U.S. v. Fumo

• Decision Date: 26 October 2007
• Docket Number: Criminal Action No. 06-319.
• Citation: 628 F.Supp.2d 573
• Parties: UNITED STATES of America v. Vincent J. FUMO, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

628 F.Supp.2d 573

UNITED STATES of America v. Vincent J. FUMO, Defendant.

Criminal Action No. 06-319.

United States District Court, E.D. Pennsylvania.

October 26, 2007.

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John J. Pease, Robert A. Zauzmer, U.S. Attorney's Office, Philadelphia, PA, for United States of America.

Memorandum and Order

YOHN, J.

Presently before the court is a motion filed pursuant to Federal Rule of Criminal Procedure 12(b) by Pennsylvania State Senator Vincent J. Fumo to dismiss various counts of the superseding indictment.

A superseding indictment ("the indictment") was filed on February 6, 2007, charging defendants Fumo, Ruth Arnao, Leonard Luchko, and Mark Eister. Senator Fumo was charged in connection with four categories of wrongdoing: (1) fraud and conspiracy to commit fraud related to the Senate of Pennsylvania ("Senate"); (2) fraud and conspiracy to commit fraud, conspiracy to obstruct the Internal Revenue Service ("IRS"), and aiding and assisting in the filing of false tax returns related to Citizens Alliance for Better Neighborhoods ("Citizens Alliance"); (3) fraud related to the Independence Seaport Museum; and (4) obstruction of justice and conspiracy to obstruct justice.

Senator Fumo seeks dismissal of Counts 1 through 64, which allege mail and wire fraud and conspiracy to commit mail and wire fraud on the Senate, because of federalism and separation of powers concerns, as well as for failure to sufficiently charge the offenses. He seeks dismissal of Counts 65 through 98, which allege mail and wire fraud and conspiracy to commit mail and wire fraud on Citizens Alliance, for failure to sufficiently charge the offenses. He seeks dismissal of Counts 101 and 103 for failure to sufficiently charge a violation of Internal Revenue Code § 7602(2). Finally, he seeks dismissal of the obstruction of justice charges based on 18 U.S.C. § 1519—Counts 109, 112, 114-15, 118, 120-21, 124-25, 127, 129-31, and 133-34—on the ground that § 1519 is unconstitutional.¹ For the reasons described herein, the motion will be denied as to all counts.

I. Standard

A motion to dismiss under Federal Rule of Criminal Procedure 12(b)(3)(B) tests the sufficiency of an indictment. An indictment must "be a plain, concise and definite written statement of the essential facts constituting the offense charged." Fed.R.Crim.P. 7(c)(1). "An indictment is sufficient if it: 1) `contains the elements of the offense intended to be charged,' 2) `sufficiently apprises the defendant of what he must be prepared to meet,' and 3) allows the defendant to `show[] with accuracy to what extent he may plead a former acquittal or conviction' in the event of a subsequent prosecution." United States v. Rankin, 870 F.2d 109, 112 (3d Cir.1989) (quoting Russell v. United States, 369 U.S. 749, 763-64, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962)). The indictment is "generally sufficient" when it "set[s] forth the offense in the words of the statute itself, as long as `those words of themselves fully, directly, and expressly, without any uncertainty or ambiguity, set forth all the elements necessary to constitute the offence intended to be punished.'" Hamling v. United States, 418 U.S. 87, 116, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974) (quoting United States v. Carll, 105 U.S. 611, 612, 26 L.Ed. 1135 (1882)). The court must take each count (including paragraphs incorporated from other counts) "as a whole," read it "reasonably," and give it "fair construction," but may not ignore the "precise manner" in which it is drawn. United States v. Schramm, 75 F.3d 156, 162 (3d Cir.1996).

In evaluating an indictment, the court must "accept[] as true the factual allegations set forth in the indictment." United States v. Besmajian, 910 F.2d 1153, 1154 (3d Cir.1990). The defendant may not use the motion to dismiss to challenge the sufficiency of the government's evidence, but only to challenge the legal sufficiency of the government's allegations. United States v. DeLaurentis, 230 F.3d 659, 660-61 (3d Cir.2000). "The government is entitled to marshal and present its evidence at trial, and have its sufficiency tested by a motion for acquittal pursuant to Federal Rule of Criminal Procedure 29." Id. at 661.

II. Counts 1-64: Mail and Wire Fraud on the Senate

Senator Fumo was elected to the Senate in 1978 to represent the First Senatorial District, which includes areas of Philadelphia. In 1985, he became the chairman of the Senate Democratic Appropriations Committee. He has maintained Senate offices in Philadelphia and Harrisburg; at times he had over ninety Senate employees. (Ind. 1.)

The indictment asserts that "Senators were prohibited from using Senate employees, during their compensated work hours, to serve the personal needs of a Senator, or to assist a political campaign for public office." Further, "Senators were . . . prohibited from requiring, as a condition of their employment, that Senate employees perform such tasks on behalf of a Senator after working hours." (Ind. 2.)

Notwithstanding these and other constraints on expenditure of Senate resources, the indictment alleges that Senator Fumo "systematically, routinely, and improperly used the funds and resources of the Senate for his personal and political benefit" by directing that Senate employees and contractors perform personal and political tasks for himself, family members, and friends. (Ind. 4-6.) Some employees allegedly did solely personal and political work for him. (Ind. 8.) The indictment also alleges that Senator Fumo "overpa[id] employees who did both official and personal tasks" and ignored pay classifications "in compensating certain employees on his staff." (Ind. 8.) He allegedly "abused his authority to use Senate funds to hire `contractors' for legislative-related tasks" by using the contractors for personal and political tasks. (Ind. 9.) In so doing, the indictment alleges, Senator Fumo "extensively used the United States mail, commercial interstate carriers . . ., and interstate wire communications" in furtherance of a scheme to defraud the Senate. (Ind. 9.) This conduct allegedly caused a loss to the Senate in excess of one million dollars. (Ind. 10.)

Senator Fumo argues that Counts 1 through 64 must be dismissed because (1) "the government seeks an unprecedented extension of the mail fraud statute into areas otherwise reserved to the states under our federal system" and the indictment is barred by the Pennsylvania Constitution's Speech or Debate Clause (Def.'s Supp. Mem. 3, 5), and (2) the government has failed to sufficiently charge the offenses of mail and wire fraud.

A. Federalism and Separation of Powers

Senator Fumo argues that, in applying the federal mail and wire fraud statutes to "Senate personnel decisions," the federal government "seeks to regulate areas that go to the core of state legislative functions" as prohibited by National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), overruled by Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), and its progeny. (Def.'s Supp. Mem. 1.) He also argues that "his indictment is barred by the protections of the Speech or Debate Clause." (Id. at 5.) Both arguments are unavailing, and I will not dismiss the charges on these grounds.

1. Federalism

The Third Circuit has been "mindful that the prosecution of state public officials . . . raises federalism concerns about the appropriateness of the federal government's interference with the operation of state and local governments." United States v. Panarella, 277 F.3d 678, 693 (2002). In a prosecution of a Pennsylvania state senator for honest services fraud under 18 U.S.C. §§ 1343 and 1346, however, the court reasoned that "a healthy federalism involves some interposition of state and federal governments into each other's respective spheres of sovereignty," and "[i]n particular, federal prosecution of state and local public officials can play a beneficial role where state prosecutors are reluctant to bring charges against political allies or superiors." Id. at 694.

The argument that National League of Cities and its progeny bar federal prosecution of a state senator for a scheme to defraud the Pennsylvania Senate by paying, with Senate funds, nominal Senate employees doing personal and political favors, was rejected in a previous mail fraud prosecution in this court. There, the defendant contended that federal prosecution "constitute[d] an impermissible intrusion into the employment practices of a [s]tate and is forbidden by the Tenth Amendment." United States v. Camiel, 503 F.Supp. 769, 772 (E.D.Pa.1980). The district judge concluded: "The holding of the National League of Cities is a limited one; certainly, it does not stand for the proposition that under no circumstances can the federal government interfere in the employer/employee relations of a state or local government." Id. at 773. The court held that National League of Cities "is not controlling," and "not relevant to this case." Id. at 773 (citing In re Grand Jury Proceedings (Appeal of Cianfrani), 563 F.2d 577, 582 (3d Cir.1977)).

In its opinion weighing federalism concerns with respect to the prosecution of another Pennsylvania state senator, the Third Circuit concluded that National League of Cities did not prohibit the grand jury investigation of federal mail fraud charges. Appeal of Cianfrani, 563 F.2d at 582. Furthermore, the court found that payroll and tax evidence (which the senator argued was privileged) was "so peripheral as not to be covered by the [federal common law legislative] privilege. The legislative function is separate and distinct from that of compensation of the office . . . ." Id. at 585; see also Fowler-Nash v. Democratic Caucus of Pa. House of Representatives, 469 F.3d 328, 340 (3d Cir. 2006) (holding that a state representative's decision to fire an...