Document Info

DocketNumber: 05-1287

Judges: Per Curiam

Filed Date: 12/23/2005

Status: Precedential

Modified Date: 9/24/2015

  •                           In the
    United States Court of Appeals
    For the Seventh Circuit
    ____________
    No. 05-1287
    UNITED STATES OF AMERICA,
    Plaintiff-Appellee,
    v.
    CARL A. GEE,
    Defendant-Appellant.
    ____________
    Appeal from the United States District Court
    for the Eastern District of Wisconsin.
    No. 03-CR-259—Rudolph T. Randa, Chief Judge.
    ____________
    ARGUED DECEMBER 7, 2005—DECIDED DECEMBER 23, 2005
    ____________
    Before EASTERBROOK, MANION, and SYKES, Circuit
    Judges.
    EASTERBROOK, Circuit Judge. Opportunities Industrial-
    ization Center of Greater Milwaukee (OIC)—an organiza-
    tion affiliated with the self-help movement founded in 1964
    by Rev. Leon H. Sullivan in Philadelphia—holds contracts
    to administer Wisconsin’s welfare-reform program, popu-
    larly known as W-2 (for “Wisconsin Works”). These con-
    tracts bring in about $40 million annually, approximately
    two-thirds of OIC’s revenue. A jury concluded in this
    criminal prosecution that Carl Gee had conspired with Gary
    George and Mark Sostarich to obtain these contracts
    corruptly. Gee caused OIC to pay kickbacks to George, who
    at the time was the majority leader of Wisconsin’s state
    2                                                No. 05-1287
    senate. The kickbacks violated 
    18 U.S.C. §666
     because OIC
    receives more than $10,000 annually in federal grants (W-2
    is itself about 80% federal money), and the agreement
    among Gee, George, and Sostarich to violate §666 in turn
    violated 
    18 U.S.C. §371
    , the general conspiracy statute. Gee
    has been sentenced to 24 months’ imprisonment and
    ordered to pay restitution of some $473,000. George pleaded
    guilty to the §371 charge, and we have affirmed his convic-
    tion and sentence of 48 months’ imprisonment, though we
    directed the district court to revisit George’s obligation to
    make restitution. See United States v. George, 
    403 F.3d 470
    (7th Cir. 2005). Sostarich pleaded guilty to a different con-
    spiracy with George, agreed to cooperate (he testified
    against Gee), and was sentenced to make restitution, serve
    home confinement but no imprisonment, and perform
    community service; he did not appeal.
    The evidence permitted a jury to find that Gee caused
    OIC to pay George for his assistance in directing the
    welfare-program-management contracts to OIC and pre-
    venting the state from auditing OIC’s performance. Money
    passed from OIC to George in two ways. First, OIC gave
    Sostarich a monthly retainer, 80% of which he made over to
    George (often after one of George’s aides picked up the
    check from OIC, delivered it to Sostarich, and waited while
    he made out a personal check to George for his cut). George
    never performed any legal work in exchange for this money;
    neither OIC nor Sostarich filed tax documents showing how
    the monthly fee had been divvied up. Second, OIC “in-
    vested” $200,000 of an affiliate’s money in a corporation,
    controlled by George’s family, whose sole asset was a TV
    station in the Virgin Islands. Although Gee told the affiliate
    that it would receive 20% of the corporation’s stock, no
    certificates were issued and the “investment” never ap-
    peared on the corporation’s books. The money seems to have
    gone straight to George’s pocket, with OIC receiving his
    goodwill and political patronage rather than an equity
    interest in a business.
    No. 05-1287                                                  3
    Gee contends that this evidence does not support the
    conviction. He offers three principal arguments. One is that
    the $200,000 came from OIC’s profits and bonuses
    for administering the W-2 program rather than from
    any federal grant. This argument supposes that §666
    reaches only funds that can be traced directly to the grant.
    The Supreme Court rejected an identical argument in Sabri
    v. United States, 
    541 U.S. 600
     (2004), as we had done
    earlier in United States v. Grossi, 
    143 F.3d 348
     (7th Cir.
    1998). Gee never mentions either of these decisions.
    Another argument is that the evidence does not estab-
    lish any specific act that George took in response to any
    specific payment. Gee contends that the absence of a quid
    pro quo prevents conviction. Yet the statute does not
    require any such link. A quid pro quo of money for a specific
    legislative act is sufficient to violate the statute, but it is
    not necessary. It is enough if someone “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 organization,
    government, or agency involving any thing of value of
    $5,000 or more”. 
    18 U.S.C. §666
    (a)(1)(B). A sensible jury
    could conclude that George had this corrupt intent, and that
    Gee and Sostarich conspired with George to carry out a plan
    in which federal money in OIC’s hands was exchanged for
    George’s influence. See United States v. Agostino, 
    132 F.3d 1183
    , 1190 (7th Cir. 1997).
    Finally, Gee observes that George was in the legislative
    rather than the executive branch of Wisconsin’s govern-
    ment, which awarded W-2 contracts, and contends that
    he therefore “had no power or authority to influence; he did
    nothing to ‘merit’ a reward.” This confuses influence with
    power to act unilaterally. A legislator with the ability to
    control the senate’s agenda can throw a monkey wrench
    into a Governor’s program, and this power confers influence
    4                                                No. 05-1287
    over executive decisions even when the legislature does not
    pass any particular law. The absence of new laws may show
    the successful application of influence. One does not need to
    live in Chicago to know that a job description is not a
    complete measure of clout. The evidence permitted a
    reasonable jury to find that George had plenty of clout and
    used it to OIC’s benefit, for which he was well paid.
    Gee does not contest the length of his prison sentence but
    does complain about the restitution. The principal problem
    that led to the remand in George was our inability to
    discern what the award represents. Here, as in George, the
    district judge failed to explain his decision; but this time it
    is easy to see where the numbers come from. The award
    equals $200,000 (the “investment” in George’s business)
    plus 80% of Sostarich’s retainer. That’s exactly what the
    victim lost and thus is an appropriate award under 18
    U.S.C. §3663A. Although George notes that the victim in a
    prosecution under §371 is the United States, OIC is a proxy
    for the federal interest because it was a recipient of federal
    funds that were designated for a particular use. Restoring
    this money to OIC will enable it to carry out the federal and
    state welfare programs with the full resources that the
    contracts provided originally. Sostarich actually provided
    legal services, but he was willing to do this for only 20% of
    the retainer. Had funds not been diverted to George, OIC
    could have saved the difference. It is entitled to restitution
    of that difference, and its entitlement to a return of the
    $200,000 is straightforward.
    AFFIRMED
    No. 05-1287                                          5
    A true Copy:
    Teste:
    ________________________________
    Clerk of the United States Court of
    Appeals for the Seventh Circuit
    USCA-02-C-0072—12-23-05