Ocasio v. United States: The Supreme Court Confronts the Blurred Line between Bribery and Extortion

May 2, 2016 Update: Today, in a 5-3 decision, the Supreme Court upheld Ocasio’s conviction and the theory of Hobbs Act conspiracy under which he was prosecuted. I’ll have more to say about the opinion in a post next week.

Sometimes the Supreme Court confronts a statutory interpretation question that sounds just a little too strange to be true. Last term, in Yates v. United States, the Justices grappled with whether a fish is a “tangible object.” This year in Ocasio v. United States the issue is: can you agree to extort money from yourself?

Ocasio involves a rather obscure legal debate over the proper interpretation of the Hobbs Act.   But it’s also an interesting study in what can happen when the chickens hatched by a questionable Supreme Court decision come home to roost more than 20 years later.

Baltimore_Police_Department_Chevy_Caprice_PPV_New_Paint_Scheme

Ocasio v. United States

Samuel Ocasio was a Baltimore police officer. For several years Ocasio and a number of other police officers were involved in a corrupt scheme with the owners of a garage called Majestic Auto Repair. When officers arrived on a car accident scene, they would refer the drivers involved to Majestic for any necessary repairs. In return, the owners of the garage would pay the officer $150 to $300 for each referral. Ultimately about sixty officers took part in this scheme, which accounted for the vast majority of Majestic’s business.

When the scheme was discovered Officer Ocasio, a number of other police officers, and the owners of Majestic were all indicted under the Hobbs Act. The owners and most of the other police officers took plea deals; Ocasio went to trial and was convicted on three counts of violating the Hobbs Act and one count of conspiracy to violate the Hobbs Act.

The Hobbs Act, 18 U.S.C. § 1951, prohibits interfering with interstate commerce by extortion, which is defined as the “obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence or fear, or under color of official right.” Hobbs Act extortion is frequently charged in federal prosecutions of state and local corruption. Because the federal bribery statute, 18 U.S.C. § 201, generally applies only to federal public officials, federal prosecutors pursuing bribery on the state and local level must use a different theory. Hobbs Act extortion under color of official right is a common choice.

I wrote about Hobbs Act extortion under color of official right in this earlier post discussing the use of that charge in the prosecution of former Virginia Governor Bob McDonnell. As I noted there, when applied to public corruption the Hobbs Act is a strange statute, thanks largely to a 1992 Supreme Court case called Evans v. United States.

Evans and the Meaning of Extortion

Evans, a county commissioner in Georgia, was convicted of extortion under color of official right for accepting money in exchange for a favorable zoning decision. He argued that he could not be found to have “induced” the payment within the meaning of the Hobbs Act unless he took some affirmative steps to seek out and request that payment. Extortion, he argued, typically connotes some kind of “shakedown” by the public official, and at a minimum requires more than simply the passive acceptance of a payment that he did not request.

The Supreme Court rejected Evans’ arguments and upheld his conviction. The majority reviewed the history of the crime of extortion and concluded that at common law extortion under color of official right was “the rough equivalent of what we would now describe as ‘taking a bribe.’” There was no requirement that the public official actively seek out or demand the payment, as long as he accepted a payment knowing that it was in exchange for some official act.

Justice Thomas dissented, joined by Justice Scalia and Chief Justice Rehnquist.   He disagreed with the majority’s historical analysis and argued that extortion under color of official right occurred only when a public official sought a payment under the pretense that he was entitled to it by virtue of his office. He argued that bribery and extortion had always been distinct crimes and that the majority’s decision effectively obliterated that distinction.

In particular, the dissenters noted, in a bribery case both sides – the bribe payer and the bribe recipient – are guilty parties to a corrupt deal. Bribery laws such as the federal bribery statute accordingly punish both sides of the bribe transaction. But in extortion, typically only the public official is charged. The person who pays the official does so under some kind of duress; they are considered a victim, not a willing participant.

Extortion under color of official right applies only to public officials, and on its face the Hobbs Act does not prohibit the payment of the extortion. What Evans left behind, therefore, was an oddity probably unique in criminal law: a statute that prohibits bribery but only punishes one side of the bribe transaction. More than two decades later, the implications of that decision led to the dispute that landed before the Supreme Court in Ocasio.

For purposes of this discussion it’s useful to distinguish two different kinds of extortion by a public official. In what we could call “classic extortion,” the official demands payment or “shakes down” the payer. The victims pay unwillingly and because they believe that, if they don’t, the official will abuse his or her authority to harm them in some way. An example would be a police officer who demands “protection” payments from the store owners on his beat, or a building inspector who lets contractors know that he will not act on their permits or inspections unless he is paid an “expediting fee.”

On the other end of the spectrum is what we might call “Evans extortion.” This includes cases, like Ocasio, where the conduct appears to be straight-up bribery. The payer is an eager and willing participant in a corrupt deal, enriching the public official in exchange for some exercise of official power that will benefit the payer. Evans held that a public official engaged in such a typical bribery transaction may be charged with extortion under color of official right.

In cases of “classic extortion,” where the public official is shaking down an unwilling payer, charging only the public official side of the transaction is perfectly appropriate. But in “Evans extortion” cases like Ocasio, where the payers are willing participants and are equally culpable, prosecutors face a dilemma: since the Hobbs Act is only a one-sided bribery prohibition, how can the bribe payers be charged?

Once Evans declared extortion under color of official right to be equivalent to bribery, it was inevitable that prosecutors in at least some cases would seek a way to charge the other side of that bribery transaction. And that brings us to the issue before the Court in Ocasio.

The Hobbs Act and the Facts of Ocasio

The owners of Majestic were at least as culpable as the police officers, but as we’ve just seen, prosecutors could not charge them directly with extortion under color of official right. Instead, they indicted the garage owners and Officer Ocasio for conspiracy to violate the Hobbs Act, charging that the owners conspired with Ocasio to extort money under color of official right from the garage owners themselves.

This is, at the very least, a linguistically awkward and rather inelegant theory. How could the garage owners be both victims of extortion and co-conspirators in the commission of that same extortion? Or put another way, how could the garage owners conspire to help extort money from themselves?

Ocasio’s lawyers argue that they couldn’t. The Hobbs Act definition of extortion requires that the public official obtain property of “another.” In the context of a conspiracy, they argue, this must mean that the conspirators agree to obtain property from someone outside of that conspiracy. If the co-conspirators are simply agreeing to exchange property among themselves, as in Ocasio’s case, then they are not obtaining property of “another” within the meaning of the statute.

The government responds that the theory behind Ocasio’s prosecution is simply textbook conspiracy law. It’s settled that someone can be guilty of conspiracy to commit a crime even if they couldn’t actually commit all elements of the underlying crime themselves. In a conspiracy the crime is the agreement to work together to further a criminal goal, and you can do that even if you couldn’t actually commit the crime on your own.

In Ocasio’s case, the government argues, it’s true that the garage owners themselves could not commit the crime of extortion under color of official right. But they could conspire to help Ocasio commit it. Only Officer Ocasio needed to obtain property of “another” – and that simply means someone other than Officer Ocasio. In this case, the “anothers” were his co-conspirators, the garage owners, who agreed to help Ocasio commit the crime.

I don’t know how the Court will come out, but I do think the fact that the government has to go through such linguistic gymnastics to frame a charge against the payers in a bribery case highlights that Evans was a dubious interpretation of the Hobbs Act.

Supreme Court

The Supreme Court Arguments

At the oral argument on October 6, Justice Kagan appeared to be siding with the government, while Justice Scalia (one of the dissenters in Evans) seemed sympathetic to Officer Ocasio’s position. Presumably Justice Thomas, who wrote the Evans dissent, also would agree that a bad decision should not be made even worse and would side with Ocasio. The other Justices were much more difficult to read.

Officer Ocasio has some support from those concerned about over-criminalization and possible overreach by federal prosecutors. For example, a group of former United States Attorneys filed an amicus brief arguing that the conspiracy charge was an unjustified expansion of the Hobbs Act and that the Court should reign in the prosecutors. They argued that upholding the government’s theory would result in a dramatic expansion of federal criminal jurisdiction over state and local bribery (which was, by the way, the same argument made by the Evans dissent). The National Association of Criminal Defense Lawyers filed a brief making similar arguments.

Arguments about over-criminalization and out-of-control prosecutors are popular these days, but I think in this case they have little force. No one suggests that the owners of Majestic were not blameworthy or did not deserve to be prosecuted. And although it’s true that if this prosecution is upheld then any state or local bribery case is a potential federal crime, that’s hardly a new or unprecedented development.

There are many ways for federal prosecutors to charge state and local bribery. Honest services mail and wire fraud apply to bribery and kickback schemes, and that theory almost certainly could have been used in Ocasio to charge both the officers and the garage owners. The Travel Act also applies to state law bribery and would be another potential charge. It’s even likely that prosecutors could have named Majestic as a RICO enterprise and indicted everyone for violating RICO based on a pattern of state-law bribery.

The argument that the government’s Hobbs Act theory in Ocasio would represent some kind of unprecedented expansion of federal criminal jurisdiction doesn’t hold water. If the primary concern is allowing federal prosecution of state or local corruption, that ship sailed long ago. If Ocasio’s conviction is overturned the lesson will be not that federal prosecutors can never pursue state and local bribery, but simply that they should use something other than the Hobbs Act.

Rather than arguments about federalism or overzealous prosecutors, I think Officer Ocasio’s strongest arguments are: 1) Evans should be considered the high-water mark for expansive readings of the Hobbs Act; even if we think Evans was rightly decided – and especially if we don’t – the Court should not make the situation worse by expanding the Hobbs Act even further; and 2) when Congress wants to criminalize state and local bribery, it knows how to do it and does so explicitly in statutes like the Travel Act, RICO, and 18 U.S.C. § 666. There’s no indication that Congress meant to do so with the much more general language of the Hobbs Act. And because this is a criminal case, any doubt or ambiguity should be resolved in Ocasio’s favor.

The strained interpretation of the Hobbs Act in Evans made it inevitable that one day the Court would have to confront the implications of what it had wrought. It will be very interesting to see what the Justices have to say now about the statutory dilemma that Evans created.  The decision is expected no later than next June.

Click here to join the Sidebars mailing list and receive e-mail notifications of future posts.

One thought on “Ocasio v. United States: The Supreme Court Confronts the Blurred Line between Bribery and Extortion

  1. Pingback: The Impact of Justice Scalia’s Death on the Bob McDonnell Case | Sidebars

Comments are closed.