United States v. Pawlinski, Jeff ( 2004 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-4093
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JEFF PAWLINSKI,
Defendant-Appellant.
____________
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 03-CR-51—Charles N. Clevert, Jr., Judge.
____________
ARGUED MAY 26, 2004—DECIDED JULY 2, 2004
____________
Before BAUER, POSNER, and COFFEY, Circuit Judges.
POSNER, Circuit Judge. Jeff Pawlinski, who was then a
Milwaukee alderman, pleaded guilty to having defrauded
contributors to the campaign fund maintained by the
“Pawlinski for Alderman” campaign committee of approxi-
mately $40,000, in violation of the federal mail fraud statute,
18 U.S.C. § 1341, by using the contributors’ money for pur-
poses unrelated to the campaign. As part of his sentence,
Pawlinski was ordered to pay restitution of $39,324.03, with
the money to be deposited in the first instance in the district
court; and he did this. The court then notified the contribu-
2 No. 03-4093
tors to the campaign fund that they might be entitled to
reimbursement. None of the contributors, as far as we
know, has been accused of any impropriety in having
contributed to Pawlinski’s campaign, even though the plea
agreement states that the campaign fund received corporate
contributions and Wisconsin law forbids corporations to
make campaign contributions. Wis. Stat. §§ 11.38(1)(a)(1),
.38(4). But only a handful of contributors stepped forward
and their claims added up to a mere $1,850.
Pawlinski’s lawyer suggested that the unclaimed balance
be returned to the “Pawlinski for Alderman” campaign
fund, which would then be dissolved and the money in it
distributed in accordance with Wisconsin law. Pawlinksi
disclaimed any right to the money himself. The government
expressed indifference between the court’s returning the
money to the campaign fund and giving it to the Crime
Victims Fund of the U.S. Treasury. 42 U.S.C. § 10601(a). The
Crime Victims Fund, which finances services to victims of
crime, 42 U.S.C. §§ 10602-10603, is funded by criminal fines,
forfeited bail bonds, penalty fees, and special assessments
collected by the Department of Justice, the federal courts,
and other federal agencies. 42 U.S.C. § 10601(b);
http://www.ojp.usdoj.gov/ovc/ncvrw/cvfa/2002/
fundawards.html.The judge amended the order of restitu-
tion to direct that the money go to the Fund.
Pawlinski appeals from the amended order and is met at
the threshold by the government’s contention that he has no
standing to challenge the amended judgment because he has
no stake in the money that had been deposited in the district
court, having renounced, as we noted, any claim to it. It is
true that he has no ownership interest in the money. But it
is untrue that he has no financial interest in who receives the
money. Under Wisconsin law, money obtained by a political
campaign in violation of the prohibition against corporate
No. 03-4093 3
contributions (acceptance of such contributions being a
violation of Wis. Stat. § 11.38(1)(b)) must either be returned
to the contributors or donated to the state’s “common school
fund” or to a charitable organization. Wis. Stat. § 11.38(6).
(Another option was added by 2001 Wis. Laws 109, but the
statute was held unconstitutional, Wisconsin Realtors Ass’n
v. Ponto, 233 F. Supp. 2d 1078, 1093 (W.D. Wis. 2002); see
also Wisconsin Right to Life, Inc. v. Schober, 366 F.3d 485, 490-
92 (7th Cir. 2004), so we ignore that option.)
In addition, and in some tension with section 11.38(6),
a candidate who wants to wind up his campaign fund
may not do so until the campaign’s debts are paid in full.
Wis. Stat. § 11.19(1). When that is done, the fund can be
terminated and any balance remaining upon termination
“may be used for any political purpose not prohibited by
law, returned to the donors in an amount not exceeding the
original contribution, transferred to the [election] board for
deposit in the Wisconsin election campaign fund or donated
to a charitable organization or the common school fund.” Id.Pawlinski acknowledges that he violated Wisconsin law—
not only the prohibition against accepting corporate cor-
porations, but also and more fundamentally the prohibition
in Wis. Stat. § 11.25(2)(a) against using “moneys solicited for
political purposes for a purpose which is other than
political”—as well as federal law (the mail fraud statute).
And though we cannot find a case on point, or a pertinent
statute or regulation, it is highly unlikely that the fact that
the fund is now empty would relieve him from any of the
financial consequences of his illegalities. He stole the
$39,324.03 that he has been ordered to make restitution of,
and presumably he has to make that loss good so that the
fund’s assets can be put to their statutorily designated uses.
We cannot be absolutely certain of this; there are civil
fines and criminal penalties for violations of Wisconsin
campaign-finance laws, see Wis. Stat. §§ 11.60, .61, and
4 No. 03-4093
conceivably they’re intended to be exclusive. And it is al-
most certainly too late for any more contributors, corporate
or otherwise, to claim restitution, in view of the time limits
in 18 U.S.C. § 3664(d)(5), though those limits can sometimes
be bent. United States v. Grimes, 173 F.3d 634, 638-40 (7th Cir.
1999); United States v. Zakhary, 357 F.3d 186, 191-93 (2d Cir.
2004); United States v. Terlingo, 327 F.3d 216, 218-23 (3d Cir.
2003); United States v. Dando, 287 F.3d 1007, 1009-11 (10th
Cir. 2002); United States v. Vandeberg, 201 F.3d 805, 813-14
(6th Cir. 2000). Anyway the district court’s coffer is empty
except for the slight amount set aside for the contributors
who have applied for reimbursement—the Crime Victims
Fund has the rest. But all that’s important is that the state
may be able to order Pawlinski to restore the stolen money
to the fund.
He has an additional financial interest in having the un-
claimed balance of the amount he deposited in the district
court returned to the campaign fund rather than seques-
tered by the Crime Victims Fund. He has campaign debts,
and we know from Wis. Stat. § 11.19(1) that the campaign’s
debts must be paid before the fund is terminated. Again,
there is uncertainty. There are no assets in the campaign
fund any more, and we do not know whether the debts are a
personal obligation of the candidate. Maybe the only liable
entity is the “Pawlinski for Alderman” campaign commit-
tee; that might depend on the terms of the contracts between
the committee and its creditors, a matter on which the
record is silent. Still a further wrinkle is that Wisconsin may
consider the Crime Victims Fund an appropriate charity to
receive the unclaimed balance in the terminated campaign
fund. See Wis. Stat. § 11.01(2), defining “charitable organiza-
tion” to include the United States and “any political subdi-
vision thereof.”
Amidst this welter of uncertainty the fact remains that if
the money originally deposited in the district court and not
No. 03-4093 5
claimed by the contributors isn’t returned to the campaign
fund, then any money that Pawlinski owes by virtue of
Wisconsin law, as a consequence of either his fraud or
simply his campaign debts, may come out of his pocket. The
fact that the injury done him by the amended judgment is
probabilistic rather than certain does not deprive him of
standing. E.g., Cook Inc. v. Boston Scientific Corp., 333 F.3d
737, 743-44 (7th Cir. 2003). The probability does not seem
negligible, though no stronger statement is possible—an
additional doubt being whether the U.S. Treasury will
return the money that the judge sent to the Crime Victims
Fund if the judge’s order is reversed.
Having satisfied ourselves that Pawlinski has standing to
maintain this appeal, we turn to the merits, where the issue
is the lawfulness of the judge’s shipping to the Crime
Victims Fund the unclaimed balance of the amount that
Pawlinski had been ordered to pay by way of restitution.
The original order of restitution was based on the
Mandatory Victims Restitution Act of 1996, which requires
restitution in the case of certain federal crimes, including
mail fraud. 18 U.S.C. § 3663A(c)(1)(A)(ii); United States v.
Grice, 319 F.3d 1174, 1177 (9th Cir. 2003) (per curiam). An
order of restitution under that statute (and no other basis for
the order is suggested) must go to victims of the defendant’s
crimes, and the Crime Victims Fund is neither a victim of
Pawlinski nor a representative of his victims. There are only
two exceptions, other than for certain drug crimes, see 18
U.S.C. § 3663(c): if the order is imposed pursuant to a plea
agreement which provides for restitution to nonvictims, or
if the victims assign their right to restitution to the Crime
Victims Fund. 18 U.S.C. §§ 3663A(a)(3), 3664(g)(2). Neither
exception is applicable to this case. There has been no as-
signment, and the defendant merely “agree[d] to pay resti-
tution as ordered by the court.” Compare United States
v. Peterson, 268 F.3d 533 (7th Cir. 2001), where the defendant
6 No. 03-4093
“promised to pay restitution for ‘all losses relating to the
offense of conviction and all losses covered by the same
course of conduct or common scheme or plan as the offense
of conviction.’ ” Id. at 533-34.
The government argues that “in the absence of a clear
statutory directive, the sentencing court was free to ‘exercise
its discretion in fashioning a restitution order,’ 18 U.S.C.
§ 3664(a).” But the quotation is cropped and misleading.
With context restored, its irrelevance and the baselessness
of arguing that the district court has discretion to order
restitution to nonvictims other than as authorized by the
statute become evident. Here is the sentence in which the
quotation appears: “For orders of restitution under this title,
the court shall order the probation officer to obtain and
include in its presentence report, or in a separate report, as
the court may direct, information sufficient for the court to
exercise its discretion in fashioning a restitution order.” The
discretion goes to the form of the order—the identity of the
victims, the amount owed each, and similar details neces-
sary to the formulation of a specific order. E.g., United States
v. Sensmeier, 361 F.3d 982, 988 (7th Cir. 2004); United States
v. Rhodes, 330 F.3d 949, 953 (7th Cir. 2003); United States v.
Wood, 364 F.3d 704, 714 (6th Cir. 2004); United States v.
Osborne, 332 F.3d 1307, 1314 (10th Cir. 2003). It is not
discretion to ignore the statutory limits on when nonvictims
may be included in a restitution order. Federal courts
cannot order restitution in a criminal case without a statu-
tory basis. United States v. Randle, 324 F.3d 550, 555 (7th Cir.
2003); United States v. Hensley, 91 F.3d 274, 276 (1st Cir.
1996); United States v. Snider, 957 F.2d 703, 706 (9th Cir. 1992)
(per curiam).
The sentence was illegal. United States v. Wolf, 90 F.3d 191,
194 (7th Cir. 1996). The government even acknowledges, in
its brief, that the judge’s amended order is “afield from the
No. 03-4093 7
statutory framework governing restitution”; but it argues
that if the sentence was therefore unlawful, still the judge’s
error was not a “plain error” and can therefore be forgiven.
We do not understand the argument. The doctrine of plain
error is meant for cases in which a defendant forfeits a
ground in the district court yet then presents it to the
appellate court (or maybe the appellate court notices it on
its own) as a basis for reversal. E.g., United States v. Cotton,
535 U.S. 625, 631-32 (2002); United States v. Olano, 507 U.S.
725, 732-37 (1993). Remember that in the district court, after
it was discovered that most of the victims of Pawlinski’s
fraud would not be asking for restitution, Pawlinski urged
that the money be returned to the campaign fund. He never
suggested that it should go to the Crime Victims Fund
instead. When the government proposed that as an alterna-
tive destination (while expressing indifference between it
and the campaign fund), Pawlinski repeated that he wanted
the money to go to the campaign fund instead of to the
Crime Victims Fund. There was thus no forfeiture of the
argument against sending the money to the Crime Victims
Fund, and hence there is no occasion to consider whether
the judge’s error was not merely error, but plain error. In
fact it was plain error, because there was not even an
arguable basis for what he did and because the entry of an
illegal sentence is a serious error routinely corrected on
plain-error review. E.g., United States v. Randle, supra, 324
F.3d at 558; United States v. Noble, 246 F.3d 946, 955-56 (7th
Cir. 2001); United States v. Ubakanma, 215 F.3d 421, 427-29
(4th Cir. 2000); United States v. Rodriguez, 938 F.2d 319, 320-
22 (1st Cir. 1991).
The judge erred in directing that the money that Pawlinski
stole from his campaign fund be given to the Crime Victims
Fund. The order of restitution must be vacated as to the
remaining balance because, as we have emphasized, the
conditions for restitution to nonvictims have not been
8 No. 03-4093
satisfied. What happens to the money that the judge
dispatched to the Crime Victims Fund will be an issue
between Wisconsin, the U.S. Department of Justice, which
administers the Fund, 42 U.S.C. § 10605, and possibly the
U.S. Treasury as well.
REVERSED AND REMANDED.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—7-2-04