When Does A Legal Campaign Contribution Become An Illegal Bribe?

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On February 14, 2013, in United States v. Terry (6th Cir., No. 11-4130, 2/14/13), the Sixth Circuit Court of Appeals upheld the conviction of an Ohio state judge on charges of honest-services fraud, holding that an otherwise legitimate campaign contribution can be deemed to be a bribe even if the prosecution is unable to tie the expectation of influence to a specific act.

Judge Steven Terry, a former judge for the Ohio Court of Common Pleas, was appointed to fill a vacancy on the state court bench in April 2007. In 2008, Terry faced reelection and, being a first time candidate for public office, Terry sought the assistance from the County Auditor, Frank Russo, who was active in Ohio politics. In July 2008, Russo had a conversation with a local attorney, Joe O’Malley, about two foreclosure cases that were on Terry’s docket. O’Malley represented several homeowners in a lawsuit against American Home Bank and asked Russo to convince Terry to deny the bank’s motions for summary judgment. Russo promised to call Terry and make sure that Terry did what he was “supposed to do” with the cases. Unbeknownst to Russo, O’Malley, or Terry, the FBI was investigating Russo on corruption charges and federal agents were monitoring Russo’s telephone calls.

Russo contacted Judge Terry two days after speaking with O’Malley. He asked Terry to deny the motions for summary judgment. Terry agreed to do so. In the same conversation, the men discussed Russo’s attendance at future fundraisers for Terry’s reelection campaign. Later that same day, Terry spoke with the magistrate judge who was assigned to the foreclosure cases and told her to deny the motions for summary judgment. The magistrate forwarded the docket to Terry so that he could deny the motions himself and Terry denied the motions without reviewing the case files.

As part of the federal investigation into Russo’s activities, Russo pled guilty to twenty-one political corruption counts and received a 262-month prison sentence. Terry was indicted on five political corruption charges including conspiracy to commit mail fraud and honest services fraud, including mail fraud by denying the bank’s summary judgment motions and honest services fraud by accepting gifts, payments and other things of value in exchange for favorable official action. The honest services fraud counts were tied to mailed documents – checks from Russo’s political action committee and a thank you note from Terry to Russo. Terry was convicted on three counts and sentenced to 63-months in prison on each count, to be served concurrently.

Terry appealed the district court’s findings, arguing, among other things, that the Court should distinguish between elected public officials who are allowed to accept campaign contributions and appointed public officials who would have no way of accepting legal contributions. Terry argued that for the class of officials who are allowed to accept contributions, a bribe can only exist if the payment was made “in exchange for a specific official act or omission.” The Court rejected this argument, noting that both Congress and the Supreme Court had refused to make such a distinction in the realm of extortion. The Court stated that “’motives and consequences, not formalities’ are the keys for determining whether a public official entered an agreement to accept a bribe.” The Court further noted that “so long as a public official agrees that payments will influence an official act,” there can be sufficient proof to show the intent that is required for a bribery conviction.

 

Topics:  Appointed Public Officials, Bribery, Campaign Contributions, Criminal Prosecution, Honest Services Fraud, Judges, Political Corruption

Published In: Criminal Law Updates, Elections & Politics Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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