Second Circuit Reinforces Narrow Definition of 'Official Act' in Politician's Fraud Case

Pepper Hamilton LLP

Pepper Hamilton LLP

The Second Circuit’s Silver decision highlights the importance for defendants of the Supreme Court’s 2016 ruling in McDonnell, which narrowed the definition of “official act” and limited the reach of the honest services fraud and Hobbs Act extortion statutes.

On July 13, the U.S. Court of Appeals for the Second Circuit vacated the conviction of former New York State Assembly Speaker Sheldon Silver, who was convicted in 2015 on seven counts of honest services fraud, Hobbs Act extortion and money laundering. United States v. Silver, No. 16-1615-cr (2d Cir. July 13, 2017). The court ruled that the instructions the district court gave to the jury did not define the phrase “official act” consistent with the U.S. Supreme Court’s unanimous opinion in United States v. McDonnell, 136 S. Ct. 2355, which was issued in June 2016, after Silver’s conviction and sentencing. The court vacated Silver’s conviction and remanded the case to the district court.


The court explained that the government’s evidence at trial showed that Silver engaged in two separate schemes to profit from his position as speaker of the New York Assembly. In the first, which the court called the “Mesothelioma Scheme,” Silver directed state research funds to Dr. Robert Taub, who in turn referred his mesothelioma patients to Silver’s law firm. According to the court, although Silver did not work on those patients’ cases, he received a referral fee from his firm.

In 2007, when New York state law changed to require public disclosure of potential conflicts of interest between legislators and grant fund recipients, Silver stopped directing grant funds to Taub. The court explained that Silver thereafter helped Taub’s daughter obtain an unpaid judicial clerkship and granted state funds to a nonprofit for which Taub’s wife was a board member. The court said in its opinion that Silver also sponsored a resolution in the Assembly commending Taub, helped Taub “navigate” the process for obtaining permits for a charitable race, and aided Taub’s son in finding a job.

The second scheme, the so-called “Real Estate Scheme,” involved a former staffer, Jay Arthur Goldberg, who specialized in tax certiorari work, which involves challenging real estate tax assessments. The court recounted that Silver induced two real estate developers to hire Goldberg’s firm for tax certiorari work, and Goldberg directed a portion of the resulting legal fees back to Silver. As a member of the Public Authorities Control Board (PACB), Silver voted through a proxy to approve one of the developer’s requests for tax-exempt financing, and he opposed a methadone clinic being relocated near one of that developer’s rental properties. According to the court, Silver voted in favor of tax abatement legislation that benefited that developer, and he met with that developer’s lobbyists to ensure they were satisfied with the provisions of a particular real estate bill before he supported and voted for it. The government alleged that Silver earned nearly $4 million from both schemes and laundered the proceeds.

The Government’s Case and the Court’s Decision

The government charged Silver with two counts of honest services fraud, which requires the government to prove that a public official committed or agreed to commit an “official act” in exchange for monetary or other benefits or the promise of such benefits. See 18 U.S.C. §§ 201, 1343, 1346; Skilling v. United States, 561 U.S. 358, 404 (2010). In other words, the government must prove a quid pro quo arrangement in which the quo is an “official act.”

The government also charged Silver with two counts of Hobbs Act extortion, which requires the government to prove that an individual induced another to give the individual property under color of official right, which the Supreme Court has interpreted to mean “in return for official acts.” Evans v. United States, 504 U.S. 255 (1992); see 18 U.S.C. § 1951(b)(2).

In the context of honest services fraud, federal law defines an “official act” as “any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.” 18 U.S.C. § 201(a)(3).

Over Silver’s objections, the district court adopted the government’s proposed definition of “official act” and instructed the jury that “[o]fficial action includes any action taken or to be taken under color of official authority.” The Second Circuit acknowledged that this instruction was consistent with the law in the circuit at the time the district court charged the jury.

In McDonnell — handed down shortly after the district court sentenced Silver — a unanimous Supreme Court held that not all acts done by a public official are “official act[s]” within the meaning of the bribery statutes. Specifically, the Court held that “setting up a meeting, calling another public official, or hosting an event does not, standing alone, qualify as an ‘official act.’” 136 S. Ct. at 2368.

Instead, to support a conviction, the government must show that the official’s conduct satisfied two requirements. First, “the Government must identify a ‘question, matter, cause, suit, proceeding or controversy’ that ‘may at any time be pending’ or ‘may by law be brought’ before a public official.” Id. Typically, this involves “a formal exercise of governmental power, such as a lawsuit, hearing, or administrative determination.” Id.

Second, the prosecution must show “that the public official made a decision or took an action ‘on’ that question, matter, cause, suit, proceeding, or controversy, or agreed to do so.” Id. The Supreme Court found that this definition, which was significantly narrower than the definition the government advocated, was necessary to avoid criminalizing routine actions that elected officials could be expected to take in a representative democracy. Id. at 2372-73. This narrower definition was also necessary to avoid rendering the meaning of “official act” so malleable as to be unconstitutionally vague. Id. at 2373.

Comparing the definition of “official act” given to the jury in the Silver case with the definition of that phrase in McDonnell, the Second Circuit found that the district court’s instruction did not pass muster. The court held that:

the instructions did not convey to the jury that an official action must be a decision or action on a matter involving the formal exercise of government power akin to a lawsuit, hearing, or agency determination. Nor did the instructions prevent the jury from concluding that meetings or events with a public official to discuss a given matter were official acts by that public official.

Because the district court’s instruction embraced political acts that were both permissible and impermissible under McDonnell, the court found the district court erred in charging the jury.

The Second Circuit also found that the overbroad jury instruction did not represent harmless error because it was not clear beyond a reasonable doubt that a jury receiving an appropriate definition of “official act” would have convicted Silver. The court reviewed each of the acts that the government argued were “official” and that occurred within the five-year statute of limitations.

As to the Mesothelioma Scheme, the court assessed that it was not clear beyond a reasonable doubt that helping Taub’s son find work and helping him obtain permits for a charitable race were official acts. While the honorary resolution in the Assembly commending Taub was clearly an official act within the scope of McDonnell, the court was not convinced that this act alone supported conviction. In its opinion, the court explained that the New York Assembly “passed hundreds of honorary resolutions that, among other things congratulated newly designated Eagle Scouts, celebrated high school sports teams, [and] commended retirees . . . . A rational jury could thus conclude that, though certainly ‘official,’ the prolific and perfunctory nature of these resolutions makes them de minimis quos unworthy of a quid.” The court also explained that the jury could have concluded that the quid pro quo scheme in which Taub referred patients to Silver in exchange for state grant funds ended before the statute of limitations period started running.

As to the Real Estate Scheme, the court also concluded that it was not clear beyond a reasonable doubt that a properly instructed jury would have found the actions proven at trial supported conviction under the McDonnell standard. In discussing votes that Silver made through a proxy at the PACB, the court noted that the record reflected that the PACB routinely approves every financing request, leading the court to question whether Silver’s proxy votes “were too perfunctory to be regarded as a quo — that is, not part of any fraudulent scheme.”


The Silver decision holds several important lessons for the government and defendants in the courts of the Second Circuit. First, the Second Circuit demonstrated that it will closely police the boundary around “official acts” that the Supreme Court drew in McDonnell. It is doubtful, given the court’s close tracking of McDonnell, that it will allow jury instructions that seek to expand that decision’s definition of “official acts.”

Next, the Second Circuit has made clear that the Supreme Court’s narrowed definition of “official acts” reaches only a small band of conduct and not all actions taken by a government official in his or her official capacity — a view the government had previously taken.

Finally, the court notes in two places that certain political acts, while “official” within the meaning of McDonnell, may be too “perfunctory” to support a conclusion of quid pro quo fraud required in the honest services fraud context. Of course, those statements arose in the context of a harmless error analysis in which the court analyzed whether it was beyond a reasonable doubt that Silver’s jury would have convicted him notwithstanding the error in the charge. Nevertheless, defendants and their counsel should consider whether the Second Circuit has opened the door to an argument that, as an extension of McDonnell, honest services fraud and Hobbs Act extortion require a sufficiently weighty quo to support conviction.

For Silver, however, the Second Circuit’s decision vacating his sentence may only postpone the inevitable. The court rejected Silver’s argument that the evidence the government introduced at his trial was insufficient to support a conviction. In a separate part of its opinion, the court held that the evidence submitted to the jury could have supported a conviction on the counts charged.

It is therefore entirely possible — even if the Second Circuit did not consider it clear beyond a reasonable doubt — that a properly charged jury would convict Silver in a retrial. The court even acknowledged in the conclusion of its opinion that some “would view the facts adduced at Silver’s trial with distaste.” The court’s ruling on the sufficiency of the evidence likely will give the government comfort as it weighs whether to retry Silver.


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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