United States v. Donagher
| Decision Date | 19 February 2021 |
| Docket Number | No. 19 CR 240,19 CR 240 |
| Citation | 520 F.Supp.3d 1034 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | UNITED STATES of America, Plaintiff, v. Donald DONAGHER, Jr. and Penn Credit Corporation, Defendants. |
AUSA, Assistant US Attorney, Ankur Srivastava, Christopher Vincent Parente, Heather Kirsten McShain, Assistant US Attorney, United States Attorney's Office, Chicago, IL, Pretrial Services, for Plaintiff.
Eric S. Pruitt, Theodore Thomas Poulos, Marty Basu, Cotsirilos, Tighe, Streicker, Poulos & Campbell, Ltd., Chicago, IL, for Defendant Donald Donagher, Jr.
James M. Becker, Pro Hac Vice, Buchanan Ingersoll Rooney PC, Philadelphia, PA, Terence H. Campbell, Theodore Thomas Poulos, Cotsirilos, Tighe, Streicker, Poulos, & Campbell, Ltd., Chicago, IL, for Defendant Penn Credit Corporation.
Defendants Penn Credit Corp. ("Penn Credit") and its Chief Executive Officer, Donald Donagher, Jr., are in the debt-collection business. Starting in 2012, the duly-elected Clerks of Court of four counties in two different states hired Penn Credit to collect traffic fines, filing fees, and other court-related debts on behalf of the respective counties. During the same period of time, Defendants provided the Clerks with thousands of dollars in campaign contributions and various gifts of substantial value. Based on that conduct, the government has charged Defendants with five counts of violating the federal programs anti-bribery statute, 18 U.S.C. § 666(a)(2), as well as one count of conspiring to do so, in violation of 18 U.S.C. § 371.
Defendants move to dismiss the indictment based on four primary arguments. First, they contend that, when an alleged violation of § 666(a)(2) is predicated on the payment of campaign contributions, the government must allege and prove an explicit quid pro quo as a necessary element given the Supreme Court's holding in McCormick v. United States , 500 U.S. 257, 111 S.Ct. 1807, 114 L.Ed.2d 307 (1991). Second, Defendants assert that the government must also allege and prove a quid pro quo whenever an alleged violation of § 666(a)(2) is premised on an intent-to-influence theory, no matter the form of consideration. Third, Defendants argue that § 666(a)(2) requires the government to allege and prove an "official act" within the meaning of 18 U.S.C. § 201(a)(3) whenever an alleged violation is premised on an intent-to-reward theory under United States v. Sun-Diamond Growers of Ca. , 526 U.S. 398, 119 S.Ct. 1402, 143 L.Ed.2d 576 (1999). And fourth, Defendants submit that, in light of the constitutional concerns raised by the Supreme Court in McDonnell v. United States , ––– U.S. ––––, 136 S. Ct. 2355, 195 L.Ed.2d 639 (2016), § 666(a)(2) is both overbroad and void for vagueness. In the alternative, Defendants move to strike certain portions of the indictment as surplusage, demand a bill of particulars, and request that the Court order the government to provide its Santiago proffer and Federal Rule of Evidence 404(b) notice sooner than the rules would require.
For the reasons below, the Court concludes that a quid pro quo is a necessary element of a violation of § 666(a)(2) whenever it is based upon the payment of a campaign contribution, but not other forms of consideration. The Court also finds that the present indictment does not sufficiently allege an explicit quid pro quo. On the other hand, the Court holds that an "official act" is not a necessary element of § 666(a)(2). Additionally, § 666(a)(2) is not constitutionally infirm, and the counts in the indictment are not duplicitous or otherwise deficient. Accordingly, Defendants’ motion to dismiss is granted in part and denied in part, and their remaining motions are denied.
A County Clerk of Court, as relevant here, is an elected public official who is responsible for, among other things, maintaining public records and collecting debts, such as traffic fines and court fees, for the county in which he or she is elected. Indictment Count I ¶ 1(h), ECF No. 1. County Clerks of Court sometimes subcontract these debt-collection responsibilities to third-party vendors, and often have the discretion to select the vendors and negotiate the terms. Id.
Between 2009 and 2016, the Clerks of Court of four counties ("the Clerks")— Cook County in Illinois and Brevard, Orange, and St. Johns Counties in Florida—paid Penn Credit to collect debts on their behalf. Id. ¶ 1(a), (f)–(g). At the same time, Defendants provided the Clerks with thousands of dollars’ worth of campaign contributions and other gifts, including sponsorship of meetings and events, payments for meals and entertainment, consulting contracts with individuals and entities associated with the Clerks, donations to affiliated charities, and free robocall services for their campaigns. Id. ¶¶ 3, 5. Defendants did so, the government says, "for the purpose of seeking favorable treatment ... in the award, allocation, and retention of debt collection work." Id. ¶ 3. Specifically, according to the indictment, Defendants sought to influence and reward the Clerks in connection with (1) awarding debt collection contracts to Penn Credit, (2) increasing the share of such work allocated to Penn Credit, (3) increasing fees paid to Penn Credit, (4) refusing to institute a public bidding process for contracts to Penn Credit's detriment, and (5) unilaterally extending the termination date for expiring contracts. Id. ¶ 4.
In one example, Donagher allegedly assisted the Cook County Clerk's election campaign by directing Penn Credit employees to place hundreds of thousands of robocalls to voters in support of her candidacy. Id. ¶ 12(f). After the Clerk won the election, Donagher reminded Penn Credit's political lobbyists that Id. ¶ 12(g).
The following year, the Cook County Clerk advised Donagher that a competing debt-collection firm had donated a substantial sum to her campaign. Id. ¶ 12(j). A few hours later, Donagher instructed his staff to "give as much plus a dollar" as the competing firm. Id. ¶ 12(i). Over the next few months, he caused a total of $5,000 to be contributed to the Clerk's campaign and allocated an additional $2,500 to host a birthday party in her honor. Id. ¶ 1(k)–(m).
In yet another example, Donagher complained to his employees that the Orange County Clerk "busted my stones and said [another debt-collection company] ponied up another 10K." Id. ¶ 12(ff). Not long after, Donagher ordered a Penn Credit lobbyist to transfer $5,000 to that Clerk's campaign fund. Id. The indictment describes dozens of similar interactions and transactions. See id. ¶ 12(a)–(gg).
The government charged Defendants with six separate counts on March 14, 2019. Counts II, III, and VI allege that Defendants violated 18 U.S.C. § 666(a)(2) by making certain campaign contributions to the Cook County Clerk. Counts IV and V charge them with violating the statute by paying other companies for the purpose of benefiting the Cook County Clerk. And Count I charges Defendants with violating 18 U.S.C. § 371 by conspiring to violate § 666(a)(2) through numerous overt acts.
Defendants move to dismiss the indictment. See Defs.’ Joint Consolidated Pretrial Mots. ("Mots.") ¶¶ A–D, ECF No. 31; Defs.’ Corrected Mem. Supp. Mots. ("Mem.") at 8–61, ECF No. 35. In the alternative, they move to strike surplusage from the indictment, request a bill of particulars, and seek early disclosure of the government's Santiago proffer and notice of evidence it intends to present under Rule 404(b). See Mots. ¶¶ E–H; Mem. at 61–69. Each motion will be addressed in turn.
Under Federal Rule of Criminal Procedure 7(c)(1), "[t]he indictment or information must be a plain, concise, and definite statement of the essential facts constituting the offense charged." Fed. R. Crim. P. 7(c)(1). An indictment satisfies that requirement if it: "(1) states all the elements of the crime charged; (2) adequately informs the defendant of the nature of the charges so that he may prepare a defense; and (3) allows the defendant to plead the judgment as a bar to any future prosecutions." United States v. White , 610 F.3d 956, 958 (7th Cir. 2010).
"Generally, an indictment is sufficient when it sets forth the offense in the words of the statute itself, as long as those words expressly set forth all the elements necessary to constitute the offense" charged. United States v. Hinkle , 637 F.2d 1154, 1157 (7th Cir. 1981) (citing Hamling v. United States , 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974) ). On the other hand, "when one element of the offense is implicit in the statute, rather than explicit, and the indictment tracks the language of the statute and fails to allege the implicit element explicitly, the indictment fails to allege an offense." United States v. Pirro , 212 F.3d 86, 93 (2d Cir. 2000) (cleaned up). In other words, elements implicit in a statute must be explicitly alleged.
"Indictments are reviewed on a practical basis and in their entirety, rather than in a hypertechnical manner." United States v. Smith , 230 F.3d 300, 305 (7th Cir. 2000) (cleaned up). And, "while there must be enough factual particulars so the defendant is aware of the specific conduct at issue, the presence or absence of any particular fact is not dispositive." White , 610 F.3d at 959. For the purpose of analyzing a motion to dismiss, the allegations in the indictment must be taken as true and viewed in a light most favorable to the government. Moore , 563 F.3d at 586.
Here, Defendants challenge the indictment from a variety of angles. Above all, they argue that the indictment is insufficient because it fails to allege the quid pro quo or "official act" elements they contend are required of a violation of § 666(a)(2), especially in light of the Supreme Court's...
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