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tv   Kelly v. United States Oral Argument  CSPAN  January 18, 2020 7:00pm-8:03pm EST

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every are on the free c-span radio app. courtsday, the supreme heard oral argument in the case concerning the federal convictions of two people involved in the 2013 new jersey bridgegate scandal. one of them, bridget kelly, i a is a former deputy chief of then-governor chris christie. she was convicted for fraud and conspiracy for her role in shutting down two lanes of the washington bridge, causing major traffic jams between new jersey and new york city. another person who works for the port authority was convicted a similar charges. originally officials claimed the , reason for the lane closure was a traffic study but really it was revealed the real reason was payback against a local new jersey mayor who refused to endorse governor christie's reelection bid. the supreme court will now here whether the federal government overreached when it used a wire fraud statute to prosecute kelly and baroni for the political revenge
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plot. >> kelly versus the united states. >> mr. chief justice, and may it please the court, once again, the government is trying to use open-ended federal statutes to enforce federal government state and local at the state and local levels. it's theory this time is that the defendants committed property fraud, by reallocating two traffic lanes from one public road to another, without disclosing their real political reason for doing so. this theory turns the integrate integrity of every official level of every government into a potential federal fraud investigation. it ends runs mcnally and skilling by subsuming on a services fraud within property fraud and by criminalizing ulterior motives even without bribes or kick backs. it would affect the sweeping expansion of federal criminal jurisdiction interview particularly fraught area. this is not the law.
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this court in cleveland held that regulatory authority is not property. so unofficial who introduces a sovereign decision through deceit has not obtained property by fraud. only when the official lies to divert state resources to private use has he stepped outside to the regulatory realm and committed property fraud. this role distinctions property fraud from services fraud and from routine political contact. defendantsse the simply reallocated traffic lanes from one public used to another, the port authority utmost was deprived of military control and not property. that is true of whether the government now alleges the defendants lacked the authority in some sense to order the realignment. mr. levy will explain why the ,overnment is wrong to say that but it is ultimately legally irrelevant because the statutes do not emit lying to take unauthorized state action.
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they prohibit lying to obtain whatrty, and that is not occurred in this case. >> be have said that if the resources work devoted to , then thee prosecution would be ok. then why is it private use to benefit the defendants politically? >> your honor, i am trying to distinguish the motive. the decision was to realign the lanes from one set of public service to another set of drivers. both are public uses of the lanes. it is true that the alleged motive of that regulatory decision was improper, it was political. that was the allegation in the case. but that doesn't mean that the use of the lanes was private. your honor, the typical case in
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which the government has prosecuted property fraud against a public official is where the official lies to take property from the government for his own use. so, a situation where you live on your expense report, say you incurred this expense for business reasons and you did not. in that situation you're lying , and you are taking the property away from the government for yourself. that is obtaining property. here, what the defendants influenced through their deceit was a decision about the alignment of the lanes. if there is anything that is regulatory in nature -- >> so, mr. roth, on that theory, would it or would it not make a difference if the defendants here, rather than doing everything that they did for a political reason, if they had done it to make their commutes easier or their family commutes it wasn't anything
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about politics, it was their own personal interests, but they did exactly the same thing. is that covered or not covered on your theory? >> on my fear he, that is certainly not property fraud. the officials in that case have not obtained property by -- >> so you are not making a distinction between private uses and public uses. private purposes and public purposes maybe. >> i'm certainly not making distinctions between the type of purpose. what i am trying to distinguish is the use of the property. and is it a regulatory decision to realign the lanes for whatever purpose, because if what we are concerned about is the integrity of the purpose behind the decision, that really like services fraud. what we are concerned about is not that the government was being cheated out of property. what we're concerned about is the good path of the official in making the decision. >> that can be a hard-line to draw. if the rerouting of the traffic
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is done for commercial benefit of the individual in whatever way, that would be a violation. right? he's get a development or something, building a hotel in fort lee and he wants the traffic redirected there or directed away from, whichever, because he thinked it will increase business at his hotel. >> your honor, if the court were to consider that a kickback that would be honest services fraud, not property fraud. again, the decision there is a - public -- a decision but allocating scarce public resource among public uses. the concern in your honor's hypothetical, was it's good reason? was it to benefit the public or himself? what this court said in stilling is if you make the decision because you were paid a bribe or because you were going to be getting a kickback, that is a violation of your duty to provide honest services to the public. justice: what we're doing here
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is interpreting a statute, and it's not quite clear to me how your argument fits into the language of this statute. money is property. and money was lost. so how does this fit into the language of the wire fraud statute? >> your honor is correct. the relevant word is property, and the second relevant word is obtain. and this court in cleveland explains that when the government is making sovereign decisions in its capacity as sovereign, implicating its regulatory interests, that is not property within the meaning that congress had when it enacted the -- justice: was there a loss of money in cleveland? >> it's not clear if there was loss of property. certainly, i would say that there was an official who was processing the fraudulent application, and if he had not fraudulentthe application to process, he would have been doing useful work for
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the agency and maybe he would have gone home on our earlier and he paid less. i don't think that would have matter to the result in cleveland. does it fitll, how in the statute, that property isn't obtained when it is simply wasted? is it a gloss on the word "defraud?" >> there are two steps. first is to establish the decision that realignment is not property, because that is control, that is regulatory power. the second step is to say, what about the costs of implementing it? and i would say, the costs of implementing that regulatory decision are part and parcel of it and the scheme is not to obtain that property. the purpose of the scheme their , the object of the scheme is to effect the policy decision this, regulatory decision in the way that the officials want. justice: so in the case of sending city snowplows to clear
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your own house first, or sending city maintenance people to paint your own house if you're a public official, i was under the impression you thought that would be a crime. is that right? >> if you are sending the public employees to do private work, yes, absolutely. that's not regulatory. at that point, you are just taking city property and using it for private use. you are obtaining the property. justice: so even though both are diversions of city resources, or state resources, whatever it is, it's just one is regulatory and one is not because one involves personal benefit? >> personal use, yes, your honor. every regulatory decision diverts resources in some way. i mean, every time a public official makes a decision, there are implications for the bureaucracy and for public property. so there is diversion going on, and maybe the decision was made for a bad reason, and if it's a
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bad enough reason, maybe it's an honest services violation. justice: is your theory that the word "obtain" does the work in response to justice kagan's hypothetical? >> i don't think it is obtaining property. cleveland focused on property , and what did congress mean when it said property? it said, we are concerned with cheating people out of their property rights. you can do that with a government entity. you can cheated the government out of its property. is an example where the court said, you lied and committed property fraud when you avoided paying taxes. the same thing in a port authority situation. you owe a toll and lie to evade paying a toll, you have cheated the government out of property that is owed. but if what you are doing is making a regulatory decision like allocating public resources among public uses -- and there
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is no question that the main line is public use just as much as the special access roads are a public use of the property. that is not obtaining property. : i can understand the distinction between a regulatory decision and a deprivation of property when the regulatory does discussion cotts -- when the regulatory decision does not cause the loss of property. but when the regulatory decision causes loss of property, i find it difficult to see the distinction. explain it to me. >> i think every revelatory decision will have consequences for public employee time, for example, which is the species of property the government has invoked. but let's take this case is an example. focus on the additional money that was spent for the toll keeper. the toll keeper had to do an additional shift. but the toll keeper was doing her job of collecting tolls for the public. the port authority was not deprived of her salary, she was earning her salary. the objection is if this
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regulatory decision had not been made, we would not have had to hire the toll keeper for that work. justice: let me try this one more time. when we write the opinion, if we were to write one in your favor, how would we explain your result within the language of the statute? >> i think the court would say the statute prohibits schemes to obtain property when you are deceit to influence a regulatory decision, to change a regulatory decision. that is not obtaining property. corollary that is important, is the cost of implementing the regulatory -- if the cost of implementing the regulatory decision don't change the results. justice: i think i'll try mine , too. why when a public official says to a city maintenance worker,
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paint my house before you do anything else, why isn't that similarly an allocation of resources? >> because -- justice: and benefits me. but i got the sense, whether it yourinting or snowplows, plow my street first, what isn't about an allocation of city resources? >> let me try to clarify the confusion. if you are plotting public roads and say, i want to plow my street or minded would first, that is not obtaining property by fraud, because that is an allocation of resources to a public use that happens to benefit you. maybe that was your motive, and it is very bad, but it is not obtaining property by fraud. if you instead trick of the public employees not into plowing public roads but into plowing your private driveway, which is not the job of the government, that is not what the government does, the government is concerned with public
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property -- if you trick the government employees into plowing your private driveway, you have taken services for your personal use, which is fundamentally different. that is no different from saying, i worked overtime, when you didn't -- please pay me my hourly wage for my overtime that i did not work. justice: and that difference, to go back to justice alito's question, where in the statute? >> the differences in the scheme to obtain property. that's where it is in the statute. you look at what is the object of the scheme? and if the object of the scheme is to influence a regulatory decision, it's not a scheme to obtain property. that's just follows from cleveland. otherwise, every decision a public official makes is on the table, and the only thing that is separating -- justice: i am sorry. i thought the scheme was to make life difficult for fort lee. scheme, and you
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defrauded the use of government property to accomplish your goals, why is that any different than taking the maintenance worker to plow your roads? your private streets? here, difference is that the alleged purpose, the alleged motive was what your honor said, to increase -- justice: that was the scheme. >> yes, the scheme was to do that through a regulatory decision. by realigning the lanes from one public use to another public use. what the objection is to the conduct here is an objection to the purpose, not the objective use of the property. , i don'tmy problem is think i can see the headline that would say, it is ok for officials to use government public money in a way that is
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plainly unauthorized, not just in its motives but in its end-use, and an official can and should never be liable for that. our public officials now can use government resources for their , not mixed motive, which is the interesting question here with the traffic they, and whether yo have enough evidence of there wasn't a traffic study, but you that what the government has said, you are not authorized to do it, there is a question about that, and you didn't have even a mixed motive, you had only a personal emotive. mr.our honor, i will lead levy speak a little more at length about unauthorized. the government judging theory
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throughout the case was that he did have the authority but he abused his power in making the decision. i am not trying to suggest that this is ok. we don't want public officials acting for personal reasons or acting necessarily for partisan or political reasons. but what i am saying is the remedy for that is not a federal property fraud statute, we have certainly political remedies that we are very much -- have pretty substantial repercussions. there may also be state law constraints on official abuses of authority. jersey has a statute called official misconduct specifically directed toward unauthorized decisions with bad purposes. that is not what the federal property fraud statute is concerned with. the statute is concerned with cheating the government out of its property rights. that is not what we have here. we have an abuse of power, and ifal abuse of power,
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anything, again, that is not honest services fraud, which this court has limited due to concerns over kickbacks. >> there are no further questions. thank you, counsel. mr. levy. >> mr. chief justice and may it please the court. a public official who is acting politically and not for personal gain does not commit fraud by lying about his reason for an official decision if the decision was generally within his authority. the government disputed that below, but it now are just that as the rule of the court. that concession requires reversal. the government alleged and proved that mr. barone any was the cohead of the port authority
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responsible for supervising all aspects of its operations. the government itself elicited that there was never any policy fromprecluded mr. barone using his authority to alter a traffic pattern. for the government's rule to work, this court should require an objectively clear lack of authority, something not even arguably shown here. otherwise, any officials who conceals his political motivation risks the convicted of fraud if a prosecutor or jury later disagrees about the scope of his authority. if the government's role is to provide any limits, this case must lie beyond those limits. i would like to begin by discussing what the government alleged, argued or approved authoritybarone's about deciding the official's authorities the line between guilt and innocence under the fraud statutes. in thank you districted court in -- in district court, the
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government alleged that he was responsible for the general supervision of all aspects of port authority business, including the operations of its transportation facilities. from its main cooperating witness, the government elicited that exact statement precisely, ticking off one of the allegations from the indictment. it elicited from the witness that the title "deputy executive director was a misnomer. but within the port authority structure, the deputy director and the deputy executive director had a 50-50 split in terms of power-sharing. that the deputy executive director was not the number two position within the port authority. that is from the government and it from -- eliciting its own cooperative witness. the arrangement is always that, that there is a new york representative who was the
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executive director and the new jersey representative who is the deputy. is that right? >> that was at the time the arrangement. it was always appoint bid the by the deputy executive director and the governor of new york for the executive director. butough witnesses government calls testified that that was the arrangement. they called mr. baroni's successor who testified that that was the arrangement. justice: this is a bistate agency. why would new jersey agree to an arrangement like that where there are always in the second seat, at least nominally? is that the brick brother across the river, -- the big brother across the river, is that it? >> i don't know the answer to that except that the structure within the port authority, that was the case. it was understood that within the port authority the deputy executive director had equal authority. the vice-chairman testified but
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about these parallel chains of command, particularly for decisions made within new jersey . it was understood that would fall within the deputy executive director's scope of authority. justice: i think one of the government's main arguments on the efficiency of -- on the sufficiency of the evidence which was clearly pro-government, was that mr. whils wildsteen had to lie to te port authority employees about the executive director knowing about the lane change. if in fact the reality of the situation was that mr. barone couldn't do this without the executive director's acquiescence or acceptance, doesn't that show his lack of authority? why isn't that sufficient? so, two things, your honor.
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first of all i don't believe here here on a sufficiency ground and for reason we argued on our reply brief. even within that, we are not saying that the line might not be a piece of evidence, but even the government concedes in the case that the line does not show a lack of authority. by government concedes that unauthorized official is permitted to lie to their subordinates. so it cannot be particularly that lie automatically establishes a lack of authority here. all the evidence was that mr. baroni had authority over port authority employees. -- mr.hstein wa asked, whyhen he was did you come up with the traffic study his first answer was for purposes of the media and for purposes of explaining it to local officials. when pressed by the government,
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he said, a reason for the was to make this go over smoothly in the same without a public official wouldn't tell the world that they're doing something for a political reason. justice: but would you spent a moment on the traffic study. >> certainly, your honor. the government conceded that if the authority to order a traffic study, he could do so. they conceded that he had the authority to order a traffic study. what they are saying is that he lied about the existence of it. but as you point out, there was about or representation the existence of a traffic study. mr. rothstein said, i would like to know what the effect would be
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free switched these lanes. and study the results, collecting numbers, and tell me what the results are. the only part of that that is a representation is the first part -- i would like to know, my motivation is, my motivators. the government agrees that is not capable of being a lie. the other two parts or a distraction to do a traffic study. the port authority did that. that is what the government spent a great time in trial proving, that the money spent on the traffic study was illegitimate because nobody cared about the results. but the government agrees now that caring about the result is not an issue. they say the traffic study didn't exist. that is flatly contrary to -- justice: is it your position that suppose mr. barone had said, i am giving you no reason at all. or suppose he had said we are
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going to do a traffic study, but it is going to be a sham traffic study. would he still has had the authority? >> certainly, the first one. he had at any point the discretion to say, as somebody had done very o early on in creating these three traffic lanes, he would've said, i think they should have a fourth lane or are thinking should have only two lanes or only one, and that was fully within his authority. as the government argued and proved in the case below, that was their submission, was that he abused the authority he was entrusted with. "weice: and the sentence are going to do a sham traffic study?" >> he can do that. as a functional matter, who knows what results from that. yes, he has the authority to say , we are going to do a traffic study because i want to do this thing and for public reasons, it is easier to do a traffic study. justice: you said this was not a
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sufficiency question. what is it if it is not a sufficiency question, because as i understand your arguments, you are not pointing to any instruction that was incorrect or to the rejection of an instruction value offered. so how are we -- instruction that you offered. how are we to look at this from a sufficiency lens? >> the way to look at it from a forfeiture issue. the defendant in a district court said that if we were authorized, then that is a complete defense. the government told the district court, do not give that instruction. the district court said it is not a defense, i am not giving that instruction because i do not want to confuse the jury. now in this court, the government is saying that it turns out the difference between guilt and innocence is whether or not he was authorized. and we get the benefit of
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evidence year in review -- review. year htiary we offer and that in the district court and they said it didn't matter. this court should assume there is a lack of authority. justice: is there any reason to think the jury actually made a finding about barone's authority? >> no reason whatsoever. the district court was attempting to make sure that they didn't consider that be relevant. that was what we pressed, what that this is the relevant distinction and the district court wanted to make sure the jury didn't believe it was a defense, and nothing in the jury instructions suggested it would be a defense. thank you. justice: thank you, counsel. mr. fagan. >> thank you mr. chief justice, and made it please the court. the defendants in this case committed fraud by telling a lie
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to take control over the physical access lanes to the george washington bridge and the employee resources necessary to re-align them. unless they lied about the existence of the port authority traffic study, none of them have the power to direct those resources and realign the lanes. because they told that lie, those resources were answering to them to their own private purposes rather than to the public officials duly appointed to decide what those resources should be allocated to do. their actions in this case were fraud in the same way that it would be fraught for someone with no connection to the fourth authority to impersonate port authority supervisors and order port authority employees to realign port authority lanes. context, forvate someone to usurp the authority by deception of a taxicab company's dispatcher and order the cabs and the drivers to good go wherever the fraudster pleases. they don't get a free pass
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simply because baroni worked for the port authority, when the evidence showed that he did not have the power to direct these resources in this way without telling a lie. they don't get a free pass because they are hypothesizing that the legitimate decision might in theory have decided to realign the lanes, when the precise point of their skiing was to take the decisions out of the decision-makers hands and put it into their own hands. they don't get a free pass simply because their motive happens to be political. let me start with the legal argument which was made by kelly's counsel, which seems to be drawing a distinction that you and in public uses. there are two main problems without -- probably three. one is, i don't see where a license for that is in the statute. and the second problem, which is that it seems to draw the distinction between fraud where
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the victim is a public entity and where the victim is a public private entity. the court rejected that distinction in a previous case. i don't know how the taxicab hypothetical, say it is only fraud if the cabs go to private use. we're talk beaut private company in that context. and the third problem is, i don't know how a jury -- i think some justices in this court are grappling with this, i don't know how a jury decides the difference between a public and a private use. justice: you have two separate points, i think. one is your statement now, which i think it's stronger than in your brief, that if you have authority and you work for the government, only if you say the lie, not truth, then you don't have authority. the code of federal regulation, rules of any department, the government is filled with rules. and there are numerous instances where a person might say something untrue about something related to a rule that gives them authority for that.
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we are enough to say, back to honest services, and it is also true of the second, if in fact there are two separate parts to the second. i might as well get both questions out. one is on the authority, i don't know where that comes from. if you have authority to do something in government, but you can't, or you lie about , well, thatnything you are in the property stealing statute. the second problem with your second claim is, if you don't have authority, but you put what now, is to public use, it a conversion of property, a obtaining the property within the statute, or it is it? , i don't see how honest
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services fraud is not back in the statute, which has been ruled out since mcnally. if it isn't, i don't see how this case works. me answer the let second part of your question first, and i will try to get back to the first part. to answer the second part of saying,stion, as i was i don't think there is a distinction between private and public uses works because that's not a distinction the statute draws -- then?e: my point was why, we are back to honest services. there is no deprivation that does not require somebody in the government to spend some time or use some paper or use some telephone in order to achieve that dishonest thing. if you are going to count that
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as property, fine. you could do it under some statute. but if you do it under this statute this statute, then prohibits the taking of dishonest services, exactly what the court held it doesn't do. a your honor, it will take me second to play this out, but i think it is a very important distinction. they are trying to lump different kinds of fraud together and make them all sound the same. this case is about a very specific kind of fraud, commandeering fraud. it is when the defendant tries to take over property that is in the hands of the victim and manage it as if it is his own property. that is what they were doing with the lanes on the bridge and in the employee resources. for example, if there is a and iow sitting there take the, keys and drive off in the snowplow everyone would agree that i have obtained the snowplow. if i instead put on one of those
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masks from the "mission impossible" to be show or movie and i impersonate the snowplow driver and tell the snowplow driver to drive around in it and exact same thing is going to do, i have obtained the snowplow and the drivers are misses by fraud. but not every deceptive -- snowplow and the driver's services by fraud. not every deceptive scheme works that way. sometimes the defendant once the scheme to do something on their behalf. sometimes they're deceptive schemes in which somebody simply wants an agency to do something or wants a private victim to do something on his behalf. and then you have to look at what is actually the object of the scheme and how the scheme works. >> but the basic difference between taking the snowplow is the official has no authority to take the snowplow for his private use. the official does have authority to regulate how lanes are used on the highway, and say these are going be used for fort lee, these aren't. baronist of all,
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did not have the authority in this case. i can get to the evidence of that in a second. i don't think it is fair to call this a public use. public use is the use to which the legitimate supervisors of the port authority have decided to put the port authority -- justice: you're saying that your theory is that by the actions in this case, they have commandeered the lanes on the expressway? >> yes, your honor. they commandeered the lanes and resources necessary -- justice: it is still being used for public purposes. >> i am not sure what they mean when they say they are being used for public services. justice: if people want to use the highway to get out of fort lee, they can and it would have nothing to do with the scheme at all. >> your honor, i guess i would push back on this to this extent. if they decided to close the bridge, is that public use or private use? if they decide only kelly can use that lane, is it public use or private use? if they decide on red cars can
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go down the lane, -- justice: they didn't decide any of those thing. just a problem getting there admit, is quite a problem. they used it for cars going down. there is a role. treat every street alike. and you know what the snowplow did? he snowplowed the mayor's street first. that is not a good thing to do. it is really undesirable and maybe it should be a crime. but 30 years in prison? that, in not sure. this statute has to do with property fraud, and is taking the snowplow and putting it to the use of a public street in violation of a role treating the mayor better -- violation of a rule treating the mayor better? is that a property crime? >> your honor, in about
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hypothetical, we would not say that is fraud. there is no lie. there is nothing material. justice: of course, there is. where are you going? i am going to fifth street first and then i will go to the then, -- ah, you know what he did? he went to the city councilman street. there's a lie. it's easy to make up cases that there's a lie in and that is my problem, same problem. we are back into honest services fraud, which is fraud, and bad. the question is, does this statute get it? >> we are not into honest services fraud. first of all, the lie was not told to obtain property, it was a lie about what he was going to do. in the honest services fraud cases, in mcnally for example, there was no dispute that the defendants and mcnally had the
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authority to decide who was going to ensure the state of kentucky -- justice: this is what troubles me about your argument. your argument is that if bernie wasauthorized -- ifbaroni authorized, he could not be convicted. >> if he had the authority to do what he did, he is not committed fraud. justice: that this care of a lot of these hypotheticals that are disturbing to some people. he said that the jury found he was authorized and there is sufficient evidence to support that finding. >> they found he was not authorized. justice: sorry, the jury found he was not authorized. but i see no indication whatsoever, no reason to believe the jury made any such finding. i have read his jury instructions several times. there is nothing in there that to thelert the juror obligation to find that baroni
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was unauthorized, unless i missed something. >> a couple of things about that. they did not make objection to the jury instructions properly in the court of appeals. justice: i know that, but i have never seen a criminal case where jurye asked to defer to a 's findings on something that the jury did not find. putting aside the question of whether there is any evidence to .how he lacked authority >> let me point you to a couple of places. first of all, there is the instruction that the court of appeals deemed adequate, page 875, the joint appendix, the instruction on obtaining property which the court of appeals deemed sufficient to notify the jury that when someone is acting on behalf of therganization, acting as agent about organization, he is not obtaining property when he exercises the authority that the agency has duly conferred on him.
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but even better than that is the materiality instruction from pages 875 to 876 which says if you find that the representation that the lane and told both reductions was for the purpose of a traffic study was false, you must determine whether that representation was one that a reasonable person might have considered important in making his or her decision to commit port authority resources for that endeavor, including services of port authority personnel. justice: what does that say about authority to reallocate the lanes? >> your honor, if baroni had the authority to reallocate the lanes for any reason or no reason, as his counsel stated he did, i don't see how the jury could have found that the lies told were material. justice: everybody has authority to spend or do their act on behalf of the agency. anybody who does it for their own personal purposes is
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unauthorized. so it is meaningless to say, is he authorized or not. he asked authorities to close the lanes under certain circumstances? did he have authority to close the lanes on his own site? >> he might have. what he did not have was the authority -- justice: did you prove that he had limited authority? where did you prove -- he did not have the authority to close the lanes under these circumstances without telling the lie. i can explain why, if you like. when whil wildstein first proposed the idea of realigning the lanes, baroni's immediate response was to ask wildstein how he was going to do that. wildstein came up with the idea that they would have the cover story of a traffic study and he explained that one purpose of the traffic study cover story
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was in order to enlist the port authority officials they would need in order to realign the lanes. he then had to lie to both the manager of the george washington bridge and the manager of the tunnels, bridges and terminals that the executive director was aware and had tacitly approved of it, where in fact, they were actually concealing it from the executive director. justice: this, contrary to their expectations, there had been no slowing of traffic -- if contrary to their expectations, there had been no slowing of traffic. and in fact, the lanes on one lane traffic remained the same or maybe improved. would you still have a case here? >> yes, your honor. the effect was catastrophic. that was the reason why the prosecution was brought, because of the incredible danger in which they put the citizens and commuters of fort lee. but they would still have committed the same crime. there were hiding it from the executive director.
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wildstein stated that there were processes to use port authority resources, and he did not follow them. when the executive director found out, he duly canceled it and stated that the process had been quote, "subverted." baroni clearly had siant authority within the port authority organization. howwhen someone questions they will do something, has no idea how they are going to do something, has a lie in order to accomplish it, has to lie that his boss has approved it, has to conceal it from his boss -- justice: isn't it often the case of the person who has the authority to do something may lie about why the person is doing the thing because, if the real reason was exposed, there would be a a furor, people would be angry, but it doesn't show the person doesn't have the authority to do it. a person hires his brother-in-law for his position, why did you hire this person? well, he is the best qualified person for this job, when the
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real reason is, his wife wants him to do it. [laughter] he doesn't want to say -- does that show he didn't have the authority to fill this position? >> your honor, that is not the only piece of evidence we are relying on. this isn't a lie why they're doing it. this is a lie that wildstein directly testified that they needed to tell in order to get the resources that they needed. it was clearly important to the george washington bridge manager and the manager of tunnels, bridges, and terminals, that this was something the executive director knew about. both the executive director and vice-chairman of the port authority board of commission ers testified that they would expect to be notified about something that was even an order of magnitude less disruptive that this was going to be, and they were never notified. want to losen't what the question was in light of the instructions given. thati have so far found is
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the defense did ask the jury to be instructed to do just what you want. said, judge, tell the jury that if the port authority granted or bestowed on the defendants the power or authority to control the property, the bridge et cetera, , and that they acted within the of that authority, then you can't find the scheme to defraud. i think you agree with that, and the problem is, the judge said no, i won't give that , instruction. then what the judge gave as an instruction insofar as the court of appeals -- and we are reviewing the court of appeals -- insofar as as the court of appeals, they said, well they gave the essence of it. the instruction is that they gave the essence of it. to establish a scheme to defraud, the government must prove the scheme deprived the port authority of money and
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property. what? that's the essence of what he didn't give? now, i haven't read the two instructions you read. but the one that i read, i think is the one that the court of appeals relied upon. so what do we do about that? >> your honor, i would look back at the materiality of the instruction. justice: but that is not what the court of appeals relied on. >> i think of the court of appeals got the substance right and you don't agree with this reasoning, there is no reason to reverse, particularly when the issue hasn't been presented to the court. this question was only raised in , whoeply brief of baroni didn't even petition. that is structured proposed in the context primarily of an instruction on 18 u.s. sc666. which is the more general misappropriation of federal funds statute. the instruction on that, which appears on page 870 is the joint
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appendix already pertains to authority. they were quite clear in district court, and you will see this in the finding of both the court of appeals and the district court that, kelly and baroni were free to argue the authority issue. the only question was whether the jury would get specific instruction on that point, and the government believed the instruction was unnecessary. it would have been a novel addition to the third circuit pattern jury instruction on section 666. moreover, i don't know that there instruction was correct. it might have confused the jury into thinking, and this goes back to my colloquy with justice sotomayor your, that if baroni had some authority under some circumstances that would given justice: you say you thought-based auction was unnecessary. case,ight have been the but surely after your focus here on the authority for it, you would not make that same
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statement. it may honor, i think have been better to is struck of somewhat more specifically on authority. justice: more specifically on the central point of the argument before us today. >> i don't know that a specific instruction would have a comp the state. i don't know that the instructional issue is before the court today. but we are defending these convictions on the precise same ground they were found to be valid by both the court of appeals and the district court, which addressed the authority issue. the district court o addressed the authority issue, telling the defendants that they could argue it a trial. and the third circuit addressed it. we have been consistent throughout that we have never argued, to my knowledge, and is certainly have not identified a place where we have argued, that if baroni in fact had the authority that his counsel and he had, which is to realign the
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lanes for any reason or no reason, that these defendants -- , nobody, no feigin decision maker has the authority to make any decision for no reason. such a misnomer in terms -- people have authority to do things only in the interests of the agency. line-drawing of a reason or no reason, meaning, -- i don't think anybody in the port authority, including the executive director could then you know, i like playing on a board. let's change it to one lane because of lack to see a different pattern today. >> my apologies. justice: so give me your definition of what "authorized" means.
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when i first read your brief, it was, if he had the ability to change the lanes on his own, then he had authority. all right? now, what the limits of that authority are is where i am trying to get to. but it yet be no authority. >> your honor, simply repeating the language the court of appeals itself used, which may have been a little hyperbolic, if he were the person to whom the port authority entrusted the decision of whether there should be three lanes or one, such that his decision under these circumstances would govern, then he had the authority. i think the evidence showed that he was not that person. again, he had to lie about --
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justice: the fact that the executive director could overturn him doesn't prove the positive. >> that's right, your honor. we wouldn't rely on that piece of evidence alone just like we are not relying alone on the fact that he told a lie. we are relying on a combination of circumstances. again, as i was saying earlier, when an idea of something to do with my organization's resources is raised to me and my initial reaction is, how are we going to do that, and then the idea is to tell a lie that will get everyone on board with it, then we lie about the fact that my boss is aware of it, and tacitly approves of it, we avoid every legitimate process and conceal it from my boss, i think a reasonable jury can rationally conclude that i am doing something i don't have the authority to do. i was going to say, that is what baroni did hear. apologies. justice: can i switch, because
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the statute clearly says that a scheme of deception has taught -- the object of it has to be to obtain property. can we talk about that for minute? if i look at this, and i am an ordinary juror, i am thinking the object of this deception was not to obtain property, it was to create traffic jams, the object was to benefit people politically. you can frame the object in lots of ways, but notwithstanding that some employee time was given over to this scheme, that was not the object of the scheme, was it, to appropriate that employee time? >> well, your honor, i think it was, because this gets back to what i was saying to justice breyer earlier. this is a particular type of fraud where it is commandeering fraud. where what they are trying to do is take property in the victim's hand, here the port authority,
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and convert to their own uses. if i take the knife off a table that doesn't belong to me and stab someone, my end goal is to stab someone, but have still stone and the knife. justice: but wasn't the commandeering here incidental and unnecessary to the scheme being carried out? i know there was a bit of time for an extra pull person, actually, to mitigate the , orlems of the traffic jam there were some people running around counting cars to conceal the purpose of what they were doing, but that was not the object of the scheme. >> your honor, the object of the scheme was for them to take control of real property, physical lanes accessing the george washington bridge, and have them be allocated the way they wanted. justice: that is a different story. that's not the employee time and labor. that's like appropriating the george washington bridge. is that right?
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it is reallocating lanes on the george washington bridge. i would have thought that cleveland makes clear that that is not an appropriation of property either. >> your honor, i think it is both. because they needed employee resources to accomplish what they were trying to do with the bridge. if i could address cleveland for a second, this case and cleveland do both involve governmental decision-making. but that's where the similarities end. in cleveland, the object of the scheme was to obtain a license under a migratory scheme that had no private analog whatsoever, it rejected every private analog the government offer to it. the license was not property in the government's hands. here you are talking about real property, physical lanes and who can access those lanes. access rights to physical property are quintessential forms of property, probably one of the oldest forms of poverty we have. then you have the employee
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resources necessary to reallocate the lanes, which i think even they acknowledge our property under the fraud statute. they acknowledge that if you send interest to paint the mayor's house, that is going to be property fraud because you are taking the employee services. justice: that's because the object of the scheme is to use the employee labor to get your house painted. but i don't think that you can say the same thing here. >> your honor -- justice: you are not using the employee labor to create the traffic jam. >> they are using the employee labor as if it were there's, not as if it was -- as if it were s, not as if it were something that the port authority gets to use in their private -- if i were to impersonate the boss and start flying around in the company jet, i have obtained the company jet -- justice: you picked an example that's easy for you. an example that is hard is futile the employee to pick up the phone and call somebody and say this.
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that is a bad thing. then immediately you say, ok, it is property fraud because i a few minutes of the employees time to convey the message. that is taking property, so it is covered by the fraud statutes, that is what you are saying. >> we wouldn't, your honor. this gets back to justice kagan's question. incidental uses a property that are not the object of the scheme are not going to be sufficient for property fraud. the easiest place to look for that is this court's decision in loughran, which involved bank fraud. the court said that if you tell a lie and the object of july is to tell money, it is not been fraud simply because on related to your lie, you didn't really care how the money came to you. that money comes to you in the form of a check, which is backed property, as opposed to cash, which it isn't.
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, and ofne tells a lie the object is to obtain a license from the state of louisiana to operate a video poker machine, which is not property, they are not committing property fraud just because some employee needs to spend some time processing the -- justice: the object of the scheme was not to commandeer lanes on the bridge. the object was to cause a traffic jam in fort lee, and if they could have done it some other way, then they would have. the use of altering the traffic lane configuration was just the incidental means of achieving the objective. >> i don't think that is right. the lie they told the for the authority to get the port authority resources was a lie that they told in order to get the resources. the causing of the traffic jam is what they wanted to accomplish with those resources. if i tell a lie to get access to the company jet, and maybe my goal is to take it on a vacation trip, but that is not the object
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of the scheme as far as the fraud is concerned, and the victim of the fraud. thank you. justice: thank you, counsel. two minutes, mr. roth. >> the government's theory of property here, as i think we just heard, is that the officials, by making this decision about lane alignment, commandeered control over the george washington bridge. that is exactly the type of regulatory control that cleveland said is not property. cleveland referred to the intangible rights of allocation, exclusion and control. the suffering's rights of allocation, exclusion and control are not property for the purposes of this statute. therefore, if what the officials deceits to th exercise those rights, they have not obtained property from the flood authority. if that is not correct, everything the official does
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falls within the scope of this statute, and the only question is whether there was the seat is involved. if that is right, then the chilling effect on honest public servants is going to be severe. justice: you responded to one half of their theory, one half of the theory is the allocation of land, and the other half is >> the incidental costs are not the object. the implementation of the decision will use some public resources. that cannot change the result. incidentalou call it when it was an essential scheme? as a result of the regulatory decision. the regulatory decision was to realign the lanes, taking tolls, studying the traffic effects,
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but that was not the object. >> what if it cost $1 million? would it be incidental? >> yes. it is a question of what is the object. >> thank you, counsel. case is submitted. announcer: here is what is coming up tonight, next joe biden pete buttigieg, amy klobuchar and elizabeth warren speak at an iowa education conference. after that, the founder of the walkaway campaign talks about his efforts to get democrats to leave their party. rice and obamaan administration officials talk about the national security priorities the progress government should focus on during its first 100 days in office. our live coverage of presidential candidates in iowa
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continue sunday. amy klobuchar, elizabeth warren, pete buttigieg, and others. senatort 4:30 eastern warren, followed by senator bernie sanders at 5:30 p.m. in des moines. watch our coverage of the candidates this weekend on c-span,, or listen on the free c-span radio app. next, joe biden, pete buttigieg, amy klobuchar, and elizabeth warren speak at niu education conference. -- at an iowa education conference. mr. beranek: good morning, everyone. all: good morning.


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