of
the conspiracy and brought the conspiracy within the statute of limitations. Id.
Although acceptance or receipt of a benefit can be an overt act, that overt act
113
must be an act that is knowingly committed. See United States v. Hogue, 812 F.2d
1568, 1579 (11th Cir. 1987) (stating as an “essential element[]” of a § 371 offense
that “the overt act was knowingly committed”); Eleventh Circuit Pattern Jury
Instructions (Criminal Cases) at 137 (2003) (“An ‘overt act’ [under § 371] is any
transaction or event . . . which is knowingly committed by a conspirator in an effort
to accomplish some object of the conspiracy.”). The jury in the Wilson trial was
correctly instructed on this point.
The problem for the government is the last two disbursements in 2000 were
from a non-conspirator (UAB) to another non-conspirator (the son), and the
government presented no evidence that defendant PUGH (through Grady Pugh) or
Wilson knew that Wilson was receiving part of the benefit of the $4,500 in March
or June 2000, rather than all at once in August 1999. There is also no evidence that
Grady Pugh or Wilson gave any direction to UAB after August 24, 1999. At trial,
Grady Pugh testified he was unaware of UAB’s disbursement arrangements, and
no evidence contradicted him on that point. Likewise, there was no evidence that
Wilson was aware of the timing of the disbursements or that Wilson had any
communications at all with UAB after the $4,500 check was sent on August 24,
1999. Accordingly, Wilson’s receipt of the benefit of the March and June 2000
disbursements cannot be considered “overt acts” knowingly committed by him,
114
and the bribery conspiracy in Count 75 was beyond the statute of limitations.90
For these reasons, we reverse PUGH’s conviction on Count 75.
XI. WHARTON’S RULE
Defendants argue they cannot be charged, convicted, or sentenced on both
conspiracy to commit § 666 bribery and the substantive § 666 offenses, and thus
their convictions violate Wharton’s Rule. Roland Pugh additionally claims his sole
conviction on Count 1 is barred by Wharton’s Rule.
As the Supreme Court noted in Iannelli v. United States, 420 U.S. 770, 95 S.
Ct. 1284 (1975), ordinarily a defendant can be convicted of both conspiracy to
commit a crime and the substantive crime itself. Id. at 777, 95 S. Ct. at 1289-90.
Historically, Wharton’s Rule was only a narrow common law exception that
provided that a defendant cannot be punished for conspiracy and a substantive
offense if the substantive offense itself requires the participation of two persons.
See Iannelli, 420 U.S. at 773, 95 S. Ct. at 1288. “The basic idea of Wharton’s Rule
is that where a [substantive] crime requires a plurality of agents for its commission,
a charge of conspiracy cannot be used to impose a heavier penalty.” United States
90
The knowledge requirement was not at issue in Anderson, where the conspirator
received the last payment or benefit directly. Anderson, 326 F.3d at 1328. While a third party
can receive the payment on behalf of a conspirator (for example to disguise the payment), the
conspirator must at least be aware of it. There was simply no evidence that Grady Pugh or
Wilson was aware of how UAB applied and disbursed the money in 2000.
115
v. Collins, 779 F.2d 1520, 1527-28 (11th Cir. 1986).
Wharton’s Rule reflects an era where conspiracy law was still developing,
and it traditionally applied to offenses such as adultery, incest, bigamy, and dueling
that were “characterized by the general congruence of the agreement and the
completed substantive offense. . . .” Iannelli, 420 U.S. at 782, 95 S. Ct. at 1292.
Wharton’s Rule, however, is not grounded in the Constitution or in double
jeopardy law and “has ‘current vitality only as a judicial presumption, to be applied
in the absence of legislative intent to the contrary.’” Collins, 779 F.2d at 1528(quoting Iannelli, 420 U.S. at 782, 95 S. Ct. at 1292); accord Curtis v. United
States, 546 F.2d 1188, 1190 (5th Cir. 1977). “The former Fifth Circuit did not
generally favor Wharton’s Rule, and it expressed doubt that it could ever be
applicable to a conspiracy to distribute narcotics.” Collins, 779 F.2d at 1528
(citing Curtis, 546 F.2d at 1190); see United States v. Previte, 648 F.2d 73, 77 (1st
Cir. 1981) (stating “Wharton’s Rule is, to some extent a relic of the discredited
merger doctrine and should be interpreted narrowly” and explaining “the Rule does
not forbid charging both a conspiracy and the substantive offense, even when it
applies” as it “merely forbids sentencing on both counts”).
In Iannelli, the Supreme Court held that Wharton’s Rule did not apply to an
illegal gambling statute, 18 U.S.C. § 1955. Iannelli, 420 U.S. at 791, 95 S. Ct.
1161296. The Supreme Court determined Congress intended that conspiracy to violate
§ 1955 and the substantive § 1955 offense should be separate crimes, stating,
“[h]ad Congress intended to foreclose the possibility of prosecuting conspiracy
offenses under § 371 by merging them into prosecutions under § 1955, we think it
would have so indicated explicitly.” Id. at 789, 95 S. Ct. at 1296.
We have already rejected, albeit without discussion, a Wharton’s Rule
challenge to a conviction for conspiracy to commit § 201 bribery. United States v.
Evans, 344 F.3d 1131, 1133 & n.2 (11th Cir. 2003); see United States v. Finazzo,
704 F.2d 300, 306 (6th Cir. 1983) (holding Wharton’s Rule does not apply to a
§ 371 conspiracy to commit § 201 bribery, noting “the consequences of bribery not
only affect the parties to the crime but have a negative effect on society at large,”
and pointing out “the agreement connected with the substantive offense of bribery
. . . poses ‘the distinct kinds of threats to society that the law of conspiracy seeks to
avert’”) (quoting Iannelli, 420 U.S. at 783, 95 S. Ct. at 1292).
Other circuits have concluded Wharton’s Rule does not preclude a
conviction for conspiracy to violate § 666(a)(1)(B). See United States v. Bornman,
559 F.3d 150, 156 (3d Cir. 2009); United States v. Hines, 541 F.3d 833, 838 (8th
Cir. 2008), cert. denied, 129 S. Ct. 1385 (2009).
We now hold Wharton’s Rule does not apply to § 666 crimes for two
117
reasons, either one of which is sufficient alone. For starters, Congress has not
expressed any intent that § 666 crimes and § 371 crimes for conspiracy to violate
§ 666 should merge. If Congress had intended to foreclose prosecuting § 371
conspiracy offenses in § 666 crimes, it could have said so or merged the offenses.
Defendants point to nothing in the legislative history that suggests any intent to
depart from the established general rule that a court can impose separate sentences
for conspiracy to commit bribery and the substantive offense itself.
Second, the effect of the crime of § 666 bribery is not limited to the
bribe-payor and recipient, as the crime involves public corruption, which harms
society as a whole. “The purpose of § 666, to protect the integrity of federal funds,
indicates that the immediate consequences of the behavior it proscribes rest on
society at large,” in this case, on the federal government and the people of
Jefferson County. Hines, 541 F.3d at 838 (quotation marks omitted). Accordingly,
we reject defendants’ claims based on Wharton’s Rule.91
91
The defendant-appellants raise these additional conviction-related issues. Swann argues
that (1) there was a material variance as to the conspiracy charged in the Indictment and any
conspiracy proven, (2) the district court erred by failing to instruct the jury on multiple
conspiracies, (3) the district court erred in not giving his proposed good faith instruction, (4) the
district court should have severed his case alone for trial and apart from the contractor-
defendants who bribed him, and (5) the district court committed cumulative error.
Roland Pugh and PUGH argue that (1) the district court erred in not giving a proposed
instruction defining goodwill gifts and legal gratuities, (2) Count 15 as to PUGH should have
been dismissed as “duplicitous,” (3) there was a material variance as to their convictions for
bribery conspiracy, (4) their involvement at most consisted of one-time buyer-seller transactions
insufficient to sustain a conspiracy conviction, and (5) the district court committed cumulative
118
XII. MCNAIR’S SENTENCE 92
McNair was sentenced to concurrent 60-month sentences on one bribery
conspiracy count (Count 1) and ten substantive bribery counts (Counts 2-3, 5-12)
from the McNair trial and one bribery conspiracy count from the USI case (Count
32).93 The district court ordered McNair to pay restitution of $851,927 to the
Jefferson County Commission and a special assessment of $1,200 but no fine.
This restitution represented $376,927 in bribes to McNair by Dawson and the
Pugh, Rast, and Dougherty defendants, and $475,000 in bribes to McNair by the
USI contractors.94 On appeal, McNair challenges only the restitution part of his
error. As noted before, McNair, RAST, Bobby Rast, Danny Rast, FWDE, and Dougherty adopt
all arguments of all defendants as to all issues. In his cumulative error claims, Swann adopts all
arguments of all defendants as to all issues.
After review and oral argument, we conclude there is no reversible error as to any of
these listed issues or as to any other conviction-related issues raised by any defendants.
92
Defendants McNair, Swann, and PUGH appeal their sentences. Defendants Roland
Pugh, RAST, Bobby Rast, Danny Rast, FWDE, and Dougherty do not appeal their sentences.
93
McNair pled guilty to Count 32 in the USI case. In his plea agreement, he waived the
right to “challenge any sentence so imposed or the manner in which the sentence was
determined.” Thus, McNair waived his right to challenge his sentence as to Count 32. See
United States v. Johnson, 541 F.3d 1064, 1067 (11th Cir. 2008), cert. denied, 129 S. Ct. 2792(2009) (“[A] waiver of the right to appeal a sentence necessarily includes a waiver of the right to
appeal the restitution imposed.”). Accordingly, we consider McNair’s sentence on only Counts
1, 2-3, 5-12 in the McNair case. The district court did not tie or link the restitution to Count 32
so we reject the government’s argument that McNair has waived his right to challenge the
restitution.
94
This $851,927 consisted of:
(1) $142,921 from PUGH ($11,709 for concrete work; three $20,000 payments; $4,820
carpet purchase; $17,200 in handrails; $5,000 retirement payment; and $44,192 check to George
Word for McNair’s Arkansas home);
(2) $84,566 from RAST ($52,990 in construction work by Mosley; $5,866 for security
119
sentence.95
A. Presentence Report
McNair’s presentence investigation report (“PSI”): (1) assigned McNair a
base offense level of 10, pursuant to U.S.S.G. § 2C1.1 (2001); (2) added 2 levels
because McNair’s conduct involved more than one bribe, pursuant to
§ 2C1.1(b)(1); and (3) added 24 levels because the net profit or benefit
($67,980,043)96 to the contractors in connection with their bribes of McNair was
gate; $5,300 in carpet installation by Gilley; $5,500 in landscaping by Bailey & Sons; $1,775 in
plumbing by Buchanan; $5,000 retirement payment; and $8,135 for Alaskan cruise);
(3) $133,040 from FWDE ($74,220 to Bailey for supervision; $5,000 retirement
payment; $50,000 check to George Word for Arkansas home; and $3,820 for construction work
on guard shack);
(4) $16,400 from Dawson for an audio visual system; and
(5) $475,000 from USI ($335,000 in cash and $140,000 paid on bogus invoices).
In the restitution amount, the district court included bribe amounts from some of the counts
either that were not submitted to the jury (such as counts involving the Arkansas home and the
three $5,000 payments after McNair’s retirement) or on which McNair was acquitted (such as
cash bribes).
In our earlier recitation of the jury’s verdict, we used the amount of the bribe listed in the
Indictment. During trial or at sentencing, the government proved that some bribe amounts
actually were higher. For example, the Indictment as to Swann alleged the amount paid to
Stanger was $24,176, but the ultimate amount proved was $28,839. The Indictment as to
McNair alleged the amount paid to Bailey was $27,434, but the ultimate amount proved was
$74,220.
95
This Court reviews de novo “the legality of an order of restitution,” and reviews for an
abuse of discretion the determination of the restitution “value” of lost or destroyed property.
United States v. Robertson, 493 F.3d 1322, 1330 (11th Cir. 2007). This Court reviews for clear
error “factual findings underlying a restitution order.” Id.96
McNair’s PSI calculated this $67,980,043 as follows: (1) from July 2000 to October
2002, RAST received $82,668,465 through County contracts and earned an average profit of
17.5%, yielding $14,466,981 in profit; (2) from October 1999 to November 2002, FWDE
received $19,647,100 in County contracts and earned an average profit of 12%, yielding
$2,357,652 in profit; (3) from August 1999 to March 2002, PUGH received $109,015,665 in
120
between $50 million and $100 million, pursuant to §§ 2B1.1(b)(1)(M) and
2C1.1(b)(2)(A).97 A total offense level of 36 and a criminal history category of I
yielded an advisory guidelines range of 188-235 months’ imprisonment.
The PSI pointed out the total value of the bribes received by McNair was
$889,962 and that restitution was mandatory, “pursuant to 18 U.S.C.
§ 3663A(a)(1).” The PSI reviewed McNair’s financial records and determined his
net worth was $497,163, calculated as follows:
Assets
Cash Assets
* Checking Accounts $379.00
Insurance, Cash Surrender Value $10,521.00
Subtotal: $10,900.00
Unencumbered Assets
Motor Vehicles $22,500.00
Subtotal: $22,500.00
Equity in Other Assets
* Residence $96,000.00
McNair Investments (McNair Studio Bldg.)
$379,455.00
Subtotal: $475,455.00
County contracts and earned an average profit of 43.61%, yielding $47,541,731 in profit; (4)
from November 2000 to March 2001, Dawson Engineering received $2,108,283 in County
contracts and earned an average profit of 12%, yielding $252,993 in profit; and (5) from
February 1999 to February 2002, USI received $28,005,724 in County contracts and earned an
average profit of 12%, yielding $3,360,686 in profit.
97
The PSI for McNair used the November 1, 2001 edition of the United States Sentencing
Commission Guidelines Manual (the “Sentencing Manual”).
121
Total Assets $508,855.00
Unsecured Debts
* Credit Card Debt $11,242.00
* Internal Revenue Service $450.00
Total Unsecured Debts $11,692.00
Net Worth $497,163.00[98]
Notably, McNair’s net worth is largely due to his equity of $379,455 in McNair’s
studio building that was improved with the bribe money.99
The PSI stated that McNair’s monthly household income was $5,850, with
monthly expenses of $4,109, resulting in net monthly cash flow of $1,741,
calculated as follows:
Income
Defendant’s Social Security $1,779.00
Defendant’s Jefferson County Retirement $1,794.00
Spouse’s Social Security $826.00
Spouse’s Teachers Retirement $1,451.00
Total Income: $5,850.00
Necessary Living Expenses
98
The PSI states: “Items marked with an asterisk (*) represent [McNair’s] half of assets
or obligations shared jointly with his spouse.”
99
The PSI’s net worth calculation does not include McNair’s partial ownership of certain
Arkansas property, which the PSI described as follows:
In addition to the above, the defendant indicated that he owns a one-twelfth share
(along with his siblings) of his parents’ home-place in Fordice, AR. The property
includes 50 acres, the parents’ original home, and a dwelling built in 2001. He
indicated that the value of the property is approximately $300,000, so his share
would be approximately $25,000. However, the property would be difficult to
sell due to its joint ownership.
122
Home Mortgage $1,990.00
Groceries, Supplies $377.00
Utilities $664.00
Telephone $62.00
Transportation $240.00
Auto Insurance $89.00
Clothing $53.00
Medical $200.00
Credit Card Minimum Payments $434.00
Total Expenses: $4,109.00
Net Monthly Cash Flow $1,741.00
McNair filed three sets of written objections to parts of the PSI, and the PSI
was revised twice, resolving some objections. McNair’s main unresolved
objections were his claims that the government failed to show: (1) that there was
any victim owed restitution; and (2) that $889,962 was the amount of loss incurred
by Jefferson County. In his written objections, however, McNair did not claim that
he lacked the financial ability to pay restitution at all or in the amount of
$889,962.100
B. Sentencing Hearing
At sentencing, McNair again claimed the government failed to identify any
victim and failed to show any identifiable losses by Jefferson County or any
connection between the bribes and the County’s losses. McNair ultimately
100
McNair filed no objection to ¶¶ 154-157 of the PSI that set forth all of this financial
information.
123
conceded he had received $851,927 in things of value but only for purposes of the
guidelines imprisonment calculations.101
McNair maintained that no restitution should be awarded, because the
government had not shown the County suffered a loss in that $851,927 amount or
any amount for that matter. McNair’s counsel argued that under “Title 18, 3663,
the Mandatory Victims Restitution Act, that the Government is required to show
losses connected to victims, and that the amount of bribes paid to Mr. McNair does
not constitute losses to victims, and that there’s been no showing of that. . . .”
McNair contended “the amount of bribes paid to us is in no way connected to
whatever losses these victims may or may not have sustained.” McNair claimed
there was no showing that $851,927 was the loss to the County. Citing
“3663(B)(ii)” twice, McNair also argued the district court should not order
restitution because the complexity and prolongation of the sentencing process in
identifying victims and determining the amount of losses attributed to those
victims outweighed the need to provide restitution. We pause to point out here that
18 U.S.C. § 3663 is the Victim & Witness Protection Act (“VWPA”), not the
101
Contrary to the government’s arguments, McNair’s counsel repeatedly objected to the
victims’ identities and loss amounts for the basis of restitution. For example, McNair’s counsel
stated: “We have agreed, for guidelines calculations, concerning that amount, but we do not
believe that that is an appropriate figure or that there is any appropriate figure for restitution in
this case. And there is no basis legally to — for the Court to impose that kind of restitution order
in this matter.”
124
Mandatory Victims Restitution Act (“MVRA”), and the substance of McNair’s
argument comes from the VWPA.102 And as discussed later, the district court’s
judgment effectively refers to the VWPA.
During the sentencing hearing, McNair again did not claim he lacked the
financial ability to pay restitution at all or in the amount of $889,962 referenced in
the PSI. Ultimately, the district court found the Jefferson County Commission was
the identifiable victim and found the amount of loss suffered was $851,927,
reasoning:
[C]ommon sense seems to me that, in any business, it doesn’t
intentionally go into business for the purpose of losing money; that the
evidence in all of these cases clearly shows that there was a great deal of
profit to be earned from these sewer contracts. And it seems to me,
commonsensically, that if you pay a certain amount of money as bribe
money, whether it’s cash or for services performed, you’re going to add
that back into the contracts or the bills submitted to the Jefferson County
Commission which pays the bills, in the first instance.
It is how they do business. Stated more clearly, it is a cost of business,
a direct cost of business that it paid and made up for, at some point, by
the Jefferson County Commission directly, and then indirectly to the rate
payers of Jefferson County.[103]
102
Section 3663(a)(1)(B)(ii) is part of the VWPA and provides:
(ii) To the extent that the court determines that the complication and prolongation of
the sentencing process resulting from the fashioning of an order of restitution under
this section outweighs the need to provide restitution to any victims, the court may
decline to make such an order.
18 U.S.C. § 3663(a)(1)(B)(ii). Although citing “3663(B)(ii),” McNair’s counsel argued the
substance of § 3663(a)(1)(B)(ii).
103
Judge C. Linwood Smith sentenced McNair after Judge Robert B. Propst conducted the
125
Recognizing the sewer construction contracts were awarded through a bidding
process, the district court found that “the benefit to the bribe payors did not
necessarily accrue in the awarding of those contracts in the first instance, but,
rather, the benefit accrued during the performance phase of the work that they were
engaged to perform through change orders, through agreements to additional
payments due to change orders, and things of that nature.” The district court also
found, “[a]t some point, any direct cost of business is going to be added back by
the bribe payors in the bills, the padded bills, that are submitted to the Jefferson
County Commission,” and “therefore, the Jefferson County Commission, in the
first instance, which paid those bids, is an identifiable victim.”
The district court reduced McNair’s total offense level by 10 levels from 36
in the PSI to 26. Specifically, the district court reduced the 24-level enhancement
in the PSI to a 14-level enhancement under §§ 2C1.1(b)(2)(A) and 2B1.1(b)(1)(H).
For the § 2C1.1(b)(2)(A) calculation, the district court used the $851,927 in bribes
the contractors made to McNair, not the $67,980,043 in net profits or benefits the
contractors received.104 After determining McNair’s offense level was 26 and
McNair trial.
104
The guidelines provide that for an offense where the benefit received or loss to the
government is more than $400,000 but not more than $1 million, a defendant’s offense level will
increase 14 levels. U.S.S.G. §§ 2C1.1(b)(2)(A), 2B1.1(b)(1)(H) (2001). Section 2C1.1 governs
the offense level for bribery of public officials but also uses, in part, the theft table in § 2B1.1.
126
criminal history category was I, the district court determined that the advisory
guidelines range was 63 to 70 months’ imprisonment.105
The district court sentenced McNair to 60 months’ imprisonment for each
count, to run concurrently, followed by two years’ supervised release, and ordered
restitution of $851,927 to the Jefferson County Commission and a special
assessment of $1,200. Although the advisory guidelines fine range was $20,000 to
$135,960,086, the district court did not impose any fine. After noting its review of
the PSI’s financial information, the district court stated it imposed restitution but
no fine, as follows:
I reviewed the financial information provided in your presentence
investigation. And in reliance upon that information, I find that you do
not have the financial ability to pay even a minimum guideline fine.
Further, the imposition of such a fine would unduly burden your wife,
who is totally dependent upon you for not just physical and spiritual, but
financial support. Therefore, no fine will be imposed.
I do order, however, as I must order, that you pay to the United States a
special assessment in the aggregate amount of $1,200. You also are
ordered to pay restitution in the amount of $851,927. That is due to the
Jefferson County Commission at the address shown in paragraph 172 of
your presentence report.
105
McNair objected to the PSI’s failure to accord McNair a reduction for acceptance of
responsibility. The district court overruled that objection. McNair does not appeal the district
court’s calculation of his advisory guidelines range as 63 to 70 months’ imprisonment.
In addition, the government has not challenged the district court’s use of the bribe
amounts, as opposed to the net profits amounts, as the basis for the enhancement calculation
under § 2C1.1(b)(2)(A), nor McNair’s advisory guidelines range. So we assume for present
purposes that the use of the bribe amounts and the guidelines range were proper.
127
At sentencing, the district court did not expressly state the statutory basis for its
order of restitution. However, the district court’s judgment states that, “pursuant to
the Victim & Witness Restitution Act,” the court finds the Jefferson County
Commission is a victim of McNair’s criminal conduct, has sustained a loss in the
amount of $851,927, and orders restitution in the amount of $851,927.106
C. Restitution for Victim’s Loss
The VWPA, 18 U.S.C. § 3663, provides that:
The court, when sentencing a defendant convicted of an offense under
[Title 18] . . . other than an offense described in section 3663A(c),[ 107]
may order . . . that the defendant make restitution to any victim of such
offense, . . .
(B)(i) The court, in determining whether to order restitution under this
section, shall consider–
(I) the amount of the loss sustained by each victim as a result of
the offense; and
106
We reject the government’s argument that the district court imposed restitution under
the MVRA. The PSI recommended the district court order restitution under “18 U.S.C.
§ 3663A(a)(1),” which is the MVRA. Although referring to the MVRA, McNair’s attorney (in
the sentencing hearing) cited sections in the VWPA and made arguments premised on the
substance of the VWPA (§ 3663). And the district court’s judgment references the “Victim &
Witness Restitution Act.” Although this reference used “Restitution” instead of Victim &
Witness Protection Act, it more closely resembles the VWPA than the MVRA. The government
never objected to that reference and never moved to correct it. Thus, we conclude the district
court imposed restitution under the VWPA.
107
The VWPA, under which restitution is discretionary, excepts offenses in § 3663A(c),
which is the MVRA, under which restitution is mandatory. We sua sponte note there is a
potential issue of whether bribery is “an offense against property” covered by § 3663A(c) and
whether the MVRA applies to bribery crimes. 18 U.S.C. § 3663A(c). Nothing herein should be
read as implying the answer to that question. We review the VWPA only because that is the
only thing the district court referenced in McNair’s sentence.
128
(II) the financial resources of the defendant, the financial needs
and earning ability of the defendant and the defendant’s dependents,
and such other factors as the court deems appropriate. . . .
(2) For the purposes of this section, the term “victim” means a person
directly and proximately harmed as a result of the commission of an
offense for which restitution may be ordered including, in the case of an
offense that involves as an element a scheme, conspiracy, or pattern of
criminal activity, any person directly harmed by the defendant’s criminal
conduct in the course of the scheme, conspiracy, or pattern.
18 U.S.C. § 3663. “The government bears the burden of demonstrating the amount
of the victim’s loss by a preponderance of the evidence.” United States v. Futrell,
209 F.3d 1286, 1290 (11th Cir. 2000) (citing 18 U.S.C. § 3664(e), which states,
“Any dispute as to the proper amount or type of restitution shall be resolved by the
court by the preponderance of the evidence.”). However, “[t]he burden of
demonstrating the financial resources of the defendant and the financial needs of
the defendant’s dependents shall be on the defendant.” 18 U.S.C. § 3664(e); see
United States v. Twitty, 107 F.3d 1482, 1494 n.14 (11th Cir. 1997) (stating the
burden rests on the defendant to demonstrate lack of financial resources by a
preponderance of the evidence).
D. County’s Losses
McNair argues that the government failed to prove any losses suffered by
the County. We disagree. For starters, the evidence showed McNair received
$851,927 in goods, services, labor, materials, and money as a result of the bribery
129
scheme. Further, during the same time period, the contractor-defendants received
hundreds of millions of dollars in payments under their County contracts and made
millions of dollars in profits.108
And the district court did not clearly err in finding that the contractors
essentially recouped their bribe money by adding it back to their sewer and
engineering contract bills as a cost of doing business with the County. See United
States v. DeVegter, 439 F.3d 1299, 1303 (11th Cir. 2006) (“Assuming the bribe
achieves its intended result, the benefit would usually exceed the bribe.”); see also
Futrell, 209 F.3d at 1292 (concluding the district court did not abuse its discretion
in ordering restitution under the MVRA based on “approximation” of loss resulting
from defendants’ fraud).
The district court’s determination is consistent with Supreme Court
precedent stating that when a public official acquires an ill-gotten benefit as a
result of his office, the government suffers losses in that amount. See United
States v. Carter, 217 U.S. 286, 305-06, 30 S. Ct. 515, 520 (1910).109
108
See supra note 96.
109
In Carter, the Supreme Court stated:
It is not enough for one occupying a confidential relation to another, who is shown
to have secretly received a benefit from the opposite party, to say, “. . . you cannot
show that you have sustained any loss by my conduct.” Such an agent has the power
to conceal his fraud and hide the injury done his principal. It would be a dangerous
precedent to lay down as law that unless some affirmative fraud or loss can be
shown, the agent may hold on to any secret benefit he may be able to make out of his
130
McNair next contends the district court erred by failing to consider his
financial ability to pay restitution and by not making an explicit finding that he had
the financial ability to pay restitution of $851,927. We can locate no place in this
voluminous record where McNair claimed in the district court that he lacked the
financial ability to pay restitution or the $889,962 amount of restitution
recommended in the PSI and sought by the government. See Jones, 289 F.3d at
1265. Because McNair raises this issue for the first time on appeal, we review it
only for plain error. United States v. Rodriguez, 398 F.3d 1291, 1298 (11th Cir.
2005). We may not correct an error the appellant failed to raise in the district court
unless there is: “‘(1) error, (2) that is plain, and (3) that affects substantial rights.’”
Id. (quoting United States v. Cotton, 535 U.S. 625, 631, 122 S. Ct. 1781, 1785
(2002)). If the preceding three conditions are met, we may exercise discretion to
correct a forfeited error, but only if “(4) the error seriously affects the fairness,
integrity, or public reputation of judicial proceedings.” Id. (quotation marks
omitted).
agency. The larger interests of public justice will not tolerate, under any
circumstances, that a public official shall retain any profit or advantage which he
may realize through the acquirement of an interest in conflict with his fidelity as an
agent. If he takes any gift, gratuity, or benefit in violation of his duty, or acquires
any interest adverse to his principal, without a full disclosure, it is a betrayal of his
trust and a breach of confidence, and he must account to his principal for all he has
received.
Carter, 217 U.S. at 305-06, 30 S. Ct. at 520.
131
McNair has not shown plain error for several reasons. First, “[d]istrict
courts are not obliged to make explicit factual findings of a defendant’s ability to
pay restitution if the record provides an adequate basis for review.” United States
v. Dabbs, 134 F.3d 1071, 1084 (11th Cir. 1998) (quoting Twitty, 107 F.3d at
1493); accord United States v. Fuentes, 107 F.3d 1515, 1529 n.27 (11th Cir. 1997);
United States v. Remillong, 55 F.3d 572, 574-78 (11th Cir. 1995); United States v.
Hairston, 888 F.2d 1349, 1353 (11th Cir. 1989) (stating, “[i]f the record provides
an adequate basis for . . . review, the court need not assign specific reasons for its
decision to order full restitution. If the record is insufficient, reasons must be
assigned.”) (quotation marks omitted).110 “‘In order to warrant a reversal of the
restitution order, the challenging party must show that the record is devoid of any
evidence that the defendant is able to satisfy the restitution order.’” Dabbs, 134
F.3d at 1084 (quoting United States v. Davis, 117 F.3d 459, 463 (11th Cir. 1997)).
However, “we will not uphold the district court’s exercise of discretion if the
record is devoid of any evidence that the defendant is able to satisfy the restitution
order.” Remillong, 55 F.3d at 574.
Second, the record is not devoid of any evidence of McNair’s ability to
110
Since 1989 this Court has agreed “with the courts that have declined to adopt a rigid
rule requiring district courts to make findings of fact whenever they impose an order of
restitution under the VWPA.” Hairston, 888 F.2d at 1352.
132
satisfy the restitution order. The PSI set forth McNair’s finances in detail, the
district court said it had reviewed that financial information, and McNair did not
contest the facts as to his finances. There is no dispute that McNair has equity of
$379,455 in his studio building, which was built in part using the bribe money.
The studio value could reduce the restitution from $851,927 to $472,472.
In addition, McNair has a net cash flow of $1,741 per month, which is about
the size of his monthly Jefferson County retirement check of $1,794. That
retirement check alone permits McNair to pay $21,528 annually toward the
restitution. Five years of $21,528 payments annually would equal over $100,000
in restitution. The unique problem in this case, however, is that McNair is now 84
years old.111 Although the PSI states McNair “reports no current medical problems
or prescription medications taken on a regular basis,” it would take McNair 21.94
years at $21,528 per year to pay the remaining $472,472 left in restitution.
Therefore, the record does not necessarily show that McNair has the financial
ability to pay the full $851,927 in restitution.
Nonetheless, under the fourth prong of plain error review, we conclude any
error does not seriously affect the fairness, integrity, or public reputation of judicial
proceedings because (1) McNair, not the government, has the burden to prove lack
111
The PSI states McNair’s date of birth is November 22, 1925.
133
of financial ability to pay the restitution in full; (2) the district court did not impose
any fine but only restitution; (3) McNair does not dispute that he received
$851,927 in goods, services, materials, labor, and other things of value; (4) no one,
not even the district court if we remanded for further findings, knows how long
McNair will live and continue to receive his monthly Jefferson County pension and
thus be able to pay some restitution each month; and (5) the party owed this
restitution is the same party currently paying McNair $1,749 per month, making it
eminently fair to recapture these payments as restitution for as long as they are
made. Given all of the unique circumstances in this case, McNair has not shown
plain error in the district court’s restitution order.
McNair also challenges the restitution order on the ground that United States
v. Booker, 543 U.S. 220, 125 S. Ct. 738 (2005), requires that the factual predicate
for restitution be found by a jury beyond a reasonable doubt. McNair’s Booker
challenge is foreclosed by our precedent. United States v. Williams, 445 F.3d
1302, 1310 (11th Cir. 2006) (“Booker does not apply to restitution orders.”),
abrogated on other grounds by United States v. Lewis, 492 F.3d 1219, 1222 (11th
Cir. 2007). We thus reject this argument.112
112
McNair objected to this statement in the PSI: “Theo Lawson, County Attorney for
Jefferson County, AL, appeared at the sentencing in U.S. v. Dougherty, (05-61, 05-544) and
indicated that the county requests restitution in each of these cases on the amount of the bribes.”
On appeal McNair claims the PSI’s inclusion of this “testimony” violated his right to
134
For the first time on appeal, McNair also claims the district court erred in
ordering any restitution because co-defendant Roland Pugh was not ordered to pay
restitution. We review this claim for plain error. See United States v. Rodriguez,
398 F.3d 1291, 1298 (11th Cir. 2005). Seven of McNair’s co-defendants were
ordered to pay restitution, to wit: PUGH ($239,652), Bobby Rast ($141,000),
Danny Rast ($141,000), RAST ($141,000), Swann ($355,533), FWDE ($225,149),
and Dougherty ($225,149). McNair has shown no plain error in this regard.113
For all these reasons, we affirm the restitution order as to McNair.
XIII. SWANN’S SENTENCE
Swann was sentenced to 102 months’ imprisonment, followed by three
years’ supervised release, on one bribery conspiracy count (Count 51), six
substantive bribery counts (Counts 52-54, 57, 58, and 60), and eleven counts of
honest services mail fraud (Counts 90-100). The district court ordered Swann to
pay restitution of $355,533 and a fine of $250,000. On appeal, Swann challenges
confrontation in the Sixth Amendment. We disagree. The district court never mentioned
Lawson, let alone relied on his statement as the basis for restitution. In any event, this Court has
held that “Crawford dealt with trial rights and we see no reason to extend Crawford to sentencing
proceedings. The right to confrontation is not a sentencing right.” United States v. Cantellano,
430 F.3d 1142, 1146 (11th Cir. 2005).
113
McNair received no fine while some co-defendants had significant fines, such as
Roland Pugh ($250,000), PUGH ($19.4 million), Bobby Rast ($2.5 million), Danny Rast ($1
million), RAST ($1,702,500), Swann ($250,000), FWDE ($3,830,760), and Dougherty
($750,000).
135
the imprisonment and his fine but not the restitution.
A. Presentence Report
The PSI: (1) assigned Swann a base offense level of 10, pursuant to U.S.S.G.
§ 2C1.1 (2003); (2) added 2 levels because Swann’s conduct involved more than
one bribe, pursuant to § 2C1.1(b)(1); (3) added 22 levels because the net profit or
benefit ($42,460,880)114 to the contractors in connection with their bribes of Swann
was between $20 million and $50 million, pursuant to §§ 2C1.1(b)(2)(A) and
2B1.1(b)(1)(L); and (4) added 2 levels for obstruction of justice, pursuant to
§ 3C1.1.115 A total offense level of 36 and a criminal history category of I yielded
an advisory guidelines range of 188 to 235 months’ imprisonment.
The PSI provided a detailed financial analysis of Swann’s assets, including
his cash, checking and savings accounts, savings bonds, deferred compensation
account, debt, investments, income, and living expenses. The PSI reported Swann
had $118,194 in assets, including $109,380 in deferred compensation, $95,000 in
114
Swann’s PSI calculated this $42,460,880 in profit as follows: (1) from September
1998 to October 2002, RAST received $127,182,375 through County contracts and earned an
average profit of 17.5%, yielding $22,256,740 in profit; (2) from September 1998 to November
2002, FWDE received $23,884,498 through County contracts and earned an average profit of
12%, yielding $2,866,139 in profit; and (3) PUGH’s total profits for 2001 and 2002 amounted to
$17,338,000.
We recognize that McNair’s PSI showed total contractor profits of $67,980,043, but
McNair’s PSI included $3,360,686 in USI profits and $47,541,731 in PUGH profits (based on a
longer time span of almost four years from August 1999 to March 2002). See supra note 96.
115
The PSI for Swann used the November 1, 2003 edition of the Sentencing Manual.
136
debt (taxes and attorneys’ fees), and a net worth of $23,194. The PSI stated
Swann’s monthly income was $6,729 ($6,604 in Jefferson County pension and
$125 salary for niece’s trust fund). Thus, at the time of the PSI, Swann had an
annual income of $80,748.
The PSI reported that Swann’s total monthly expenses were $6,971,
calculated as follows:
Necessary Living Expenses
Home Mortgage/Equity Line (645 Winwood) $2,321.00
Home Mortgage/Equity Line (641 Winwood) $1,201.00
Groceries/Supplies/Transportation $1,435.00
(Includes all credit card purchases
other than non-copay medical
expenses.)
Utilities $452.00
Telephone $118.00
Auto Insurance $122.00
Life Insurance $395.00
Home Maintenance Insurance $36.00
Clothing $20.00
Medical $488.00
Printing/Copying/Postage $60.00
Dry Cleaning $10.00
Pest Control/Termite Bond $48.00
OTC Medications/Personal Grooming $122.00
Lawn Maintenance $120.00
Internet Service $23.00
Total Expenses: $6,971.00[116]
The PSI noted (1) Swann’s wife was retired from Bellsouth, (2) their newly
116
Swann also submitted other expenses as “necessary,” which the PSI did not include in
the above calculations as “necessary”: meals out $75; entertainment $30; and newspaper $12.40.
137
remodeled home at 645 Winwood Drive was in her name, and (3) she owned their
former home, at 641 Winwood Drive two doors down, jointly with her mother and
paid that mortgage.117 According to the PSI, Swann’s wife had refused to provide
any additional financial information for the PSI. Swann claimed he had no
knowledge of the value of his wife’s investments, nor of the income generated
from her investments or retirement.
In calculating Swann’s fine under 18 U.S.C. § 3571(d),118 the PSI stated the
“gross loss” amount was the $42,460,880 benefit the contractors received. Based
on this information, the PSI determined the guidelines fine range was $20,000 to
$84,921,760 (i.e., double the gross loss amount pursuant to U.S.S.G. § 5E1.2).
The PSI stated: “Based on his financial condition it appears that the defendant
[Swann] could pay a fine within the guideline range or make a lump-sum payment
toward restitution shortly after sentencing through use of liquid assets.” The PSI
noted that Swann’s “future ability to make payments on an installment basis will
117
Swann filed no objections to ¶¶ 153-159 of the PSI that set forth all of this financial
information.
118
Section 3571(d) provides:
If any person derives pecuniary gain from the offense, or if the offense results in
pecuniary loss to a person other than the defendant, the defendant may be fined not
more than the greater of twice the gross gain or twice the gross loss, unless
imposition of a fine under this subsection would unduly complicate or prolong the
sentencing process.
18 U.S.C. § 3571(d).
138
be dependant [sic] on several factors including the sentence in this case, his family
situation, and his ability to contain monthly expenses.”
The PSI stated that restitution was mandatory under 18 U.S.C.
§ 3663A(a)(1) (the MVRA) and that the County had requested restitution.
Swann objected to the 22-level increase to his offense level under U.S.S.G.
§ 2C1.1(b)(2)(A), arguing his offense level should be based on the amount of
bribes ($355,533) rather than the net profits or benefits ($42,460,880) the
contractors received. Section 2C1.1(b)(2)(A) provides:
If the value of the payment, the benefit received or to be received in
return for the payment, or the loss to the government from the offense,
whichever is greatest (i) exceeded $2,000 but did not exceed $5,000,
increase by 1 level; or (ii) exceeded $5,000, increase by the number of
levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud)
corresponding to that amount.
U.S.S.G. § 2C1.1(b)(2)(A) (2003).119 Swann argued there was no evidence of a
causal connection linking any bribe to the award of any contract, and therefore, the
22-level adjustment under § 2C1.1(b)(2)(A) was improper. Even if a quid pro quo
is not required for a § 666 conviction, Swann claimed evidence of a quid pro quo
was necessary under § 2C1.1(b)(2)(A) to increase his offense level.
B. Sentencing Hearing
119
The guidelines provide that for an offense where the benefit received or loss to the
government is more than $20 million but not more than $50 million, a defendant’s offense level
will increase by 22 levels. U.S.S.G. §§ 2C1.1(b)(2)(A), 2B1.1(b)(1)(L).
139
At sentencing, Swann objected to the PSI on the ground that co-defendants
RAST, Bobby Rast, and Danny Rast’s offense levels were based on the amount of
bribes given, not the financial benefit or profit to them. Swann also objected to
any obstruction of justice enhancement. The district court sustained Swann’s
objection to the obstruction enhancement.120
The district court, however, concluded the benefit, not bribe, amount should
be used under § 2C1.1(b)(2)(A) and found the evidence was “absolutely clear that
there is at least 20 million dollars that was benefit” to the bribe-payor contractors.
As support for the $20 million figure, the district court cited instances where
Swann (1) decided not to invoke the performance bond against RAST, (2) allowed
RAST to rebid the Valley Creek job for an additional $23.927 million, and (3) was
involved in granting RAST a $2.677 million change order when RAST’s boring
machine became stuck. The district court found that a preponderance of the
evidence established that the $20 million benefit to the bribe-payors “was a direct
result of that influence of [RAST’s] bribes.” The court also pointed out that Swann
120
Because some of Swann’s co-defendants were sentenced under an earlier guidelines
edition and that edition would result in a lower guidelines range for him, Swann urged the court
to use the earlier edition to avoid a sentencing disparity with his co-defendants. The district
court overruled that objection.
On appeal Swann does not challenge the applicability of the 2003 guidelines edition to
the calculations of his advisory guidelines range. Rather, as discussed later, Swann claims his
sentence is substantively unreasonable because the use of different editions as to co-defendants
caused disparities in his and his co-defendants’ sentences that are unwarranted. We address that
issue later.
140
granted PUGH’s joint venture a 180-day extension just days after PUGH’s Yessick
hired a landscaper for Swann’s property, saving PUGH’s joint venture $180,000 in
liquidated damages. At sentencing, the district court expressly found a direct
connection between the bribes to Swann and the financial benefit to the bribe-
payor contractors, stating:
I think it is absolutely clear that there is at least 20 million dollars that
was benefit, for instance, to [RAST], two change orders being 2.677
million of the digging out of the boring machine and pulling out a boring
machine and rebid of that job, 23.927 million. The testimony as I recall
it at trial and the testimony that was presented today, I conclude, based
on the burden of proof that’s required, not beyond a reasonable doubt but
by a preponderance of the evidence, that that is due to be calculated at
2B1.1 as a gain of over 20 million dollars, that because of the decision
by Mr. Swann that I believe was a result of the bribes and stuff that was
provided him by RAST, I think that that was a direct result of that
influence of those bribes. And I am not going to go through the others.
Like for instance, the extensions, just one example is with regard to
exhibit 36, the 180 extension that was granted to PUGH. A thousand
dollars a day is what I recall the evidence to be that it would have been
if they weren’t granted that extension and that’s $180,000. I am not even
necessarily having to go to the aspect of whether or not because Mr.
Swann was Mr. Wilson’s supervisor the effect of the contracts or the
approval of the committee because I find I am going to, for calculation
of fine purposes, set that amount at 20 million and one dollars. More
than 20 million, I am going to set it at 20 million and one dollars as
clearly – in fact, actually I think I figured it at 26 million at the bottom
end, but I am going to set it at 20 million and one dollars for the purpose
of calculating the fine range, and I will ask him that you do that for me,
and we’ll need to recalculate the other.
The district court found that Swann’s base offense level was 10, added 2
levels because Swann’s offenses involved multiple bribes, and added 22 levels
141
because the benefit to the bribe-payor contractors was between $20 million and
$50 million, resulting in a total offense level of 34. See U.S.S.G.
§§ 2C1.1(b)(2)(A), 2B1.1(b)(1). This total offense level of 34 and a criminal
history category of I yielded an advisory guidelines range of 151 to 188 months’
imprisonment.
In considering the § 3553 factors, the district court found that Swann (1) was
not credible in stating his wife was the one responsible and he did not know that
these contractors were doing the work and what was going on, (2) had “not
indicated any remorse whatsoever,” and (3) refused to accept responsibility. The
district court also considered that it was “bribery on a large scale of a public
official” that had affected many people. The court noted “the need to reflect the
seriousness of this offense and to promote respect for the law and to provide just
punishment for this offense.” The court also commented that, because Swann held
a position of public trust, he was different than the contractor-defendants that were
bribing him. The district court stated it had considered all of the § 3553 factors.
Citing Swann’s “history” and “character,” the district court varied downward from
the 151 to 188 months’ range and imposed a sentence of 102 months’
imprisonment, followed by 3 years’ supervised release.121
121
As to Counts 51 and 90 to 100, the district court imposed a sentence of 60 months’
imprisonment, to run concurrently. As to Counts 52, 53, 54, 57, 58, and 60, the district court
142
Importantly, the district court also stated that, even if it had adopted Swann’s
view that the U.S.S.G. § 2C1.1(b)(2)(A) calculation should be based on the bribe
amount Swann received (instead of the net benefit to the contractors) and even if
Swann’s total offense level was 24 and his guidelines range was 51 to 63 months,
it would nonetheless vary upward on Swann’s sentence, explaining:
[C]ounsel has urged me to utilize the guideline range that would result
from considering the bribes of $355,533 in calculating your sentencing
range and indicated that if I used that, it would result in a guideline
offense level, criminal offense level of 24 when combined with a
criminal history category of roman numeral one would result in
imprisonment range of 51 to 63 months. I am going to state for the
record that if I used that, I would nonetheless vary upward because I
would believe that would not be sufficient to account for the other
factors in [18 U.S.C. § 3553] that I am charged with the responsibility of
weighing, including the nature and circumstances of this particular
offense, as well as the need to reflect the seriousness of the offense,
provide respect for law. I would have varied upwards, in other words,
on that sentence. So if the Eleventh Circuit has any question about that
when they get this on appeal which I suppose they will, if they ask or
wonder what I would have done had I went that way, that’s what I would
have done. I believe that’s appropriate and I have given that weight. I
have actually considered that, and I started to just go ahead and do that.
But I thought it appropriate in this instance because I think it is very
clear that at least the 23 million dollars that I discussed earlier was a
correct calculation.
(Emphasis added). Although the district court did not say the precise words — “I
would impose the same 102 months sentence” — the record is patently clear that is
imposed a sentence of 102 months’ imprisonment, to run concurrently. The sentences for all 18
counts thus run concurrently.
143
what the district court meant.
As to restitution, Swann disputed that the amount of the bribes paid was
$355,533, but conceded that, if restitution was owed, it should be based on the
amount of bribes paid. Based on the evidence, the district court found the total
bribe amount Swann received was $355,533. The district court rejected Swann’s
argument that restitution should be only the total $93,680 bribe amount referenced
in the conviction counts (Counts 52-54, 57-58, 60, 90-100) that the jury found
Swann received beyond a reasonable doubt. The district court ordered Swann to
pay restitution of $355,533122 to the “Jefferson County Commission.”
As to the fine, Swann pointed out he “has no money,” that his house was
transferred to his wife’s name before he became aware of the subpoenas in the
investigation, and that he lost the respect of his community and thereby lost his
ability to earn a living. Swann argued for a reduced fine but did not propose any
specific fine amount.
122
This $355,533 consisted of:
(1) $149,102 from PUGH ($7,422 for waterfall and koi pond, $1,000 in gift certificates to
Alabama Book Smith, and $140,680 in landscaping by Guthrie);
(2) $55,885 from RAST ($4,441 for concrete work; $3,535 for flooring; $1,054 in brick
work; $8,940 in plumbing; $9,733 for painting; $6,300 to Derek Houston for supervision;
$18,867 in labor for miscellaneous employees; and $3,015 for Swann’s trip to England and
Scotland); and
(3) $150,929 from FWDE ($28,839 to Stanger for supervision; $94,090 to Hendon for
supervision; and $28,000 to Dudley Davis for framing). The sentencing court and its judgment
use $355,533, and we do too. But these amounts total $355,933.
144
After determining the advisory guidelines fine range was $17,500 to
$40,000,002, the court imposed a $250,000 fine and a $1,800 special assessment.
As to the $250,000 fine, the district court stated:
You are ordered to pay a fine in the amount of $250,000. I don’t know
whether that’s collectable or not. I don’t think it is, but I think it’s
appropriate considering the circumstances.
C. Guidelines Range Calculations
On appeal Swann claims the district court improperly calculated his
guidelines range because “[t]he court utilized a ‘net benefit’ approach instead of
the amount of the alleged bribes in calculating the base offense level.” This is a
challenge to the procedural reasonableness of Swann’s 102 months’ imprisonment
sentence.123
As noted earlier, the bribery offense level is calculated using the greater of
the value of the bribe payment or the benefit received in return. See U.S.S.G.
§ 2C1.1(b)(2)(A). “The value of ‘the benefit received or to be received’ means the
123
In reviewing the reasonableness of a sentence, we apply an abuse-of-discretion
standard using a two-step process. United States v. Pugh, 515 F.3d 1179, 1189-90 (11th Cir.
2008) (relying on Gall v. United States, 552 U.S. 38, 51, 128 S. Ct. 586, 597 (2007)). First, we
look at whether the district court committed any significant procedural error, such as
miscalculating the advisory guidelines range, treating the guidelines as mandatory, failing to
consider the 18 U.S.C. § 3553(a) factors, selecting a sentence based on clearly erroneous facts,
or failing to explain adequately the sentence. Pugh, 515 F.3d at 1190. Then we look at whether
the sentence is substantively reasonable under the totality of the circumstances. Id.145
net value of such benefit.” § 2C1.1 cmt. n.2.124 “The net value of the improper
benefit need only be estimated, and the bribe amount should be used only when the
net value cannot be estimated.” DeVegter, 439 F.3d at 1303. The net value “need
only be a reasonable estimate given the information available to the government.”
United States v. Cabrera, 172 F.3d 1287, 1292 (11th Cir. 1999).125
On appeal Swann does not claim that the bribe amount ($355,533) he
received was greater than the net benefit amount (over $20 million) the contractor-
defendants received.126 Rather, Swann argues that, to use the net benefit approach,
the government first must show a connection (i.e., a quid pro quo) between a
124
The Commentary to § 2C1.1 gives the following examples of net value: “(1) A
government employee, in return for a $500 bribe, reduces the price of a piece of surplus property
offered for sale by the government from $10,000 to $2,000; the value of the benefit received is
$8,000. (2) A $150,000 contract on which $20,000 profit was made was awarded in return for a
bribe; the value of the benefit received is $20,000.” U.S.S.G. § 2C1.1 cmt. n.2.
The Commentary to § 2C1.1 also provides: “[F]or deterrence purposes, the punishment
should be commensurate with the gain to the payer or the recipient of the bribe, whichever is
higher.” Id. cmt. Background.
125
In United States v. DeVegter, 439 F.3d at 1304, this Court adopted the Fifth Circuit’s
approach to calculating net value under § 2C1.1 as set forth in United States v. Landers, 68 F.3d
882 (5th Cir. 1995). The Fifth Circuit in Landers concluded that the profit on a contract, not the
gross revenue or value, is to be used to determine net value. We stated in DeVegter, “[w]e agree
with the Fifth Circuit’s approach [in Landers] which subtracts direct costs, but not indirect costs,
from profits to determine the net improper benefit.” DeVegter, 439 F.3d at 1304.
126
Swann’s appeal brief refers to the $20 million as the “net benefit” and does not argue
that the district court erred by using $20 million in its calculation of net benefit. Although the
district court’s finding that the benefit was $20 million to the contractor-defendants appears to be
based on gross revenue received by the contractor-defendants and not their net profit, other
portions of the trial record amply support total profits in excess of $20 million to the contractor-
defendants RAST, PUGH, and FWDE, and thus a net benefit in excess of $20 million. This may
be why no remand was requested on this issue.
146
particular bribe and a particular contract or action by a public official. Swann
claims the government’s evidence failed to show the requisite causal connection.
In this regard, Swann first argues there is no connection between the bribes
he received and the contractors’ revenue because he had no authority to award the
sewer or engineering contracts. Alternatively, Swann claims, “there was no tie or
connection of any kind between any alleged bribe and any contract awarded even if
Appellant Swann could have influenced the award of the contract.” Therefore,
Swann says, “the proper loss amount to be utilized under § 2C1.1 was the amount
of the alleged bribes paid to Appellant Swann and the court erred in failing to
utilize said amount.” Swann points out that had the $355,533 bribe amount been
used (as opposed to the $20 million benefit amount), the district court would have
added only 12 levels (not 22) under § 2C1.1, resulting in a total adjusted offense
level of 24 (not 34).
This Court has not addressed what type of connection under
§ 2C1.1(b)(2)(A) the government must establish between the bribe given and the
benefit received. Section 2C1.1(b)(2)(A) does speak in terms of “the value of . . .
the benefit received or to be received in return for the payment . . . .” U.S.S.G.
§ 2C1.1(b)(2)(A). Other circuits have held that the threshold for establishing a
causal connection under § 2C1.1(b)(2)(A) is low. See United States v. Sapoznik,
147
161 F.3d 1117, 1119 (7th Cir. 1998) (concluding that “[t]o show that the bribes
benefitted the people paying them [the bar owners/illegal gambling], . . . it is
enough for the government to show that the bribes facilitated the gambling
operations”); United States v. Kinter, 235 F.3d 192, 198 (4th Cir. 2000) (stating
“[t]he threshold for the causation inquiry for § 2C1.1 calculations is relatively
low”). In Sapoznik, the Seventh Circuit explained that the question of causation
between the bribe and the benefit is different from the question of quantification of
the actual benefit received, concluding the government had established a causal
connection between the bribe and the benefit even though it had not shown the
precise amount of the benefit to the bribe-payor. Sapoznik, 161 F.3d at 1119. And
the bribes need only contribute or facilitate the business activity involved. Id.Here, given the wealth of evidence in the record, we readily conclude the
district court did not clearly err in finding that the benefits the contractors received
(such as the RAST revenue from the $2.6 million change order, the RAST job
rebid for an additional $23,837,350, and the PUGH time extension on the Vestavia
Trunk Sewer Replacement project) were a result of the corrupt bribes to Swann.
This amply satisfies any causal connection requirement in § 2C1.1(b)(2)(A).127
127
We review the district court’s findings of fact in sentencing for clear error. DeVegter,
439 F.3d at 1303. We do not find clear error unless “‘we are left with a definite and firm
conviction that a mistake has been committed. . . . [T]he clear error standard is purposefully
deferential to the district court, . . . [but r]eview for clear error does not mean no review.’” Id.148
Accordingly, we find no reversible error in the district court’s calculations adding
22 levels under § 2C1.1(b)(2)(A) to Swann’s offense level.
The district court alternatively stated that even if it used the bribe amount
approach and not the net benefit approach, it would vary upward from the lower
range (51 to 63 months) urged by Swann based on “other factors in 18 USC
Section 3553 that I am charged with the responsibility of weighing.” Therefore,
we also conclude any error in the guidelines calculations as to Swann was
harmless. See United States v. Barner, 572 F.3d 1239, 1248 (11th Cir. 2009)
(“Where a district judge clearly states that he would impose the same sentence,
even if he erred in calculating the guidelines, then any error in the calculation is
harmless.”); United States v. Dean, 517 F.3d 1224, 1232 (11th Cir. 2008), aff’d,
Dean v. United States, 129 S. Ct. 1849 (2009); United States v. Keene, 470 F.3d
1347, 1348-49 (11th Cir. 2006).
D. Substantive Reasonableness
Swann also argues his 102-month sentence was substantively unreasonable
because the district court impermissibly considered that (1) Swann showed no
remorse, and (2) because he was a public official, Swann was more culpable than
the contractors and, without his conduct, the bribe-payors could not have
(quoting United States v. Crawford, 407 F.3d 1174, 1177 (11th Cir. 2005)). We review
questions of law arising under the federal Sentencing Guidelines de novo. Id.149
committed the crime.128
This Court considers the substantive reasonableness of the sentence imposed
by inquiring whether the sentence is supported by the 18 U.S.C. § 3553(a) factors.
Gall v. United States, 552 U.S. 38, 56, 128 S. Ct. 586, 600 (2007).129
The district court need not discuss each of the § 3553(a) factors. United
States v. Talley, 431 F.3d 784, 786 (11th Cir. 2005) (“[N]othing in Booker or
elsewhere requires the district court to state on the record that it has explicitly
considered each of the section 3553(a) factors or to discuss each of the section
3553(a) factors.”) (quotation marks omitted). The district court’s acknowledgment
that it considered the defendant’s arguments and the factors in § 3553(a) is
sufficient. Id.
The district court’s consideration of Swann’s lack of remorse was not
improper. A district court is permitted to consider lack of remorse in its § 3553(a)
128
Swann claims these were improper factors (1) for not varying even lower than 102
months from the 151 to 188 months guidelines range and alternatively (2) for varying upward to
102 months from the 51 to 63 months guidelines range.
129
The § 3553(a) factors are: (1) the nature and circumstances of the offense and the
history and characteristics of the defendant; (2) the need to reflect the seriousness of the offense,
to promote respect for the law, and to provide just punishment for the offense; (3) the need for
deterrence; (4) the need to protect the public; (5) the need to provide the defendant with needed
educational or vocational training or medical care; (6) the kinds of sentences available; (7) the
Sentencing Guidelines range; (8) pertinent policy statements of the Sentencing Commission; (9)
the need to avoid unwanted sentencing disparities; and (10) the need to provide restitution to
victims. 18 U.S.C. § 3553(a). We review de novo whether the district court considered an
impermissible factor. United States v. Velasquez Velasquez, 524 F.3d 1248, 1252 (11th Cir.
2008).
150
analysis as to several factors, such as the characteristics of a defendant, the need to
promote respect for the law, and the need to protect society. See United States v.
Kapordelis, 569 F.3d 1291, 1318 (11th Cir. 2009) (stating “district court did not
abuse its discretion by considering . . . [defendant’s] lack of remorse” and
affirming where district court found “upward variance was necessary to protect
society because it was unlikely that [the defendant] would be rehabilitated given
his attitude and lack of remorse”), cert. denied, 130 S. Ct. 1315 (2010); United
States v. Cruzado-Laureano, 527 F.3d 231, 236-37 (1st Cir. 2008) (upholding
consideration of lack of remorse as a permissible factor under § 3553(a)(1) as to
the characteristics of a defendant, under § 3553(a)(2)(A) to promote respect for the
law, and under § 3553(a)(2)(C) to protect the public from future crimes of the
defendant). The district court also did not err in considering Swann was a public
official, another characteristic of the defendant. See 18 U.S.C. § 3553(a)(1).
Swann further argues there was an unwarranted disparity between his 102-
month sentence and those of his co-defendants Bobby Rast (51 months), Danny
Rast (41 months), and Dougherty (51 months). Swann claims Bobby and Danny
Rast received lower sentences because the district court sentenced them using the
bribe amount (not the net benefit amount) in calculating their guidelines ranges
151
under § 2C1.1.130 Swann argues that in using the net benefit in his case, the district
court created sentencing disparity with similarly situated co-defendants because it
had utilized different methods to calculate the guidelines range for various co-
defendants. This ignores a number of factors that differentiate Swann from these
particular co-defendants: (1) Swann was a public official and the private
contractors were not, (2) Swann took bribes not just from the Rast defendants but
also from the Pugh and Dougherty defendants, (3) the district court found Swann
not credible in stating he did not understand the home remodeling work was
intended to influence him, and (4) Swann showed a lack of remorse. Simply put,
Swann has not proved he and these particular co-defendants are similarly situated.
As to FWDE and Dougherty, Swann also argues they received lower
sentences because the district court applied an earlier edition of the sentencing
guidelines. As to FWDE, Swann is incorrect because the PSI and the district court
applied the 2003 guidelines to calculate FWDE’s sentence. As to Dougherty, the
2000 guidelines were used. Under the 2000 guidelines, a $20 million net benefit
resulted in a 16-level increase, rather than the 22-level increase in the 2003
version. Compare U.S.S.G. § 2F1.1(b)(1)(Q), (R) (2000) with § 2B1.1(b)(1)(L),
130
Judge L. Scott Coogler conducted the Swann and Wilson trials and sentenced Swann on
March 30, 2007, the Rast defendants on March 29, 2007, and the Dougherty defendants on
March 28, 2007. Different judges sentenced McNair and PUGH.
152
(M) (2003).131 That a district court may have used the wrong version of the
guidelines in a co-defendant’s separate sentencing (to the benefit of a defendant)
does not make another defendant’s sentence under the correct version unreasonable
in any way. In addition, the Dougherty defendants’ profits were much lower than
the Pugh and Rast defendants, who also gave bribes to Swann. Also, Swann
ignores the fact that the district court granted a downward variance to 102 months
from his advisory guidelines range of 151-188 months. Swann has shown no
reversible error in his 102-month sentence based on disparity with his co-
defendants.
E. Swann’s Fine
The district court ordered that Swann pay a fine of $250,000, based on a fine
guidelines range of $20,000 to approximately $84 million. See U.S.S.G. § 5E1.2.
Swann argues that the district court erred in not considering any of the fine
guidelines factors, including Swann’s ability to pay.
The sentencing guidelines require courts to “impose a fine in all cases,
except where the defendant establishes he is unable to pay and is not likely to
become able to pay any fine.” U.S.S.G. § 5E1.2(a). The defendant has the burden
131
With a 16-level increase, Swann’s total offense level would be 28, which, with a
criminal history category of I, would yield an advisory guidelines range of 78 to 97 months
under the 2000 guidelines. For Dougherty, the PSI used the 2000 edition, and, apparently, there
was no objection by the government.
153
of proving inability to pay a fine. United States v. McGuinness, 451 F.3d 1302,
1307 (11th Cir. 2006).132
After determining a fine is appropriate, the district court shall consider these
factors in fixing the amount of the fine:
(1) the need for the combined sentence to reflect the seriousness of the
offense (including the harm or loss to the victim and the gain to the
defendant), to promote respect for the law, to provide just punishment
and to afford adequate deterrence;
(2) any evidence presented as to the defendant’s ability to pay the fine
(including the ability to pay over a period of time) in light of his earning
capacity and financial resources;
(3) the burden that the fine places on the defendant and his dependents
relative to alternative punishments;
(4) any restitution or reparation that the defendant has made or is
obligated to make;
(5) any collateral consequences of conviction, including civil obligations
arising from the defendant’s conduct;
(6) whether the defendant previously has been fined for a similar
offense;
(7) the expected costs to the government of any term of probation, or
term of imprisonment and term of supervised release imposed; and
(8) any other pertinent equitable considerations.
U.S.S.G. § 5E1.2(d).
“While some circuits require that the district court make specific findings,
we have adopted the less rigid approach, and do not require the sentencing court to
make specific findings of fact with respect to the Sentencing Guideline factors as
132
This Court reviews a district court’s decision that a defendant can pay a fine for clear
error. United States v. Gonzalez, 541 F.3d 1250, 1255 (11th Cir. 2008).
154
long as the record reflects the district court’s consideration of the pertinent factors
prior to imposing the fine.” United States v. Hernandez, 160 F.3d 661, 665-66
(11th Cir. 1998) (citations and quotation marks omitted); see United States v.
Lombardo, 35 F.3d 526, 530 (11th Cir. 1994) (holding that where the record
contains sufficient information with respect to the factors to permit us to find that
the district court did not clearly err in imposing or in setting the amount of the fine,
we will not reverse merely because the district court failed to make specific
findings on each of the factors). “Explicit findings on these factors are not
required . . . .” United States v. Khawaja, 118 F.3d 1454, 1459 (11th Cir. 1997).
We have applied this rule to uphold a fine where the district court did not make
explicit findings of fact as to the defendant’s ability to pay. United States v. Long,
122 F.3d 1360, 1367 (11th Cir. 1997). However, “[i]f the record does not reflect
the district court’s reasoned basis for imposing a fine, we must remand the case so
that the necessary factual findings can be made.” United States v. Gonzalez, 541
F.3d 1250, 1256 (11th Cir. 2008) (quotation marks omitted).
Swann claims the PSI said Swann could pay a fine within the guidelines
range or make a lump-sum restitution but not both. That is not correct. We quoted
the PSI earlier as it (1) says that Swann could pay a fine or make a lump-sum
payment toward restitution shortly after sentencing with liquid assets, and then (2)
155
states it does not determine Swann’s future ability to pay a fine or further
restitution on an installment basis.
Furthermore, the district court adopted the factual findings in the PSI, which
included numerous findings relevant to Swann’s current income and future earning
capacity. The PSI set forth Swann’s net worth, educational background, work
history, and monthly income of $6,729, yielding $80,748 annually. Swann holds
two bachelors degrees, one in civil engineering and one in textile management, and
a masters degree in sanitary engineering. Swann has retired from Jefferson County
but submitted no evidence to show he had tried and failed to gain employment.
Swann already has an annual retirement income of $80,748 even without social
security or future wages from working.133
Although Swann makes two mortgage payments on the two Winwood Drive
residences and pays over $658 in monthly home utility, lawn, pest control, and
maintenance expenses, the homes are in his wife’s name and she lives there too.
The record shows Swann can pay at least some fine. The record also shows
Swann’s counsel argued for a reduced fine and the district court considered the
pertinent factors. As the district court reviewed the PSI before imposing the fine
and heard argument of counsel about the fine, “we infer without hesitation that the
133
The PSI, dated February 5, 2007, did not show Swann drawing any social security. In
2010, Swann is now 64.
156
district court considered the pertinent factors prior to imposing the fine.” Khawaja,
118 F.3d at 1459.
Although Swann has shown no clear error in the district court’s imposition
of some fine, the record is not sufficient to permit us to say there is no error in the
amount of the fine. As to the $250,000 amount, the district court remarked: “I
don’t know whether that’s collectable or not. I don’t think it is . . . .” We cannot
glean from the record the basis for this statement or how the court determined that
the fine should be $250,000 as opposed to $150,000 or $750,000, especially given
the fine guidelines range goes up to $84 million. Thus, we vacate and remand as to
the amount of the fine. See Khawaja, 118 F.3d at 1459-60 (requiring remand
where record does not reflect court’s reasoned basis for amount of $175,000 fine).
XIV. PUGH’S SENTENCE
PUGH was sentenced to 60 months’ probation on four bribery conspiracy
counts (Counts 1 involving McNair, 51 involving Swann, 75 involving Wilson,
and 78 involving Barber), nine substantive bribery counts (Counts 15, 61-63, 71,
83-86), and eleven counts of honest services mail fraud (Counts 90-100). The
district court ordered PUGH to pay a $19.4 million fine, a special assessment of
$9,600, and $239,652 in restitution to the Jefferson County Commission. On
appeal, PUGH challenges only the fine.
157
A. Presentence Report
The PSI stated that PUGH performed nearly $200 million worth of
construction work for sewer projects for Jefferson County between 1997 and 2003
and that a majority of this work was for JCESD-related projects. The PSI listed
bribes given by PUGH to McNair, Swann, Chandler, Barber, and Wilson, totaling
$395,514.134 The PSI stated that PUGH had this net income: $19.09 million in
2001, $15.32 million in 2002, $9.10 million in 2003, $2.94 million in 2004, and
$3.67 million in 2005. PUGH’s federal tax returns reported net income of $17.89
million in 2001, $14.95 million in 2002, $8.10 million in 2003, $3 million in 2004,
and $3.97 million in 2005.
According to the PSI, PUGH received more than $109 million in JCESD
contracts related to the bribery conspiracy from August 1999 to June 2003. This
$109 million reflected only PUGH’s portion of its joint venture work for Jefferson
County. The PSI determined that from 1999 to 2002 PUGH earned an average
134
This $395,514 in restitution consists of PUGH’s payments of:
(1) $192,000 to McNair ($175,000 for construction, remodeling, and cash for his studio
and $17,200 installation of hand railings for his studio);
(2) $149,102 to Swann ($140,680 for Guthrie Landscaping, $7,422 for installation of
waterfall and pond, and $1,000 in gift certificates to Alabama Book Smith);
(3) $610 to Chandler for condominium rental at Pelican Beach Condominiums;
(4) $49,102 to Barber ($47,927 for McCalla, Alabama land, $148 for casino trip to
Vicksburg, Mississippi, $546 resort trip to Biloxi, Mississippi, and $481 trip to Gulf Shores,
Alabama); and
(5) $4,500 to Wilson (UAB scholarship).
158
profit of 43.61% and that PUGH’s profit from County contracts was $47.92
million.135
The PSI: (1) assigned PUGH a base offense level of 10, pursuant to U.S.S.G.
§ 2C1.1(a) (2003); (2) added 2 levels because the offense involved more than one
bribe, pursuant to § 2C1.1(b)(1); and (3) added 22 levels because the net profit to
PUGH was between $20 million and $50 million, pursuant to §§ 2C1.1(b)(2)(A)
and 2B1.1(b)(1)(L),136 yielding a total offense level of 34.137 Under the § 8C2.4(d)
table, this total offense level of 34 required a base fine amount of $28.5 million.
However, the PSI determined PUGH’s pecuniary gain under § 8C2.4(a)(2)
was its $47.92 million profit from the County contracts. Under § 8C2.4(a), the
base fine amount became $47.92 million, because PUGH’s $47.92 million
pecuniary gain was greater than the $28.5 million amount from the § 8C2.4(d) fine
table and greater than the pecuniary loss of $319,425 suffered by the victim
135
PUGH later filed for Chapter 11 bankruptcy. At the time PUGH’s PSI was prepared,
the bankruptcy case was pending. In April 2008, the bankruptcy court confirmed PUGH’s
proposed plan of liquidation. See In re Roland Pugh Constr., Inc., No. Bk-06-71769-CMS-11,
2007 WL 509225 (Bankr. N.D. Ala. Feb. 12, 2007). The bankruptcy court ordered PUGH to
establish a trust account in the amount of $19,409,600, which would be used to pay the federal
criminal fine assessed in the present case. In re Roland Pugh Constr., Inc., No. Bk-06-71769-
CMS-11 (Bankr. N.D. Ala. Apr. 21, 2008).
136
The PSI listed the table section as “§ 2B1.1(b)(1)(M)” but applied the enhancement
listed in § 2B1.1(b)(1)(L) of that table, which provides a 22-level enhancement for amounts
between $20 million and $50 million.
137
The PSI for PUGH used the November 1, 2003 edition of the Sentencing Manual.
159
County.
The PSI determined PUGH’s culpability score was 7 under § 8C2.5, because
(1) PUGH had 50 or more employees and (2) individuals with substantial authority
(Board Chairman Roland Pugh, CEO Grady Pugh, and President Yessick)
participated in the offenses. This culpability score of 7 resulted in a minimum fine
multiplier of 1.4 and a maximum multiplier of 2.8, under § 8C2.6. Based on these
multipliers and the base fine of approximately $47.92 million, the PSI calculated
the guidelines fine range to be $67,089,446.48 to $134,178,892.96.
The statutory maximum fine was $95,842,066, pursuant to 18 U.S.C.
§ 3571(b), (d) (i.e., double the pecuniary gain of $47.92 million). Thus, the PSI
concluded PUGH’s advisory guidelines fine range was $67,089,446 to
$95,842,066.
The PSI stated PUGH appeared unable to pay a fine within that $67 million
to $95 million guidelines range and recommended the district court reduce the fine
if it determined PUGH was unable to pay the minimum fine amount. The PSI
noted that, under § 8C3.4, the guidelines fine could be offset by 67.75%, because
(1) PUGH was a closely held organization, (2) three of PUGH’s owners (Roland
Pugh, Yessick, and Grady Pugh) whose total interests amounted to 67.75% had
already been fined for the same offense conduct, and (3) one owner (Andy Pugh)
160
had a 32.25% interest and was not convicted in the bribery scheme.
PUGH objected to the PSI’s calculation of profits or pecuniary gain. PUGH
argued there was no evidence that PUGH obtained any contracts, or the $47.92
million in profits, because of its bribes. PUGH contended its base offense level
should be based on the $129,138.81 amount of bribes PUGH paid, which would
result in a total offense level of 22 and a base fine of $1.2 million.138
B. Supplemental Briefing Before Sentencing
The district court ordered briefs addressing the fine amount. PUGH’s brief
reiterated its challenge to the PSI’s calculations, arguing there was no evidence the
County suffered any pecuniary loss from the bribery scheme.
The government recalculated PUGH’s pecuniary gain based on a job-by-job
analysis of PUGH’s contracts with the County. The government submitted a list of
bribery and post-bribery jobs, which showed the revenue earned, gross profit, gross
profit percentage, and “improper gain” for each job. The government calculated an
average unit price for items used by PUGH in eight of its projects over a 20-month
period from 2001 to 2002 and then compared those prices for this time period to
the average unit price PUGH charged the County for these items during the bribery
138
PUGH’s total did not use certain amounts that were included in the PSI, such as (1)
$60,696 that PUGH claimed Swann repaid to PUGH, (2) $37,000 worth of unperformed work on
Swann’s home that PUGH paid Guthrie for, and (3) $167,679 in items PUGH gave to McNair.
161
period of 1997 to 2001. The government determined PUGH’s improper gain was
$24.667 million, while PUGH made about $20 million in “normal profit.” Based
on the improper gain of $24.667 million and applicable multipliers, the
government concluded PUGH’s guidelines fine range was $34.533 million to
$69.067 million.139
PUGH’s reply brief then challenged the government’s recalculation for
failing to account for a price increase that occurred in 2003 and for using
artificially low post-bribery prices in 2001 and 2002. PUGH claims this skewed
the government’s analysis of PUGH’s profits to reflect greater profits during the
bribery period. PUGH also claimed that, to prove PUGH profited from the bribery
scheme, the government had to show that PUGH’s bribes caused the PRC to limit
the number of cured-in-place contracts.
C. Sentencing Hearing
The district court conducted a lengthy sentencing hearing, including two
days of evidence and a partial day of argument on evidence assessment and factual
139
When comparing the unit prices of bribery-period and post-bribery jobs, the
government’s analysis used only PUGH’s sewer rehab jobs — and not other jobs such as
wastewater treatments, trunk sewer jobs, and annual contracts — so that the analysis would
reflect an “apples-to-apples” comparison. FBI Agent Tom Mayhall stated PUGH earned about
$55 million from other work from the County, which was not included in the improper gain
calculation.
Although the government points out PUGH continued to make some bribes in 2001 and
well into 2002, the majority of PUGH’s bribes were given prior to December 31, 2000, and the
government thus compared the profit before the end of 2000 with that in 2001-02.
162
determinations. The government presented evidence as to the bribes PUGH paid
and the revenue and profits PUGH earned from its County contracts during the
bribery scheme. For example, FBI Agent Tom Mayhall calculated PUGH’s
improper gains by comparing (1) the average unit price of items on invoices for
sewer rehab jobs PUGH submitted to the County during the bribery scheme
through the end of 2000 with (2) the average unit price of items on eight sewer
rehab jobs PUGH performed in 2001 and 2002. Based on this comparison, Agent
Mayhall concluded PUGH’s improper gain was approximately $24.667 million.140
Agent Mayhall testified about PUGH’s bribes to County employees and the
benefits PUGH received from its County contracts and as a result of the PRC’s
decisions. PUGH maintained that the increase in profits was not substantial and
was based on areas of PUGH’s business other than its work for the County.
The district court rejected the government’s pricing analysis, finding that the
evidence failed to show the line items in PUGH’s contracts were affected by the
bribes PUGH paid. The court found PUGH paid bribes to County employees
because PUGH was “afraid of what might happen if [it] did not do so” and that
140
Agent Mayhall testified PUGH made about $44.536 million total gross profit on about
$109 million in revenue on JCESD rehab jobs during the bribery period. Mayhall testified that
of this $44.536 million total gross profit, about $19.869 million was a result of PUGH’s normal
profit margin, and the remaining $24.667 million was therefore improper gain. Mayhall added
that PUGH had about $22 million in cash on hand, which earned about $77,000 per month in
interest, and bankruptcy creditors claimed less than $200,000 of that cash.
163
“what might have happened is that [PUGH] might have lost all its contracts, those
current and future, with the County and the profits associated with those
contracts.”141 The court further found, for example, “that the Swann bribes . . .
were designed to ensure that [PUGH] stayed in good favor with Mr. Swann so that
[PUGH] would have and continue to have the opportunity to receive contracts and
be paid on contracts from Jefferson County.” The court later stated “there [was] an
expectation that if you do business with the County, you’re expected to do this.
And I think that the reason [PUGH] did it was because others were doing it and it
wanted to protect the contracts it had.”
The court also found that, beginning in August 1999, PUGH started making
bribes “in order to maintain its standing in the revenues and profits realized in the
contracts awarded by Jefferson County; and, indeed, they became extremely high
profits during that bribe period.”
The district court found that PUGH made its first bribe in August 1999 and
its final bribe in September 2002. The court found that (1) from September 1,
1999 to December 31, 2002, PUGH benefitted from the bribes, (2) during this
1999-2002 period PUGH generated from its County contracts a total profit of
141
Judge David R. Proctor conducted the Barber trial and sentenced the Pugh defendants.
164
$43,985,869,142 and (3) given PUGH’s $107,887,832 in revenues, this $43,985,869
profit was a 40.77% profit margin during that period. Using that profit to calculate
the base fine amount, the district court determined the guidelines fine range was
$61,580,216 to $87,971,738. See U.S.S.G. §§ 8C2.5, 8C2.7. After considering
PUGH’s ability to pay, the district court reduced the fine to $21 million. The
district court then gave a $1.6 million offset for fines paid by individuals who
owned at least 5% of PUGH, which resulted in a final fine of $19.4 million.
D. Challenges to $19.4 Million Fine
On appeal, PUGH primarily raises objections to the manner in which the
district court arrived at the $19.4 million fine, but none of them has merit. The PSI
contained extensive financial information about PUGH’s revenue and profits. The
district court’s fact-findings are supported by the record and undisputed facts in the
PSI, and PUGH has shown no clear error in any of them. PUGH also has shown
no legal error in any of the district court’s calculations regarding the advisory
guidelines fine range or in any other matters under the sentencing guidelines.
PUGH’s brief as to the fine mainly resorts to claiming PUGH did not have
142
The court found, “[t]he September 1, ‘99 date signifies the first contract awarded to
Pugh by the County after the August 1999 concrete work was done for McNair.” The court
stated: “I have not attributed any profits made by Pugh in 2003, although the government may
well have a good argument that profits in 2003 and revenues in 2003 continued to be effected
[sic] because of the bribes paid in ‘99, 2000, 2001 and 2002.” The court added: “Likewise, I
have not attributed any pre-September 1999 gain to Pugh Construction based upon the bribe
scheme that was in place and paid by other contractors.”
165
adequate notice of certain arguments or adequate opportunity to respond. The
record refutes those claims too. The parties submitted numerous sentencing briefs
and offered a substantial amount of evidence as to PUGH’s revenue and profits.
PUGH claims it did not know the district court would consider that the bribes were
paid out of fear of losing contracts or future payments thereon. However, PUGH’s
counsel, in arguing that the bribes were unrelated to the PRC, relied on the fact that
the contractors feared what would happen if they did not pay bribes:
[L]et me explain to [the court] why I think the contractors make such
payments to public officials.
....
[T]he best testimony that I heard about that was from Mr. William
Dawson. Mr. Dawson was an engineer, independent, who was doing
work for Jefferson County. . . . Mr. McNair invited him to come by the
studio. And when he got there, Mr. McNair said, Mr. Dawson I’ve never
asked you for anything before, but what I would like is for you to buy
me an audio-visual equipment, some sort of a projector or something of
that nature, and he had a book. And he said this is the model and this is
what I would like to have. Well, Mr. Dawson didn’t want to do that.
And he went home and he thought about it and finally he did it. And he
did it because he was afraid of what Chris McNair would do to him if he
didn’t.
So when these people come and put the touch on a contractor or
someone, I think it’s the fear of the unknown.
In closing arguments, PUGH’s trial counsel maintained that any benefits PUGH
provided to the County employees were given purely out of friendship. PUGH
cannot now claim it had an inadequate opportunity to explain its motivation in
166
paying bribes or to prepare for the ultimate approach the district court took in
deciding on the amount of the fine. If anything, counsel’s argument succeeded in
reducing the amount of the fine imposed to well below the advisory guidelines
range of $61,580,216 to $87,971,738. PUGH has shown no reversible error in any
procedural aspects of the sentencing proceedings before the district court in
PUGH’s case.
XV. CONCLUSION
We affirm all of the defendant-appellants’ convictions except PUGH’s
conviction on Count 75, which we reverse. We affirm McNair’s sentence. We
affirm Swann’s sentence except as to the amount of the fine. While there was no
legal error in the imposition of some fine for Swann, we vacate and remand as to
the amount of the fine. As to PUGH’s sentence, we (1) affirm the district court’s
findings of fact as supported by the record; and (2) conclude there was no error in
the district court’s calculations under the sentencing guidelines; but (3) in light of
the reversal of its Count 75 conviction, we vacate PUGH’s sentence and remand
for resentencing without Count 75.143
AFFIRMED IN PART, REVERSED IN PART, VACATED AND
143
PUGH was convicted and sentenced on 24 counts of conviction, and the reversal on
Count 75 does not appear to impact its overall sentence. However, in an abundance of caution,
we vacate PUGH’s sentence and remand for resentencing by the district court because, at a
minimum, Count 75 must be removed.
167
REMANDED IN PART.
168