U.S. v. Cisneros

• Decision Date: 12 May 1999
• Docket Number: No. 98-3094,98-3094
• Parties: UNITED STATES of America, Appellee, v. Henry G. CISNEROS, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 763

169 F.3d 763

335 U.S.App.D.C. 135

UNITED STATES of America, Appellee, v. Henry G. CISNEROS, Appellant.

No. 98-3094.

United States Court of Appeals, District of Columbia Circuit.

Argued Feb. 4, 1999.

Decided March 9, 1999.

Rehearing and Suggestion for Rehearing En Banc Denied May 12, 1999. ^*

Appeal from the United States District Court for the District of Columbia (97cr00485-01).

Barry S. Simon argued the cause for appellant. With him on the briefs were Brendan V. Sullivan, Jr. and Marcie R. Ziegler.

Mathew S. Rosengart, Senior Associate Independent Counsel, argued the cause for appellee. With him on the brief were David M. Barrett, Independent Counsel, James P. Fleissner and Mark V. Jackowski, Senior Associate Independent Counsel.

Before: HENDERSON, RANDOLPH, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

Henry G. Cisneros, former Secretary of Housing and Urban Development, brings this appeal from an order of the district court denying his motion to dismiss Counts 1 through 18 of a 21-count indictment returned against him, two of his former employees (Sylvia Arce-Garcia and John D. Rosales) and Linda D. Medlar, his one-time girlfriend. Independent Counsel David M. Barrett prosecuted the case. Cisneros sought a dismissal on the ground that any adjudication of the charges against him would run afoul of the separation of powers doctrine. The first and, as it turns out, the only question we must decide is whether we have jurisdiction to hear the appeal despite its interlocutory nature.

I

The Presidential Transition Act of 1963 declared the purpose of Congress to promote "the orderly transfer of the executive power in connection with the expiration of the term of office of a President and the inauguration of a new President." Presidential Transition Act of 1963, Pub.L. No. 88-277, 78 Stat. 153 (1964) (codified at 3 U.S.C. § 102 (notes)). One of the immediate tasks facing any newly-elected President is to begin forming a Cabinet. For a smooth transition, the selection of potential nominees, the investigations of their backgrounds, and the adjudications of their security clearances must begin well before the President takes the oath on January 20th. U.S. CONST. amend. XX, § 1.

To these ends, President-elect Clinton and Warren Christopher, the head of his transition team, signed a Memorandum of Understanding with Attorney General Barr of the outgoing Bush Administration a few days after the November 1992 election. Indictment, Background, at p. 6, pp 5-6. The Memorandum stated that upon written requests of President-elect Clinton, the FBI would conduct background investigations of his prospective nominees. Memorandum of Understanding at 1. According to the Memorandum, the FBI would have two principal objectives in conducting its investigations. First, it should "ascertain facts and information relevant to the candidate's suitability for Federal government employment ... in accordance with Executive Order 10450," id. Second, it should compile information to "permit adjudication of the candidate for clearance for access to Sensitive Compartmented Information, when necessary, in accordance with the standards set forth in Director of Central Intelligence (DCI) Directive 1/14." Id.

Executive Order No. 10450, relied upon in the Memorandum of Understanding, has been in effect since President Eisenhower issued it in 1953. In order to ensure that all officers and employees would be "reliable, trustworthy, of good conduct and character, and of complete and unswerving loyalty to the United States," Executive Order No. 10450 directed investigators to develop information regarding the candidate's "deliberate misrepresentations, falsifications, or omissions of material facts," any "criminal" or "dishonest" conduct on the individual's part, facts concerning the candidate's susceptibility to "coercion, influence, or pressure which may cause him to act contrary to the best interests of the national security," and other behavior by the candidate indicating that he is "not reliable or trustworthy." Executive Order No. 10450, 18 Fed.Reg. 2489 (1953). The information developed by the FBI would be used, not only by the President-elect, but also by the Personnel Security Office of the Department of Justice in determining whether to grant the candidate a national security clearance.

After President-elect Clinton identified Cisneros as a potential nominee for HUD Secretary, Cisneros completed a "Questionnaire for Sensitive Positions (For National Security)," commonly known as an "SF-86." Indictment, Background, at pp. 13-14, p 19. Pursuant to the Memorandum of Understanding, Cisneros's SF-86 and a written request from President-elect Clinton triggered the FBI's full-field investigation. Although the conspiracy count (Count 1) of the Indictment stretches from the summer of 1992 through September 1994, the focus of this count and the other counts naming Cisneros (Counts 1 through 18) is the period between the election of President Clinton in November 1992 and the appointment of Cisneros as HUD Secretary in late January 1993.

According to the charges, Cisneros set out to deceive the FBI and the Department of Justice, all to the end of ensuring his nomination, confirmation, appointment and continuation in office. What Cisneros wrote in his SF-86 and what he said to FBI special agents in two background interviews are at the heart of the case. It would serve no useful purpose to recite each of the counts in detail. Suffice it to say that if the charges are proved, Cisneros repeatedly lied about and concealed the fact that he had paid large amounts of money to Medlar ($44,500 in 1990; $73,000 in 1991; $67,500 in 1992); that even during the FBI's investigation of him from December 1992 through early January 1993, he continued to pay Medlar while denying that he was doing so; that although Cisneros stated on a supplemental SF-86 that he was not subject to blackmail and although he told the FBI that Medlar had not threatened or coerced him, he continued making payments because Medlar was still threatening to expose him; that Cisneros illegally structured some of these payments to avoid having a Currency Transaction Report filed, itself a felony (see 31 U.S.C. §§ 5324, 5322(a); Ratzlaf v. United States, 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994)); and that he failed to file gift tax returns with the Internal Revenue Service reporting his payments to Medlar. (After the magnitude of the payments became known in the summer of 1994, the IRS opened an investigation of Cisneros.)

Count 1 charges conspiracy among Cisneros, Medlar, Arce-Garcia, and Rosales, in violation of 18 U.S.C. § 371. Counts 2 through 17 charge Cisneros with violating 18 U.S.C. § 1001. Count 18 charges him with obstruction of justice, in violation of 18 U.S.C. § 1505, by influencing and impeding the Justice Department's inquiry into whether to grant him a security clearance.

II

A.

As to Counts 2 through 17, Cisneros's argument on appeal, like his motion to dismiss, proceeds as follows. To prove the violation of 18 U.S.C. § 1001, ¹ as alleged in each of these counts, the government would have to show that the facts Cisneros concealed or the false statements he made on his SF-86 and to the FBI were "material." See United States v. Hansen, 772 F.2d 940, 949 (D.C.Cir.1985). "The 'central object' of any materiality inquiry is 'whether the misrepresentation or concealment was predictably capable of affecting, i.e., had a natural tendency to affect, the official decision.' " In re Sealed Case, 162 F.3d 670, 673-74 (D.C.Cir.1998) (quoting Kungys v. United States, 485 U.S. 759, 771, 108 S.Ct. 1537, 99 L.Ed.2d 839 (1988)). Cisneros argues that "courts may not adjudicate" materiality in this case. As he sees it, the separation of powers doctrine precludes the Judicial Branch from considering what information would be capable of influencing the President or the Senate in evaluating prospective cabinet officers. Hence, materiality cannot be established and Cisneros cannot be convicted of violating § 1001. Brief for Appellant at 11-12. ²

Cisneros stakes out a bold position indeed, and he admits as much. As to his specific situation, he maintains that the information he allegedly falsified and the facts he allegedly concealed did not influence President-elect Clinton's decision to nominate him. He backs this up with an off-the-record assertion. According to Cisneros, he made the President-elect and the Transition Team "fully aware" of the "information about which he allegedly deceived the FBI" and the President-elect nevertheless decided not to withdraw his nomination. Brief for Appellant at 25 n.13. ³ Apart from the particulars of his nomination, Cisneros believes that no potential Presidential appointee undergoing a background investigation has a judicially enforceable obligation to tell the truth in filling out forms or in talking with FBI agents. In other words, if such an individual falsified information about himself or covered up his misconduct, no legal consequences could follow. Judge Sporkin thought that Cisneros's "position would allow unqualified candidates for high public office to lie their way into extremely sensitive and important positions of government." Memorandum Opinion and Order, Sept. 17, 1998, at 5 (denying appellant's motion for reconsideration). Relying on our holding on the merits in United States v. Durenberger, 48 F.3d 1239 (D.C.Cir.1995), Judge Sporkin denied Cisneros's motion to dismiss, rejecting his argument that the prosecution impermissibly intruded upon the prerogatives of the executive and legislative branches to nominate and confirm prospective Cabinet members. Memorandum Opinion, July 30, 1998, at 12-14.

Whether Judge Sporkin ruled correctly is not our immediate concern, however. Without a judgment ending the case on the merits and leaving "nothing for the court to...