United States v. Bravo-Fernández, 18-1358

• Decision Date: 17 January 2019
• Docket Number: No. 18-1370,No. 18-1358,18-1358
• Citation: 913 F.3d 244
• Parties: UNITED STATES of America, Appellee, v. Juan BRAVO-FERNÁNDEZ, Defendant, Appellant. United States of America, Appellee, v. Héctor Martínez-Maldonado, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

913 F.3d 244

UNITED STATES of America, Appellee,

v.Juan BRAVO-FERNÁNDEZ, Defendant, Appellant.

United States of America, Appellee,

v.Héctor Martínez-Maldonado, Defendant, Appellant.

No. 18-1358

No. 18-1370

United States Court of Appeals, First Circuit.

January 17, 2019

Martin G. Weinberg, with whom Kimberly Homan, Boston, MA, were on brief, for appellant Bravo-Fernández.

Abbe David Lowell, with whom Christopher D. Man and Winston & Strawn LLP, Washington, DC, were on brief, for appellant Martínez-Maldonado.

Vijay Shanker, U.S. Department of Justice, Criminal Division, Appellate Section, with whom Brian A. Benczkowski, Assistant Attorney General, Matthew S. Miner, Deputy Assistant Attorney General, Peter M. Koski, Public Integrity Section, and Gwendolyn Amelia Stamper, Public Integrity Section, were on brief, for appellee.

Before Howard, Chief Judge, Torruella and Kayatta, Circuit Judges.

TORRUELLA, Circuit Judge.

Because everything old is new again,¹ Defendants Juan Bravo-Fernández ("Bravo") and Héctor Martínez-Maldonado ("Martínez") come before us for a third time. See United States v. Bravo-Fernández, 790 F.3d 41 (1st Cir. 2015) ; United States v. Fernández, 722 F.3d 1 (1st Cir. 2013). In this appeal, they seek to overturn their 2017 convictions for federal program bribery under 18 U.S.C. § 666, arguing primarily that evidence stipulated to early in the proceedings was insufficient to convict.

Among the elements of § 666, the government was required to establish that the entity Martínez represented as an agent, in this case the Commonwealth of Puerto Rico, received at least $10,000 in federal "benefits" within the meaning of that statute. The government did not meet this burden. Accordingly, we must reverse defendants' convictions for federal program bribery.

I.

The pertinent facts and procedural background are examined in detail in Bravo-Fernández, 790 F.3d at 43-45, and Fernández, 722 F.3d at 6-8, for which we only sketch a high-level overview of that account here.

This case traces its origin to 2010, when Bravo and Martínez were charged with federal program bribery in violation of § 666, among other things. The charges stemmed from payments that Bravo made in 2005 involving a trip to Las Vegas to which he invited Martínez, then a Puerto Rico senator. According to the government, Bravo used the trip to bribe Martínez in exchange for his support of pending legislation that would have favored Bravo's business, Ranger American, a local security company.

Bravo and Martínez were first tried and found guilty of federal program bribery in 2011, an outcome which they successfully challenged before this court. See Fernández, 722 F.3d at 6, 39. In that initial appeal, we ruled that § 666 only criminalizes bribery, not gratuities, and that the evidence presented at trial, together with the jury instructions, could have led the jury to improperly convict on either a "bribery" or "gratuity" theory. Id. 16-17, 23-26. Because it was insufficiently clear to discern which theory the jury relied on to reach its verdict, we vacated defendants' convictions on the § 666 counts and remanded for potential re-prosecution. Id. at 26-28, 39.

On remand, Bravo and Martínez moved for judgment of acquittal, arguing that double jeopardy barred their renewed prosecution. Bravo-Fernández, 790 F.3d at 43, 49. The district court rejected this contention, after which defendants sought refuge before our court once again. Id. at 43. This time, however, defendants' appeal was unsuccessful and we affirmed the district court's decision on the double jeopardy issue. Id. Defendants' further appellate endeavor before the Supreme Court reached a similar result. See Bravo-Fernández v. United States, ––– U.S. ––––, 137 S.Ct. 352, 196 L.Ed.2d 242 (2016).

Bravo and Martínez faced their second trial in May 2017, and once again a jury found them guilty of federal program bribery under § 666. Those proceedings devolved into the instant appeal, the latest stage in this case's arduous journey.

II.

We are able to reduce the several questions that have been raised before us² to the only one that merits our decisional attention and mandates the outcome of this appeal: Whether the government introduced evidence at trial to satisfy the jurisdictional element under 18 U.S.C. § 666(b) that the government entity involved received "benefits in excess of $10,000 under a Federal program." (emphasis added). Where, as here, defendants have preserved a sufficiency challenge, we review de novo a district court's denial of their motion for judgment of acquittal. United States v. Acevedo-Hernández, 898 F.3d 150, 161 (1st Cir. 2018).

To maintain a conviction for federal program bribery, the government must prove beyond a reasonable doubt that the party receiving the bribe was an agent of an entity that "receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance." 18 U.S.C. § 666(b). This requirement is often referred to as the "jurisdictional element" of § 666. See, e.g., United States v. McLean, 802 F.3d 1228, 1240 (11th Cir. 2015). And not all federal funds constitute "benefits" under the statute. See Fischer v. United States, 529 U.S. 667, 681, 120 S.Ct. 1780, 146 L.Ed.2d 707 (2000) ("Any receipt of federal funds can, at some level of generality, be characterized as a benefit. The statute does not employ this broad, almost limitless use of the term."); see also United States v. Dubón-Otero, 292 F.3d 1, 7 n.7 (1st Cir. 2002) (acknowledging that there exists "compensation of the type excluded by § 666 (c)" including salaries, wages and expenses paid in the usual course of business). In Fischer, the Supreme Court explained that only federal monies that "promote[ ] well-being," such as those which provide individuals with "financial help in time of sickness, old age, or unemployment," may qualify as "benefits." Fischer, 529 U.S. at 677, 120 S.Ct. 1780 (citing Webster's Third New International Dictionary 204 (1971) ). Critically, "[t]o determine whether an organization participating in a federal assistance program receives 'benefits,' an examination must be undertaken of the program's structure, operation, and purpose." Id. at 681, 120 S.Ct. 1780. The government has the burden of producing adequate evidence for this examination to occur.

In resolving if the § 666(b) jurisdictional element was satisfied, we find it instructive to begin by comparing the evidence that the government offered on this key element during the 2011 trial with that it presented in the 2017 proceedings leading to this appeal.

At defendants' first trial, the government introduced evidence specifically tailored to establishing the § 666 jurisdictional requirement. An employee of the Puerto Rico Treasury Department testified for the government that "the Senate of Puerto Rico childcare program (known as the Food Program for the Care of Children and Adults) receive[d] funding from the Government of the United States." United States v. Bravo-Fernández, 828 F.Supp.2d 441, 455 (D.P.R. 2011), rev'd in part, vacated in part sub nom. United States v. Fernández, 722 F.3d 1 (1st Cir. 2013). The witness further averred, with the support of documentation also admitted into evidence, that the Puerto Rico Senate annually received around $20,000 in federal funds for the childcare program during the relevant period. Id. at 456. This provided the basis for the district court to conclude in its resolution of the Rule 29 motion for judgment of acquittal that "[t]he federal assistance received by the Senate of Puerto Rico for [its] childcare program clearly qualifies as a ‘benefit’ provided under a federal program" for purposes of § 666(b). Id.

In contrast, the record of the second trial is barren of evidence showing disbursement of federal "benefits" to the Senate of Puerto Rico or even to the Commonwealth as a whole. All we have is a stipulation the parties accorded prior to trial providing that "in fiscal year 2005[,] the Commonwealth of Puerto Rico received more than $10,000 in federal funding. Specifically, from October 1, 2004, to September 30, 2005, the Commonwealth of Puerto Rico received over $4.7 billion in federal funds." (emphasis added) Later, on the first day of trial during a conference about preliminary jury instructions, the district judge asked counsel whether this stipulation allowed him to inform jurors that the § 666 jurisdictional element had been met. Counsel for defendant Martínez responded that the court should not instruct so because "the ... law ... doesn't equate funds with benefits, and the statute says benefits.... We have stipulated to the amount of money, but not that [the jurisdictional] element has been satisfied." Incredibly, this clear warning of things to come went unattended and the government proceeded to present its case in chief without introducing any evidence to cover this gaping hole in its case.

Following the close of the government's case, defendants made a Rule 29 motion for a verdict of acquittal in which they specifically argued that the government failed to establish the existence of $10,000 in benefits under a federal program. The district court denied this motion without explanation. In charging the jury, the district court stated that § 666 only required jurors to find that the Commonwealth received federal "funds of more than $10,000." No instruction was given on what constitutes a benefit, and the word "benefits" does not appear even once throughout the instructions. Counsel for defendant Martínez objected to the instruction's language, but that objection was summarily overruled by the district court.

Given the foregoing, and in keeping with our own precedent and that of the Supreme Court, we can only conclude that the government failed to meet its burden of establishing that the entity Martínez represented as an agent received the amount of benefits required...