U.S. v. Santopietro

• Decision Date: 22 January 1999
• Docket Number: Docket Nos. 97-1373,97-1571CO,97-2410CON and 97-2449CON
• Citation: 166 F.3d 88
• Parties: UNITED STATES of America, Appellant-Cross-Appellee, v. Joseph J. SANTOPIETRO; Paul R. Vitarelli, Appellants, Perry A. Pisciotti, Appellee.
• Court: U.S. Court of Appeals — Second Circuit

Page 88

166 F.3d 88

UNITED STATES of America, Appellant-Cross-Appellee, v. Joseph J. SANTOPIETRO; Paul R. Vitarelli, Appellants Perry A. Pisciotti, Appellee.

Docket Nos. 97-1373L, 97-1571CON, 97-2410CON and 97-2449CON.

United States Court of Appeals Second Circuit.

Argued Aug. 31, 1998.

Decided Jan. 22, 1999.

Stephen V. Manning, Asst. U.S. Atty., New Haven, Conn. (John H. Durham, U.S. Atty., Leonard C. Boyle, Thomas J. Murphy, Asst. U.S. Attys., New Haven, Conn., on the brief), for appellant-cross-appellee.

John L. Pollack, Hoffman Pollok & Pickholz, New York, NY (Eileen McGann, West Redding, Conn., on the brief), for appellant Santopietro.

Sara C. Schnell, Asst. Fed. Pub. Defender, New Haven, Conn. (Thomas C. Dennis, Fed. Pub. Defender, New Haven, Conn., on the brief), for appellant Vitarelli.

Andrew A. Feinstein, Simsbury, Conn., for appellee Pisciotti.

Before: NEWMAN, CARDAMONE and PARKER, Circuit Judges.

JON O. NEWMAN, Circuit Judge:

These consolidated appeals and cross-appeal primarily concern the interpretation of 18 U.S.C. § 666 (1994 & Supp. II 1996) and the continued validity of this Court's decision in United States v. Foley, 73 F.3d 484 (2d Cir.1996), in light of the Supreme Court's subsequent decision in Salinas v. United States, 522 U.S. 52, 118 S.Ct. 469, 139 L.Ed.2d 352 (1997). Section 666(a)(1)(B), (b), set out in full in the margin, ¹ punishes receipt of corrupt payments by any person who "corruptly solicits or demands" money "intending to be influenced or rewarded in connection with any ... transaction" of an "organization, government, or agency involving anything of value of $5,000 or more" if the "organization, government, or agency receives, in any one year period, benefits in excess of $10,000 under a Federal program...." 18 U.S.C. § 666(a)(1)(B), (b). The precise issue is whether the $5,000 or more required to be involved in the transaction must be worth at least that amount to a recipient of federal funds, as Foley held, see 73 F.3d at 492-93, or whether, in light of Salinas, it is sufficient if the transaction is worth $5,000 or more to any person or entity, and bears some relationship to a federally funded program, see 522 U.S. at 52, 118 S.Ct. at 473-75.

This issue arises on an appeal by the United States from the revised sentence imposed by the District Court for the District of Connecticut (Gerard L. Goettel, District Judge), on Perry Pisciotti on May 22, 1998, and a cross-appeal by the United States from the revised sentence the District Court imposed on Joseph J. Santopietro on May 30, 1998. These sentences were imposed after the District Court, on remand from this Court in light of Foley, vacated the convictions of both defendants and those of appellant Paul R. Vitarelli on section-666-related counts. Santopietro and Vitarelli also appeal from their revised sentences, raising various challenges. The Government has not cross-appealed as to Vitarelli, who had served his original sentence by the time the District Court vacated his convictions on these counts. See Santopietro v. United States, 948 F.Supp. 145, 148 (D.Conn.1996) ("Santopietro II ").

On the defendants' appeals we affirm; on the Government's cross-appeal, we reverse and remand for reinstatement of the section 666 convictions and for further resentencing.

Background

The essential facts of the defendants' crimes are set forth in our 1993 opinion affirming their convictions on direct appeal. See United States v. Santopietro, 996 F.2d 17 (2d Cir.1993) ("Santopietro I "). In brief, Santopietro, the former Mayor of Waterbury, Connecticut, Pisciotti, the former Republican Town Chairman of Waterbury, and Vitarelli, the former President of the Waterbury Board of Aldermen, were convicted of substantive and conspiracy offenses involving the receipt of corrupt payments, in violation of section 666(a)(1)(B), and tax offenses, among other crimes. Their corrupt payment convictions arose out of a scheme whereby Santopietro "use[d] his political position to influence decisions by various city agencies in return for bank loans and cash payoffs from certain local businessmen," and, "[i]n return, Santopietro and other members of his administration received hundreds of thousands of dollars disguised as loans, sales of options, real estate contract cancellations, and property leases." Id. at 18. Although large amounts of money flowed to individuals through corrupt means, there was no obvious or direct financial loss to the City of Waterbury itself.

After the affirmance in Santopietro I, this Court considered the appeal of Richard Foley, a former member of the Connecticut General Assembly, who was convicted of violating section 666(a)(1)(B) by soliciting and accepting monthly compensation of $2,500 as a "consultant" in exchange for his agreement to try to persuade state legislators to support a one-year exemption delaying the effective date of a bank divestiture requirement imposed by Connecticut law. The exemption was sought by Fleet Bank, from which the two individuals who agreed to "retain" Foley as a "consultant" were seeking a $12,500,000 loan. Ultimately, the exemption sought by Fleet Bank was enacted by the legislature, and Foley received a total of $25,000 for which he rendered no services, other than aiding passage of the delaying legislation. See Foley, 73 F.3d at 486.

On Foley's appeal, this Court reversed his convictions on the section 666(a)(1)(B) counts on the ground that the entity receiving the benefit valued in excess of $5,000, Fleet Bank, was not a recipient of any federal funds. See id. at 492-93. The Court acknowledged that the State of Connecticut, during the relevant period, received federal funds well in excess of the $10,000 statutory threshold of section 666(b), but ruled that the evidence was deficient in failing to establish that the exemption legislation had any financial value to the State, or that the exemption legislation had any connection with a federal program. See id. In effect, the Court ruled, in general, that the corruption penalized by section 666(a)(1)(B) must be "shown in some way to touch upon federal funds" and, in particular, that the organization, government, or agency whose transaction involves $5,000 or more and which the recipient of the corrupt payments endeavors to influence must itself be the recipient of at least $10,000 of federal funds. See id. at 493. Judge Lumbard dissented. See id. at 494.

After the Foley decision, Santopietro, Pisciotti, and Vitarelli moved, pursuant to 28 U.S.C. § 2255 (1994), to vacate all of their convictions, including those based on section 666(a)(1)(B). Judge Goettel agreed that Foley required him to vacate their convictions on the substantive and conspiracy counts charging acceptance of corrupt payments, but denied relief as to all other counts. See Santopietro II, 948 F.Supp. at 155. He noted that the jury had been instructed that the element of the statute requiring proof of "anything of value" of $5,000 or more was stated to be " 'any item ... that the recipient or the giver considers to be worth something' " and that "[n]o reference was made to a loss by the government." Id. at 150 (quoting jury charge). Accordingly, he resentenced Santopietro to a total sentence of 90 months and Vitarelli to six months, with both defendants receiving credit for time served. Pisciotti was resentenced to time served.

Santopietro appeals to challenge the revised sentence calculations, and Vitarelli appeals to seek a new trial on the one remaining count on which he stands convicted, Count 24 charging the filing of a false tax return, in violation of 26 U.S.C. § 7206(1) (1994). The Government appeals as to Pisciotti and cross-appeals as to Santopietro (but not Vitarelli) to seek reinstatement of their convictions relating to acceptance of corrupt payments.

Discussion

I. The Government's Cross-Appeal

We consider first the Government's cross-appeal, which contends that Foley should be reconsidered in light of the Supreme Court's decision in Salinas and that the conspiracy and substantive counts relating to acceptance of corrupt payments should be reinstated.

Salinas concerned a county deputy sheriff who was convicted under section 666(a)(1)(B) for accepting bribes from a state prisoner in exchange for facilitating conjugal visits for the prisoner with the prisoner's wife and girlfriend. The bribes consisted of a pick-up truck and two watches. ² The conjugal visits occurred at a jail run by Hidalgo County, Texas. The County had contracted with the United States to house federal prisoners. The federal government made a substantial grant to the county to repair the jail, and paid a specified amount per day for each federal prisoner housed. These payments were far in excess of the $10,000 threshold of section 666(b). See 522 U.S. at ----, 118 S.Ct. at 472.

In the Court of Appeals, Salinas contended, among other things, that his "transaction" did not involve "anything of value of $5,000 or more," as required by section 666(a)(1)(B). The Fifth Circuit rejected that contention, concluding that "anything of value" included items of intangible value. See United States v. Marmolejo, 89 F.3d 1185, 1191 (5th Cir.1996). The Court of Appeals also ruled that the visits had a value in excess of $5,000. See id. at 1194. In rejecting Salinas's contention, the Fifth Circuit, relying on its prior decision in United States v. Westmoreland, 841 F.2d 572, 576 (5th Cir.1988), noted that the $5,000 anything-of-value element of the statute did not require either that a federally funded transaction itself involve $5,000 or that the affected transaction involve $5,000 of federal funds. See Marmolejo, 89 F.3d at 1193. The Fifth Circuit explicitly contrasted its own position, expressed in Westmoreland, that the statute does not require any relation between the $5,000 thing of value and the federal funds received by the local agency, with our statement in Foley that the " 'value...