U.S. v. Mitchell

• Decision Date: 09 February 1993
• Docket Number: No. 92-5663,92-5663
• Citation: 985 F.2d 1275
• Parties: -886, 93-1 USTC P 50,171 UNITED STATES of America, Plaintiff-Appellant, v. Richard M. MITCHELL, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1275

985 F.2d 1275

71 A.F.T.R.2d 93-886, 93-1 USTC P 50,171

UNITED STATES of America, Plaintiff-Appellant, v. Richard M. MITCHELL, Defendant-Appellee.

No. 92-5663.

United States Court of Appeals Fourth Circuit.

Argued Dec. 3, 1992.

Decided Feb. 9, 1993.

Andrew Gerald McBride, Asst. U.S. Atty., Alexandria, VA, argued (Richard Cullen, U.S. Atty., W. Neil Hammerstrom, Jr., and David G. Barger, Asst. U.S. Attys., on brief), for appellant.

Mark Daniel Hopson, Washington, DC, argued (Thomas C. Green, Carter G. Phillips, Tamara L. Cohen, and Ashutosh A. Bhagwat, on brief), Sidley & Austin, for appellee.

Before MURNAGHAN, WILKINS and WILLIAMS, Circuit Judges.

OPINION

MURNAGHAN, Circuit Judge:

Defendant Robert Mitchell, a zoologist working for the United States Department of the Interior, was charged in a nine count indictment with obstructing and impeding the administration of the internal revenue laws, 26 U.S.C. § 7212(a), violating the federal conflict of interest laws, 18 U.S.C. § 208, aiding and assisting in the preparation of false tax returns by others, 26 U.S.C. § 7206(2), taking and transporting animals in violation of foreign law, 16 U.S.C. § 3372(a)(2), and smuggling in violation of 18 U.S.C. § 545.

On Mitchell's motion to dismiss and the government's motion to determine foreign law, the district court dismissed before trial Counts 1 and 8. Count 1 charged the corrupt obstruction of the administration of revenue laws under 26 U.S.C. § 7212(a). The court dismissed the Count because it determined that the statute did not reach the conduct alleged. Count 8 charged a violation of the Lacey Act, which makes it illegal under United States law to violate the wildlife import-export laws of a foreign nation. The court dismissed Count 8 after a hearing to determine foreign law. That decision was based on the district court's holding that neither of the two Pakistani laws alleged to have been violated were applicable. The government prior to trial has taken an interlocutory appeal contesting the dismissal of both Counts.

I. Count 1

Since 1979 Mitchell has been employed by the Fish and Wildlife Service of the Department of the Interior. His duties have included implementing federal law involving international wildlife conservation, reviewing applications for wildlife import and export permits, working as a program manager for China and Pakistan at the Smithsonian Institution, organizing field research and collection of specimens, and developing educational and training programs.

In March of 1984, according to Count 1 of the indictment, Mitchell incorporated an organization known as the American Ecological Union, Inc. (AEU) under his home address in Arlington County, Virginia. In May of that year, he filed an Application for Recognition of Exemption with the IRS to have AEU recognized as a tax-exempt organization for purposes of soliciting contributions. Mitchell's application represented that AEU's fund-raising activities would consist of writing proposals to obtain grants, and that the organization would provide benefits and services related to its exempt function of promoting and facilitating scientific research in the area of ecology.

The government charged that beginning in February 1985, Mitchell used AEU and its tax-exempt status as a vehicle to solicit "contributions" from big-game hunters. He induced payments to AEU from hunters, with offers to arrange hunting privileges in Pakistan and China. He obtained permits, made arrangements for hunting trips in Pakistan and China, lobbied on behalf of the contributors to have endangered animals de-listed, and accompanied several contributors on big game hunts. Mitchell then caused the big-game hunters to file fraudulent income tax returns that claimed the donations to AEU as tax-deductible contributions.

Mitchell's activities, as charged in Count 1 of the indictment, comprised an "artifice and scheme to defraud the United States." The artifice and scheme, the government contended, was a corrupt endeavor to impede and obstruct the due administration of the tax laws, and thus constituted a violation of 26 U.S.C. § 7212(a). Mitchell claimed that although the activity charged might be criminal, it did not state a violation of § 7212(a). The district court in agreeing read the statute narrowly and found that 26 U.S.C. § 7212(a) required "that kind of corruption that goes to a particular officer or employee."

The government's appeal of the district court's dismissal of the Count presents us with the task of discerning the reach of the statute. 26 U.S.C. § 7212(a) provides that

--Whoever corruptly or by force or threats of force ... endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title, or in any other way corruptly or by force or threats of force ... obstructs or impedes, or endeavors to obstruct or impede the due administration of this title ...

shall be subject to fines or imprisonment. There is no contention that Mitchell interfered with Internal Revenue Agents or other government officials, or used force or threats of force to interfere with the due administration of the Code. The question is whether the second omnibus clause prohibiting action that "in any other way corruptly ... obstruct[s] or impede[s] ... the due administration" of Title 26 reaches fraud and misrepresentation, or whether the clause prohibits only more narrowly defined means of obstructing the tax laws.

On appeal Mitchell has argued that the trial court correctly dismissed Count 1 because a violation of 26 U.S.C. § 7212(a) requires some action taken against another person as the object of the action. The sort of action contemplated under the statute, he submits, is bribery, solicitation or subornation. Mitchell in focusing on the word "corruptly" has argued that the term refers to the means by which a defendant obstructs or impedes due administration of the tax laws, rather than simply defining a state of mind.

Mitchell offered two cases to advance his argument that a corrupt endeavor as used in § 7212(a) refers to only specific means of obstructing the tax laws such as solicitation or subornation. In United States v. Reeves, 752 F.2d 995 (5th Cir.), cert. denied, 474 U.S. 834, 106 S.Ct. 107, 88 L.Ed.2d 87 (1985), the Fifth Circuit rejected the definition of "corruptly" used at trial below--"with improper motive or bad or evil purpose"--as redundant and potentially overbroad or vague. In United States v. Poindexter, 951 F.2d 369 (D.C.Cir.1991), cert. denied, --- U.S. ----, 113 S.Ct. 656, 121 L.Ed.2d 583 (1992), the Circuit Court of the District of Columbia found the term "corruptly" to be vague in the context of the obstruction of justice statutes. The court stated, "[i]n the absence of some narrowing gloss, people must guess at [ ][the] meaning [of the word corruptly] and differ as to its application." Id. at 378. Poindexter applied the principle of ejusdem generis to the obstruction of justice statute and reasoned that corruptly must mean some form of subornation since the other terms used in the statute--"force" and "threats"--referred to actions directed at another person. Id. at 379.

Neither of those cases persuades us that only subornation constitutes a corrupt endeavor under § 7212(a). Reeves, though rejecting the contention that corruptly refers only to improper motive or intent, did not go so far as to adopt Mitchell's interpretation of the word or reach of the statute. "Corruptly," Reeves noted, "describes an act done with an intent to give some advantage inconsistent with the official duty and rights of others.... It includes bribery but is more comprehensive, because an act may be corruptly done though the advantage to be derived from it be not offered by another." Reeves, 752 F.2d at 998 (citations and quotations omitted). That definition neatly describes Mitchell's conduct of fraudulently representing to the IRS that his organization was involved in tax exempt activities, of using his tax exempt status to solicit contributions that were not used for tax-exempt purposes, and of inducing hunters to file false returns. Each resulted in benefits to Mitchell and to the hunters that were inconsistent with the legal rights and duties of themselves and others. Reeves, in rejecting the definition of improper or evil intent to define the contours of § 7212(a), did not exclude fraud and misrepresentation from its purview. Rather, Reeves was concerned with excluding from its purview the type of impediments to tax administration engaged in with no intent to gain any improper advantage or benefit. See Reeves, 752 F.2d at 999 ("A disgruntled taxpayer may annoy a revenue agent with no intent to gain any advantage or benefit other than the satisfaction of annoying the agent. Such actions by taxpayers are not to be condoned, but neither are they 'corrupt' under section 7212(a)"). Misrepresentation and fraud, in fact, are paradigm examples of activities done with an intent to gain an improper benefit or advantage.

In addition, this court has rejected the position that a "corrupt endeavor" as used in obstruction of justice statutes must involve means that are illegal in themselves, such as bribery or intimidation. United States v. Mitchell, 877 F.2d 294, 299 (4th Cir.1989). In Mitchell, where a congressman's relatives were charged under 18 U.S.C. § 1505 for taking money to influence the congressman's investigation, we upheld the convictions, rejecting the defendants' contentions on appeal that they had not acted corruptly because bribery or extortion were not used or contemplated. "Such a narrow interpretation of § 1505 runs contrary to the well-established rule that the omnibus clause of the federal obstruction statutes should be broadly construed." Id. at 298 (citations omitted). The court explained the rationale for the broad construction: "The obstruction statute was drafted with an eye to 'the variety...