In the Courts

CLECs are a byproduct of the Federal Telecommunications Act of 1996, wherein Congress required that the “Regional” or “Baby Bells” offer local retail telecommunications services for resale to properly certified CLECs at a wholesale discount. While the court summarily dealt with the other issues raised by the three on appeal, it noted that the Eleventh Circuit had not squarely addressed the issue, post-Booker, whereby a district court applied a different Guideline range than the version that had been applicable when the offense underlying the conviction had occurred. In United States v. Booker, 543 U.S. 220 (2005), the Supreme Court held that the Sentencing Guidelines were merely advisory ' as mandatory application violated the Sixth Amendment. In Wetherald, the Eleventh Circuit noted that it had not assessed any potential violations of the Ex Post Facto Clause stemming from application of a later version of a Guidelines provision. In this instance however, the district judge had sentenced Wetherald, Shiner, and Swichkow using the 2008 Guidelines rather than the 2002 Guidelines, providing an opportunity for such review.

The Eleventh Circuit noted that, pre-Booker, it had repeatedly held that although the district courts should “presumptively apply the Guidelines as they exist at the time of sentencing, they may not do so where those Guidelines would lead to imposition of a harsher penalty than that to which the defendant was subject at the time of the offense.” United States v. Simmons, 368 F.3d 1335, 1338 (11th Cir. 2004). Further, while it had not had occasion to address the ex post facto implications of Booker prior to appellants' appeal, it had affirmed the underlying principles that led to the application of the Ex Post Facto Clause in its pre-Booker opinions.

The court noted that its sister circuits had reached differing conclusions upon assessing any potential Ex Post Facto implications presented by application of a harsher, later version of a Guidelines provision, in light of the direction provided by the Supreme Court in its Booker analysis. The Seventh Circuit and Sixth Circuits found no tension, as the clause applied “only to laws and regulations that bind rather than advise.” United States v. Demaree, 459 F.3d 791, 795 (7th Cir. 2006); see also United States v. Barton, 455 F.3d 649, 655 n.4 (6th Cir. 2006).

In contrast with the conclusion reached by the Sixth and Seventh Circuits, the D.C. Circuit found a clear constitutional problem with application of a harsher Guidelines provision ' even in the post-Booker world. United States v. Turner, 548 F.3d 1094, 1099-1100 (D.C. Cir. 2008). Going further, the D.C. Circuit concluded that the “proper approach is therefore to conduct an 'as applied' constitutional analysis,” finding that a party need only show that the district court's failure to employ the Guidelines in effect at the time the offense was committed resulted in a “substantial risk” of a more severe sentence. Id. at 1100.

The Eleventh Circuit found the approach set forth by the D.C. Circuit instructive. In its analysis, the Eleventh Circuit noted that, while the Guidelines were no longer mandatory, “[p]ractically speaking, applicable Sentencing Guidelines provide a starting point or 'anchor' for judges and are likely to influence the sentences judges impose.” Id. at 1099. This perspective led to the Eleventh Circuit adopting the “substantial risk” standard as the proper level of analysis. The court stated that this approach provided the appropriate measure of protection, as “[t]his standard recognizes the ongoing importance of the Sentencing Guidelines while maintaining the district court's broad discretion to consider relevant information in formulating an appropriate sentence.”

In reviewing the immediate case, the Eleventh Circuit evaluated both the district judge's comments during sentencing, as well as the actual sentences imposed on the three defendants. In doing so, the court remarked that the sentences imposed on two of the individuals fell below even the range provided by the lower 2002 Guidelines range, with the third individual's sentence falling within that lower range. Using these facts, the court affirmed all three sentences, as it found that the use of the Sentencing Guidelines in effect at the time of sentencing did not raise a substantial risk of a harsher punishment for the defendants and, therefore, the district court's actions did not implicate the Ex Post Facto Clause.

DC Circuit Court Affirms Conviction of Abramoff
Colleague

On May 13, 2011, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the conviction of David H. Safavian on one count of obstruction of an investigation and three counts of false statements. United States v. Safavian, No. 09-3112, slip op. at 1 (DC Cir. May 13, 2011).

Safavian, a friend of lobbyist Jack Abramoff, was the Chief of Staff of the General Services Administration (“GSA”). Abramoff invited Safavian on a golfing trip to Scotland for which Safavian sought counsel from the GSA's ethics officer. He told the ethics officer that Abramoff had no business with the GSA (although he had asked about several GSA properties) and would only be paying for Safavian's airfare, as Abramoff was already chartering a flight for the group. In response, the ethics officer approved the acceptance of the airfare and Safavian gave Abramoff a check for $3,100 for his share of the costs (excluding airfare). Thereafter, the GSA's Office of the Inspector General (“OIG”) received an anonymous tip that led to an investigation of Safavian's trip and, ultimately, his indictment on five counts. He was convicted on four counts and appealed. The appellate court reversed or remanded each of his convictions.

As a part of his initial defense at trial, Safavian had argued that he did not make a false statement by saying that Abramoff was not doing business with the GSA because Abramoff at the time had no contracts and was not exchanging money or services with the agency. The district court excluded Safavian's expert witness on this interpretation of “doing business,” finding that it would not help the jury. The Court of Appeals reversed and remanded for a new trial.

Following remand, the government filed a superseding indictment against Safavian with three counts that closely followed the original indictment, and two that implicated new conduct. The first new count charged him with having made false statements in his Financial Disclosure form, wherein he was required to report gifts above a certain value, in violation of the Ethics in Government Act of 1978. The second charged him with having made false statements to the FBI during the investigation.

After conviction on four of the five counts, including the two new ones, Safavian appealed, claiming that the two new counts were added to the indictment as a result of prosecutorial vindictiveness. He also claimed that the government had failed to prove that the false statements were material, as was required to support his other two counts of conviction.

The Court of Appeals, adopting the lower court's rationale, affirmed the conviction on three of the four counts. Regarding the fourth count ' Safavian's conviction for false statements made to the FBI ' the court quickly dismissed the argument that the statements were not material because the statements needed only to “have a natural tendency to influence or be capable of influencing an agency function or decision,” a standard easily met. Id. at 6 (quoting United States v. Moore, 612 F.3d 698 (D.C. Cir. 2010)).

The Court of Appeals also found that the District Court had not clearly erred in determining the question of prosecutorial vindictiveness. As an initial matter, the defendant was required to present evidence that the action was more likely than not a result of vindictiveness. The only evidence that the District Court considered was the simple fact that the prosecutor had added new charges after a successful appeal which, the court found, was sufficient to establish a presumption of prosecutorial vindictiveness.

To overcome that presumption the government had to offer objective, non-vindictive evidence supporting its actions. Id. at 6-7 (citing United States v. Meyer, 810 F.2d 1242, 1245 (D.C. Cir. 1987)). In this case, the government offered two rationales for the additional count. First, the government claimed it needed to rebut the defense of literal truth that Safavian offered by ensuring that his statements to the FBI would be admissible. Id. at 8-9. Second, the government claimed that, in light of the appellate ruling, it needed to bolster its case by including charges that did not turn on Safavian's truth defense or his associated expert. Id. at 9.

The Court of Appeals agreed with the defendant that the first alleged rationale was “entirely unpersuasive.” Id. at 10. The court found that there could have been no doubt in the government's ability to introduce the statement to the FBI, even absent the additional count.

But the court found that reliance on the second argument was not clearly erroneous. It concluded that the government's change of “strategy in response to an adverse ruling of the court” was a sufficient and objective basis for the additional count. Despite the defendant's argument that trial strategy was “inherently subjective,” the court found that its prior ruling would “provide[] a basis for assessing the objective reasonableness of the Government's adding a new charge.” As a result, the Court of Appeals affirmed.

Business Crimes Hotline and In the Courts were written by Associate Editor Kenneth S. Clark. He is an associate at Kirkland & Ellis LLP, Washington, DC.

Eleventh Circuit Analysis Deepens Circuit Split
Regarding Ex Post Facto Implications

On March 28, 2011, in United States v. Wetherald, No. 09-11687, the United States Court of Appeals for the Eleventh Circuit, in an opinion authored by Chief Judge Joel F. Dubina, held that the Ex Post Facto Clause of the Constitution precluded a district court from sentencing a defendant under a more punitive version of a U.S. Sentencing Guidelines provision than the version that had been in place when the offense occurred.

Timothy Wetherald, Marc Shiner, and Leon Swichkow, all former operators ' from 2000 through 2003 ' of telecommunications companies known as competitive local exchange carriers (“CLECs”), had each been convicted and sentenced on differing combinations of mail, wire, and securities fraud, as well as multiple counts of money laundering, for their respective roles in a scheme to defraud investors in the companies they operated.

CLECs are a byproduct of the Federal Telecommunications Act of 1996, wherein Congress required that the “Regional” or “Baby Bells” offer local retail telecommunications services for resale to properly certified CLECs at a wholesale discount. While the court summarily dealt with the other issues raised by the three on appeal, it noted that the Eleventh Circuit had not squarely addressed the issue, post-Booker, whereby a district court applied a different Guideline range than the version that had been applicable when the offense underlying the conviction had occurred. In United States v. Booker , 543 U.S. 220 (2005), the Supreme Court held that the Sentencing Guidelines were merely advisory ' as mandatory application violated the Sixth Amendment. In Wetherald, the Eleventh Circuit noted that it had not assessed any potential violations of the Ex Post Facto Clause stemming from application of a later version of a Guidelines provision. In this instance however, the district judge had sentenced Wetherald, Shiner, and Swichkow using the 2008 Guidelines rather than the 2002 Guidelines, providing an opportunity for such review.

The Eleventh Circuit noted that, pre- Booker , it had repeatedly held that although the district courts should “presumptively apply the Guidelines as they exist at the time of sentencing, they may not do so where those Guidelines would lead to imposition of a harsher penalty than that to which the defendant was subject at the time of the offense.” United States v. Simmons , 368 F.3d 1335, 1338 (11th Cir. 2004). Further, while it had not had occasion to address the ex post facto implications of Booker prior to appellants' appeal, it had affirmed the underlying principles that led to the application of the Ex Post Facto Clause in its pre-Booker opinions.

The court noted that its sister circuits had reached differing conclusions upon assessing any potential Ex Post Facto implications presented by application of a harsher, later version of a Guidelines provision, in light of the direction provided by the Supreme Court in its Booker analysis. The Seventh Circuit and Sixth Circuits found no tension, as the clause applied “only to laws and regulations that bind rather than advise.” United States v. Demaree , 459 F.3d 791, 795 (7th Cir. 2006); see also United States v. Barton , 455 F.3d 649, 655 n.4 (6th Cir. 2006).

In contrast with the conclusion reached by the Sixth and Seventh Circuits, the D.C. Circuit found a clear constitutional problem with application of a harsher Guidelines provision ' even in the post-Booker world. United States v. Turner , 548 F.3d 1094, 1099-1100 (D.C. Cir. 2008). Going further, the D.C. Circuit concluded that the “proper approach is therefore to conduct an 'as applied' constitutional analysis,” finding that a party need only show that the district court's failure to employ the Guidelines in effect at the time the offense was committed resulted in a “substantial risk” of a more severe sentence. Id. at 1100.

The Eleventh Circuit found the approach set forth by the D.C. Circuit instructive. In its analysis, the Eleventh Circuit noted that, while the Guidelines were no longer mandatory, “[p]ractically speaking, applicable Sentencing Guidelines provide a starting point or 'anchor' for judges and are likely to influence the sentences judges impose.” Id. at 1099. This perspective led to the Eleventh Circuit adopting the “substantial risk” standard as the proper level of analysis. The court stated that this approach provided the appropriate measure of protection, as “[t]his standard recognizes the ongoing importance of the Sentencing Guidelines while maintaining the district court's broad discretion to consider relevant information in formulating an appropriate sentence.”

In reviewing the immediate case, the Eleventh Circuit evaluated both the district judge's comments during sentencing, as well as the actual sentences imposed on the three defendants. In doing so, the court remarked that the sentences imposed on two of the individuals fell below even the range provided by the lower 2002 Guidelines range, with the third individual's sentence falling within that lower range. Using these facts, the court affirmed all three sentences, as it found that the use of the Sentencing Guidelines in effect at the time of sentencing did not raise a substantial risk of a harsher punishment for the defendants and, therefore, the district court's actions did not implicate the Ex Post Facto Clause.

DC Circuit Court Affirms Conviction of Abramoff
Colleague

On May 13, 2011, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the conviction of David H. Safavian on one count of obstruction of an investigation and three counts of false statements. United States v. Safavian, No. 09-3112, slip op. at 1 (DC Cir. May 13, 2011).

Safavian, a friend of lobbyist Jack Abramoff, was the Chief of Staff of the General Services Administration (“GSA”). Abramoff invited Safavian on a golfing trip to Scotland for which Safavian sought counsel from the GSA's ethics officer. He told the ethics officer that Abramoff had no business with the GSA (although he had asked about several GSA properties) and would only be paying for Safavian's airfare, as Abramoff was already chartering a flight for the group. In response, the ethics officer approved the acceptance of the airfare and Safavian gave Abramoff a check for $3,100 for his share of the costs (excluding airfare). Thereafter, the GSA's Office of the Inspector General (“OIG”) received an anonymous tip that led to an investigation of Safavian's trip and, ultimately, his indictment on five counts. He was convicted on four counts and appealed. The appellate court reversed or remanded each of his convictions.

As a part of his initial defense at trial, Safavian had argued that he did not make a false statement by saying that Abramoff was not doing business with the GSA because Abramoff at the time had no contracts and was not exchanging money or services with the agency. The district court excluded Safavian's expert witness on this interpretation of “doing business,” finding that it would not help the jury. The Court of Appeals reversed and remanded for a new trial.

Following remand, the government filed a superseding indictment against Safavian with three counts that closely followed the original indictment, and two that implicated new conduct. The first new count charged him with having made false statements in his Financial Disclosure form, wherein he was required to report gifts above a certain value, in violation of the Ethics in Government Act of 1978. The second charged him with having made false statements to the FBI during the investigation.

After conviction on four of the five counts, including the two new ones, Safavian appealed, claiming that the two new counts were added to the indictment as a result of prosecutorial vindictiveness. He also claimed that the government had failed to prove that the false statements were material, as was required to support his other two counts of conviction.

The Court of Appeals, adopting the lower court's rationale, affirmed the conviction on three of the four counts. Regarding the fourth count ' Safavian's conviction for false statements made to the FBI ' the court quickly dismissed the argument that the statements were not material because the statements needed only to “have a natural tendency to influence or be capable of influencing an agency function or decision,” a standard easily met. Id . at 6 (quoting United States v. Moore , 612 F.3d 698 (D.C. Cir. 2010)).

The Court of Appeals also found that the District Court had not clearly erred in determining the question of prosecutorial vindictiveness. As an initial matter, the defendant was required to present evidence that the action was more likely than not a result of vindictiveness. The only evidence that the District Court considered was the simple fact that the prosecutor had added new charges after a successful appeal which, the court found, was sufficient to establish a presumption of prosecutorial vindictiveness.

To overcome that presumption the government had to offer objective, non-vindictive evidence supporting its actions. Id . at 6-7 (citing United States v. Meyer , 810 F.2d 1242, 1245 (D.C. Cir. 1987)). In this case, the government offered two rationales for the additional count. First, the government claimed it needed to rebut the defense of literal truth that Safavian offered by ensuring that his statements to the FBI would be admissible. Id. at 8-9. Second, the government claimed that, in light of the appellate ruling, it needed to bolster its case by including charges that did not turn on Safavian's truth defense or his associated expert. Id. at 9.

The Court of Appeals agreed with the defendant that the first alleged rationale was “entirely unpersuasive.” Id. at 10. The court found that there could have been no doubt in the government's ability to introduce the statement to the FBI, even absent the additional count.

But the court found that reliance on the second argument was not clearly erroneous. It concluded that the government's change of “strategy in response to an adverse ruling of the court” was a sufficient and objective basis for the additional count. Despite the defendant's argument that trial strategy was “inherently subjective,” the court found that its prior ruling would “provide[] a basis for assessing the objective reasonableness of the Government's adding a new charge.” As a result, the Court of Appeals affirmed.

Business Crimes Hotline and In the Courts were written by Associate Editor Kenneth S. Clark. He is an associate at Kirkland & Ellis LLP, Washington, DC.