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COPYRIGHT 2008 Stanford Law School
INTRODUCTION
I. DEFINING CORRUPTION IN THE PUBLIC SPHERE A. A Brief Intellectual History of "Corruption" B. The Federal Law of Public Corruption II. MAIL/WIRE FRAUD A. The Road to [section] 1346 B. Fits and Starts in the Redefinition of Harm Under [section] 1346 C. The Public/Private Blur D. The Curious History--and Economics--of the Kickback 1. What is wrong with a kickback? 2. The mysterious economics (and occasional law) of commercial kickbacks E. Kickbacks and the Adventures of the Second Circuit III. INSIDER TRADING AND FAITHLESS FIDUCIARIES A. The New "Victimology" of Insider Trading B. The New Worm of Fiduciary Relations C. Sarbanes-Oxley, [section] 1348, and the Future of Fraud Law IV. THE POSITIVE LEGAL MEANINGS OF "FRAUD ON THE MARKET" A. Fraud on the Market in Private Securities Law B. Loss and Punishment in Federal Sentencing CONCLUSION
INTRODUCTION
This Article is about how federal white collar crime law is put to the test of defining corruption. We focus on the concept of "corruption" while acknowledging that it is hopelessly vague and that the legal system, so long as it identifies more specific goals for criminal or civil legislation, bears no intellectual responsibility to define "corruption" or to resolve larger philosophical debates about its meaning. Nevertheless, the effort at definition finds motivation in several sources, such as deference to the normative concerns of juries or the public generally, sincere respect for the normative standards imputed to legislatures, and concern for coherence in or restraint on prosecutorial and jury discretion in the absence of clear legislative criteria. Whatever the key motivation, white collar crime prosecutions frequently turn on difficult value-laden judgments about types and effects of conduct for which the term "corruption" is, in the spheres of laws and morals, our dominant name.
Although some version of the word "corrupt" appears as an actual statutory term in some laws, (1) we examine broader social and economic concerns about how a polity or an economy gets "corrupted" by crime, and how those concerns animate our legal definitions of the nature and effects of criminal misconduct. (2) Our thesis is that federal white collar criminal law has exhibited a remarkable trend toward the principle that the victim protected by our white collar laws is an abstraction: the theoretical equilibrium (or, in more ethical terms, the "integrity") of a fair commercial market. This trend has been far from linear--it has been anxious and fitful and has produced considerable inconsistency among the federal courts. Moreover, its manifestations may be very hard to capture through empirical crunching of case filings. Rather, the manifestations lie in the conceptual expressions of the courts, abetted of course by prosecutorial arguments and framing of indictments.
The notion of the market as a victim is remarkable because it creates in federal white collar law a new concept of an inchoate crime, no longer focused on the causation of, or even the attempt to cause, the kinds of demonstrable material harm that most criminal law, even traditional white collar law, aims to prevent. To capture this trend, we focus on two key statutory crimes--so-called "honest services" fraud under mail and wire fraud laws (3) and securities fraud. (4) But as a prelude to our detailed examination of mail/wire fraud and securities fraud, we first review the state of the law in the more straightforward area of the federal statutory scheme proscribing the bribery of federal government officials. Our legal system necessarily accepts the absence--or infeasibility--of any requirement of a demonstrable material economic loss in the public bribery arena. So this public bribery scheme is a useful predicate for our main statutory subjects, where absence of such a harm requirement is very much a political and philosophical choice.
In the mail/wire and securities fraud areas, we associate the new notion of inchoate harm with a general concern that the contemporary breed of white collar criminals has breached vital fiduciary duties. The implicit (sometimes explicit) incorporation of notions of fiduciary duty into anti-corruption laws points to parallel areas of recent scholarship that have directly addressed the meaning of "fiduciary" in American law and culture. Scholars have been examining these questions from a number of disciplinary angles. Indeed, recent years have seen a flourishing of this writing, underscoring how fiduciary duty is both a compelling and highly contested phenomenon in American law--though few connections to criminal corruption law have been made in the academic writing. (5) Whereas traditional fiduciary duties are usually associated with contractual duties to specific individuals or some formal legal responsibilities required by virtue of a special relationship to a set of corporate beneficiaries, federal fraud crime has implicitly redefined fiduciary duty. Our legal and political systems assume a general principle that when public officials take bribes, they violate a fiduciary duty to the body politic, even if the terms and boundaries of that fiduciary duty are rarely examined. Moreover, recent developments in the law governing federal white collar crime treat private corruption as mimicking public corruption--in that the duty allegedly breached is to the market, conceived as broadly and amorphously as the body politic. In this Article we demonstrate the tropism of both mail wire/fraud and securities law doctrines toward this new inchoate harm, and we note how components of the new Sarbanes-Oxley Act (6) have the potential to augment this tropism.
As a matter of historical context, the new trend in white collar law could be explained by what might be called a new cultural criminology of financial corruption, and a populist perception that the United States has been suffering a "crime wave" of white collar offenses. Even in a more familiar crime wave, for example a rise in the rate of violent crime, segments of the populace who are not really threatened with victimization often adopt--or have ascribed to them--the social role of the fed-up, vulnerable citizen. (7) In the imagery of most modern American crime waves, the perpetrator is a malevolent, sociopathic street criminal, alas, all too well exemplified by the 1988 figure of Willie Horton. For the crime wave to have any political purchase, of course, the victim needs to be a figure of populist sympathy, and for conventional crime waves, the victim is the frightened, law-abiding, fed-up, resentful good citizen. (8)
But white collar crime complicates the role of the prototypical victim of endemic crime. (9) In white collar crime waves, the perpetrator is the powerful politician or wealthy businessperson who is both corrupt and corrupting. Self-described ordinary citizens, the iconic victims of street crime waves, are especially implausible claimants of direct vulnerability to white collar crime. Rather, to achieve a sense of victimization, they must feel, or profess, outrage at some greater, diffuse social harm. They must believe--or plausibly profess to believe--that the crime wave is concretely linked to their own economic frustration; they must alter the imagined target of their moral outrage from the sociopathic street predator to the calculating, moral choice-maker. (10)
Complicating things further--and this is especially true of the Enron crime wave--the notion of measuring a crime wave is especially challenging when the most salient consideration justifying the use of prosecutorial resources is not the number of crimes, but the total economic loss and the number of people potentially affected, however indirectly. (11) That loss is difficult to calculate, perhaps conceptually unknowable, and, ironically, often made harder to know by the highly conflicted self-interest of the businesses and shareholders who are arguably victims. Similar to perceived street crime waves, perceived white collar crime waves hardly require any actual increase in crime to develop political salience. But, of course, for white collar crime, measurement is in any event quite elusive, because the definitions of bad action and mental state are always more amorphous and contested than anything that could be captured in a Uniform Crime Index. (12)
In the case of the Sarbanes-Oxley legislation--the dramatic legal response to the Enron crime wave--public sentiment and political rhetoric addressed these complications by redefining the iconic crime victim as the populist shareholder for whom the loss in portfolio value seems to be a legitimate, personal harm. Millions of Americans can now (somewhat) plausibly claim to have experienced measurable losses, even though there is often little clear correlation between those losses and the crime itself. This new victim is a participant in capitalism, often a profit-seeking participant in her employer's wealth, who feels as much betrayed as victimized. Put differently, the victim of an Enron-crime perpetrator is a kind of co-dependent capitalist decrying a relationship gone bad.
It might seem that the criminal laws condemning mail/wire fraud and securities fraud, or white collar crime law more broadly, have no special role to play here, since civil and regulatory constraints on corruption raise and address the same questions. But white collar crime prosecutions are cultural events that test our notions of combating corruption far more dramatically than civil suits and regulations. More importantly, we have to remember what is special about these being criminal laws. An act becomes a crime because it is an act against the public order, even if it is also an act that victimizes a private individual in some material way. The very decision to make an act criminal is a way of impressing the targets of the criminal law's coverage into a public role.
I. DEFINING CORRUPTION IN THE PUBLIC SPHERE
Our first premise, however, is that a study of the legal regulation of fraud and corruption requires some grasp of the intellectual history of the notion of corruption, to help appreciate the complexities and contingencies of the subject. We thus start with a brief survey of the scholarly landscape of efforts to define, evaluate, and explain "corruption"--a necessary background to examining the difficulties of translating concepts and definitions of corruption into legal rules. We begin that survey with a focus on "public" corruption, or corruption of government officials, because public corruption, less tethered to common law theft as a deprivation of material harm, serves as a predicate for our thesis about the redefinition of harm in the private sector--the subject we turn to thereafter.
The point of this preliminary inquiry is that even where white collar law has no intellectual obligation to define punishable harm in the theft-based sense, huge implicit questions lurk about how to conceive the social or economic harm that should motivate public corruption laws, and those questions get masked as, or transformed into, debates over more technical-looking components of crime definition.
Even in the field of government malfeasance, it is a risky enterprise to attempt to define "corruption" broadly. The one undeniable form of corruption would be outfight theft or embezzlement by a public official from the public treasury. (13) But once we set aside such taking of definable property, any definition will partake of uncertain notions about how we identify when an "outside" influence so distorts the governmental structures, processes, or economic systems as to merit the term "corrupt." Such a definitional effort often invokes some concern about deception as the core of the wrong, although there is arguably something unrealistic, if not disingenuous, about the consequent suggestion that the harm of fraud is simply the failure to disclose what would otherwise be corrupt conduct. (14)
As one more initial matter, we note that in any discussion of fraud, the common legal scholar's trope of the "public/private distinction" seems inevitable. It descriptively distinguishes cases where the bribed or fraudster is a government official from those where no government official is involved--what we sometimes refer to in this Article as "private bribery" or "private fraud." While we acknowledge that this distinction has historical significance and that the courts and academia still believe that this distinction has great legal significance, our main thesis is that there is a trend towards the blurring of the public/private distinction. (15) That is, the notions applicable to explain the prosecution of public corruption have bled over to support the prosecution of purely private acts. (16)
A. A Brief Intellectual History of "Corruption"
In history and the social sciences, there is a vast academic literature on the subject of describing and defining corruption--a body of work so vast that we can only briefly allude to it here. But any review of this scholarship must acknowledge that it is very difficult to derive any consensus definition of corruption or to measure the alleged harm of what positive law calls corruption, and that any effort at a positive or even normative definition of corruption is heavily contingent on independent economic, political, and social factors.
More specifically, a glance back at the evolving definitions of corruption in European history reveals two useful admonitions. First, the contemporary notion that corruption is something that the profane private realm does to the sacred public realm is hardly essential or universal. And, second, denunciations of political corruption have always been matched by agnosticism about the provable harm of corruption or even guarded praise for its potential benefits. In modern comparative political science, the different mixes and stages of development of public and private spheres lead to different forms of corruption. For example, a glance not so far back to studies of corruption in communist systems reveals that the kind of corruption we associate with capitalism simply exists in a variant form in communist countries and is often a contributor to stable social and economic equilibriums. Under the so-called "covert participant" model, a dominant private ethos can be harmonious with the government, as individual self-interest can lead an official to disdain official rules, but at the same time, to aim for higher system outputs. (17)
If we link the perspective of law-and-economics to studies of corruption in Third World countries, we see further uncertainty about how to define harmful corruption. Once we get past the uncontroversial case of outright theft from the public rise and look at subtler breaches of public duty, a key theme of this work is that efforts at general definitions of corruption founder on at least two issues: (a) economics is a neutral tool for defining corruption, and many official actions taken at least partially in response to private benefits conferred on officials are sound policy for reasons sometimes relevant and sometimes irrelevant to the inducement; and (b) by some definitions of corruption, the major cause of corruption is government itself--i.e., the greater the government power, the greater the amount of corruption. (18) To the legal economist, in a second-best world with preexisting policy-induced distortions, graft may sometimes encourage productive economic transactions and prod the government to help entrepreneurs at critical times in economic development by reducing the uncertainties of investment. Corruption can be a force for democracy, or at least egalitarian distribution, and it is an open question whether a fair and honest public administration can accomplish these things better than petty bribery can. (19)
Corruption in that sense is a "normal" and functional substitute for conventional access to power. (20) In this regard, some have suggested that corruption can well serve minority groups who can afford, in the financial sense, to buy government services that they cannot afford socially or politically--that is, they cannot openly campaign for such services. (21) More optimistically, corruption, while it could be a sign of hyper-individualistic social anomie or moral anarchy, may actually have the usefully constraining effect of enmeshing people into investments in inclusive networks. (22) Graft can also serve as a mediator to help a society avoid contentious and morally fraught legal disputes; (23) it can serve as a kind of organized political hypocrisy to modify or render unenforceable rigid or inefficient laws and regulations that cannot readily be attacked head on in public debate. (24) Corruption thus enables participants in a functioning market to purchase the regulation they need, rather than invite public politicking that may simply lead to newer bad laws. As for more technical or abstract economics, some work has taken the wizened view that corruption is simply a specific subset of agency cost problems in the public sphere and that it is unavoidable. (25)
Parallel insights have come from sociologists who have concluded that there is an independent valence to certain social structures and types of relations that either explains corruption or the particularly persistent forms it can take. For example, Mark Granovetter has shown that the relative social status of parties to social exchange matters a great deal in understanding corruption. (26) In some societies, he notes, a bribe is a condescending gift, so to accept a bribe is to acknowledge that one is socially inferior to the briber. Thus, one factor affecting the extent of corruption is the pattern of status differentials between groups whose exchanges are typically implicated in corruption, e.g., government officials and private economic actors. (27) This sociological perspective also helps us address extortion, a form of corruption which American law has great difficulty distinguishing from bribery. (28) Sociology suggests that the often elusive difference between coerced extortion and consensual bribery is itself a matter of social interpretation to the extent that it rests at least partly on the question of which party initiates the exchange. (29) Whereas a lower status businessman may find his bribe refused by a higher status civil servant, the latter has no problem taking the payment if he extorted it--after all, it cannot be an insult if he is the one who solicited it to begin with, because extortion by the socially superior of the socially inferior would be quite normal. The proper characterization of an exchange as between bribery and extortion thus may require exquisite social subtlety.
From yet another disciplinary perspective, political theorists have decried the lack, or inadequacy, of systematic scholarship addressing the difficulty of drawing meaningful boundaries around condemnable corruption, (30) and Daniel Lowenstein, the major legal scholar to tackle these issues has also lamented the failure of non-legal scholarship to provide their law colleagues much help. (31)
The failure of non-legal scholarship to produce a meaningful definition and political theory to distinguish "acceptable" forms of corruption from nonacceptable forms has only confounded efforts to resolve confusion within legal doctrine itself--as we will demonstrate in the next section. Lowenstein has made noble efforts to derive a political theory to evaluate corruption laws. But he himself admits to having to rely on vague criteria such as consensus notions of the public interest or culture-specific norms, and he laments that many theorists from whom he seeks guidance end up conceding that the only possible definitions are purely positive. (32) Lowenstein recognizes that political philosophy offers the temptations of various traditional guideposts for defining corruption. There is Burkean trusteeship theory, whereby officials must only look to an objective public interest and never respond to public opinion or political influence, much less private interest. (33) There is its complement, mandate theory, which accommodates public opinion, and whereby organized political pressure may be a legitimate expression of public opinion, but officials must never yield to private benefit. (34) But Lowenstein concludes that these guideposts are ultimately too abstract to answer questions about how politicians should make disinterested decisions about the public interest, (35) and he has relentlessly attacked as wishful thinkers various scholars who claim to have found normatively uncontroversial alternatives. (36)
Lowenstein worries that the best political or legal theory can do is to lay out a continuum of actions that contains gradually differing mixes of public and private motivations for action, augmented by situation-specific aggravating and mitigating criteria. He thus ends up somewhat dissatisfied with the best he can produce--a set of rough balancing tests: for example, a presumption that bargains for personal financial benefit are corrupt because they are unrelated to voting; but another presumption that bargained-for endorsement is not corrupt because it only works if it is harmonious with voting sentiment; and a final concession that campaign contributions are ambiguous cases because they can work independently of voter support and because electoral politics and money interact in very varied and unpredictable ways. (37)
B. The Federal Law of Public Corruption
As we turn to specific legal definitions of corruption and focus on public bribery, we first note that campaign finance law is itself a large category of regulation of potentially corrupt relations and transactions. Even though legal structures specifically aimed at campaign financing often have criminal prohibitions within them, they tend to pose much smaller sanctions than general bribery laws, and we set them outside the category of white collar laws that concern us. (38) Nevertheless, a brief look at the views of Justice Scalia on campaign finance cases helps to underscore our overall theme. In Austin v. Michigan State Chamber of Commerce, (39) one of the cases elaborating the implications of Buckley v. Valeo's (40) tortured effort to reconcile campaign finance regulation and the First Amendment, the Court upheld, against a First Amendment challenge, a local rule restricting the power of corporations to fund independent expenditures in relation to state candidates. In a sharp dissent, Justice Scalia sounded a great note of skepticism about normative definitions of corruption. (41)
In Justice Scalia's view:
The Court does not try to defend the proposition that independent advocacy poses a substantial risk of political "corruption," as English speakers understand that term. Rather, it asserts that that concept (which it defines as "'financial quid pro quo' corruption,") is really just a narrow subspecies of a hitherto unrecognized genus of political corruption. "Michigan's regulation," we are told, "aims at a different type of corruption in the political arena: the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political ideas." Under this mode of analysis, virtually anything the Court deems politically undesirable can be turned into political corruption--by simply describing its effects as politically "corrosive," which is close enough to "corruptive" to qualify. It is sad to think that the First Amendment will ultimately be brought down not by brute force but by poetic metaphor. (42)
But our first detailed focus on public bribery law focuses on 18 U.S.C. [section] 201, the law that prohibits federal officials from taking, and private parties from giving, bribes and "gratuities." As we will discuss below, federal mail and wire fraud statutes enable federal prosecutors to punish local and state corruption, but the federalism concerns underlying such prosecutions greatly complicate the doctrinal mechanisms prosecutors must deploy. By contrast, [section] 201, raising no federalism problems, can be used to attack bribery head on.
Section 201 defines two crimes. The harshly punished felony of official bribery (with a maximum theoretical sentence of fifteen years) occurs if something of value is "corruptly give[n], offer[ed] or promise[d] ... to ... a public official" or "corruptly demand[ed], [sought], receive[d], accept[ed], or agree[d] to [be] receive[d] or accept[ed]" by a public official with "intent to influence any official act" or in return for "being influenced in ... the performance of any official act." (43) Whether the colorful term "corruptly" is a redundant moral gesture, rhetorical flourish, or a separate element is a tempting question--one that has proved quite an obstacle to rational doctrine-making in its other key manifestation, the law of obstruction of justice. (44) The lesser but hardly trivial crime under [section] 201 is that of illegal gratuities (with a maximum theoretical sentence of two years), defined as the giving of "anything of value" to any past, present, or future official "for or because of any official act performed or to be performed" by the official. (45)
A major doctrinal puzzle [section] 201 presents is how to distinguish bribes from gratuities (and both from innocent transactions). And one of the key elements of the puzzle is the requirement that a bribe be given or taken "corruptly," whereas an illegal gratuity occurs without proof that it be "corruptly" given or accepted. Obviously, both the bribe and gratuity provisions assume some public consensus on the harm which arises when a public official allows a material conflict of interest to influence her work. Since harm is assumed rather than defined, these laws concentrate wholly on defining the overt elements of the crime. Yet these laws have also thereby largely dodged defining the term "corruptly" in any explicit and substantive sense, declining to identify differential actor's mens rea elements in these laws that could serve as indirect instruments of capturing supposed degrees of corruption.
Section 201 has been the subject of a modest amount of judicial interpretation in recent years, but, as exemplified by the only major recent Supreme Court case, United States v. Sun-Diamond Growers of California, (46) the scope of interpretation has been limited to very narrow matters of legislative language and history, as if the statute neither requires nor encourages, whether or not it permits, more purposive judicial interpretation addressing the philosophical or political bases of these laws. Sun-Diamond, a trade association, allegedly gave illegal consideration (sports tickets, meals, and small gift items) to Secretary of Agriculture Michael Espy. The alleged official acts involved Espy deeming the association's members qualified for subsidies for foreign marketing and trying to persuade the EPA not to ban certain pesticides favored by the member growers.
The debate in Sun-Diamond was about the nature, degree, and specificity of the quasi-contractual consideration between a public official and an alleged gratuity-giver. The case turns on a fairly crabbed effort of construction to draw the elusive distinction between bribery, requiring something like a commensurate quid pro quo between a fairly specific beneficial governmental act in exchange for value given to the official, and a gratuity, which can at best be described as some sort of value given to the official as a general expression of gratitude or support for the official's actions. The trial court had said that under the gratuity statute it was not necessary for the government to allege "a direct nexus between the value conferred ... and an official act performed or to be performed...." Rather, it was sufficient to allege that the item was given "because of" the donee's position or "because he held public office." (47) Thus, as described in the Supreme Court,, "the indictment did not ... allege a specific connection between either of those matters (or any other Espy action) and the gratuities conferred." But, says the Supreme Court, the indictment was therefore deficient, because "[t]he [statute's] insistence upon an 'official act,' carefully defined [in 201 (a)(3)], seems pregnant with the requirement that some particular official act be identified and proved." (48)
The key question left open by the Supreme Court's Sun-Diamond decision is whether in its effort to distinguish a bribe from a gratuity, the Court has left any conceptual room for immunizing a legal campaign contribution or a minor, legal gift by distinguishing it from a gratuity. In condemning the trial instruction, Justice Scalia, unsurprisingly, proffers some sharp arguments to support his reading of the statute. (49) But an undertone in the opinion suggests that Justice Scalia is aware that Congress has posed for him a problem he cannot solve. For one thing, lurking in the background is the bribery section of the statute and the issue of whether the term "corruptly" supplies any independent element of the crime. Justice Scalia's Sun-Diamond opinion is clear--or purports to be clear--that it is the quid pro quo requirement that distinguishes bribery from gratuities. The question whether the quid pro quo is merely necessary or is also sufficient for bribery is technically not before the court. But when Justice Scalia does refer to the quid pro quo he describes it as distinguishing the intent requirement of the greater crime--i.e., the gravamen of bribery seems to be the intent to exchange a gift for an official act in some directly causal way. (50) If the quid pro quo is not some special actus reus or a proxy for some especially severe harm to the public weal, but is instead the evidence of a required aggravating intent, then the term "corruptly" may be left unmoored in the statute.
As for gratuities, Justice Scalia says that the trial court's bad instruction would permit prosecution where the gift was given merely "to build a reservoir of goodwill that might ultimately affect one or more of a multitude of unspecified acts, now and in the future." (51) But Justice Scalia does not thereby help us very much in distinguishing the bad instruction from the statutory language, since this "specified act" could still be one that occurs well down the road and is performed by an official not yet in office. (52) The distinctions become exquisitely subtle, and, given that the prosecution in Sun-Diamond certainly gave the jury evidence of specific acts to be done, the requirement of a specified act begins to look like a sort of technical pleading requirement imposed on the judge at the instruction stage. (53)
Thus, Congress, having sought at least to partly calibrate and parse the gradations of public corruption, may not have overcome the inherent vagueness and subtlety of the continuum of public/private relations of which the sociologists and political scientists have warned. And the Court has therefore avoided more speculative consideration of the nature of the fiduciary duty owed by officials to their constituents or to the government. Presumably, the logical basis for this kind of corruption law is some barely-stated notion of a baseline of political fidelity--fidelity to what at best can be described as the processes of democracy. Voting for legislators or executives is a matter of pure preference, so there can be little substantive content to that duty in any positive sense. After all, the very nature of a political office is the official's oath to serve the public or the electorate. Or, to put it differently, the bribery and gratuity laws, along with other conflict of interest laws, constitute in a sense the official's employment contract. And if contract law is the model, then we feel less need to prove the harm of wrongful conduct. Thus, in terms of the laws explicitly designed to prohibit corruption by government officials, we do not-perhaps because we cannot--lay out very interesting normative criteria to distinguish legitimate from illegitimate official conduct or to give content to some notion of an official's fiduciary duty.
To put the argument in terms of criminal law components, we might ask whether [section] 201 might be seen as one of the following: (a) Section 201 is a mens rea based crime, in which the subtle language differences between bribery and gratuity reflect a difference in actus reus necessary to prove the mental state, but where the focus is on the malevolent or corrupt attitude toward the public weal. (b) Section 201 is an inchoate crime focused on risk of harm to the body politic, but in a context in which no actual harm could ever be proved. Bribery is then a kind of specific-intent, high-risk-creating crime; a gratuity is a crime in which there is conceivable but less probable risk of actual harm or the appearance of harm to the body politic. (c) Section 201 is a harm-based crime in which the difference between a quid pro quo and the elusively lesser transaction in a gratuity case has to do with the question of actual causation of harm, where the harm at issue is the actual distortion of the official's judgment to produce a result or undertake an act she otherwise would not have done. (54) Thus, in a quid pro quo bribe, there is at least a strong presumption that the official act would not have happened without the bribe; the gratuity then becomes a somewhat inchoate crime in which the causation of harm is still possible, or one in which there is indeed a presumption of harm, but it is the harm of the appearance of corruption. Finally one can imagine (d), whereby [section] 201 would ideally be a unitary crime but Congress put it in two parts because it foresaw that in various cases the prosecution would face greater or lesser evidentiary difficulties in proving the existence of the influence of the payment, and it wanted to offer juries a milder alternative to increase the probability that some conviction could be salvaged where the facts were shaky.
An intriguing recent case under [section] 201 hers to elaborate these different jurisprudential paths. In United States v. Alfisi, (55) Alfisi was a wholesaler who made secret payments to a federal official who inspected produce at a major New York market. The case illustrates one of the grayer areas of law and commercial fact about the world of public bribery. On one set of facts in the very ambiguous trial record, Alfisi was expressly paying the inspector, Cashin, for erroneous inspections, as a way of cheating Alfisi's customers. By another set, Alfisi was simply frustrated that Cashin was not performing the inspections per se, regardless of the outcome, and the payment was solely to nudge Cashin to perform the function he was supposed to perform anyway. (56) The real question in the case is whether that difference in facts should decide the question of whether Alfisi had acted "corruptly." On the first set of facts, we have either bribery or gratuities under [section] 201, depending on the somewhat unsettled distinction between the but-for-cause/quid-pro-quo requirement of bribery and the on-account-of component of gratuities. On that set of facts, the official was obviously violating his duty in some objective sense by lying about the quality of the produce.
On the latter set of facts, the issue is more complicated (and there was sufficient evidence of the latter that the court had to address the issue). For one thing, the latter facts suggest that Alfisi, rather than being a briber, might rather be seen as a victim-of extortion. If Cashin had simply said he would not do the inspection without a fee, the question would arise whether this was force under color of official office that would establish extortion. (57) Assuming a jury would find a bribery conviction unfair on those facts, was there some gray area whereby a jury might consider the lesser crime on the theory that Alfisi could manage to survive financially even if he lost one particular transaction, and hence that he was not truly coerced into making the payment? Since the trial judge gave an instruction on an affirmative defense of "economic coercion" (58)--a kind of partial proxy for an extortion charge against the official--the judge must have recognized the existence of this gray area.
This otherwise garden-variety case raises important and unexplored issues about public corruption: How do we assess the relative guilt of the briber and the bribed? If these two levels of guilt are different, what do we then learn about the nature of the harm that the bribery laws aim to punish or prevent? Where the bribe is given to cause the official to do something she should not do (i.e., grant a license to an unqualified applicant), then it is not too difficult to imagine ways of describing the harm, nor is it difficult to roughly equate the guilt of briber and bribed. But Alfisi challenges us to ask whether the harm is different in cases where the official accepts the payment as a condition of doing something that is clearly his duty. In this latter case, do we blame the briber less? Perhaps yes, if the core of the official's guilt is the unfair pressure he places on the briber. On the other hand, perhaps the harm is the general risk that government process will be undermined if official actions are conditioned upon improper payments. If so, then the person who does pay the bribe, though somewhat sympathetic, is abetting this form of harm and should be punished for failing to resist the demand for payment.
In theory, courts like the one in Alfisi have some tools external to [section] 201 to help resolve these questions. One such tool is the law of extortion, whereby we can recharacterize the transaction as one in which the bribed party is the villain and the briber the victim. But it turns out that the standard law of extortion is only ambiguously helpful on this score. (59) Or the court could appeal to some general doctrines of the substantive criminal law, doctrines involving accomplice liability that might allow for differential guilty of the two parties, (60) or, more strongly, the affirmative defense of duress for the coerced briber. But general accomplice doctrines never seem to get mentioned in these corruption cases, and the duress defense may prove fruitless because it sets such a high bar for the defendant claiming it (61)--especially in the case of the potential briber who could, after all, walk away from the demand.
In any event, Alfisi was left to frame his arguments on other legal grounds. He argued that the quid pro quo versus "on account of" distinction that has become the convention was not sufficient for these facts because it...
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