Tuesday, May 5, 2015

Does Poarch Creek plan to fix Alabama budget in exchange for gaming rights amount to bribery?

Wind Creek Casino in
Wetumpka, Alabama
The Poarch Band of Creek Indians has offered to fill Alabama's $250-million budget shortfall in exchange for exclusive gaming rights in the state.

If that sounds like a "something for something" deal--known under the law as a quid pro quo--that's because it probably is. If you recognize a quid pro quo as the central element in federal bribery laws, that's because it is.

Does that mean tribal officials and state legislators could be engaging in bribery if the Poarch Creek plan moves forward? Does that mean officials on both sides of the deal could find themselves facing prosecution and lengthy federal prison terms?

Our review of applicable statutes and case law indicate the likely answer to both questions is yes.

Like many Alabamians, our knowledge of federal bribery statutes grew from the 2006 prosecution of former governor Don Siegelman and former HealthSouth CEO Richard Scrushy, which ended with convictions that were wildly contrary to law. The issue took center stage again in 2011 with the federal bingo/vote-buying prosecution, which netted a handful of guilty pleas and zero convictions.

In both of those cases, the defendants mostly were Democrats, with Republicans pushing for convictions--when they weren't touting their own lofty ethical standards. Now, it's Republicans who are pushing various gaming initiatives as possible solutions to Alabama's budget woes.

Wouldn't it be ironic if Republicans--who for years have claimed to be morally opposed to gambling--wound up in the federal cross hairs over a proposal based on . . . gambling? It could happen because the Poarch Creek proposal, on its face, raises serious questions about bribery.

To be sure, federal bribery law is a complex topic, covered by three primary statutes and decades of case law designed to provide clarity on various elements of the crime. On top of that, federal statutes tend to be written in such a way that even experts have a hard time figuring out what they mean.

While the law is murky, we think it's clear that Creek officials and Alabama legislators could be walking into a brier patch--with no clear exit signs.

The applicable statute in this case probably would be 18 U.S.C. 666 (federal funds bribery), which was at the heart of the Siegelman prosecution. The guiding case law in that instance was McCormick v. United States, 500 U.S. 257 (1991), which addresses bribery in the context of a campaign contribution.

Based on the limited information we have at the moment about the Poarch Creek proposal, campaign contributions do not appear to be in play. That means another case, Evans v. United States, 504 U.S. 255 (1992), likely would play a key role. An article on the 666 statute at Rutgers Law Review states that Evans is the primary case cited in instances that do not involve campaign contributions.

Evans revolved around a Georgia county commissioner who accepted $7,000 in cash from an undercover FBI agent posing as a real-estate developer who wanted land rezoned for a residential development. The commissioner was convicted of extortion under the Hobbs Act, and courts have found that the same principles apply to bribery cases under 666.

The U.S. Supreme Court upheld the convictions in Evans, stating (citations omitted):

Viewing the evidence in the light most favorable to the Government, as we must in light of the verdict . . . , we assume that the jury found that petitioner accepted the cash knowing that it was intended to ensure that he would vote in favor of the rezoning application and that he would try to persuade his fellow commissioners to do likewise. Thus, although petitioner did not initiate the transaction, his acceptance of the bribe constituted an implicit promise to use his official position to serve the interests of the bribegiver.

In affirming petitioner's conviction, the Court of Appeals noted that the instruction did not require the jury to find that petitioner had demanded or requested the money, or that he had conditioned the performance of any official act upon its receipt. . . . The Court of Appeals held, however, that "passive acceptance of a benefit by a public official is sufficient to form the basis of a Hobbs Act violation if the official knows that he is being offered the payment in exchange for a specific requested exercise of his official power. The official need not take any specific action to induce the offering of the benefit."

Once the high court established that a public official need not initiate the transaction, it then shined additional light on the elements of bribery:

We reject petitioner's criticism of the instruction, and conclude that it satisfies the quid pro quo requirement of [McCormick], because the offense is completed at the time when the public official receives a payment in return for his agreement to perform specific official acts; fulfillment of the quid pro quo is not an element of the offense. We also reject petitioner's contention that an affirmative step is an element of the offense of extortion "under color of official right" and need be included in the instruction. As we explained above, our construction of the statute is informed by the common-law tradition from which the term of art was drawn and understood. We hold today that the Government need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts.

Evans teaches three key points: (1) A public official need not initiate the questionable transaction; (2) The bribery offense is completed when the official receives payment in exchange for his agreement to perform specific official acts; and (3) The prosecution need only show that the official received payment to which he was not entitled, and he knew the payment was made in return for official acts.

Much remains unknown about the Poarch Creek proposal. But published reports indicate the following:

* Poarch Creek officials, unhappy with a plan that would expand gaming at non-Indian facilities, initiated discussions with unknown legislators;

* Tribe officials made it clear they could cover the state-budget deficit of about $250 million;

* Tribe officials want exclusive gaming rights in exchange for the $250 million.

Does that mean multiple parties are going down for bribery? It's much too early to say that. For one thing, we see no signs that a payment has been made, so a possible offense likely has not been completed. For another, the Obama administration has such a dismal record on justice issues that it's questionable whether the DOJ would bat an eye at even a blatant case of bribery in Alabama.

But this much seems clear: Based on a clear reading of Evans, and published reports about the Poarch Creek proposal, parties on both sides are playing with fire--and the evidence of potential bribery already appears to be stronger than was present in the Siegelman and bingo cases.


Anonymous said...

L S I was wondering when you were going to weigh in on this topic. I could not believe that the Indians would make this type of offer so openly. It gives new meaning to the thought that the Indians have financially behind the fight to keep other gaming facilities closed and have no competition, just a monopoly.

Anonymous said...

My God, the gaming business must be pretty good when you don't have any competition. Sounds like the Creeks have more money than the entire state of Alabama.

legalschnauzer said...

Good point, @7:08. It sure didn't take the tribe long to pipe up when Del Marsh floated his plan to expanding non-Indian gaming.

Anonymous said...

How does the state have the authority to run non-Indian gaming sites out of business while granting exclusive rights to the Creeks? I smell heap big lawsuit coming if this proposal passes.

legalschnauzer said...

I don't know the answer to your question, @10:11, but it's a darned good one. That might be where the bribery comes in. Creeks are paying the state to create such authority, whether it's lawful or not. In terms of lawsuits, it sounds to me like VictoryLand, GreeneTrack, and others might have a fine case for tortious interference.

Anonymous said...

Excellent reporting and analysis, Mr. Schnauzer. This is so blatant that you wonder if even the MSM will pick up on it at some point.

legalschnauzer said...

Appreciate the kind words, @10:20. I have to give credit to a reader/Facebook friend for bringing it to my attention. Would like to give her credit by name, but not sure she would want that.

Must admit that I was so stunned by the GOP's sudden embrace of gambling that the Creek/bribery issue slipped right by me.

Jewel said...

Do the Creeks think they are exempt from the laws that govern the rest of us?

legalschnauzer said...

I don't know, Jewel, but the second line of the 666 statute says it applies to anyone who is an agent of "an Indian tribal government."

Anonymous said...

Just another day at the office for the GOP party. Say one thing, free market, less government, no gaming, do another, sell the state to the higher bidder and give them a monopoly on gaming, raise taxes for the working people, give big business ten years tax abatement in return for two new minimum wage jobs. Until we wake up to the fact that there is not a dime bit of differences with both parties we are doomed.

Anonymous said...

Sounds like a scene from the Godfather, "I will make them an offer they can't refuse."