Snyder v. United States

Issues

Does a prohibition on “corruptly accepting anything of value, intending to be influenced or rewarded” include gratuities, or does it only prohibit bribes?

Oral argument:

April 15, 2024

Court below:

United States Court of Appeals for the Seventh Circuit

This case asks the Supreme Court to decide whether 18 U.S.C. Section 666—the statute for federal-funds bribery—also criminalizes gratuities. Snyder, a former mayor in Indiana, steered city contracts to a local company and then accepted from that company a fabricated consulting job worth $13,000. A jury convicted him of accepting an illegal gratuity under the statute. Snyder argues that the law only criminalizes bribes, however, because Congress has removed the language from the statute that used to refer to gratuities. The United States argues that the statute criminalizes gratuities through the word “rewarded,” while the word “influenced” refers to bribes. This case raises concerns about federal intrusion on state interests depending on how broadly courts will construe federal criminal statutes that seek to prohibit gratuities. It may also affect the outcome of how federal prosecutors will combat corruption at the state and local levels.

Questions as Framed for the Court by the Parties

Whether 18 U.S.C. § 666(a)(1)(B) criminalizes gratuities, i.e., payments in recognition of actions a state or local official has already taken or committed to take, without any quid pro quo agreement to take those actions.

Facts

James Snyder became mayor of Portage, Indiana, in 2012. United States v. Snyder at 2. At the time, he was behind on both his personal taxes and his business’s payroll taxes. Id. at 2–3. The IRS had levied on his personal and business bank accounts, allowing it to collect incoming payments to satisfy Snyder’s tax debts. Id. But Snyder devised a scheme to evade the levy on the business and failed to report the additional income he received to the IRS. Id. at 2–3, 21. By 2016, he had fully paid off his personal tax debt. Id. at 17.

In his campaign, Snyder promised to improve garbage collection in Portage. Brief for Petitioner, James E. Snyder at 6. Once in office, he put his friend Randy Reeder in charge of a public bidding process to buy better garbage trucks. Snyder at 25. Snyder and the two people he appointed were to vote on the bids. Id. Reeder set requirements that favored Great Lakes Peterbilt (“GLPB”), a local truck dealer owned by Robert and Stephen Buha. Id. at 2. For example, Reeder demanded an “unusually fast” delivery that only GLPB could do. Id. at 25. Multiple bids were submitted in January 2013, but only GLPB met all requirements and thus won the contract. Id. at 25–26.

Around the same time, a GLPB manager told Reeder that GPLB had another unused truck available for sale. Id. at 26. Snyder wanted to buy the truck “outright,” but state law required a public bidding process. Id. Reeder again invited bids, but he set the requirements “to match the truck sitting on GLPB’s lot.” Id. In December 2013, GLPB again won the contract. Id.

GPLB received $1.1 million in total for the two contracts. Id. at 25. Witnesses later testified that the dealer earned between $20,000 and $30,000 in profits from the contracts. Id. at 6. Witnesses also testified that the city could have saved $60,000 had it not asked for the fast delivery. Brief for Respondent, the United States at 9.

Soon after, Snyder went to GPLB, told the Buhas about his tax debt, and asked them for $15,000. Id. at 27. They decided to pay Snyder $13,000, in exchange for future consulting services. Id. Robert Buha told GLPB’s controller that the payment was really for Snyder’s influence. Id.

In the meantime, the FBI had begun investigating Snyder. Brief for Petitioner at 7. When the FBI questioned Snyder about the payment, he said it was for “health insurance . . . consulting,” explaining that he had “advised GPLB on healthcare options after passage of the Affordable Care Act.” Snyder at 40. But he could not point to any work product. Id. at 40–41. In addition, he had told Reeder that the payment was for payroll and telephone consulting, while he had told another employee that it was for lobbying the state legislature. Id. at 27.

In November 2016, Snyder was indicted for obstructing the IRS and for federal-funds bribery under 18 U.S.C. § 666(a)(1)(B) (“Section 666”). Id. at 3. He was convicted of both crimes. Id. at 3–4. He then appealed to the United States Court of Appeals for the Seventh Circuit, arguing that the bribery statute does not apply to gratuities. Id. at 24. The Seventh Circuit affirmed his convictions. Id. at 2. It refused to recognize an upfront quid-pro-quo requirement—which distinguishes bribery from gratuities—and held that the statute “easily reaches both bribes and gratuities.” Id. at 35–36.

The United States Supreme Court granted Snyder’s petition for certiorari on December 13, 2023. Brief for Respondent at 1.

Analysis

THE TEXT OF SECTION 666: WHETHER “REWARDED” INCLUDES GRATUITIES

Snyder argues that Section 666 criminalizes bribes but not gratuities. Brief for Petitioner, Snyder at 16. Snyder defines a bribe as a “quid pro quo exchange of something of value for official conduct” and a gratuity as a “payment[] in appreciation for actions already taken . . . , with no required connection to any quid[-]pro[-]quo exchange.” Id. According to Snyder, the text of Section 666 covers only bribes by following a quid-pro-quo structure. Id. Snyder posits that accepting anything of value is the quid, the government conduct is the quo, and the corrupt intent to be influenced or rewarded is the pro that satisfies the exchange requirement. Id.

Next, Snyder contends that if Congress had wanted to criminalize gratuities in Section 666, it would have used clearer language than “intending to be rewarded.” Id. at 17. Snyder argues that the use of the word “rewarded” in the statute means the same as the word “influenced” because they both refer to exchanging government conduct for private gain. Id. Snyder adds that in common law, rewards commonly refer to payments made to influence a public official’s conduct. Id. at 18. As an example of that definition, Snyder notes that people intend to be rewarded when they find and return a lost pet to its owner “spurred . . . by the offer of a lost-dog reward.” Id.

Lastly, Snyder posits that Congress often uses “overlapping terms” to prevent guilty individuals from using statutory gaps to escape liability. Id. at 21–22. Here, Snyder contends, Congress added the word “rewarded” to close two statutory gaps. Id. at 20–21. First, Snyder asserts that it forecloses an official’s defense that the official “supposedly would have acted the same way” without the payment. Id. at 20. An official can raise that defense, Snyder argues, because the word “influenced” implies that the official must have acted differently because of the payment. Id. According to Snyder, the word “rewarded” ensures that Section 666 reaches all quid pro quos, even when the official claims they did not act differently. Id. Second, Snyder claims that the word “rewarded” refers to payments made only if and after the official has taken the desired act, filling the gap left by the word “influenced,” which refers to payments made before the act. Id.

The United States (“U.S.”) maintains that Section 666, through the word “rewarded,” criminalizes gratuities and not just bribes. Brief for Respondent, the United States at 19. The U.S. defines an illegal gratuity as “a reward for some future act that the public official will take (and may have already determined to take), or for a past act that [the recipient] has already taken,” citing United States v. Sun-Diamond Growers, a case about gratuities under 18 U.S.C. § 201(c). Id. at 19. According to the U.S., dictionaries define a “reward” as something “given in return for good or evil done or received.” Id. Unlike a bribe, the U.S. argues, a reward does not require any “prior meeting of the minds” before the official act. Id. at 20–21. As an example of this definition, the U.S. notes that people are rewarded when they return a lost wallet to its owner without “any agreement with the owner to find the wallet in exchange for the money.” Id. at 20. Accordingly, the U.S. contends, Congress has often relied on the use of the term “reward” to criminalize gratuities. Id.

Next, the U.S. argues that Congress did speak clearly enough to criminalize gratuities. Id. at 18. The U.S. posits that Section 666 refers to two different kinds of actions by separating the words “influenced” and “rewarded” with “or.” Id. at 21. As a result, the U.S. contends, the statute covers both bribes agreed upon before the official act and illegal gratuities paid after the fact. Id. The U.S. asserts that if Congress had wanted to criminalize bribes alone, it would have used clearer language. Id. at 22. In other statutes, the U.S. notes, Congress has only classified a “reward” as a bribe when that reward is given in exchange for a promise or a future act, with an agreement beforehand. Id. at 22–23.

Lastly, the U.S. disagrees with the two gap-filling purposes that Snyder identifies. Id. at 24. First, the U.S. disputes that an official can defend against a bribery charge by claiming that the official would have acted the same way without the payment. Id. The U.S. asserts that officials commit bribery as soon as they agree to be influenced, and that actual influence is not an element of the crime. Id. Second, the U.S. disagrees with Snyder that the word “influenced” left a gap in the statute for payments made after the official act and that Section 666 therefore needed the word “rewarded” to cover those payments. Id. According to the U.S., the language “agrees to accept” already covers such arrangements. Id.

THE HISTORY AND STRUCTURE OF SECTION 666

Snyder argues that Section 666’s history supports his argument that the statute only applies to bribes. Brief for Petitioner at 34. Snyder notes that the statute initially criminalized “accept[ing] anything of value . . . for or because of the recipient’s official conduct,” and the statute is modeled after Section 201(c), which criminalizes gratuities for federal officials. Id. But two years after the enactment, Snyder points out, Congress replaced that language with “corruptly . . . intending to be influenced or rewarded.” Id. Snyder contends that because Congress deleted the exact text that criminalizes gratuities in Section 201(c), Section 666 no longer criminalizes gratuities. Id.

Snyder further asserts that Section 666’s title and structure weigh in favor of a bribery-only interpretation. Id. at 26. Snyder notes that the title mentions theft and bribery, but not gratuities. Id. Snyder argues that the structure follows the title, with Sections 666(a)(1)(A) and (B) criminalizing theft and bribery respectively. Id. Snyder further argues that the safe harbor in Section 666(c)—which allows officials to accept well-intended, normal compensation for outside employment—avoids criminalizing innocent payments that look like bribes. Id. at 27.

The U.S. counters that Section 666’s history supports its argument that the statute applies to gratuities. Brief for Respondent at 27. The U.S. agrees with Snyder that Congress intended to criminalize gratuities when it first enacted the statute. Id. at 27–28. But the U.S. argues that Congress merely restyled the statute later and did not intend a “dramatic retreat from coverage of gratuities.” Id. at 29. The U.S. claims that 18 U.S.C. § 215 was amended around the same time as Section 666, contains identical language, and “is well understood to cover gratuities.” Id. According to the U.S., both statutes purport to “reach corrupt gratuities without criminalizing routine gift-giving activity in the workplace.” Id. at 30.

The U.S. also contests Snyder’s arguments about Section 666’s title and structure. Id. at 26. The U.S. first notes that the title of Section 201, like Section 666, does not mention gratuities even though it “undisputedly” criminalizes them. Id. The U.S. further argues that the safe harbor in Section 666(c) is primarily aimed at gratuities because well-intended compensation is “far more likely to be mistaken for a gratuity than a quid[-]pro[-]quo bribe.” Id.

SECTION 666 COMPARED TO STATUTES SEPARATELY CRIMINALIZING GRATUITIES

Snyder argues that in other statutes, Congress separately addresses gratuities when it wants to criminalize them. Brief for Petitioner at 28. First, Snyder points to Sections 201(b) and (c), which criminalize bribery and gratuities separately. Id. Snyder notes that the Department of Justice recognizes Section 201 as creating “two distinct offenses” and that Congress criminalized gratuities in Section 201(c) because of concerns unique to federal officials. Id. at 29–30. Next, Snyder points to 18 U.S.C. § 213 and § 292, which expressly prohibit gratuities, and to 19 U.S.C. § 60 and 22 U.S.C. § 4202, which do not expressly prohibit gratuities but which Congress specifically enacted for that purpose. Id. at 30–31. Lastly, Snyder points to 13 U.S.C. § 211, 18 U.S.C. § 600, and 33 U.S.C. § 447, all bribery statutes in which the word “reward” refers to a bribe offered to a public official. Id. at 19.

The U.S. counters that other statutes use the word “reward” to refer to gratuities, similar to Section 666. Brief for Respondent at 20. First, the U.S. points to 18 U.S.C. § 1912, which criminalizes gratuities by prohibiting federal shipping agents from receiving a “reward” for carrying out their duties. Id. The U.S. also points to 26 U.S.C. § 7214(a)(2), which similarly criminalizes gratuities by prohibiting IRS officials from receiving a “reward” for performing their duties. Id. at 20–21. Lastly, the U.S. disagrees with Snyder about Section 4202 and argues that it does expressly criminalize gratuities by prohibiting customs officials from receiving a “reward” for their services. Id.

Discussion

FEDERALISM AND INTRUSION ON STATE INTERESTS

The Washington Legal Foundation and Due Process Institute (collectively “WLF”) argue, in support of Snyder, that regulating gratuities under federal criminal law deters citizens from showing gratitude to or voting for state and local officials. Brief of Amici Curiae Washington Legal Foundation and Due Process Institute (“WLF”), in Support of Petitioner at 23–24. The WLF contends that local legislators, many of whom work part-time, and their constituents would hesitate to enter into any financial transactions, fearing prosecution under Section 666 for any business or personal relationship. Id. at 26–28. As a result, the WLF asserts, only citizens who can get by without outside employment would take official part-time positions, restricting who would run for local political positions. Id. at 27. The James Madison Center for Free Speech (“Madison Center”) further claims, in support of Snyder, that applying the statute to gratuities would allow the federal government to selectively prosecute unfavorable individuals. Brief of Amicus Curiae James Madison Center for Free Speech (“Madison Center”), in Support of Petitioner at 8.

Additionally, the Madison Center argues that Section 666 disturbs the balance of federal and state authority by federalizing crimes that would be better enforced at the state level. Id. at 15. The Separation of Powers Clinic (“SPC”) contends, in support of Snyder, that federal corruption laws are also notoriously vague, posing a serious concern for fair notice and empowering unelected judges and prosecutors to legislate what counts as criminal conduct. Brief of Amicus Curiae Separation of Powers Clinic, in Support of Petitioner at 3, 10. The SPC asserts that the statute has become the federal government’s main tool for prosecuting state-level corruption because proving gratuities is much easier than proving bribery. Id. at 12. The American Center for Law and Justice (“ACLJ”) maintains, in support of Snyder, that the statute intrudes on states’ interests, hindering state regulation of bribery. Brief of Amicus Curiae American Center For Law and Justice, in Support of Petitioner at 26–27. According to the ACLJ, the Seventh Circuit’s holding is contrary to the understanding of states within the Seventh Circuit, like Indiana, Wisconsin, and Illinois, who have all read the statute more narrowly. Id. at 27–31.

The U.S. counters that federalism concerns are misguided because Section 666 limits the scope of gratuities that it criminalizes. Brief for Respondent, the United States at 36. The U.S. argues that the statute only prohibits gratuities that are (1) outside the usual course of business, (2) connected to business or transactions with a value of more than $5,000, and (3) accepted “corruptly.” Id. As a result, the U.S. contends, the statute only prohibits corrupt gratuities like an official’s illicit acceptance of money from a contractor to whom he had granted lucrative city business; it does not prohibit benign thank-you gifts that public officials receive from members of the public. Id.

The U.S. next asserts that the $5,000 monetary threshold requirement of Section 666 prevents prosecutors from applying the statute in most of the situations that Snyder warns about. Id. at 38. The U.S. names two examples: a grateful parent giving a gift to a public-school teacher, and a token of thanks that a citizen offers to a municipal employee for plowing her road. Id. In both situations, the U.S. argues, the gratuities are unlikely to exceed the $5,000 threshold. Id. at 38. The U.S. also claims that Snyder fails to cite any cases showing that the statute in fact criminalizes the kind of harmless conduct that Snyder claims it could reach. Id. at 40. Further, the U.S. contends that Snyder overlooks the harm that gratuities inflict on local governments, such as self-enrichment by public officials, at the expense of the government they are supposed to serve. Id. at 41.

UNFAIRNESS IN SENTENCING OUTCOMES

The WLF argues that it would be illogical to interpret Section 666 to include gratuities because of the penalties involved. Brief of WLF at 14. The WLF notes that Section 201 imposes penalties of up to two years imprisonment for gratuities and fifteen for bribery, whereas Section 666 imposes a single penalty of up to ten years for both gratuities and bribes. Id. at 14. The WLF contends that prosecutors can therefore accomplish the same penalty under the statute by going for the lesser offense of illegal gratuity instead of the more difficult charge of bribery. Id. at 14–15.

The U.S. counters that such concerns are misguided because section 666’s sentencing range allows judges to tailor the sentence to “fit the particular crime.” Brief for Respondent at 42. The U.S. adds that the statute has no minimum sentence, so judges can impose sentences comparable to, or even lower than, the two-year maximum that applies to illegal gratuities for federal officials under section 201(c). Id.