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BRIDGEGATE’S LESSONS OF FAILURE

Last Thursday’s reversal of the Bridgegate convictions of Bridget Kelly and William Baroni by the United States Supreme Court was hardly surprising, especially given the Justices’ extreme skepticism, as expressed during oral argument in January, about whether the federal property fraud statutes charged (federal program fraud, 18 U.S.C. § 666, and wire fraud, 18 U.S.C. § 1343) embraced the defendants’ conduct. But the decision in Kelly v. United States, ___ U.S. ___, 2020 WL 2200833 (May 7, 2020) – and the public reactions from the players involved – were eye-opening in several respects.

First, the opinion was not merely unanimous but without any qualification, clarification or reservation; no Justice commented separately on any aspect of Justice Kagan’s opinion in so much as a footnote, much less in any concurring opinion. For such a controversial case, moreover, the decision was remarkably brief; the slip opinion runs a little over 12 pages, the Westlaw version just 5 pages. And only half those pages are devoted to discussing the legal issues that dictated the case’s disposition; the other half described the trial evidence against the defendants.

Second, that evidentiary description graphically evinces the Court’s disgust with the defendants’ conduct. The opinion began by stating that “[t]he evidence the jury heard no doubt shows wrongdoing – deception, corruption, abuse of power,” id. at *2, and concluded by reiterating that, “[f]or no reason other than political payback, [defendants] used deception to reduce Fort Lee’s access lanes to the George Washington Bridge – and thereby jeopardized the safety of the town’s residents.” Id. at *7. In between, the Court went out of its way to detail the “cast of characters[’]” more egregious actions and words and repeatedly employed pithy terms to describe their misconduct, e.g., Kelly’s infamous “traffic problems” email was “admirably concise,” and the defendants “merrily” maintained the lane realignments for another three days despite the public safety problems they caused. Id. at **3-4.

Third, in holding that the defendants’ misconduct did not violate the federal property statutes charged, the Court did not identify any statutory ambiguity, precedential uncertainty, or unresolved question of law. Instead, it deemed the prosecution’s theory squarely foreclosed by Cleveland v. United States, another unanimous decision (written 20 years ago by Justice Ginsburg) that reversed similar convictions by holding that the defendant’s “deceptive scheme to influence, to his own benefit, Louisiana’s issuance of gaming licenses” implicated only the state’s “sovereign power to regulate” – i.e., its “intangible rights of allocation, exclusion, and control” – and not its role “as property holder.” Id. at *5 (quoting Cleveland).

Finally, the Court felt compelled to repeat its “oft-repeated instruction: Federal prosecutors may not use property fraud statutes to ‘set[] standards of disclosure and good government for local and state officials.’” Kelly, supra, at *7 (quoting McNally v. United States, 483 U.S. 350, 360 (1987)). The Court again relied on Cleveland to re-emphasize to federal prosecutors – and to Congress, which has chosen not to respond to the Court’s prior warnings – that federal property fraud statutes cannot be stretched to criminalize such officials’ dishonest services (i.e., so-called “honest services fraud”) absent an objective to obtain property:

Much of governance involves (as it did here) regulatory choice. If U.S. Attorneys could prosecute as property fraud every lie a state or local official tells in making such a decision, the result would be – as Cleveland recognized – “a sweeping expansion of federal criminal jurisdiction.” [] And if those prosecutors could end- run Cleveland just by pointing to the regulation’s incidental costs, the same
ballooning of federal power would follow. In effect, the Federal Government could use the criminal law to enforce (its view of) integrity in broad swaths of state and local policymaking. The property fraud statutes do not countenance that outcome. They do not “proscribe[] schemes to defraud citizens of their intangible rights to honest and impartial government.” [] They only bar schemes for obtaining property.

Id. (citations omitted).

The fallout of the Court’s decision reveals no winners, other than the defense attorneys (some of whom reportedly worked for free) who consistently challenged the legal viability of the prosecution’s theories for several years and ultimately prevailed across the board. All other players in this long-running saga emerge stained by it.

Both Kelly and Baroni proclaimed the decision established their “innocence,” even though it left “no doubt” they had engaged in “wrongdoing – deception, corruption, abuse of power” that nevertheless fell outside the scope of the federal property fraud statutes charged.  Former Governor Christie – who was never charged, even though both the prosecution and the defense claimed at trial that he contemporaneously knew of the wrongdoing – also claimed vindication, and President Trump congratulated Christie “and all others involved[] on a complete and total exoneration ….” Reality was left to the prosecutors’ primary cooperating witness, David Wildstein, who acknowledged, “The conduct by me and others was still wrong. This is not a vindication.”

That the unanimous Court so readily found that Cleveland prohibited the federal property fraud charges against the defendants as a matter of law does not speak well of the lower courts that sustained them. Indeed, the Court’s opinion did not deem it necessary to address any aspect of the Third Circuit’s lengthy, unanimous decision upholding the defendants’ convictions. See United States v. Baroni, 909 F.3d 550 (3d Cir. 2018). And for good reason, since the Third Circuit had accepted both prosecution theories of property deprivation without even mentioning Cleveland, finding that the defendants deprived the Port Authority of its property both by usurping its “right to control” the traffic lanes and by causing it to pay its employees for their services related to the realignment scheme. Id. at 560-79.

The Supreme Court instead found that Cleveland directly undermined the former theory, reasoning that the defendants merely “alter[ed] a regulatory decision” – albeit “for bad reasons” and “by resorting to lies” – “about which drivers had a ‘license’ to use which lanes,” which “cannot count as the taking of property.” Kelly, supra, at *5. The Court also found that Cleveland repudiated the latter theory because “the fraud on Louisiana’s licensing system doubtless imposed costs calculable in employee time” but such costs could not constitute the requisite property because they were never the object of the scheme. Id. at *6. “This case is no different,”the Court reasoned, because the defendants never sought to obtain the Port Authority employees’ services, and the cost of those services was merely an “incidental byproduct” of their scheme, not an object of it. Id. In short, whereas the Third Circuit found that the defense “arguments concerning the property interest at issue falls far short.” 909 F.3d at 567, the Supreme Court found those same arguments were not merely correct but mandated by Cleveland.

But the biggest loser is the U.S. Attorney’s Office that pursued this ill-conceived federal prosecution, rather than allowing state authorities to investigate the matter or handing off its investigative findings to such authorities for prosecution under New Jersey’s broad “official misconduct” statute, N.J.S.A. 2C:30-2, which clearly embraced and proscribed the defendants’ misconduct. While it is hardly certain that state authorities would have pursued such a prosecution, the enormous media attention focused on the scandal, coupled with the state legislative commission that investigated it and attendant political pressure, likely would have compelled some form of charges. Instead, federal prosecutors effectively usurped all state responses and tried to shoehorn the defendants’ wrongdoing into federal property fraud and civil rights statutes (the Third Circuit previously reversed the defendants’ convictions under the latter by concluding that they, too, were legally defective).

By doing so, the federal prosecutors invited not only the humiliating repudiation of their legal theories but the shocking allegations of prosecutorial misconduct, vindictiveness, and politically motivated sabotage advanced last week by former Governor Christie, who specifically accused his successor as U.S. Attorney, Paul Fishman, of pursuing the case in order to torpedo Christie’s presidential ambitions and to gain a top-level Justice Department position in what he hoped would be a Hillary Clinton administration. And even more stunning, Wildstein’s defense attorney publicly claimed that the prosecutors verbally promised they would move to vacate his client’s guilty plea and dismiss the charges against him in the event – now reality – the charges against Kelly and Baroni were ultimately rejected. If true, such a verbal promise – undisclosed to defense attorneys or the trial court – would not only contradict Wildstein’s plea agreement but also violate DOJ policy. And it was not reassuring that Fishman declined to comment on Wildstein’s counsel’s claim, even while vehemently denying Christie’s allegations.

Unfortunately, the federal prosecutors’ misguided course in Bridgegate followed an all too familiar path. Next month, it will be exactly 33 years since the Supreme Court in McNally (in reversing a conviction under the federal mail fraud statute, 18 U.S.C. § 1341) sent the following message to such prosecutors considering public corruption charges against state and local officials:

Rather than construe the statute in a manner that leaves its outer boundaries ambiguous and involves the Federal Government in setting standards of disclosure and good government for local and state officials, we read § 1341 as limited in scope to the protection of property rights. If Congress desires to go
further, it must speak more clearly than it has.

McNally, 483 U.S. at 360. Congress has yet to speak more clearly, yet federal prosecutors continue to treat the “limited [] scope” of property fraud statutes as if those statutes “outer boundaries [were] ambiguous” and empower them to “set[] standards of disclosure and good government for local and state officials ….” And lower federal courts continue to let them get away with it, at least until they reach the Supreme Court, which – consistently, repeatedly, and emphatically – slaps them down and reiterates its warnings against overextending federal criminal statutes beyond their breaking point. See, e.g., McDonnell v. United States, 579 U.S. ___ (2016) (unanimously reversing Virginia governor’s conviction under federal bribery statute); Skilling v. United States, 561 U.S. 358 (2010) (reversing corporate CEO’s conviction by limiting federal honest services statute to proscribing bribes and kickbacks).

The reasons for this vicious circle involve both overzealous federal prosecutors and under-zealous state prosecutors, who are too often influenced, if not controlled, by the state lawmakers they should be overseeing and, when appropriate, pursuing criminally. The result?  Legally flawed federal prosecutions that waste countless resources and ultimately convict many state and local officials of federal crimes they did not commit – except those exceedingly few who have the funding and good fortune to get their case heard by the Supreme Court – when state prosecutions would effectively and efficiently serve justice by convicting them of crimes they did commit. For this recurring fiasco, all branches – executive, legislative and judicial – of both federal and state systems share responsibility.

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