U.S. v. Lund

• Decision Date: 01 August 1988
• Docket Number: No. 87-5642,87-5642
• Citation: 853 F.2d 242
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. James Milton LUND, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 242

853 F.2d 242

UNITED STATES of America, Plaintiff-Appellant, v. James Milton LUND, Defendant-Appellee.

No. 87-5642.

United States Court of Appeals, Fourth Circuit.

Argued May 2, 1988.

Decided Aug. 1, 1988.

Michael K. Fee (G. Allen Carver, Jr., Public Integrity Section, Criminal Div., U.S. Dept. of Justice, Washington, D.C., on brief), for plaintiff-appellant.

Joseph B. Scott (William S. Aramony, Kator, Scott & Heller, Washington, D.C., on brief), for defendant-appellee.

Before PHILLIPS, SPROUSE and ERVIN, Circuit Judges.

JAMES DICKSON PHILLIPS, Circuit Judge:

James Lund, an employee of the Defense Communications Agency, was indicted on three counts of violating the federal conflict-of-interest statute, 18 U.S.C. Sec. 208(a), based on his alleged participation in three intra-agency personnel decisions in which his wife, who was one of his subordinates, had a financial interest. The district court dismissed the indictment on the ground that Sec. 208(a) did not apply to conflicts of interest in intra-agency personnel matters. We find this narrow construction of Sec. 208(a) to be inconsistent with the statute's plain and unambiguous language, as well as with its legislative history and purpose, and therefore reverse.

I

Lund was employed by the Defense Communications Agency (DCA) as Chief of Communications Management Control Activity. In December 1985, Lund married one of his subordinates, Judith Chaffee. Lund and Chaffee did not disclose their marriage to the DCA. Over the next few years, the government contends, Lund participated in several personnel decisions involving Chaffee without disclosing their relationship to his superiors. Specifically, the government claims: (1) that in April 1986, Lund granted his wife a within-grade pay increase; (2) that in September 1986, he selected her over another applicant for promotion to a higher-paying position; and (3) that in October 1986, he recommended her for a masters' degree program funded by the United States government. Based on these allegations, the government sought and obtained an indictment charging Lund with three counts of violating the federal conflict-of-interest statute, 18 U.S.C. Sec. 208(a), which provides:

[W]hoever, being an officer or employee of the executive branch of the United States Government [or] of any independent agency of the United States ... participates personally and substantially as a Government officer or employee, through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, in a judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in which, to his knowledge, he, his spouse, minor child, partner, organization in which he is serving as officer, director, trustee, partner or employee, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment, has a financial interest--

Shall be fined not more than $10,000, or imprisoned not more than two years, or both.

18 U.S.C. Sec. 208(a).

Before trial, Lund moved to dismiss the indictment on the ground that Sec. 208(a) was not applicable to conflicts of interest in intra-agency personnel matters. The government responded that Lund's actions fell squarely within the letter of the statute, because he had participated in a "contract" in which his wife had a financial interest--her employment contract--when he granted her a salary increase, and in two "applications" in which she had a financial interest--her application for promotion to a higher-paying job and her application for government-funded graduate school. Alternatively, and only as a fallback position, the government argued that the catchall language "other particular matter" encompassed all three matters in which Lund was alleged to have participated.

The district court agreed with Lund and dismissed the indictment, 670 F.Supp. 654. The court reasoned that Sec. 208(a) was "ambiguous" because the terms "contract," "application," and "other particular matter" were not defined and it was "[not] plain from the text of Sec. 208 what contracts, applications, or matters Congress intended to criminalize and in what context these terms were to be applied." To resolve this alleged ambiguity, the district court turned first to the statute's legislative history, in which it found evidence that Congress intended Sec. 208(a) to apply only to conflicts of interest in matters involving "outside suppliers of goods and services to the government," and thus, by implication, not to those arising in internal personnel matters. This view was confirmed, said the court, by the fact that another federal statute dealt specifically and comprehensively with the problem of nepotism in federal personnel matters. Finally, the court noted that although Sec. 208(a) had been in existence more than 25 years, the government had never before used it to prosecute a conflict of interest in an internal personnel matter. Based upon these factors, together with the general principle that criminal statutes are to be strictly construed, the court concluded that Sec. 208(a) was not applicable to the conduct charged in the indictment and therefore granted the motion to dismiss. This appeal followed.

II

The sole issue in this case is whether the government may prosecute a federal employee under 18 U.S.C. Sec. 208(a) for granting his spouse, who is one of his subordinates, a salary increase, selecting her over another applicant for promotion to a higher-paying position, and recommending her for government-funded graduate school. ¹ Lund's attack on the indictment is twofold. He argues first that the statutory language is ambiguous and that consideration of extrinsic sources and canons of construction compels the conclusion that its reach is limited to conflicts of interest in matters involving outside suppliers of goods and services to the government. Second, he argues that even if the literal language of the statute is broad enough to reach the conduct at issue here, such an application of the statute is "precluded" by the existence of the Civil Service Reform Act of 1978 (CSRA), Pub.L. 95-454, 92 Stat. 1111 et seq. (codified as amended in scattered sections of 5 U.S.C.), which contains two provisions dealing specifically with the problem of nepotism in federal personnel matters.

We begin, of course, with the language of the statute itself. United States v. Jackson, 759 F.2d 342, 344 (4th Cir.1985), quoting Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 756, 95 S.Ct. 1917, 1935, 44 L.Ed.2d 539 (1975) (Powell, J., concurring). Section 208(a) prohibits a federal officer or employee from "participat[ing] personally and substantially as a Government officer or employee ... in a[n] ... application, ... contract, ... or other particular matter in which, to his knowledge, ... his spouse ... has a financial interest." The language of the statute is plain and unambiguous: it proscribes a federal employee's participation, on behalf of the government, in any application or contract in which he knows his spouse has a financial interest. To create ambiguity in the words "application" and "contract," as they are used here, "requires some ingenuity." Rothschild v. United States, 179 U.S. 463, 465, 21 S.Ct. 197, 198, 45 L.Ed. 277 (1900). They are common words with well-established meanings that are more than adequate to give persons of ordinary intelligence fair notice of the conduct proscribed by the statute. Cf. United States v. Conlon, 628 F.2d 150, 154 (D.C.Cir.1980) (making similar observation about terms "negotiating" and "arrangement" in Sec. 208(a)). Under the ordinary meaning of these statutory terms, Lund participated in a "contract" in which his wife had a financial interest--her employment contract with the federal government--when he granted her a salary increase, and in "applications" in which she had a financial interest when he selected her over another applicant for promotion to a higher-paying position and recommended her for government-funded graduate school.

Nor is the statute ambiguous in regard to the conduct charged here, as Lund suggests, because it contains no express mention of nepotism or of conflicts of interest in internal personnel decisions regarding salary increases, promotions, or government-funded graduate school. See Appellee's Brief at 15-16. The plain terms "contract" and "application" are, as indicated, broad enough to encompass the particular personnel decisions at issue here, and nothing on the face of the statute suggests a congressional intent to limit those terms to less than their normal reach. Resort to the principle of lenity, see United States v. Bass, 404 U.S. 336, 347-49, 92 S.Ct. 515, 522-23, 30 L.Ed.2d 488 (1971); Rewis v. United States, 401 U.S. 808, 812, 91 S.Ct. 1056, 1059-60, 28 L.Ed.2d 493 (1971), is therefore inappropriate, for "there is no ambiguity that calls for a resolution in favor of lenity." Barrett v. United States, 423 U.S. 212, 218, 96 S.Ct. 498, 502, 46 L.Ed.2d 450 (1975); see Bifulco v. United States, 447 U.S. 381, 387, 100 S.Ct. 2247, 2252, 65 L.Ed.2d 205 (1980) (the "touchstone" of the principle of lenity is "statutory ambiguity").

A

As the Supreme Court has repeatedly recognized, when the terms of a statute are unambiguous, "judicial inquiry is complete, except 'in "rare and exceptional circumstances" ' " Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981), quoting TVA v. Hill, 437 U.S. 153, 187 n. 33, 98 S.Ct. 2279, 2298 n. 33, 57 L.Ed.2d 117 (1978), quoting Crooks v. Harrelson, 282 U.S. 55, 60, 51 S.Ct. 49, 50-51, 75 L.Ed. 156 (1930). This principle, which is grounded in basic notions of separation of powers, is not to be deviated from simply because the statute being construed is criminal rather than civil. See United States v. Albertini, 472...