Supreme Court Reverses 'Bridgegate' Convictions

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Last week, the Supreme Court of the United States issued a decision in Kelly v. United States[1] that limits federal prosecutors’ ability to seek criminal charges for public corruption.

The Kelly case concerns the 2013 “Bridgegate” scandal that resulted in the prosecutions of Bridget Kelly, Deputy Chief of Staff to former New Jersey Governor Chris Christie, and William Baroni, the former Deputy Director of the Port Authority of New York and New Jersey. The Supreme Court’s decision reversed Kelly’s and Baroni’s criminal convictions for wire fraud and fraud on a federally funded program because their actions – though for “bad reasons” – were within their regulatory power and did not aim to obtain money or property.

Bridgegate came about because Mayor Mark Sokolich of Fort Lee, N.J., would not support Governor Christie’s 2013 reelection campaign. Thereafter, Kelly, Baroni and David Wildstein (Baroni’s chief of staff) sought to “punish” Sokolich and “send him a message” for refusing to support Governor Christie. They accomplished their political revenge by reducing from three to one the number of lanes from the upper roadway of the George Washington Bridge (the GWB) dedicated to the streets of Fort Lee during the morning rush hour under the guise of a “traffic study.” Predictably, the traffic backed up onto the streets of Fort Lee, causing gridlock for Fort Lee residents, which delayed – among other things – first responders coping with emergencies.

Their scheme lasted for four days until the Executive Director of the Port Authority was informed of the “traffic study” and promptly ended it. Immediately thereafter, Kelly, Baroni and Wildstein lost their jobs and were prosecuted by the U.S. Attorney for the District of New Jersey. Wildstein pled guilty, but Kelly and Baroni proceeded to trial and were convicted of wire fraud (under 18 U.S.C. § 1343) and fraud on a federally funded program or entity – the Port Authority of New York and New Jersey (under 18 U.S.C. §666(a)(1)(A)).

The wire fraud statute can be applied to an extremely broad set of circumstances, including public corruption cases. The statute provides criminal penalties for using interstate “wires” – telephone, radio or other form of electronic communication – as part of a “scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.”[2] As simply stated by the Supreme Court in Kelly, the wire fraud statute, absent any evidence of bribes or kickbacks, prohibits “only deceptive schemes to deprive the victim of money or property”.[3] Similarly, the fraud on a federally funded program statute prohibits obtaining property (including money) by fraud from a federally funded program.[4]

In Kelly, the government had to prove, under both the wire fraud statue and fraud on a federally funded program statute, that Kelly and Baroni engaged in deception and that “an object of their fraud was property”.[5] The U.S. Attorney prosecuted Kelly and Baroni under the theories that their revenge plot schemed to take control of two lanes of the GWB and took funds belonging to the Port Authority to pay engineers and other staff as part of their “traffic study” ruse.[6]

The Supreme Court disagreed and found that reducing the number of lanes designated for Fort Lee residents was not a “taking” of property. The Supreme Court found that Kelly and Baroni were within their regulatory power to change the flow of traffic and that their use of regulatory power, although for bad reasons and dishonest, was not a taking of property.

The Supreme Court also disagreed that the money used to pay engineers and extra staff to support their cover-up “traffic study” was sufficient to establish wire fraud and fraud on a federally funded program. As the true scheme sought revenge against Sokolich, the Supreme Court found that the money used to pay the engineers and extra staff was only “incidental” to their scheme, not the object of it.

The Supreme Court reversed the Court of Appeals’ affirmation of Kelly’s and Baroni’s convictions because the object of their fraudulent scheme was not to take property or money. It will be interesting to see how lower courts interpret this decision. For now, it seems as though any political official who exercises his or her own regulatory power for deceitful purposes may not be convicted of wire fraud as long as the intent of the action is not to take property or money. As stated by the Supreme Court, “not every corrupt act by state or local officials is a federal crime.”[7]

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[1] 590 U.S. ____ (2020), No. 18-1059 (May 7, 2020).
[2] 18 U.S.C. § 1343.
[3] 590 U.S. ____ (2020), No. 18-1059 (May 7, 2020).
[4] 18 U.S.C. §666(a)(1)(A).
[5] 590 U.S. ____ (2020), No. 18-1059 (May 7, 2020).
[6] The U.S. Attorney could not prosecute Kelly and Baroni under the theory that their use of “the wires” was a scheme to “deprive another of the intangible right of honest services” under 18 U.S.C. § 1346, as the Supreme Court has narrowly construed the “honest services” statute only to include schemes involving bribes or kickbacks, and no such evidence existed in the case. Skilling v. United States, 561 U.S. 358 (2010).
[7] 590 U.S. ____ (2020), No. 18-1059 (May 7, 2020).

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