U.S. v. Turner, 05-6326.
| Decision Date | 31 August 2006 |
| Docket Number | No. 05-6326.,No. 05-6339.,05-6326.,05-6339. |
| Citation | 459 F.3d 775 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Loren Glenn TURNER, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Chad A. Readler, Jones Day, Columbus, Ohio, for Appellant. Kenneth R. Taylor, Assistant United States Attorney, Lexington, Kentucky, for Appellee.
ON BRIEF:
Chad A. Readler, Mary Beth Young, Jones Day, Columbus, Ohio, Mark D. Chandler, Louisville, Kentucky, for Appellant. Kenneth R. Taylor, Assistant United States Attorney, Lexington, Kentucky, for Appellee.
Before: MOORE and GIBBONS, Circuit Judges; SHADUR, District Judge.*
This appeal requires us to consider the application of the federal mail fraud statute to a case involving state election fraud. Defendant-appellant Loren Glenn Turner was indicted on charges arising from his involvement in two Kentucky state elections. The first was the May 2002 election of Donnie Newsome as Knott County Judge Executive. The second was the November 2002 election for Pike County District Judge, involving candidate John Doug Hays. The alleged election fraud included the use of "vote hauling" checks to buy votes unlawfully;1 the use of "straw contributors" who fraudulently donated money to the Hays campaign on behalf of one of Hays's prominent backers so as to avoid Kentucky's maximum individual contribution limits; the direct payment of cash to voters on election day to buy votes; the structuring of cash withdrawals used to repay straw contributors from bank accounts in the knowing attempt to avoid federal credit transaction reporting ("CTR") requirements; and unlawful direct cash payments to a candidate of amounts far above the maximum contribution allowed by Kentucky law.
A jury convicted Turner of mail fraud in connection with the Newsome campaign and conspiracy to commit mail fraud in connection with the Hays campaign. Turner's convictions were based on two alternate theories: first, that Turner participated in a scheme to defraud the citizens of Kentucky of the honest services of a candidate (Newsome or Hays) for public office (the "honest services theory"); and second, that Turner participated in a scheme to defraud the citizens of Kentucky of money or property — specifically, the salary and emoluments of the public office sought by Newsome or Hays (the "salary theory").
We reverse the judgment of the district court because Turner's conduct, as alleged in the indictment, may not be prosecuted under the mail fraud statute using either the honest services theory or salary theory of prosecution.
Turner, a life-long Kentuckian, worked as an employee for Ross Harris, a wealthy and successful coal operator who had a reputation of having significant influence in regional politics.2 In the fall of 2002, John Doug Hays ran as a candidate for Pike County District Judge. Although Harris had been noncommittal early in the district judge race, he eventually backed Hays. At some point during the Hays campaign, a local resident named Linda White contacted the Pikeville office of the Federal Bureau of Investigation concerning the activities of her ex-husband, Tom Varney, who was at that time working for the Hays campaign. White had been secretly recording her telephone conversations with Varney, and she turned tapes of those conversations over to the FBI. During the conversations, Varney bragged about Harris's involvement in the Hays campaign and his own relationship with Harris. Of interest to the FBI, Varney also discussed the use of "vote hauling" checks in the campaign. Varney repeatedly promised White two vote hauling checks but did not discuss any legitimate arrangement for her to transport voters. Varney said on the tapes that he gave a third check to his daughter so that she could buy a coat. Varney described "vote hauling" as a figure of speech and warned his daughter not to tell anyone that the check is for buying votes. Based on the tapes, the FBI began an investigation into alleged misconduct in the Hays and Newsome campaigns.
As a result of that investigation, a federal grand jury returned a seventeen-count indictment charging ten defendants with violations relating to the two Kentucky elections. Relevant to this appeal, the indictment charged Turner with conspiracy, pursuant to 18 U.S.C. § 371, to buy votes in violation of 42 U.S.C. § 1973i(c), and conspiracy, pursuant to 18 U.S.C. § 371, to commit mail fraud in violation of 18 U.S.C. §§ 1341 and 1346, in connection with the Hays campaign. Turner was also charged with mail fraud in violation of 18 U.S.C. §§ 1341 and 1346, in connection with the Newsome campaign. With regard to the Hays campaign, the indictment alleged a two-part conspiracy. First, the defendants devised a scheme to avoid the $1000 limit on personal campaign contributions under which straw contributors wrote personal checks for $1,000 to the Hays campaign and were then reimbursed by Harris in cash. Harris was also alleged to have given unreported cash directly to Hays, who spent it as his own personal money in the election. According to the indictment, Turner participated in the scheme by assisting Harris in using straw contributors. The indictment alleged that the Hays campaign mailed to the Kentucky Registry for Election Finance (the "Registry") a campaign finance report falsely reporting that the campaign had received $1,000 contributions from each of at least twenty-one contributors when in fact the contributions were concealed donations from Harris. As the second part of the scheme, in an effort to utilize the contributions from Harris, the Hays campaign issued and distributed 680 checks in the amount of $50 to potential voters. Although the checks were ostensibly labeled "vote hauling" checks, their purpose was to influence voters. The checks were distributed with sample ballots showing voters how to vote for Hays, and the persons distributing the checks instructed voters to vote for Hays. The Hays campaign also gave cash directly to voters on election day. The Hays campaign also allegedly mailed the Registry a report of expenditures falsely claiming that 680 people had been paid fifty dollars for vote hauling, when in fact the money had been used to influence voters. With regard to the Newsome campaign, the indictment alleged that Harris, with Turner's assistance, funneled $20,000 to Newsome. In an election finance statement delivered through the mails, the cash contribution was hidden from the Registry when Newsome falsely reported that the source of the money was loans and personal contributions.
Before trial, Turner moved to dismiss the mail fraud charges in the indictment, arguing that the conduct alleged could not be prosecuted under either the honest services theory or salary theory of mail fraud. The district court denied his motion and allowed the prosecution to proceed on both theories. Following trial, the jury found Turner guilty of mail fraud and conspiracy to commit mail fraud on both the honest services theory and salary theory in connection with both the Hays and Newsome campaigns.3 Turner was not found guilty of conspiracy to buy votes in connection with the Hays campaign. Turner was sentenced to forty-eight months imprisonment, three years supervised release, and a $10,000 fine.4 This appeal followed.
The federal mail fraud statute, 18 U.S.C. § 1341, prohibits use of the mails by any person "having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises . . . ." Before 1987, § 1341 was used to prosecute a wide range of schemes to defraud individuals of "intangible rights" in addition to more typical schemes to defraud individuals of money or property. See Cleveland v. United States, 531 U.S. 12, 18, 121 S.Ct. 365, 148 L.Ed.2d 221 (2000). Defendants whose schemes involved deprivations of "intangible rights" included public officials who deprived citizens of their right to the official's honest services, private persons with clear fiduciary duties who defrauded their employers or unions by accepting kickbacks or selling confidential information, elected officials and campaign workers who deprived the citizenry of its right to an honest election, and defendants who defrauded individuals of their rights to privacy and other nonmonetary rights. See McNally v. United States, 483 U.S. 350, 362-64, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987) (Stevens, J., dissenting) ().
In McNally v. United States, however, the Supreme Court invalidated the use of § 1341 to prosecute deprivations of "intangible rights," concluding that the mail fraud statute was "limited in scope to the protection of property rights." 483 U.S. at 360, 107 S.Ct. 2875. If Congress intended to protect intangible rights, the Court stated that "it must speak more clearly than it has." Id. Congress responded by quickly passing what has been called the "McNally fix": Section 1346, which defines "scheme or artifice to defraud" as including "a scheme or artifice to deprive another of the intangible right of honest services." 18 U.S.C. § 1346.
The first question we address is whether the election fraud alleged in the indictment falls within the scope of "the intangible right of honest services" protected under § 1346. In order to do so, we must consider whether the enactment of § 1346 revived the pre-McNally line of intangible-rights cases that allowed for prosecutions of election fraud using the mail fraud statute.
In interpreting a statute, this court looks first to its plain language. See Cowherd v. Million, 380 F.3d 909, 913 (6th Cir.2004). The plain language of § 1346 supports appellants' position that the statute does not cover the conduct outlined in the indictment. While candidates may be dishonest in seeking...
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