We talk through the implications of the story about an alleged leak in the Hobby Lobby case, respond to a mysterious voicemail, and then break down two interesting federal criminal fraud cases, Cimenelli and Percoco.
We talk through the implications of the story about an alleged leak in the Hobby Lobby case, respond to a mysterious voicemail, and then break down two interesting federal criminal fraud cases, Cimenelli v. United States and Percoco v. United States.
[Divided Argument theme]
Will: Welcome to Divided Argument, an unscheduled, unpredictable Supreme Court podcast. I'm Will Baude.
Dan: And I'm Dan Epps. So, Will, hasn't been too long since our last episode. I feel the term has gotten going and we're actually in a little bit of a groove.
Will: It's nice.
Dan: It's good. It's getting back in regular action. Maybe we'll actually get good at this podcasting thing. We're hoping this one is going to come out on Thanksgiving so you all can have one more thing to be grateful for.
Will: Yeah. Happy holidays.
Dan: Same. One announcement, I think, we need to make, which is that Will and I have made the difficult decision to withdraw from the podcast rankings. We think that podcast rankings do not sufficiently value our ability to offer cold takes. So, we will no longer participate in this enterprise of podcast rankings.
Will: They overevaluate expenditures per listener metric, which we also do very poorly. We're not cooperating anymore. Now, how does this not cooperating thing work? Does that mean that--
Dan: Should we tell people who are not on Twitter like what this is about?
Will: Maybe who are not in law at all? [crosstalk]
Dan: Yeah. Which is that you're alma mater and then shortly thereafter, mine, Yale Law School has decided to withdraw from the U.S. News & World Report's Rankings. And there is a Supreme Court hook here, which we'll get to in a second. So, they're not going to play ball with U.S. News & World Report's Law School Rankings, in which Yale has for many, many years been number one. And then shortly after that, like half an hour later, Harvard is like, "Us too. And we've been planning this for a long time." And then, a whole bunch of other schools have also participated. Chicago still, they haven't.
Will: We have not issued any announcement that I know of. Have you guys?
Dan: No, we're still in. So now, we're like a top five school or something.
Will: It's clear what this means. U.S. News doesn't ask you, "Can we please decide how good of a law school you are?" They issue a ranking on the basis of a complicated formula. As I understand that the two main ways schools "cooperate," one is they send all the schools a survey where people at the school get to rank how good other schools are. I guess people at Yale could not fill out that survey.
Dan: That would be up to those individual faculty members who get the survey, I think.
Will: I think the dean is one of the people that gets them.
Dan: Yeah. Most recently tenured faculty member, I got to vote last year.
Will: And that might actually hurt Yale's reputational ratings significantly, because there might be at this point, the people who think Yale is the best law school are heavily concentrated at Yale. And then, the other thing they provide is they provide data to U.S. News on how much money they spend, because U.S. News gives you a lot of money if you spend-- gives you a higher ranking if you spend lots of money on your students, [unintelligible [00:03:05] Yale and Harvard do very well.
Dan: Yale better than Harvard because Yale has fewer students.
Will: And a lot of money. It's not totally clear what this means. I think so far, U.S. News has said they're going to do their best to rank schools, and every year, there are schools that don't cooperate. They just don't get an announcement because nobody cares whether the--
Dan: Why is this happening now? I had laid out my thesis on Twitter, which a number of people seem to find persuasive. This is actually Yale trying to get out in front of the Affirmative Action cases that we talked about last episode, which is that Yale sees the writing on the wall, they recognize that their current admission strategy is not going to pass legal muster in a post-- what are we going to call those cases? Fair-- what is--[crosstalk]
Will: Fair admissions? [crosstalk]
Dan: Fair admissions. And so at least if they want to maintain diversity of their student body, they're going to have to do something, I think, quite significantly different. I don't know what that something looks like. My guess is they're anticipating making some changes like that. And then--
Will: [crosstalk] -dropping the LSAT for instance.
Dan: Dropping the LSAT entirely. And then, depending on what other schools do or don't do, that could have fairly significant rankings implications. Obviously, if everybody does something similar, then maybe it doesn't matter, but if other schools respond differently or if they're differently situated in terms of their applicants.
Will: Right. I like this theory for many reasons, among the fact that it's cynical, but I don't totally understand why Yale and Harvard would be the first movers into this theory because it is the standard account you get of the tradeoffs of diversity in law school admissions. The top schools have it easiest really because they have their pick of the entire pool, and then it's schools lower down in the rankings that could potentially be in this sort of bind. Do you have any theory about that, or--?
Dan: I'm not sure. It may be that those schools had decided that they're going to do this in order to advance a certain commitment to diversity but they anticipate that other schools might make a different calculus and might try to leverage that moment to move up in the rankings by not pursuing the same strategies that Yale and Harvard do.
Will: Yeah, I like this theory. Can I offer some additional theories, and you tell me if they fit with your theory?
Dan: Sure.
Will: There is this sort of related theory that observes that Yale's whatever reputation rating has recently dropped from a 4.8/5 to like a 4.6, and that was before sort of all the recent hubbub about free speech at Yale and the boycott, all that stuff. And you can imagine that they credibly worry that their rating is going to drop further. Not because everybody will think so but just because enough people who thought of the rankings will care about that, that this is the year they might have dropped to number two anyway. So, it works better to quit than to be fired.
Dan: Yeah, I think that maybe overlaps a little bit in the sense that these are both theories about how something is bad is going to happen rankings wise, and if they can say, "Well, actually, just because we didn't participate," looks better for them. They had dropped in the last couple years. I don't totally know what the theory is behind that. I'm a little skeptical that individual disputes over student controversies really make that much of a ripple on these reputational rankings, which I think are more often driven by how good was Yale when Judge whoever was applying to law school back in 1967. So, that seems to be maybe putting a little bit too much weight on the immediate present.
Will: I mean, as I understand it, historically, the main thing you can do to really move your reputation ranking is to change your name. There are both instances of schools merging with a well-known state school, and then suddenly renaming their previously private law school, and they surge in the rankings, because people think like, "Oh, the University of Wherever, that must be decent, right?" There's some joke, I don't think it's based in reality that Harvard has the ninth ranked geography department in the country, even though they have no geography department, people figure like [chuckles] the Harvard geography department is probably a top 10. Probably, the Princeton Law School. Princeton doesn't have a law school. Probably does pretty well.
Dan: This is a problem for us, which-- our name, Washington University, everyone gets confused, like even Seattle or even DC. So, my hope is that we can find a naming donor for the whole university, which I think would solve this problem. Solve the branding problem. Give us a few extra billion dollars, if you're a billionaire.
Will: Of how much that would cost, what numbers?
Dan: Well, I don't know. What do you think is reasonable, two, three billion?
Will: I think so far, the biggest law school naming gift has been in the mid hundreds of millions.
Dan: No, I mean, university. The whole university. The whole thing. It's a problem for the whole university. Let's get the whole thing.
Will: You think you can get two billion?
Dan: If you're mega billionaire and you want to leave your name on something, and you can say, "Here's already-- it's a kind of top 15 university, I can make it even stronger. And it'll have my name on it forever," it seems like a better deal than a lot of things, if you're trying to get your-- it's a lot more lasting than putting your name on a building or something.
Will: Yeah, FTX University.
Dan: If we'd done that, would we have had to pay the money back?
Will: This is a very interesting question. Maybe. Probably not.
Dan: This is the crypto exchange that currently has crashed and burned. Also, the law school connection there, Sam Bankman-Fried, his parents are both law professors at Stanford, utterly blameless in all this as far as anyone have said, but they were airing all the Superbowl ads and now it doesn't exist.
Will: Well, they were also giving lots of money to various altruistic causes, researching artificial intelligence and promoting veganism. I think there are a bunch of tiny charitable startups that are now having to retain bankruptcy counsel to see if their money can be clawed back as a preferential transfer or a fraudulent transfer.
Dan: Yeah. Well, I guess good thing, we didn't accept their sponsorship dollars last year.
Will: One of my favorite podcasts, other than ours I listened to, was sponsored by FTX for the past couple of years, and this has been a recurring criticism on their Reddit page by their listeners, and now they have had to apologize.
Dan: That doesn’t look good. What is that podcast?
Will: Limited Resources. It's Magic: The Gathering podcast.
Dan: Okay. Are you still like an active competition player?
Will: No, I'm not. I enter a few tournaments here and there online.
Dan: Okay. Just online.
Will: Not seriously. Yeah.
Dan: Is there a lot of cheating in the Magic: The Gathering World?
Will: I think it's hard to cheat online, really.
Dan: Well. I mean, it depends on the game, I guess.
Will: Yeah.
Dan: Have you followed the St. Louis based chess cheating scandal?
Will: A little bit.
Dan: Well, I'm struggling to find a Supreme Court hook there.
Will: It's pretty far out of our jurisdiction.
Dan: We're pretty far but if you're interested, it's a fascinating case.
Will: [crosstalk] -feedback we should talk about?
Dan: Yeah. Is there anything that's not related to any of this? What are you doing for Thanksgiving? You make a turkey?
Will: No. My mother-in-law does all Thanksgiving cooking.
Dan: Oh, that's nice.
Will: I'm going to smoke a brisket, I think. Turkey is overrated. Let's see if that gets us any hate. Yeah, in terms of feedback, we do have some. We have a voicemail.
Dan: Good.
Will: This is the first one we're going to play on the show, and this one is a keeper. I don't quite know what to say about it, but why don't we just play it and then come back?
Male Speaker: [in a singing tone] Professor Baude had a theory. Ee i ee i oh. Baude's theory is wrong, but that's the point. Ee i ee i oh. Feigning ignorance, playing the victim. Ee i ee i oh. Dodging questions, gaining the issues. Ee i ee i oh. Alternate facts, dangerous thinking. Ee i ee i oh. Unpersuasive scholar trolling. Ee i ee i oh. Knows exactly what he's doing. Ee i ee i oh. Believes if he's wrong, then no one can be right. Ee i ee i oh.
Dan: Well, then I found that went in our inbox, and I was like, "This is fun. I don't know if Will's going to be willing to play this." And you were like, "Let's go for it."
Will: Yeah, so the first question I have is, are you outsourcing the relentless personal attacks, is that the idea? Like you're sick of getting criticized and--?
Dan: That is beyond my creativity. Who would have thought that the right way to approach this was personal attacks set to Old MacDonald Had a Farm, right?
Will: Yeah. The next question is, what's up with the farm motif? Is there some point there?
Dan: I don't know. I think that maybe he was just struggling to put it into some kind of lyrical framework, and that was like the one easiest at hand. It lacked a certain kind of coherence in that sense.
Will: I'm from Indiana, so I thought maybe that was somehow the implication.
Dan: I don’t know. They've got firms everywhere. Unpersuasive scholar trolling is that--?
Will: Yeah, at first, I will say, when I agreed to put the voicemail, I thought he was saying, baller trolling, which I appreciated as a compliment.
Dan: That would have been too complimentary.
Will: Yeah, I think so.
Dan: There's a lot to unpack there. I don't know if we'll get-- Unpersuasive scholar trolling. So, if it's unpersuasive, do we really need the song to trash you? Playing the victim, you play the victim?
Will: I guess the whole relentless personal attacks thing, right? Here I am being [unintelligible 00:13:00] than you.
Dan: That wasn't you playing the victim. You're just sitting there, taking it. You're like, "Bring it on." It's other people painting you as the victim.
Will: That's what makes me such a good victim.
Dan: Alternate facts. If you're wrong, no one else can be.
Will: Right.
Dan: Okay.
Will: Yeah. Look, I want to say we get-- [crosstalk]
Dan: Are you chastened? What's your takeaway? Are you chastened by this?
Will: It's good for me to hear it. I really don't get it. I mean, this must be one of my failings. I totally understand people who think I'm wrong about everything. That's like most people. The idea that I'm not only wrong, but also insincere.
Dan: Pretending that you don't know why they call you insincere, ee i ee i oh. [chuckles] Anytime you say something, I can just put it to Old MacDonald, and then make it sound ridiculous. Make you sound ridiculous.
Will: Yeah. Well, I'm not sure who sounds ridiculous here, Dan.
Dan: I don't know.
Will: I think there's some maxim with that. If you find yourself mocking somebody else, by singing Old MacDonald Had a Farm, like clearly who's the--?
Dan: Yeah, but then you just got this podcast to spend several minutes discussing it, assessing your lyrical contributions.
Will: Yeah, I will say I'm glad to play that one. I am hoping that future critical voicemails can up the game a little bit. Either better lyrics or a clearer thesis or evidence or something. Yeah, I don't know.
Dan: Yeah, that was a good template though. So, if somebody wants to-- maybe a diss track kind of aimed at Will, that would be good. We would play that. Could be aimed at me. I guess I can't promise I'll play that one because I do control the account that the voicemails go to, so if someone did a song about me, I might just never tell Will about it. But we'll see.
Will: Yeah, I totally suspect from people like you.
Dan: It would have been more persuasive if you'd sung it. What else? We got a stay application pending shadow docket activity, where the Fifth Circuit had put on hold the President's student loan repayment, student loan Forgiveness plan.
Will: I think we've two cases, one on the Eighth Circuit, and then one from a district court in the Fifth Circuit that may still be pending and--[crosstalk]
Dan: Yeah.
Will: I think the Eighth Circuit one is more ripe, and the SG Elizabeth Prelogar has gone to the Supreme Court on the shadow docket to say, "The district court and now the Eighth Circuit has have effectively put on hold the entire student loan forgiveness plan. They're not taking new applications while this is suspending," and she said, "Lift this." Among other weird things, the Eighth Circuit did this thing that I really thought you weren't supposed to do anymore, where they issue an injunction or a stay without taking a view on the merits at all, they concluded there's proper standing, which maybe there is and the merits questions are serious questions that we will have to look at.
I swear 15 years ago, Ninth Circuit used to do that. Used to say like, "Well, there's irreparable injury and there's a merits question. We're not even willing to say anything about the merits question, but there is a merits question." And then, the court issued these cases like [unintelligible 00:16:04] Winter and McCann, written by Chief Justice Roberts saying there are four factors in the state inquiry, and the most important one is likely to success on the merits. So, that seems a little weird. And then she also said, of course, you could just treat this as a cert petition, and we're prepared to argue this case as soon as February, if you want to just get this out of the way, which is, I think, a nice move. But the court hasn't done anything with that yet. So surely, they'll do something.
Dan: Another important piece of Supreme Court news is a report by the New York Times piece by Jodi Kantor and Jo Becker that came out on Saturday, the 19th, which alleges another breach of Supreme Court secrecy, another leak, but this one occurring in 2014 in connection with the Hobby Lobby case.
Will: Okay, I don't remember this.
Dan: Don't remember what?
Will: [crosstalk] -this happening in 2014. Yeah
Dan: As alleged, it was not a public leak. Instead, what happened is there's a minister named Rob Schenck, who was involved-- and we'll talk about this more in a minute, because I think this is maybe the more interesting part of it. Involved in this sort of influence-peddling operation, trying to get people to ingratiate themselves with the Justices in order to push them in favor of religious liberty cases and push them to overturn Roe and things like that. And so, he alleges that he was told by two people who were his donors, like people that he was working with and sort of coordinating with them to help curry favor with Justices, they told him that they had dinner with Justice Alito, and Justice Alito's wife. They were told the outcome of the Hobby Lobby case, and the Justice Alito was winning it, that it was going to be a victory for Hobby Lobby, and then they pass that information along to Schenck, and then he used that in order to prepare for a public relations offensive immediately after the decision was going to be released.
Will: Okay, so the broader claim they brought-- the sort of the broader influence-peddling scheme is interesting and really troubling, let's get to that in a sec, but on the specific facts, you remind me how hearsay works? So, does anybody present at this conversation say that it happened?
Dan: No. We don't have any slam dunk evidence that it did happen. Schenck says, "I was told this by the Wrights," that's the name of the couple that dined with the Alitos. But he doesn't have any direct evidence showing that's the case. Instead, he has an email that says immediately after the dinner and everyone-- there's no dispute that this dinner occurred. The dinner occurred. And then, email from Ms. Wright that says, "Rob, if you want some interesting news, please call, no emails," which is something. This is suggestive that there was something around that same time period that she wanted to share that was sensitive, sensitive enough that didn't want it in an email. So, that's something. And then, there is also evidence that after that Schenck seemed to be doing things that would be consistent with his belief that Hobby Lobby was coming out in a particular way.
Will: Yeah. Okay. And Wright says that that is not what happened.
Dan: Yeah. And Justice Alito denies that this happened. And said, "The allegation that the Wrights were told the outcome of the decision in the Hobby Lobby case, or the authorship or the opinion of the court by me or my wife is completely false." Kind of weirdly written in the passive voice. Not sure why, but that is a denial.
Will: Yeah. I guess you could also imagine some things in between. Like if you could imagine, I don't know, that she asks him, "Hey, are you writing the Hobby Lobby case? You got a [unintelligible 00:20:08] for us?" And that he blushes or something. And I guess, we don't really know, it could be anything in that range.
Dan: Yeah. Or, they had some conversation in which someone could make an inference. He didn't say anything. I mean, there's various things that can happen, or, he could have told them. I mean, it's really hard to know.
Will: Two more things that kind of puzzled me. One is on the inference. This supposedly happened in June 2014, like a couple of weeks before the decision issue, right?
Dan: Yeah.
Will: Now, maybe you remember things differently, maybe you don't remember things. I feel by then it was pretty clear who was going to win the Hobby Lobby case. We'd had arguments. Even though it was taking a long time, there was not a ton of suspense. And I could be wrong about this. But by that time, a lot of opinions had come out. Me even, I thought, even people thought Justice Alito is going to be writing it beforehand because you can do this kind of Supreme Court Sudoku where you say, "Okay, well, Justice Breyer already has one from the sitting and Justice Sotomayor can't be writing it, because she's not going to get majority," and so on.
Dan: I haven't gone back to reconstruct. The alleged communication would have been passed on June 3rd. At which point, there still would have been a fair number of decisions to go but you would start to have some idea, but I don't think SCOTUSblog has real-time archives of their grids where you can figure out an opinion authorship. It would take a little bit of work to sit down and reconstruct how likely was that Alito was writing at that point. Yeah, this isn't like some shocking leak.
Will: Which in some ways makes it more plausible. The fact that it's-- in some ways, it's a weird thing to make up eight years later. And then, how did this supposedly help him? He was on the pro Hobby Lobby side, and then--[crosstalk]
Dan: Helped him write press releases-- [crosstalk]
Will: Previously. It hadn't occurred to him he's going to win. He hadn't drafted any winning press releases. But once he learned that maybe he was going to win, and then he starts working on them. He was previously spending too much of his time on his losing press releases, and now he knew he could put all his energy behind this. I don't totally understand this.
Dan: Yeah. I mean, so even if this happened, it seems like it could have been some-- obviously, I know that there's denials here, we have to accept that I think one person is lying, somebody was lying in the story, right?
Will: People can be misremembering or confused.
Dan: Either Wright called Schenck and said, "Here's what happened, I got this leak," that happened or it didn’t. That's not the kind of thing you would misremember. But it does seem like it's a different leak, if it were a leak than the Dobbs draft, that's a leak, probably calculated in some way to move the needle. You knew that there was a debate about-- was it conservatives playing four-dimensional chess or something. But this would have been more like letting something slip in a social conversation without any kind of clear line between that and actually making a difference in the world. Yeah, maybe it made this guy better able to write press releases or something. I'd never heard of him before this week.
Will: Has this made a big impact on you?
Dan: Yeah. I mean, so the leak itself, I guess, is maybe-- I assume that stuff happens. Justices have friends, maybe they let something slip. That's not great. The thing that's troubling though is the bigger picture here, I think.
Will: Yeah, I agree. We talk a lot about dark money influencing the Supreme Court and all this stuff. I don't know the various theories, this seems to be an instance of that. I guess I don't know if the money is dark or not. I guess now I can say this and nobody will believe me, but I've always wondered about the Supreme Court Historical Society. They run the gift shop at the court and publish the journals [unintelligible 00:24:10] history and sponsor various talks at the court. They, in some ways, sort of act like an arm of the Supreme Court's public face, but they are a private charitable organization. They take donations. I knew there were big donors to Supreme Court Historical Society, and I always wondered that was weird. I guess now, somebody else must have wondered that too and thought, "Hey, we can donate big dollars to Supreme Court Historical Society. Maybe that will buy us access to the Justices."
Dan: Yes. So, this is fascinating. There was this calculated strategy involving, not exclusively the Supreme Court Historical Society, but a calculated set of strategies aimed at getting rich, religious conservative people in with the Justices, to get them to be friends with the Justices and go to dinner with them and maybe occasionally say things in their presence that make the Justices more emboldened to rule in favor of the kind of interests that this evangelical group supported. So, part of that was by getting people to donate to the Supreme Court Historical Society. Come to the parties. The Justices are there and then the director of this Historical Society can introduce you to people, cultivate other kinds of friendships. Schenck bought a building across the street from the court and started preaching at a church where a court staff member attended and tried to build a relationship with that court staff member and just doing all sorts of questionable things like this.
No particular reason to think any of this made any impact on the world, but the fact that this is a viable strategy and the fact that he does seem to have accomplished having intermediaries working for him and working on the Justices. He was getting people like the Wrights, were giving him updates, like, "Hey, got to have lunch with CT, really exciting." Kind of looping him in on stuff. It's a little troubling, right?
Will: Yeah.
Dan: These people clearly with a secret agenda who are out there trying to befriend the Justices. If I were a Justice, I'd be very sad about this, makes it even harder to have social friendships, if you know that the people that you're friends with are agents of some sinister organization.
Will: Right. This old sort of saying in Washington, politics, that you basically can't have any new friends. Like the Obamas could hang out with the people they'd known from way back when and had an inner circle, but in a way that you can't have anybody new in the inner circle, because it's too much of a possibility that they're there for an agenda. I don't know if that's the lesson that the Justices should be-- It's funny because people often complain the Justices are too cloistered and don't know how the world works, aren't talking to enough people. And now, I don't know, they're going to have lunch with only each other and their law clerks, people they have known for 50 years.
Dan: Yeah. I wonder, do you think this will cause any practices to change? Will it cause them to not go to events hosted by the Supreme Court Historical Society?
Will: We're going to see what this does to the Supreme Court Historical Society specifically. I haven't kept track of whether there have been leadership changes since then, how that works.
Dan: Schenck, he called his agents as stealth missionaries, and said, "The Justices will let their guard down at the Historical Society's annual dinners." And got some of these people to give like $125,000.
Will: Yeah.
Dan: Which I guess gives you special status. Did you ever give any money to the Historical Society?
Will: I have never given any money to the Historical Society.
Dan: I have inadvertently.
Will: Really?
Dan: Well, there was an appeal, as there is when this happens, for Justice Kennedy's portrait that's not paid for by the Government. And so, the former clerks funded through donations.
Will: The Historical Society?
Dan: No, I'm going to get there. The portrait, they sent out a thing saying, "Here's a recommended donation." It was kind of a lot, portraits are expensive. I gave what I could, I gave a little bit less than they wanted. And then I got a thing after that, saying, "Oh, good news. We actually got way more money than we needed. And so, we gave your money to the Supreme Court Historical Society."
Will: [laughs]
Dan: I was like, "Well, you could have just given it back to me, that would have been fine, too." But I did get a tradeoff for that donation. So, it all worked out.
Will: I might have once bought a copy of the Journal of Supreme Court History, I think. [crosstalk]
Dan: Does that count as a donation or is that just a purchase?
Will: Not sure. I don't remember if it's one of those things where you donate and get a free issue. I don't know how that works.
Dan: Well, not a huge--
Will: I'm just saying--
Dan: It didn't get you in the inner circle.
Will: I'm not going to deny that I've ever had any interactions with the Supreme Court Historical Society.
Dan: Because then, you could be accused of various things in song form.
Will: I've got to think, isn't the better strategy to work on the law clerks? Like you figure out what bars they go to and you just start like planting people there--[crosstalk]
Dan: It depends on what your game is. If you're trying to get information that might be better, although it's a lot of effort for limited return because if you spend six months cultivating someone, then they're off the job in six more months, right?
Will: Oh, I was thinking of the influence. It seems like the main program was just to remind the Justices that Christians are good. [crosstalk]
Dan: Yeah, I guess. Whether to overturn Roe v. Wade, that's a Justice decision. That's not a law clerk-- "Well, the law clerks wrote a persuasive bench memo, so I guess we're going to do that."
Will: I know I get accused of-- All right, just until there's the axis of change here is the idea that Justice Kavanaugh might otherwise have been wobbly in Dobbs, but some heart to heart he had was some other person of faith a couple of years ago was going to really stick with him and harden his resolve.
Dan: Well, that's what Schenck thought. He said, "You see a Justice boldly approach," this is in his briefing document. "If given the opportunity, bear witness to biblical truth, but don't push it. Your presence alone telegraphs a very important signal to the Justices. Christians are concerned about the court and the issues that come before it."
Will: I don't know. I don't really talk to missionaries in general. So maybe I'm not in the target audience. It seems like a weird-- it's a troubling scam. The whole thing seems weird. I would like to learn more about this. This seems like something that really should be investigated.
Dan: Yeah. Schenck also says he did go see Justices Scalia and Thomas in chambers. I'm quoting the Times here, "Where he shaped his prayers as political messaging using phrases like the sanctity of human life to plea for an end to abortion." I don't know, what do you think about Justices meeting with people that work for these advocacy groups privately, does that seem weird? He also facilitated a meeting between Justice Scalia and Reverend Frank Pavone, described as an incendiary anti-abortion activist who ran Priests for Life, a nonprofit that has been involved in issues before the court. Should the Justices be having meetings like that with people?
Will: I'm not sure what makes it a meeting like that-- We have the secret campaign part, that Justice Ginsburg has dinner with Nina Totenberg, people meet with a law school dean, who also is litigating cases. I don't totally understand-- given how much the Supreme Court touches everything, I don't totally understand-- the set of neutral people who don't care any of the Supreme Court cases comes out are probably real weirdos.
Dan: Yeah, I guess, but maybe there's a difference between people who have a personal interest and people who work for advocacy organizations [crosstalk] personal interests.
Will: Not sure it makes these advocacy organizations exactly in a way that like--
Dan: Well, this guy's organizations seem to have an actual part of its mission to influence the Supreme Court.
Will: Right. I'm just saying like, the ABA is an advocacy organization that file amicus briefs all the time. And maybe the Justice shouldn’t [crosstalk] ABA actually, kind of like [crosstalk] ABA.
Dan: I don't know. Yeah.
Will: Berkeley Law School files cases in front of the court. And maybe again, nobody [unintelligible [00:32:34] but seems weird to me. Obviously, we could talk about the Federalist Society, which actually does not file briefs in front of Supreme Court, unlike a lot of these other organizations, but people see that as an advocacy organization as well.
Dan: I don't know if anybody would object to Justices meeting with the head of the ACLU in chambers or something like that. I'm not sure.
Will: I see why there's something-- again, the cynical external organization, although again, may have raised a lot of money for the Supreme Historical Society, that seems weird and troubling, but short of asking the Justices to be monks, I'm not sure what we want from them other than maybe using their judgment and I guess maybe being a little more cynical about who they meet with.
Dan: Yeah. I don't know whether there's-- suggest some greater role for the court staff in trying to suss out whether there are people who are pushing this manipulative agenda and trying to-- we need a Supreme Court Intelligence Service or something. Counterintelligence.
Will: [chuckles] Yeah, I'm not sure that's-- I mean, okay, after the leak, maybe that's what we do need but I'm not sure that's a good use of resources.
Dan: Well, they've got plenty of resources. Supreme Court is one of the most efficient branches of government. They have all this extra money, I think, from all the bar applications, Supreme Court bar dues. They just pile up and don't really know what to do with. They have even more if you applied.
Will: They should buy some portraits.
Dan: Well, yeah, but they're not allowed to use that for the portraits. Portraits have to be a private money. Doesn't seem great. The court, as we've talked about, has taken a little bit of a PR beating in the last couple of years and leaks in stuff like this, I don't think helps. Maybe you've got a theory, kind of theory of about how actually this helps Supreme Court legitimacy. Can you pull that off?
Will: No. I did see the claim. Did you see that Schenck went to Politico first with the story, and that they wouldn't run it because they couldn't corroborate it?
Dan: I didn't see that. But the Times at least kind of suggested that they had been trying to corroborate it for months. And then, I guess at some point got comfortable enough. But it does seem like one of those stories where, based on what's in the story itself, it's on the border of whether this seems like they really got it to justify going with the story.
Will: I guess, yeah. I'm not saying--
Dan: They don't even have a contemporaneous email from him to someone else saying, "Ms. Wright told me that Alito said this."
Will: Right. [crosstalk] -statement.
Dan: What they have is that mysterious email, and then his actions and then later statements by him.
Will: Yeah.
Dan: Okay. So, we'll see. The White House has demanded investigation sort of saying that the Senate Judiciary Committee should investigate if the court doesn't unclear whether the court is going to do anything with this. Probably won't in the wake of the denial by Justice Alito.
Will: They should tell him that the Supreme Court marshals will look into it.
Dan: Marshal law continues. Okay, shall we actually talk about maybe a case?
Will: Yeah, kind of related.
Dan: All comes back to money influence. We were going to give the people what they want. They want to hear about the big cases, and so we're going to-- let's skip over US v. Texas. Let's skip over 303 Creative, big First Amendment case. Let's skip over Moore v. Harper, the independent state legislature case. Let's talk about criminal fraud. That's what people have been clamoring for.
Will: Are you accusing the Supreme Court of criminal fraud now?
Dan: Well, I don't know. It depends on the theory. We've got these two, I think, quite interesting [unintelligible 00:36:24] criminal law cases before the court involving the scope of federal fraud statutes. I actually don't know which one to start with. We've got Chi-minelli or Ciminelli as they may be anglicized v. United States and Percoco v. United States. Did you have an instinct as to where to start with these?
Will: No, maybe Ciminelli first.
Dan: Okay. This is an interesting one. So, bigger picture. Under federal law, there's statutes that criminalize using the mail or using the wires to engage in fraud. Specifically, the wire fraud statute says, "Whoever having devised or intended to devise any scheme or artifice to defraud or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted," da, da, da, "is guilty and can be punished with incarceration of not more than 20 years." Not a lot of language there. "Devise or intended to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted," blah, blah, blah. What's this case about in relation to that?
Will: Well, I guess it depends on whether you think about the facts or the legal theory. But this case is about--
Dan: In which legal theory?
[laughter]
Will: This case is about spending a lot of money to redevelop Buffalo.
Dan: Buffalo Billion. Buffalo Billion plan.
Will: Buffalo Billion plan. It sounds like a lot of money. And that, of course, involves government contracts, one of the most lucrative and corrupt areas of the law, and request for bidders for these various projects and redevelopment. The allegation is that the bidding process was rigged, I guess, to set the bidding criteria such that one particular bidder would be especially likely to win the bids, make a lot of money, right?
Dan: Yeah. The structure of this is a little confusing and complicated, because there was this special nonprofit entity that had been set up that was associated with the state university system but had to be kind of a separate entity because of various state rules about public-private partnerships. And that entity was supposed to issue these requests for proposals. And then, there was this kind of secret backchannel that was going where Ciminelli's company, LPCiminelli, was kind of manipulating things behind the scenes to get them to design the process in such a way that it was going to favor them. Was like, "We're looking for bidders who have companies that are owned by people whose names start with C." And just like very kind of gerrymandered. Basically, how long have you been working in the Buffalo area? What skills or expertise did you have?" So designed to make it easier for this particular company to win when the ultimate contract and involving this kind of intermediary who was being paid to do this and was working.
Will: Obviously, the puzzling thing is, so the fraud statute, lots of government action involves people trying to tell the government to do things, people trying to get the government to do things. And for the fraud statute to be triggered, one of the hooks that you need is you need to show that the defendant had the scheme to obtain money or property. One question is, "Okay, so what's the money? What's the property?" I think this is one of the changes with the case, but at least the court granted cert on the question of a theory of what is the property? Where the Second Circuit, in a series of cases, previous precedents that are recognized here said that one of the kinds of property interests that you can be deprived of under the statute is the right to control your economic decisions. If your scheme is to put somebody in the dark about the information so they make bad decisions that--[crosstalk]
Dan: Or not even a bad decision, right? Just a decision that--
Will: Uninformed decisions.
Dan: Yeah.
Will: You control the decision more than they do in some way, that itself is the property. Even if the decision is otherwise good, even if the decision doesn't cause them to necessarily do anything bad or fraudulent.
Dan: Yeah, even if they paid a fair price for the services, for the contract and got everything and they couldn't have gotten a better deal. Right?
Will: Right. But still the scheme to obtain the control or the decision is itself a kind of property. That's the idea?
Dan: I think so.
Will: Yeah.
Dan: This is interesting though because the petitioner who is the criminal defendant, Ciminelli-- Did you see the council record was on this one, by the way?
Will: I did.
Dan: This guy, I don’t know how good he is as a government contractor, very good at lawyer selection. He has hired a former longtime Deputy Solicitor General of the United States, Michael R. Dreeben, who's now, after arguing a bazillion cases at the court, has decided to practice for better at O'Melveny. He has got to be the person in the country who knows the most about federal criminal law, at least at the level of the Supreme Court level.
Will: Because Dreeben, as the longtime deputy, he basically had the big criminal cases.
Dan: Yeah. He was the criminal deputy. He had basically, primary authority for kind of crafting the government's arguments in all criminal cases before the Supreme Court.
Will: Right. So now, he's coming back on the other side, to say-- obviously, he has a lot of expertise, maybe even a little bit of credibility, I'm not sure.
Dan: I would think so.
Will: To say this theory doesn't work.
Dan: Yeah. What's interesting is that he argued some big fraud cases when he was in the government. He argued a case that comes up a bit here and in the next case we're going to talk about, Skilling v. United States, which involved a variation, a sort of an extra statute that kind of adds something to regular money or property fraud, which is honest services fraud, and more on that in a minute. But he argued that case in which the government's position was rejected and the court sort of said, "The lower courts have interpreted the statute too broadly and we need to really pare it back." And now, he's a criminal defense lawyer and he's leaning on that decision quite a bit here to say, "Look, if you interpret this part of the fraud statutes this way, it's going to create the same problems that you try to get rid of in the Skilling case." His brief, the O'Melveny brief spends-- it's 50 pages really tearing apart this theory. This idea that you can defraud someone out of their right to control their money or whatever, by not failing to disclose something that they might care about, and causing them to kind of like, use it in a different way, even if they're not harmed anyway, I think, kind of demolishes that.
There's a lot of interesting arguments going on in there. One is that accepting that theory requires accepting a conception of property that really didn't really exist when the fraud statutes were first written down, it's kind of inconsistent with underlying common law, which saw property as having several distinct components. Whereas now, post 20th century, we're all like, "Property is all this bundle of sticks, there's all these different pieces you can pull out of it." And they say, "No, that's not the way property would have been understood, under the common law," which is kind of the background for these fraud statutes. And that to defraud someone, you would actually have to be not depriving them of some right of control, but actually depriving them of use or possession, basically, of their actual property or money, right?
Will: Right. There's a way in which the modern usage is of sort of what's seen as fraudulent or shady dealings well beyond the narrower kinds of categories that were known to common law, especially criminal common law.
Dan: And so, on this theory, just not taking away someone's like-- denying someone access to relevant information, here the information that Ciminelli was secretly manipulating the RFP process behind the scenes is fraud. The government seems to agree with that. That just doesn't work.
Will: Yeah, I think so. They certainly don't want to defend it. I think they even--
Dan: They say it's incorrect. They do make a classic kind of SG's office move, where you can tell they really recognize that they've gotten too far out on a limb. I thought quite fairly quickly in the government's brief, they sort of say, "Yeah, I know the Second Circuit has been saying there's this right to control theory. That's not right. That's incorrect. But that doesn't mean that the defendant should win." They have a different theory.
Will: Right. They want to say, "Look, we don't need to rely on the right to control as the money or property, because here, there was actual money changing hands because of the contracts [crosstalk] lot of money."
Dan: The scheme was to obtain the money, the millions of dollars that were paid pursuant to the contract. That was the scheme. But then, you run into this other question, which is, "Well, what were they actually being defrauded of or was the victim being defrauded of?" If paid out the money and got the actual services at reasonable value, at least potentially, for that money.
Will: Maybe they could have gotten a better value.
Dan: Maybe, although that wasn't an element. That didn't have to be proven in this case.
Will: Right. That's the tricky part, the two truths of switching theories with the government's--
Dan: Hold on one second, I've just got to take my sweatshirt off.
Will: Yeah, but that's the tricky part of switching theories. The government wants to say, "Look, surely, it's plausible that had the process has not been rigged, there could have been another bidder. The jury found that this was not a competitive process. For all we know, there would have been other stronger applications." But nobody focused on that at trial or in front of the Second Circuit, because it didn't matter, because Second Circuit precedent was much more loosey-goosey.
Dan: The government's theory now is, I think, the following, which is that you are defrauding someone of money or property anytime you, in the course of dealing with them, say something or failed to say something that is material to their decision-making process. And as a result, they part with their money or property.
Will: Is that what material means?
Dan: Like it would matter to them, even if it's idiosyncratic.
Will: I think so. The government does have this claim that there was some sort of tangible economic harm to the government that was shown. The jury was instructed that it had to find a tangible economic harm such as an economic discrepancy between what Fort Schuyler reasonably anticipated to receive and what it actually received. So, I can't quite tell what the limits of the theory is. And that is one of the strange things about this case, is since the government is now introducing a new theory of the statute, that was not what they had to litigate or prove below, I feel like we don't exactly know what the elements of this new version of the statute are. So, it might be a little narrower than that.
Dan: Yeah, I thought they clearly say that you don't have to prove harm.
Will: Well, you have to have actual harm but you have to prove that the scheme-- because there is this-- I think everybody agrees that the statute is about schemes. So, you can be convicted of a scheme, even if the scheme doesn't come to fruition.
Dan: Interesting thing. Here's something on page 23. "A contractor commits fraud if it obtains a lucrative contract by materially misrepresenting its qualifications, whether or not the client can prove that they could have secured better or cheaper work had the fraud not occurred." Which is interesting. So, it's fraud, even if the client couldn't have gotten cheaper or better work. So, basically, you got good work at a good price. It's still fraud. Should that be right?
Will: Yeah. The whole paragraph is funny. "The presence of intent to cause harm is a useful indicator, but it's not required." They had the example of a student who obtains scholarship funds by misrepresenting qualifications, commits fraud even though they get the same amount of money somebody else would have.
Dan: And that actually relates to some cases that are floating out there. What's the catchphrase for those cases?
Will: Varsity blues?
Dan: Varsity blues, yeah.
Will: I don't know if that example is quite right, because again, presumably the scholarship grantor actually has some interest in granting them to some people rather than others in a way that the government mostly cares about the contract being committed. I guess I'll say I can't totally figure this out. They have a bunch of factors that they kind of lean on and kind of don't. I assume this is part of the arguments when it comes to stuff, is them getting pressed on what exactly is their theory. They'll have to decide on the fly with whether to move to a more limited version of the theory to try to win or to stick to this brief, which is, I think you're right--
Dan: It's slippery.
Will: Yeah. And then, of course, the whole thing is slippery. As you know, and maybe some listeners will and won't, the whole structure of switching theories that the Supreme Court is partly an artifact of who in the government is in charge of litigating the case when. And when this case is first brought, it's brought by presumably the local US Attorney's Office most of the time or the occasional DOJ would come in, I don't know if they did here, but it's not the SG's office.
And then if the government wins a trial and the defendants appeal, basically, the same lawyers usually handle that appeal. And it's not until the case gets to the Supreme Court, or people ask the Supreme Court to take the case, that for the first time, the SG's office really has to look at the case and take a position on it. Having one below, they would like to keep their victory. So, it might well be that if somebody had been able to advise them from the beginning, like, "Hey, you can litigate this theory, will have an easier time defending." They would have, but instead, they just have to parachute it now and try to cook up some theory that they can still convince the Supreme Court of that lets them keep their victory.
Dan: I read the petitioner's brief, found it pretty persuasive. I read the government's brief and I was like, "Okay, that makes a little bit more sense than what the government's--" what I thought the government's position was going to be based on the petitioner's brief. But then, I read the reply brief, that was also quite persuasive that it kind of goes ballistic on the government, and it's like, "Look, this is not the theory litigated this case under. You totally forfeited. You're just coming in at this last minute." But then, also points out that even this new theory, that it's a scheme to obtain money or property from another person anytime you misrepresent something that would matter, even if there's no harm whatsoever, even if the person parting with the money gets a very good deal." That maybe is problematic, the example being that anytime an employee like puffs up their resume, get a job, that's federal criminal fraud. That seems troubling.
Will: If they use the mail or the wires.
Dan: It's very hard not to.
Will: [laughs] "Submit your resume by hand." Yeah, no, that's right. Or you think of maybe not even puffing a resume, but any kind of interview question where you give a kind of a dishonestly favorable answer.
Dan: And you're going to obtain money, your salary. And you're doing that with the intent to deceive, and that's now fraud. That's now criminal fraud under the theory.
Will: Yeah. I'm [unintelligible [00:52:52] would that be so crazy? You occasionally hear these people who get a job as a lawyer, but made up whether they went to law school, or just something totally out of nowhere, work for years under false pretenses. Is it obvious that shouldn't be bad?
Dan: It's obviously troubling. And obviously, those people should be fired, and maybe there's something that they should be-- something bad should happen. Is it fraud though? Has anyone been defrauded in that situation if you say, "Well, we hired this person, and they did a really good job. We didn't have to pay out a single dollar more than we would have otherwise"?
Will: Right. If you hired them and they did a bad job because they misrepresent their qualifications and you had to pay a lot of money [crosstalk] otherwise.
Dan: Yeah, maybe there.
Will: Yeah. Well, it's funny, because if you imagine a more modest lie, imagine you just misrepresented your years of experience, and so you get paid a little higher on the seniority scale, that clearly would be fraud under this theory, you getting the money?
Dan: I think so.
Will: It's a little funny to say if you lie to get a small raise or a small seniority bump, that's a federal crime, but if you're lying to get the whole job, that's not a crime in one way?
Dan: Yeah. Although in the second situation-- in your hypo, what would happen if the person didn't make the misrepresentation? They just would continue getting paid and just get paid less?
Will: Yeah.
Dan: Rather than just a different person being hired at that level of seniority?
Will: Yeah, I'm thinking like the equivalent of the government, you're hired and they're trying to figure out where on the pay scale do you go.
Dan: This was a tricky one. I kept going back and forth on this. My instinct is that the government is not in great shape here just because they seem to have had to abandon their legal theory on which this conviction rested and are now struggling to find something else. Now, it may be that-- there's a range of things that could happen. One could be that the court just says, "Well, you're not really accepting the-- you've rejected the theory in which we granted cert to resolve. So, fine, send it back down and you can litigate whether there's anything left of your other theory or whether that's properly preserved." The court could say, "Well, let's consider the merits of your alternative theory. And we think it's right or we think it's wrong." The court could also say, "You're both wrong. And actually, the right to control is a properly interpreted as a species of fraud." There's a lot of ways this could go. And I think that last one is least likely.
Will: Yeah. So, my prediction is, I think the baseline result you expect is the court will reject the right to control theory of fraud, and then will remand the other theory, will say, "This is a newly constructed theory. We're not even sure whether you can still sustain it or not." If they're really unsure about whether to reject the first theory, like if there are enough people who support it, then sometimes you get the opinion where they punt on that, even though that’s the question they granted on and just all agree to resolve on the affirmative ground. Like, "Oh, we don't know if the right to control theory is good or not, but unanimously agree on the other ground," or something. But only if they couldn't get someplace on the first ground, I think, would be my guess of how they normally go about it because they aren't necessarily going to reward this kind of gamesmanship.
Dan: Yeah. It does raise all these interesting hypos. If I say can I buy your car, because I'm a used car collector, and this is such a special car, and I want to cherish it. And then I buy it for the fair market value, the same price you were going to sell it for anyways and then, I strip it for parts. Were you defrauded? I think under the government's theory, yes, because it's material that was like you really--[crosstalk]
Will: [crosstalk] Yeah, I think that's right. This really happened to me when I was in high school, I guess. Traded for, bought a friend's collectible cards. They might have been Spellfire cards, which was the D&D branded version of magic competitor at the time.
Dan: I did not catch on.
Will: It caught on for a few years. Actually, my friend who was on the other side of this transaction was the world champion Spellfire player the next year at Gen Con, the big gaming convention but it did not survive. Anyway, I traded for a bunch of his cards. We traded various things. And then basically, I did not tell him I was engaging in internet arbitrage. So, I could take a fraction of the things I'd gotten from him and on the internet, retrade them for all the stuff I'd traded to him, came out ahead, which made him really mad, and he's not speaking to me.
Dan: Forever?
Will: I at the time thought it was outrageous that he'd be mad about this because we'd negotiated the deal, we'd spent many days working on the deal. I made him sleep on it. He was sure he wanted it. He really thought he was taking advantage of me and he got exactly what I offered him.
Dan: And he just hadn't done his research about what else he could get.
Will: Yeah, that was the early days. I mean, it was pre-2000, so trading on the internet-- eBay did not exist yet. So, trading on the internet was a little risky because you had to basically just put stuff in the mail and hope that other people are going to send you what they're going to send you but there were message boards where they review players and you could build a reputation. I had built up a reputation because I did a lot of trading of these things online. But yeah, it just didn't really hurt him. So, I guess under the government's theory, he was right, and I'm the criminal.
Dan: Is he listening?
Will: [crosstalk] I don't know. If you're out there, feel free to write in.
Dan: Call the show, call the voicemail and sing a song.
Will: Yeah.
Dan: Okay. So, prediction. I do think that this is going to some kind of a ruling in favor of the defendant, favor the petitioner, whether it's an outright reversal or a vacant or remand or something?
Will: I think if you're Mr. Ciminelli, I think you're going to leave this case better off than you entered it in all likelihood.
Dan: Yeah.
Will: Or leave the Supreme Court--
Dan: Or couldn't really get worse. Conviction was upheld.
Will: Right. I mean, [unintelligible [00:59:15] likely.
Dan: Yeah.
Will: Okay. Should we talk about the related case?
Dan: Yes.
Will: It's funny, these cases are kind of related. The government filed one brief in opposition to both of them. And so, the Second Circuit, they must have been sort of consolidated in the Second Circuit, although they feature very different adjacent legal questions.
Dan: They're all somehow in the vicinity of Andrew Cuomo.
Will: [laughs]
Dan: Andrew Cuomo was behind the Buffalo Billion and now he's involved in this other case. Percoco v. United States. This is not just a regular old money or property wire fraud. This is honest services fraud.
Will: Okay. So, is honest services a kind of money or property?
Dan: Well, it was and then it wasn't in that basically, the statutes that we talked about last time criminalized money or property fraud. And then in the lower courts in, I don't know, the 70s, maybe, and the 80s, came up with this idea that you can commit fraud to deprive someone of the intangible right to honest services. This is not exactly money or property. You, either a private citizen or government official, owe some kind of intangible right of honest services to the public, or to your employer, and you can do deceitful stuff, that can be criminal fraud, even if we can't point to any money or property you obtained as a result of that.
Will: Right. It's sort of partway between fraud and bribery, I think, in terms of the kind of things we're worried about. Like a place where the government official might be doing something that's not in the best interest of the public, they're doing it for their own reasons. So, not giving the government their fully honest services, but it's not like they're getting rich off-- It's not like they're getting direct money off of it either.
Dan: Yeah, you wouldn't have to prove that. In some of the court cases, just showing an undisclosed conflict of interest, I think, would be enough even if you can't prove that that conflict of interest resulted in you making any decisions as a government officials say or as an employee that you wouldn't have otherwise made. It might have been the government would not have to prove that.
Will: Or you can make decisions that don't involve money or property, that just you agree to file an amicus brief, a case of no economic value.
Dan: Yeah, it doesn't cost. And so that happened, and then the Supreme Court in a case called McNally said, "That's not a thing. The statute says it has to be money or property. It doesn't say anything about honest services." And so, those cases went away and then Congress tried to bring them back. It passed a new statute, very brief language, sort of tried to resurrect all that case law. It was a very diverse set of cases that involve basically just all sorts of cases where people did stuff that was kind of shady but it's really hard to exactly pin down, it was bad, it was like, "Yeah, you shouldn't have been doing this," or--
Will: I mean all stuff that looks bad to the jury. The prosecutors come in and say, "This is--
Dan: "You're getting paid to let this person pass their dissertation when you shouldn't have," or things like that. So, the Congress sort of tried to resurrect that whole diversified cases with the statute 18 U.S. Code § 1346 says, "For purposes of this chapter, the term 'scheme' or 'artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services." Okay, so you can be guilty of defrauding your employer, or the public if you're a public official of whatever this intangible right of honest service is, it's kind of a fuzzy concept. That then proliferated, again, in lower courts, lots of cases, wacky cases where all sorts of weird theories being accepted, just because federal prosecutor was like, "This person was doing something shady," and jury's like, "Yeah, this is shady. We don't like it."
Will: Sometimes there's an alternative to real fraud. Like you might say, "Look, our theory is that there was a scheme and you were somehow profiting off of the awarding the contracts to your buddies. But look, even if we can't prove that you are profiting off of it, we still want to instruct the jury that we can't prove you're profiting off of it." And that's nice, because then you have an excuse to introduce lots of evidence to the jury about all the ways you might have been profiting off of it. But then in the end, you don't actually have to prove it. So, it's just there to make you look bad.
Dan: Yeah. Then, got back to the Supreme Court, and Supreme Court didn't really weigh on this for a very long time. It got back to the Supreme Court the year I was clerking. This was October term 2009, in a case that was being argued by Michael Dreeben. Actually, it was a couple of cases, and then the court granted a third case, Skilling. But in the first two cases, the court was confronted with all this honest services stuff that had been going on to the federal lower federal courts, and was kind of like, "What? Really? This is out there. This doesn't seem okay." And you could see-- Dreeben actually-- I thought he got visibly upset at the argument once he realized that this whole huge weapon in the prosecutorial arsenal was about to fall apart in the first two cases, Black and [unintelligible [01:04:32]. And so, the court then granted this other case that actually presented the question of not just what the statute should mean, but whether this statutory provision is unconstitutionally vague. Whether it just has such unclear content that it can't constitutionally be applied at all.
The court ultimately did not go for that big argument, did upheld the statute as constitutional but pared it down really, really significantly so that it only applies to bribes and kickbacks. So, it doesn't include this other nebulous category of undisclosed conflicts of interest.
Will: Right. And you could think of that, yeah, the court describes it as sort of a holding it out of this narrow interpretation. That's in some ways the equivalent of striking it down and finding it severable as to some core. A bribe is different between a--[crosstalk]
Dan: It's not what they said they were doing.
Will: Yeah. In terms functionally, you can think of it that.
Dan: Yeah.
Will: They were clearly getting rid of a lot of the lower court prosecutions that had existed before Skilling by saying, "You can't interpret the statute that way if it's going to be constitutional." So, how is a bribe different from obtaining property or is it just redundant?
Dan: With the bribe, you're not obtaining property from the victim.
Will: You're obtaining property for somebody who wants to--[crosstalk]
Dan: From somebody else in order to-- someone else's giving you money in order to get your employer to do something. But you're not necessarily taking any money property away from the victim, from the employer. [crosstalk]
Will: So, if I bribe somebody to give me a good grade, or let me pass them, that's still-- and I do it over email, that's still wire fraud.
Dan: Yes.
Will: But instead of bribing them, I offer to do them a favor.
Dan: Someone would bribe you presumably. You wouldn't have to bribe your own student to-- right?
Will: Okay, sure. If I accept a bribe from one of my students to give them a good grade, I've committed wire fraud. But if I accept some other more nebulous trade, like they'll make sure that when they clerk for the Supreme Court, the Justice cites me or something, then that would not be fraud.
Dan: Well, now that's confusing, because then now that person is going to be a public official.
Will: Well, yeah, that's where I'm going.
Dan: Yeah, work that out.
Will: I was just thinking that wouldn't fall from the bribes and kickbacks exception by itself.
Dan: Because what?
Will: No money changes hands.
Dan: Because it's not a bribe.
Will: Yeah.
Dan: Because it's some sort of just promise. Yeah, and it'll kick back several years where you do something on behalf of someone else, and then you're getting some money, like you direct a contract, favor of some vendor and the vendor gives you some money back as a result of that even though you don't have to prove that the government paid too much or anything like that.
Will: Yeah. Okay. Does that bring us to Percoco?
Dan: I think so. Now we're in honest services world, post Skilling. Skilling is a case where they pare the statute back. And the question is, "When can this statute be applied?" And the thing that I always thought was tricky about, Justice Kennedy was on the side of saying the statute was unconstitutionally vague, one thing that I thought was tricky about what the majority was doing in Skilling was-- the statute itself does not saying a thing about bribes or kickbacks, doesn't define those terms. So, there's going to be a lot of interpretive questions for courts about, "Well, what counts as like a bribe or kickback for purposes of honest services fraud? What are the elements of that of that crime?", and so forth. And so here, we have a case where-- and it's a little weird, I feel this is not a great case to resolve a big question about the meaning of the statute because it's like a weird kind of sort of sui generis case. But to figure out whether what the defendant did here was honest services fraud.
Will: Yeah. So once again, I feel like the big question and then the government trying to say this big question was not really implicated here, because we've got an alternate theory in which it doesn’t sound implicated. But on the big question, can I just read the first three sentences of petitioner's brief?
Dan: Sure.
Will: When you want to see that the big-- By Yaakov Roth, a lawyer at Jones Day.
Dan: [crosstalk] clerk term, and my law school classmate, another--
Will: One of the smartest clerks in the building. "When a public official accepts money to convince the government to do something, we call them a crook. But when a private citizen accepts money to convince the government to do something, we call him a lobbyist. This is not an arbitrary distinction." And that's their big theory, really.
Dan: Yeah. And so, because what happened here was this guy, he worked for the governor, and then he left to go run the governor's campaign and was not a government employee for a while and took on some private consulting lobbying work and then within eight months, goes back to the government. In that period in the middle, he still has his old office. It's not like his office, but he still uses the office that he used when he was a government employee. And he still seems to have a lot of influence and sway. He still seems to be functionally acting as if has government authority or like-- [crosstalk]
Will: Well, all those things are different though. The office, I agree that at some point, you could just say-- you say you've left the government, but you're still there, you're still working there. That's one issue. The issue that he has a lot of sway, that will be true even if he really were somebody who had worked in the governor's office as a close confidant until last month. Even if you really are a private citizen and you're never going back, you will have a lot of sway. That's why it's a revolving door where we hire lots of ex-government officials to be lobbyists. And it is true that person's different from a government official. But obviously, they're not just like a person off the street. And then, we also got the fact that he eventually goes back. So, this is only a sort of an eight-month interregnum or whatever, that then makes them feel especially like a government official? But I feel throughout, we still got the two questions of, does it matter whether he's a government official? Is the petitioner right that this kind of duty of honest services turns heavily on whether you're a private lobbyist or a government official? And then if they're right about that, what do we do with people who are kind of in and out for short periods of time, what's going on here? Is that the right way to break it down?
Dan: Yeah. The petitioner's position is a fairly clear, bright line one, which is that you can't be guilty of honest services fraud, you can't be guilty of depriving the public of honest services if you don't actually work for the government because basically, there's no fiduciary duty there to the public if you're just a guy who has influence.
Will: You don't owe the money on honest services [crosstalk] anything.
Dan: Yes, exactly. Which kind of makes sense. I think makes sense. What really happened here is on the facts-- because there was a lot of different stuff going on below, and there are some allegations of actual bribes and some evidence of actual bribes that happened while he was still a government official or about stuff involving when he's a government official, that I think are not necessarily touched by this question. But there's just a lot of stuff getting thrown around, and I think maybe the lower courts and the jury were just like, "Oh, close enough, whatever. He was out of the government. He was going back into the government. He's still using his office. It's all the same. Let's fudge it." But that doesn't leave you with a tenable legal theory. It seems like to be guilty of honest services fraud, you have to actually be able to show what duty was owed at the time that you committed the alleged crime.
Will: I agree. Yeah, so the government in a way has two different alternative theories. One is you're sort of a de facto government official even if you're not a de jure government official, that's the kind of point that he has an office and in fact, is directing people to still work with his assistant who works there. It's somebody that's still working out of his old office. And so, you could say, "Look, you can't just put up a sign on the door that says, 'Today, I'm not the government and be not the government.'" I get that theory. It does make me wonder if this came up for other purposes, I take it the reason he did this is because he needs to not be part of the government while he's running the campaign to comply with some other rule. Are we saying that rule was broken? That actually the campaigning was illegal, because he never really left? Maybe. That part's confusing.
And then the alternative theory, which is even narrower, but maybe is doing a lot of intuitive work here is that because he's also coming back, he's sort of more like a government official. It's not just a matter of you're out of office now, you're an ex-government official with a lot of juice, but you're out of office very briefly, and this was your little window to do a bunch of dishonest services. But then, they would want to say, "You can't do that when everybody knows you're about to go back into government."
Dan: Yeah. Surely, you couldn't accept money on the promise of doing stuff once you were back in government, right? That can't be okay.
Will: Right. And the petitioner agrees with that. Petitioner says, sure, obviously, if you are a future Supreme Court law clerk-- To use an example, you're a future Supreme Court law clerk and you take a bunch of bribes now to rig the cases when you get there, that's bribery. The question is if you're like a future Supreme Court law clerk, and you take a bunch of money now to write an amicus brief to the court or something, maybe dishonest amicus brief where you meet with the Supreme Court Historical Society or whatever, as a future Supreme Court law clerk, are you in some sort of special situation where you now owe your honest services to the public? That seems like a reach.
Dan: Are you referencing the hypo in the reply brief? I liked this. Let's read it. "Consider a law school graduate hired to clerked for a Justice of this court starting two terms hence. If a person is selected to be a federal employee who owes a duty of honest services from the time of selection, and thus cannot accept payment to advisor pressure current officials, that future law clerk would be categorically barred from earning a salary for practicing law before federal courts in the intervening years." That can't be right. Maybe someone could write why that would be a better rule.
Will: Right. I'm not sure whether the government really thinks that or whether they would say, "Look, there's a difference between openly advising and pressuring through the briefing process that the court's set up versus covertly and dishonestly doing that." And if you connect it to the news story we started with, that a future law clerk who agreed to be part of Reverend Schenck's scheme, might be differently positioned than all the set of random civilians. [crosstalk]
Dan: I mean, it seems fishy, but I'm not sure why it's fraud.
Will: Well, that's the part that it would make it a scheme to defraud is that you're-- or that it's not just a lack of honest services, where you might say when you write a brief, that's honest. On other hand, what if you don't believe what you write in the brief? Then, it's dishonest in a different way.
Dan: Okay, a lot going on here. What do you think is going to happen? Is this another case where the government is walking away?
Will: Yeah. This is another case where my baseline expectation would be, the petitioner is going to win on their claim that the lower courts theory is too broad. And then, there may be a remand or whatever on the other theory. I will say the facts here somehow seem-- it's a little more plausible to me that this would be a case where the Justices would unite around the government's alternate theory and say, "We're not sure what to say about private people owing honest services, but in this case, this person wasn't really a private person."
Dan: Yeah. The tough part with this case, I assume, was getting cert granted, because the facts on this are a little messy, and not necessarily super compelling. And so, having gotten through that hurdle, my guess is-- I share your intuition, but my guess is that's probably not the way it's going to go.
Will: Yeah, I think that's right.
Dan: The court could just say, "Look, you only owe a duty when you actually work for the government. Not just because people in the government listen to you," and then send it back down and figure out what happens to-- there's different counts of conviction here and not clear which ones matter.
Will: Yeah. No, I like the petitioner's odds in both cases.
Dan: Okay, so those are not the big picture cases that people wanted to know about, but they're interesting ones. They're fine.
Will: [crosstalk]
Dan: Yeah, not necessarily ones that are going to divide the court on those all too familiar partisan lines that we're going to get to know so, so well in the years to come, but kind of a fun one to talk about.
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Dan: Despite what we said at the beginning, we actually do still care about the rankings. So, please do rate and review us on the Apple Podcast app or anywhere else you listen to your podcasts, and continue to tell friends about us. We're continuing to get great growth in the show. Every episode of the last five or six episodes has gotten more listeners than the previous one. Still a lot of room for growth. So, rate and review, send it around, spread the word. Check out our website, dividedargument.com, where we have transcripts of the episodes that go up pretty soon after the episode's release. Go to store.dividedargument.com where we have merchandise. You can shoot us an email at pod@dividedargument.com. We do read them all. We're not great about responding, but we do read them. Leave us a voicemail in song format or not, 314-649-3790. And anything else, Will?
Will: Thanks to the Constitutional Law Institute for sponsoring all our endeavors, and maybe if you're going to leave a voicemail, try to be sober.
Dan: And if we don't record an episode for a while, it's because we've been convicted of criminal fraud.
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