U.S. v. Sun-Diamond Growers of California (04/27/1999)

By: Daniel Rubin, Medill News Service

Questions presented

Is the requirement in 18 U.S.C. sec. 201 c (1)(A) that a thing of value be given ""for or because of an official act"" satisfied by a showing that the giving of the thing of value was motivated by the recipients official position.

Brief

Dating back to their college days at Howard University, Mike Espy and Richard Douglas considered each other to be good friends.

And for 25 years, the men maintained that friendship.

Along the way, each man would pursue different career paths. Espy returned to his native state of Mississippi and in 1987, become the states first African-American congressman in nearly 100 years. Considered to be a rising star in the Democratic Party, Espy was picked by President-elect Bill Clinton in 1992 to become the Secretary of the Department of Agriculture, a Cabinet-level position.

Richard Douglas chose to enter the business world, where he would rise to the level of senior vice president for corporate affairs of Sun-Diamond Growers of California, a cooperative of growers that is the largest producer of raisins, walnuts, prunes, figs, and hazelnuts in the United States. His duties included lobbying the government on behalf of his employer.

After Espy was confirmed by the Senate in 1993, the different worlds of Mike Espy and Richard Douglas became linked. In order to promote U.S. goods internationally, the Agriculture Department had an ongoing Market Promotion Program that allowed U.S. growers to receive federal funds for international marketing.

However, in August 1993, Congress mandated that the funds should be given to small growers, instead of large cooperatives such as Sun-Diamond. The stakes in Congress action were huge for Sun Diamond: Sun Diamonds companies received close to $24 million through the program in the years of 1990-1995.

Congress left the implementation of its mandate up to the Department of Agriculture, leaving the fate of Sun-Diamond squarely in the hands of Espy.

It was against that backdrop that Agriculture Secretary Mike Espy, along with his girlfriend, traveled with Douglas to the 1993 U.S. Open Tennis Tournament in September 1993. Along the way Douglas paid for all of Espys tickets, meals and even bought $2000 worth of luggage for Espy and a $500 crystal bowl. All told, Douglas spent $5,900 on Espy alone, and was reimbursed by Sun-Diamond.

In December 1994, Espy resigned in disgrace in the midst of Independent Counsel Donald C. Smaltzs investigation of Espys dealings with Tyson Foods. Smaltz had been appointed by U.S. Attorney General Janet Reno to investigate charges of widespread corruption in Espys office. In June 1996, Sun-Diamond was indicted on charges of making illegal gifts to Espy, committing wire fraud, and making illegal campaign contributions. Espy was indicted separately on charges of receiving illegal gratuities covering $34,000 in gifts from companies, including Sun-Diamond and Tyson Foods.

During the trial, lawyers for Sun-Diamond argued that because Espy and Douglas had been friends for such a long period of time, the money spent by Douglas was merely an act of friendship.

On Sept. 24, 1996, Sun-Diamond was convicted of the charges stemming from the U.S. Open incident. The first count of the indictment alleged that Sun-Diamond violated 18 U.S.C d 201 which prohibits an individual from giving gifts to public officials ""É for or because of any official act performed or to be performed..."" The Sun-Diamond conviction represented the first person or entity convicted in approximately 100 years for giving a gratuity to a sitting Cabinet member.

But in March 1998, the Court of Appeals for the District of Columbia reversed the conviction, saying that the jury instructions regarding the bribery count were too broad.

The jury instructions in the case stated that, ""The gratuity statute makes it a crime for a person to knowingly and willingly give a public official a thing of value because of his official position whether or not the giver or receiver intended that particular officials acts be influenced.""

In its ruling, the appeals court took a stance that the statute only forbids gifts that are given on a quid pro quo basis for favor in an official act.

""The language of the charge is far broader than that of the statute,"" the court said. ""To satisfy the criminal intent requirement embodied in the phrase Ôfor or because of any official act, the giver must intend either to reward some past concrete official act or acts, or to enhance the likelihood of some future act or acts.""

The ruling, which was consistent with earlier rulings by that court, was in direct conflict with rulings in the 2nd, 3rd, 5th and 9th circuits and set the stage for the U.S. Supreme Court to hear the matter.

Sun-Diamonds lawyer, Eric W. Bloom, said that differences in the circuits is probably why the Supreme Court decided to hear the case.

""Obviously the rest of the courts have not agreed with the [D.C.] court,"" said Bloom. ""Their [the D.C. circuit] is trying to protect against the government taking a broader standard.""

But Smaltz, in the petition for writ of certiorari to the Supreme Court, said the holding is extremely dangerous and could undermine a measure aimed at cleaning up government.

""The D.C. Circuits decision in this case has potentially disastrous practical consequences,"" Smaltz wrote. ""Astonishing as it may seem, the D.C. Circuits decision in this case means that a gratuity that would be a federal crime if given to a minor federal official in the 2nd, 3rd, 5th or 9th Circuits might be considered perfectly legal if given to a Cabinet Secretary in Washington, D.C.""

The U.S. Supreme Court granted certiorari on Nov.2, 1998.

On Dec. 2, 1998, after a seven-week trial, Espy was acquitted on all 30 counts of receiving illegal gratuities.

Then on April 27, 1999, a unanimous Supreme Court affirmed. Writing for the Court, Justice Antonin Scalia said that federal prosecutors must prove a link between a thing of value conferred upon a federal official and a specific ""official act"" for or because of which it was given. It is not enough, Justice Scalia wrote, to show that someone wanted to curry favor because an official was in a position to help them.

The Court concluded that the government's contention would produce peculiar results, criminalizing, for instance, token gifts to the President based on his official position and not linked to any identifiable act--""such as the replica jerseys given by championship sports teams each year during ceremonial White House visits.""