United States v. Brumley , 59 F.3d 517 ( 1997 )


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  •                                REVISED
    
                  IN THE UNITED STATES COURT OF APPEALS
    
                          FOR THE FIFTH CIRCUIT
    
    
    
                                No. 94-40560
    
    
    
    
    UNITED STATES OF AMERICA,
                                                  Plaintiff-Appellee,
    
                                   versus
    
    MICHAEL BRYANT BRUMLEY,
                                                  Defendant-Appellant.
    
    
    
    
              Appeal from the United States District Court
                   for the Eastern District of Texas
    
    
                                June 18, 1997
    
    Before POLITZ, Chief Judge, and KING, GARWOOD, JOLLY, HIGGINBOTHAM,
    DAVIS, JONES, SMITH, DUHÉ, WIENER, BARKSDALE, EMILIO M. GARZA,
    DeMOSS, BENAVIDES, STEWART, PARKER, and DENNIS, Circuit Judges.
    
    PATRICK E. HIGGINBOTHAM, Circuit Judge:
    
         Michael Bryant Brumley was convicted in a bench trial of
    
    conspiring to defraud the citizens of the State of Texas of honest
    
    services by use of interstate wire communications and the United
    
    States mail in violation of 18 U.S.C. § 371, three counts of wire
    
    fraud in violation of 18 U.S.C. § 1343, three counts of money
    
    laundering in violation of 18 U.S.C. § 1956, and two counts of
    
    making a false statement to a financial institution in violation of
    18 U.S.C. § 1014.       Brumley does not appeal his conviction on the
    
    last two counts of defrauding a financial institution, and they are
    
    not before us.
    
         As we will explain, Brumley’s primary contention is that the
    
    government has misused federal criminal statutes to prosecute a
    
    state employee for ethical lapses.           Along the way to review by the
    
    en banc court the issues on appeal have narrowed to four.                First,
    
    Brumley urges that neither the plain language of § 1346 nor its
    
    legislative history expands the types of victims protected by the
    
    statute to include a state employer.            Second, he insists that an
    
    ethical   lapse,   or    at   worst    a    state   misdemeanor,    is   not   a
    
    deprivation of honest services. Third, he argues that the Commerce
    
    Clause does not support § 1346.             Finally, he contends that the
    
    money laundering statute does not reach his conduct.             Brumley also
    
    challenged the statute and the indictment on vagueness grounds in
    
    the district court, but he did not pursue these contentions on
    
    appeal.
    
         We   reject    each      of   these    contentions    and     affirm   the
    
    convictions.     In doing so we reject the argument that Congress
    
    failed in its 1988 effort to expand the statute to cover the
    
    deprivation of honest services which the McNally and Carpenter
    
    decisions found were outside the statute’s reach. See Carpenter v.
    
    United States, 
    484 U.S. 19
    , 25 (1987); McNally v. United States,
    
    
    483 U.S. 350
    , 359-60 (1987).          This argument has gathered strength
    
    from the Supreme Court’s recent Commerce Clause decisions, but we
    
                                            2
    ultimately conclude that it cannot escape the plain language of
    
    § 1346.
    
                                          I
    
           A panel of this court first reversed the convictions for wire
    
    and mail fraud, as well as money laundering and conspiracy. United
    
    States v. Brumley, 
    59 F.3d 517
     (5th Cir. 1995), withdrawn, 
    79 F.3d 1430
     (5th Cir. 1996).    The panel reversed for lack of evidence that
    
    Brumley   could   foresee    the   interstate       character   of    the   wire
    
    transmission relied upon by the government. After withdrawing this
    
    opinion, the panel, with one judge dissenting, held that the term
    
    “another” as used in 18 U.S.C. § 1346 does not reach citizens of a
    
    state or political subdivision who have been deprived of the honest
    
    services of their public officials.           United States v. Brumley, 
    79 F.3d 1430
    , 1441-42 (5th Cir. 1996).            We granted the government’s
    
    petition for rehearing en banc on July 17, 1996.           United States v.
    
    Brumley, 
    91 F.3d 676
     (5th Cir. 1996).
    
                                          II
    
           Texas’ workers’ compensation law was long administered by the
    
    Texas Industrial Accident Board. Under this regime the Board dealt
    
    with   three   groups:      claimants,      their   lawyers,    and   insurance
    
    carriers insuring the employers.           Brumley worked for the Board and
    
    resided in Beaumont, Texas.        In 1990 the Texas legislature changed
    
    the process for resolving workers’ compensation claims.               The Board
    
    became the Texas Workers’ Compensation Commission, and Brumley was
    
    promoted to Associate Director of the new commission and moved to
    
                                          3
    the new commission’s Houston office. Brumley’s duties included the
    
    handling of claims arising under the old law and, according to the
    
    indictment, responsibility for “identifying attorneys and insurance
    
    carriers who failed to follow TWCC or IAB rules and regulations.”
    
    Brumley’s work gave him knowledge of the conduct of lawyers, the
    
    identity of unrepresented claimants, and the details of the process
    
    itself.
    
          Brumley never seemed to be able to live within his income.     As
    
    early as 1982, he began to solicit loans from lawyers representing
    
    claimants and their assistance in obtaining loans from lending
    
    institutions. In 1985 and 1986, while he was conducting prehearing
    
    conferences in cases in Lufkin, Texas, he charged and never repaid
    
    several hundred dollars to the account of a claimant’s counsel at
    
    the local country club.    By 1988 Brumley had borrowed money from at
    
    least eight lawyers and struck up a relationship with John M. Cely,
    
    a   Lufkin   attorney   with   a   substantial   workers’   compensation
    
    practice.    Cely and persons employed by his law firm made frequent
    
    appearances before Brumley in prehearing conferences.        They began
    
    a process whereby Cely would cause wire transfers to be made from
    
    the Western Union office in Lufkin to Brumley at various locations
    
    in Texas.    These wire transfers were accomplished electronically
    
    through a Western Union facility located outside of Texas.         From
    
    1987 to May of 1992, Cely made some seventy wire transfers to
    
    Brumley totaling approximately $86,730. In all, Brumley “borrowed”
    
    
    
                                         4
    some $112,156 from eleven lawyers, including Cely.    None of this
    
    sum was ever repaid.
    
         The indictment charged a scheme to defraud “the citizens of
    
    the State of Texas, including the members of the Texas Industrial
    
    Accident Board . . . , an agency of the State of Texas, from
    
    receiving the intangible right to honest services.”
    
    
    
                                   III
    
         Brumley contends that Congress did not intend to reach schemes
    
    to deprive an entity of state government of the intangible right of
    
    honest services in its 1988 enactment of § 1346.      That statute
    
    provides:
    
         For the purposes of this Chapter, the term “scheme or
         artifice to defraud” includes a scheme or artifice to
         deprive another of the intangible right of honest
         services.
    
    Reading § 1346 with § 1343 we have the following prohibition:
    
         Whoever, having devised or intending to devise any
         [scheme or artifice to deprive another of the intangible
         right of honest services], . . . transmits or causes to
         be transmitted by means of [interstate wires] for the
         purpose of executing such scheme or artifice, shall be
         fined under this title or imprisoned not more than five
         years, or both.
    
    
         Brumley’s present argument, taking a cue from the second panel
    
    opinion, takes two related cuts at the application of the statute
    
    to his conduct.   First, he contends that “another” has the same
    
    meaning as the term “whoever” for purposes of the fraud chapter of
    
    the criminal code, specifically Chapter 63 of Title 18.         And
    
                                    5
    “another” cannot include his state employer or the citizens of the
    
    State of Texas. Second, invoking federalism, Brumley contends that
    
    Congress failed to state its purpose with the clarity demanded for
    
    federal incursions into state matters, at least those traveling on
    
    the commerce power.
    
         We are persuaded that a governmental entity qualifies as
    
    “another” within the meaning of § 1346, and that “honest services”
    
    can include “honest and impartial government.”      The panel opinion
    
    notes that Section 1 of Title I of the U.S. Code provides that
    
    “‘person’   and   ‘whoever’    include     corporations,    companies,
    
    associations, firms, partnerships, and societies, and joint stock
    
    companies, as well as individuals.”      79 F.3d at 1435.   It “note[s]
    
    that among the meanings of the word ‘whoever’ in Section 1, Title
    
    I, there is nothing that could even remotely be interpreted or
    
    construed to mean ‘a state,’ ‘a political subdivision of a state,’
    
    ‘a government,’ ‘a governmental agency,’ or ‘the citizens of a
    
    state as a body politic.’”    Id.
    
         Brumley is himself an “individual,” and we think he must
    
    qualify as a “whoever” within the meaning of the statute, in which
    
    case he can be prosecuted for depriving “another” of his intangible
    
    right of honest services. This case does not involve a prosecution
    
    of a state, state subdivision, government, or agency.       Rather, it
    
    is a prosecution of an individual who abused his position as an
    
    employee of a state commission.         That the mail fraud statute
    
    
    
                                        6
    reaches Brumley’s conduct is consistent with the proposition that
    
    the statute does not allow prosecution of a state or state agency.
    
         Moreover, Section 1 of Title I provides that “person” and
    
    “whoever” include the listed terms.               We read this to mean that
    
    “person” and “whoever” include the listed terms without deciding
    
    whether other non-mentioned entities may qualify as a “person” or
    
    a “whoever.”   Otherwise, Congress would have said something other
    
    than “include,” such as “person” and “whoever” mean the listed
    
    terms (or consist of, or perhaps include only).               In this criminal
    
    statute, “another” defines the range of victims while “whoever”
    
    defines the perpetrator; we do not think it makes sense to define
    
    the victims by reference to the definition of the perpetrator.               See
    
    United States v. Castro, 
    89 F.3d 1443
    , 1456 (11th Cir. 1996)
    
    (concluding that the plain language and legislative history of
    
    § 1346 do not limit its application to governmental victims of
    
    fraud), cert. denied, 
    117 S. Ct. 965
     (1997).
    
                                       IV
    
         Brumley   argues   that    even       if    “another”   does   not   modify
    
    “whoever,” it does not include “citizens as the body politic.” The
    
    exact thrust of this contention is uncertain, given the fact that
    
    the defendant is not a political entity but a person charged with
    
    fraudulent   activity   while    employed         by   a   state   entity.    We
    
    understand the argument to be that “another” should not be read to
    
    reach such abuses of state office.              The contention is that § 1343
    
    is at least sufficiently uncertain that it need not be so read, and
    
                                           7
    traditional   principles   of   lenity   and   the    doctrine   of   clear
    
    statement counsel that it should not be.        The argument points to
    
    McNally itself, specifically the Court’s observation that:
    
         Rather than construe the statute in a manner that leaves
         its outer boundaries ambiguous and involves the Federal
         Government in setting standards of disclosure and good
         government for local and state officials, we read [the
         statute] as limited in scope to the protection of
         property rights. If Congress desires to go further, it
         must speak more clearly than it has.
    
    483 U.S. at 360.
    
         The argument fails because Congress accepted the Court’s
    
    invitation and was clear in its purpose.             First, we think the
    
    statutory language plainly reaches state officials such as Brumley,
    
    and thus it is unnecessary to repair to legislative history.           That
    
    history is recounted by the dissent and by the panel majority, see
    
    79 F.3d at 1435-40, and we will not rehearse it again.           There is
    
    nothing to suggest that Congress did not intend by § 1346 to
    
    overturn the Supreme Court’s McNally decision and to insist that
    
    the fraud statutes cover deprivations of intangible rights such as
    
    those charged in the counts for which Brumley was convicted.            We
    
    join the First, Fourth, and Eleventh Circuits in rejecting similar
    
    attacks on § 1343 convictions.     United States v. Sawyer, 
    85 F.3d 713
    , 723-24 (1st Cir. 1996); United States v. Bryan, 
    58 F.3d 933
    ,
    
    939-43 (4th Cir. 1995); United States v. Waymer, 
    55 F.3d 564
    , 568
    
    n.3 (11th Cir. 1995), cert. denied, 
    116 S. Ct. 1350
     (1996).
    
    
    
    
                                       8
          The dissent, worried that the text of § 1346 fails to give
    
    citizens adequate notice, accuses the majority of illicitly re-
    
    drafting a criminal statute.        But we are hardly announcing a
    
    common-law crime.   As the Supreme Court has recently explained,
    
    “the touchstone is whether the statute, either standing alone or as
    
    construed, made it reasonably clear at the relevant time that the
    
    defendant’s conduct was criminal.”       United States v. Lanier, ___
    
    U.S. ___, ___, 
    117 S. Ct. 1219
    , 1225 (1997).         Gauging fair notice
    
    requires an inquiry into the state of the law as a whole, not
    
    merely into the words printed on a single page of the United States
    
    Code. Constructions of a statute announced by the Supreme Court or
    
    lower courts can give citizens fair warning, even if the cases are
    
    not “fundamentally similar.”    Id. at ___-___, 117 S. Ct. at 1226-
    
    28.
    
          Here Brumley had notice that Congress had repudiated the
    
    Supreme Court’s interpretation in McNally.           Congress, in other
    
    words, announced that it wanted the courts to enforce the honest-
    
    services doctrine developed in the years leading up to McNally.
    
    Because Congress was not faced with a uniform formulation of the
    
    precise contours of the doctrine, some defendants on the outer
    
    reaches of the statute might be able to complain that they were not
    
    on notice that Congress criminalized their conduct when it revived
    
    the   honest-services   doctrine.       But   even   if   there   are   such
    
    defendants, Brumley is not among them.         As we will explain, his
    
    conduct was inconsistent with his duties under Texas law.                The
    
                                        9
    boundaries of “intangible rights” may be difficult to discern, but
    
    that does not mean that it is difficult to determine whether
    
    Brumley in particular violated them.       See Village of Hoffman
    
    Estates v. Flipside, Hoffman Estates, Inc., 
    455 U.S. 489
    , 505, 
    102 S. Ct. 1186
    , 1196 (1982) (rejecting a vagueness challenge to a
    
    quasi-criminal ordinance regulating the sale of drug paraphernalia
    
    because the ordinance was “reasonably clear in its application to
    
    the complainant”).
    
                                      V
    
         We must next find the meaning of honest services as used in
    
    this federal statute.1   As we have explained, Congress has insisted
    
    that the fraud statutes cover the deprivation of intangible rights.
    
    In doing so, it reestablished the honest services doctrine.      It
    
    bears emphasis that before McNally the doctrine of honest services
    
    was not a unified set of rules.       And Congress could not have
    
    intended to bless each and every pre-McNally lower court “honest
    
    services” opinion.   Many of these opinions have expressions far
    
    broader than their holdings.   See United States v. Curry, 
    681 F.2d 402
    , 419 n.1 (5th Cir. 1982) (Garwood, J., concurring).   Congress,
    
    then, has set us back on a course of defining “honest services,”
    
    and we turn to that task.
    
    
    
    
         The statute continues to draw much cogent and scholarly
    commentary. See, e.g., George D. Brown, Should Federalism Shield
    Corruption?--Mail Fraud, State Law and Post-Lopez Analysis, 82
    Cornell L. Rev. 225 (1997).
    
                                     10
          Before McNally, the meaning of “honest services” was uneven.
    
    See, e.g., United States v. Holzer, 
    816 F.2d 304
    , 307-10 (7th Cir.)
    
    (affirming the conviction of a county judge who accepted “loans”
    
    from attorneys who practiced before him, even though the government
    
    never showed that the judge ruled differently in a case because of
    
    any lawyer’s willingness to make a “loan”), vacated, 
    484 U.S. 807
    
    (1988) (remanded for reconsideration in light of McNally); United
    
    States v. Silvano, 
    812 F.2d 754
     (1st Cir. 1987) (affirming the
    
    conviction of a city budget director who did not disclose his
    
    secret plan to enrich a friend with an expensive and unnecessary
    
    project bid); United States v. Lovett, 
    811 F.2d 979
     (7th Cir. 1987)
    
    (affirming the conviction of a mayor who accepted an undisclosed 5%
    
    interest in a local cable company attempting to bid on a city
    
    franchise); United States v. Bruno, 
    809 F.2d 1097
    , 1104-06 & n.1
    
    (5th Cir.) (affirming convictions under § 1343 based on a scheme to
    
    bribe), cert. denied, 
    481 U.S. 1057
     (1987); United States v.
    
    Barber, 
    668 F.2d 778
     (4th Cir.) (affirming the conviction of an
    
    Alcoholic    Beverage   Control   Commission       official    who   “withdrew”
    
    liquor from a state warehouse with subsequent “authorization” from
    
    liquor companies so that the companies would be billed), cert.
    
    denied, 
    459 U.S. 829
     (1982); Bradford v. United States, 
    129 F.2d 274
    , 276 (5th Cir.) (grounding a § 1343 conviction on a scheme to
    
    use   city   officials’   positions    to   sell    buses     to   the   city   at
    
    exorbitant prices for unearned profits), cert. denied, 
    317 U.S. 683
    
    (1942); Shushan v. United States, 
    117 F.2d 110
    , 115 (5th Cir.) (“No
    
                                          11
    trustee has more sacred duties than a public official and any
    
    scheme to obtain an unfair advantage by corrupting such a one must
    
    in the federal law be considered a scheme to defraud.”), cert.
    
    denied, 
    313 U.S. 374
    , 
    314 U.S. 706
     (1941).
    
         A   close    look    at    these   cases   uncovers     two    uncertainties
    
    regarding   the    draw    by    this   federal    statute      upon     state    law,
    
    specifically in defining the statutory element of honest services.
    
    First, must the services be owed under state law?               Second, must the
    
    breach of a duty to provide services rooted in state law violate
    
    the criminal law of the state?          We decide today that services must
    
    be owed under state law and that the government must prove in a
    
    federal prosecution that they were in fact not delivered.                        We do
    
    not reach the question of whether a breach of a duty to perform
    
    must violate the criminal law of the state.
    
         We begin with the plain language of the statute.                     There are
    
    two words — “honest” and “services.”              We will not lightly infer
    
    that Congress intended to leave to courts and prosecutors, in the
    
    first instance, the power to define the range and quality of
    
    services a state employer may choose to demand of its employees.
    
    We find nothing to suggest that Congress was attempting in § 1346
    
    to garner to the federal government the right to impose upon states
    
    a federal vision of appropriate services — to establish, in other
    
    words, an ethical regime for state employees.                   Such a taking of
    
    power    would   sorely    tax    separation      of   powers      and   erode     our
    
    federalist structure.            Under the most natural reading of the
    
                                            12
    statute, a federal prosecutor must prove that conduct of a state
    
    official breached a duty respecting the provision of services owed
    
    to the official’s employer under state law.    Stated directly, the
    
    official must act or fail to act contrary to the requirements of
    
    his job under state law.   This means that if the official does all
    
    that is required under state law, alleging that the services were
    
    not otherwise done “honestly” does not charge a violation of the
    
    mail fraud statute. The statute contemplates that there must first
    
    be a breach of a state-owed duty.     It follows that a violation of
    
    state law that prohibits only appearances of corruption will not
    
    alone support a violation of §§ 1343 and 1346.     See United States
    
    v. Sawyer, 
    85 F.3d 713
    , 728-29 (1st Cir. 1996).        As the Ninth
    
    Circuit put it, “[t]o hold otherwise that illegal conduct alone
    
    [would suffice] would have the potential of bringing almost any
    
    illegal act within the province of the mail fraud statute.”   United
    
    States v. Dowling, 
    739 F.2d 1445
    , 1450 (9th Cir. 1984), rev’d on
    
    other grounds, 
    473 U.S. 207
     (1985).
    
         Stated another way, “honest services” contemplates that in
    
    rendering some particular service or services, the defendant was
    
    conscious of the fact that his actions were something less than in
    
    the best interests of the employer — or that he consciously
    
    contemplated or intended such actions.       For example, something
    
    close to bribery.   If the employee renders all the services his
    
    position calls for, and if these and all other services rendered by
    
    him are just the services which would be rendered by a totally
    
                                     13
    faithful    employee,       and    if    the       scheme    does     not    contemplate
    
    otherwise, there has been no deprivation of honest services.                          See,
    
    e.g., United States v. Czubinski, 
    106 F.3d 1069
    , 1077 (1st Cir.
    
    1997)    (reversing     convictions       under      §§     1343    and     1346   because
    
    although unauthorized browsing of taxpayer files by an IRS employee
    
    constitutes    a   breach     of    personnel        policies,        “there      [was]   no
    
    suggestion    that    he    failed       to    carry      out   his    official      tasks
    
    adequately, or intended to do so”); United States v. Rabbitt, 
    583 F.2d 1014
    , 1026 (8th Cir. 1978), cert. denied, 
    439 U.S. 1116
    
    (1979); United States v. McNeive, 
    536 F.2d 1245
    , 1246 (8th Cir.
    
    1976).     Thus, the mere violation of a gratuity statute, even one
    
    closer to     bribery      than    the   Texas       statute,      will     not    suffice.
    
    Sawyer, 85 F.3d at 729-30.
    
         Finally, the statute proscribes an actual scheme or artifice
    
    to defraud.        There is nothing in the informing principles of
    
    federalism or legislative history to suggest that the scheme or
    
    artifice to defraud elements are drawn from state law.                             Rather,
    
    they are familiar terms of federal criminal law generating and
    
    drawing their sustenance from federal common law.                           These wholly
    
    federal elements, read with the jurisdictional elements of mail
    
    usage and coupled with the draw upon state law for the definition
    
    of service, allow the statute to serve federal interests without
    
    supplanting rights of core state governance.                           The indictment
    
    charged that Brumley used his position to assist Cely in exchange
    
    
    
                                                  14
    for money.    Thus, the federal component of the crime was properly
    
    charged, and, as we will explain, was proved.
    
         We    pause     to     put     aside    the        frequent     invocations     of   a
    
    deprivation of citizens’ rights to honest services. See Bruno, 809
    
    F.2d at 1105-06; Shushan, 117 F.2d at 115.                       The reference to such
    
    “rights” of citizens has little relevant meaning beyond a shorthand
    
    statement of a duty rooted in state law and owed to the state
    
    employer.    Despite its rhetorical ring, the rights of citizens to
    
    honest government have no purchase independent of rights and duties
    
    locatable in state law.           To hold otherwise would offer § 1346 as an
    
    enforcer of federal preferences of “good government” with attendant
    
    potential for large federal inroads into state matters and genuine
    
    difficulties of vagueness.            Congress did not use those words, and
    
    we will not supply them.
    
         The federalism arguments that inform the definition of “honest
    
    services”    under        federal     criminal          law    are   powerful,     and    we
    
    acknowledge them in our holdings today.                       A sitting state official
    
    with adjudicatory authority who accepts payments from lawyers
    
    practicing in front of him and simultaneously acts for those
    
    lawyers in his official capacity contrary to his state-law duty has
    
    provided    dishonest       services        to    his    employer,     here   the   Texas
    
    Industrial Accident Board and its successor, the TWCC. As it turns
    
    out, Texas condemns such conduct by making it a criminal offense
    
    punishable by imprisonment for up to one year and a fine as large
    
    as $4,000, and this violation was part of a fraudulent scheme and
    
                                                 15
    conspiracy under § 1346, as found by the district court.        The
    
    tension inherent in federal criminalization of conduct by state
    
    officials innocent under state law is absent here.
    
         We have held that services under § 1346 are those an employee
    
    must provide the employer under state law.     Using his office to
    
    pursue his own account and not that of his employer, Brumley
    
    violated a Texas criminal statute. This case does not then require
    
    us to decide whether the amended federal statute criminalizes
    
    conduct no part of which is criminal under state law.    Cf. United
    
    States v. Cochran, 
    109 F.3d 660
    , 667 (10th Cir. 1997) (“[I]t would
    
    give us great pause if a right to honest services is violated by
    
    every breach of contract or every misstatement made in the course
    
    of dealing.”).
    
         Our previous cases have not made clear the use of state law we
    
    emphasize today.   To the extent our prior cases are contrary, they
    
    are overruled.
    
                                     VI
    
         Having concluded that § 1343 applies to deprivations of honest
    
    services by state employees and that such services must be owed
    
    under state law, we now address Brumley’s contention that his own
    
    actions did not do so.   At trial, the government stipulated that it
    
    would not try to prove that any IAB award was enhanced by Brumley
    
    or that any claimant was awarded more money by Brumley or that
    
    Brumley referred any unrepresented claimant to an attorney in
    
    return for cash. Rather, the government’s “position [was] that the
    
                                     16
    quid pro quo [was] intangible, such as favoritism or other types of
    
    intangible matters.”    The government points out that Cely admitted
    
    to the trial court that the $86,780 in payments to Brumley were not
    
    “loans.”   And during the time period that Brumley was receiving
    
    these payments from Cely, Brumley vouched for Cely’s good character
    
    when Cely was investigated by IAB and interceded to try to stop the
    
    investigation    altogether.        Brumley   also    advised    Cely    on   the
    
    alteration of documents subpoenaed by the IAB, so as to make easy
    
    detection of wrongdoing difficult.           The relationship between Cely
    
    and Brumley was so tight that when one of Cely’s employees inquired
    
    into Cely’s unconcerned confidence about an impending TWCC/IAB
    
    investigation of Cely, he replied: “We have Brumley.” Brumley also
    
    helped Cely’s attempt to lease property in Lufkin to the TWCC by
    
    advising Cely how to conceal his efforts and by aggressively
    
    discouraging the TWCC from leasing from another bidder.
    
         The district court found “ample and convincing” evidence to
    
    support each of the counts of the indictment.             According to the
    
    district court, Brumley and Cely engaged in a conspiracy in which
    
    Cely would give Brumley money and Brumley would use his position
    
    with the IAB and TWCC to assist Cely’s dealings with the agency.
    
    Although   the   district   court    found    clear   evidence    of    ethical
    
    violations, it did not rely on them to make its decision.               Instead,
    
    the district court found a scheme to defraud that included conduct
    
    that violated Texas penal law.       See Tex. Penal Code Ann. § 36.08(e)
    
    (making it a Class A misdemeanor for a public servant with judicial
    
                                          17
    authority to “solicit[], accept[], or agree[] to accept any benefit
    
    from a person the public servant knows is interested in or likely
    
    to become interested in any matter before the public servant or
    
    [his] tribunal”).
    
         Brumley’s other contentions are without merit, and we affirm
    
    the judgment of convictions.
    
         AFFIRMED.
    
    
    
    
                                    18
    JOLLY and DeMOSS, Circuit Judges, with whom SMITH, Circuit Judge,
    joins, Dissenting:
    
         We    respectfully        dissent   from    what     we    consider    to    be   an
    
    issue-evasive and jurisprudentially flawed majority opinion.                       With
    
    little analysis, and much judicially engrafted legislation, it
    
    holds     that   general,       undefined,      vague,     and     ambiguous      words
    
    constitute a clear statement that Congress intended for federal
    
    prosecutors      and   grand    juries   to     police    the     conduct   of    state
    
    officers acting in their official state capacities. We should make
    
    clear that we do not at all suggest that the criminal statute at
    
    issue is unconstitutional or must otherwise be stricken -- only
    
    that as the statute is applied in this case, the indictment and
    
    proof fails to state and prove a crime.
    
    
    
                                       INTRODUCTION
    
         First,      the    majority     needs      to   be        reminded    that    when
    
    interpreting a criminal statute, courts must apply the rule of
    
    lenity; that is, when choosing between two readings of a criminal
    
    statute, the courts must favor the narrower interpretation unless
    
    Congress has spoken to the contrary in language that is clear and
    
    definite.     This is an indisputable rule of statutory construction
    
    ignored by the majority.          Second, the Supreme Court has emphasized
    
    that when a statute is applied, as here, to alter the balance of
    
    federalism, congressional intent must be plain on the face of the
    statute -- an intent that even infrared eyes cannot detect from
    
    this statute.
    
           The words we interpret today are these few: “For the purpose
    
    of this chapter, the term ‘scheme or artifice to defraud’ includes
    
    a scheme or artifice to deprive another of the intangible right of
    
    honest services.”       For the majority to prevail, these words must
    
    clearly demonstrate that Congress intended to apply the wire fraud
    
    statute to police the integrity of state officials acting in the
    
    capacities of their offices.          Moreover, these words must satisfy
    
    constitutional due process, which requires that citizens be given
    
    fair notice that specific conduct constitutes a crime.
    
           The majority utterly fails to address these principles of
    
    statutory construction.           The reason the majority opinion avoids
    
    raising these crucial matters is simple: it cannot possibly conform
    
    its conclusions with principles of statutory construction.
    
            Principles      of   statutory     construction        are    not   the   only
    
    obstacles    to   the    majority's        reading   of   the        statute.      The
    
    legislative history is also devastating to the majority’s position
    
    that Congress has spoken clearly in § 1346 to reach the conduct of
    
    state officers acting in their official capacity.                       Because the
    
    statute fails on its face to make a crime of the charged conduct,
    
    this dissent need not address the matter of legislative history.
    
    The legislative history does, however, make plain beyond any doubt
    
    that   §   1346   cannot     be   fairly      construed   to    reflect     a     clear
    
    congressional intent to police the integrity of state officers.
    
                                             20
    Thus, rather than deal with the legislative history, the majority
    
    pursues the only course available to it:           silence.
    
         Indeed, the only significant issue in this case that the
    
    majority squarely faces is the meaning of “honest services," a term
    
    that the majority acknowledges is ambiguous and undefined by
    
    Congress.      One   would   think   that   the   majority    would   directly
    
    acknowledge that this patent and indisputable ambiguity cripples
    
    this prosecution.      But no.   Instead, the majority assumes a role
    
    somewhere between a philosopher king and a legislator to create its
    
    own definitions of the terms of a criminal statute.              Surely, the
    
    majority should recognize the laudatory principle to which we as a
    
    Court try scrupulously to adhere: The courts may not assume the
    
    place of Congress by writing or rewriting criminal laws pursuant to
    
    which citizens will be prosecuted.          This is solely the prerogative
    
    of Congress.     With great respect for the usual judgment of our
    
    colleagues, we must say that the majority opinion in this respect
    
    is hardly a judicial opinion.2
    
    
    
                    That it is necessary for the majority to write more
    in the nature of legislative drafting than judicial reasoning
    underscores that the majority implicitly acknowledges that the
    statute does not reflect a clear statement of Congressional intent.
    For example, the majority says at page 10, “We decide today” that
    “honest services” must be owed under state law in order to
    establish a crime under § 1343 as amended by § 1346. Furthermore,
    at page 14, the majority overrules all previous cases that
    criminalize conduct under § 1343, if these cases involve less, or
    more, than the majority’s determination of the appropriate state
    law component. In short, the majority’s legislative engraftment
    onto § 1343 gives the appearance that Brumley is being convicted of
    a crime that is now in the process of being devised by the Court.
    
                                          21
         The majority opinion is flawed in other respects as we shall
    
    develop more fully in this dissent.       Its argument that it makes no
    
    sense to "define victims by reference to the definition of the
    
    perpetrator" is sophistry, a glib phrase giving the appearance of
    
    a truism, resorted to by the majority because it can provide no
    
    answer to otherwise define the meaning of “another” as it appears
    
    in the statute.    Although it may be less than a perfect method of
    
    divining the hidden intent of Congress, we suggest that defining
    
    "another," which is otherwise completely undefined by Congress, by
    
    referring   to   "whoever,"   is   an   absolutely   correct   grammatical
    
    construction of the one-sentence statute; at least it provides some
    
    definitional meaning or limits to the term “another.” The majority
    
    opinion provides no definitional limits for a key term in a
    
    criminal statute.     The majority also says nothing about the due
    
    process problems of sufficient notice of what behavior has been
    
    prohibited when such key terms have no definitional limits.
    
         In this dissent, we shall further show that the majority,
    
    without any analysis, baldly states that "another" means the
    
    citizens as the body politic.      It is beyond our capacity to accept
    
    the conclusion that by using the term "another" in § 1346, Congress
    
    clearly has referred to the entire “body politic” of the State of
    
    Texas.   In so concluding without analysis, the majority gives the
    
    phrase judicial chutzpa new meaning.
    
         After the majority completes its assumed legislative task of
    
    defining honest services, it appears to have some second thoughts
    
                                        22
    about the     application     of   "another"        to   the    body   politic,     and
    
    "pauses" to
    
                 put aside the frequent invocations of a deprivation
                 of citizens' rights to honest services. The
                 reference to such "rights" of citizens has little
                 relevant meaning beyond a shorthand statement of a
                 duty rooted in state law and owed to the state
                 employer. Despite its rhetorical ring, the rights
                 of citizens to honest government have no purchase
                 independent of rights and duties locatable in state
                 law. To hold otherwise would offer § 1346 as an
                 enforcer   of   federal    preferences   of   "good
                 government" with attendant potential for large
                 federal inroads into state matters and genuine
                 difficulties of vagueness.    Congress did not use
                 those words, and we will not supply them.
    
    Maj. Op. at 13 (internal citation omitted).                   It is certainly true
    
    that Congress did not use those words.                   Indeed, that is a major
    
    point of this dissent.        The indictment, however, used those words.
    
    Does   the   majority      conclude       that   the     indictment     charges     the
    
    specifics of a crime unauthorized by Congress?                    If for no other
    
    purpose    than     to   remind   the     majority,      we   point    out   that   the
    
    indictment charged Brumley with depriving "the citizens of the
    
    State of Texas . . . from receiving . . . honest services."                         Yet
    
    the majority says the term has no “purchase.”                    No purchase?       The
    
    deprivation of the “citizens of Texas rights to honest services” in
    
    this case     has    “purchased”      a   federal      prison    sentence     for   Mr.
    
    Brumley.
    
           We turn now to more fully address the substantive issues
    
    raised by this appeal. We first address the Supreme Court opinions
    
    in McNally and Carpenter, the cases that prompted the passage of §
    
    
                                               23
    1346.    We will then show how the Supreme Court has made it
    
    unmistakably plain that Congress must make a clear statement when
    
    it intends to extend a criminal statute into policing the behavior
    
    of state officials.   Next we will show that the statutory language
    
    cannot possibly be interpreted as such a clear statement, and that
    
    the legislative history debunks the majority’s position that § 1346
    
    is a clear statement that Congress intended to police the honesty
    
    of   state   government   officials   in   their    official   capacities.
    
    Finally, we demonstrate that the phrase "honest services" is
    
    entirely ambiguous.
    
    
    
                              McNALLY AND CARPENTER
    
          A thorough understanding of the Supreme Court's landmark
    
    decision in McNally v. United States, 
    483 U.S. 350
    , 
    107 S. Ct. 2875
    , 
    97 L. Ed. 2d 292
     (1987), is the first order of business.          This
    
    case involved the prosecution of a former public official of
    
    Kentucky and a private individual for alleged violation of the
    
    federal mail fraud statute, 18 U.S.C. § 1341. The principal theory
    
    of the prosecution in McNally, which was accepted by the courts
    
    below, was that the defendants' participation in a self-dealing
    
    patronage scheme defrauded the citizens and government of Kentucky
    
    of certain "intangible rights," such as the right to have the
    
    commonwealth affairs conducted honestly.           The jury convicted the
    
    defendants and the Court of Appeals affirmed the convictions,
    
    
                                       24
    relying upon a line of decision from the Courts of Appeals holding
    
    that the mail fraud statute proscribed schemes to defraud citizens
    
    of their intangible rights to honest and impartial government. The
    
    Supreme   Court   granted   certiorari   and   reversed.   The   most
    
    illuminating language of the majority opinion in McNally provides
    
    that:
    
               Rather than construe the statute [mail fraud, §
               1341] in a manner that leaves its outer boundaries
               ambiguous and involves the Federal Government in
               setting standards of disclosure and good government
               for local and state officials, we read § 1341 as
               limited in scope to the protection of property
               rights. If Congress desires to go further, it must
               speak more clearly than it has.
    
    Id. at 360 (emphasis added).
    
         This seven to two majority opinion overturned the theories
    
    upon which a large number of prior Circuit Court decisions had been
    
    based.    Justice Stevens' dissent identifies in detail the prior
    
    Circuit Court cases and categorizes them in separate footnotes:
    
               Footnote 1
    
               State and federal officials convicted of defrauding
               citizens of their right to the honest services of
               their governmental officials, id. at 362;
    
               Footnote 2
    
               Elected officials and campaign workers convicted of
               mail fraud for using the mail to falsify votes,
               thus defrauding the citizenry of its right to an
               honest election, id. at 363;
    
               Footnote 3
    
               In the private sector, agents with clear fiduciary
               duty to their employers or unions, found guilty of
    
                                      25
              defrauding by accepting kick backs or                 selling
              confidential information, id. at 363; and
    
              Footnote 4
    
              In the private sector, defendants convicted for
              defrauding individuals of their rights to privacy
              and other non-monetary rights. Id. at 364.
    
    
         The key language from McNally quoted above clearly states that
    
    the majority overruled the body of case law referred to in Justice
    
    Stevens' footnotes for two reasons:
    
              1.     The majority did not want to construe the statute as
    
         involving the federal government in setting standards of
    
         disclosure and good government for local and state officials.
    
         This is a healthy recognition of the realities of our federal
    
         system    and   pulls   the   rug   out   from   under   the   conceptual
    
         analysis used by the Circuit Courts in deciding the cases in
    
         footnotes 1 and 2 of the dissent; and
    
              2.     The majority did not want to construe the mail fraud
    
         statute in a manner that would create ambiguity in its outer
    
         limits, so it said the statute would apply only to the
    
         "protection of property rights," thereby pulling the rug out
    
         from under the category of cases described in footnotes 3 and
    
         4.
    
         Both the majority opinion and the dissent in McNally indicate
    
    that Congress might change the Court's construction; but the
    
    
    
    
                                         26
    majority made it absolutely clear that Congress "must speak more
    
    clearly than it has" if it desired to make such changes.
    
          Shortly after its decision in McNally, the Supreme Court
    
    decided Carpenter v. United States, 
    484 U.S. 19
    , 
    108 S. Ct. 316
    , 98
    
    L.Ed.2d. 275 (1987).         In Carpenter, a unanimous Supreme Court
    
    described its holding in McNally as follows:
    
                  We held in McNally that the mail fraud statute does
                  not reach "schemes to defraud citizens of their
                  intangible   rights   to   honest   and   impartial
                  government" and that the statute is "limited in
                  scope to the protection of property rights."
    
    Id. at 320 (internal citations omitted).
    
          In Carpenter, the Supreme Court found that the property
    
    rights, though intangible, were none the less property rights and
    
    that "McNally did not limit the scope of § 1341 to tangible as
    
    distinguished from intangible property rights."             Id.    Therefore,
    
    Carpenter clearly reaffirms the majority opinion in McNally, but
    
    recognizes that both tangible and intangible property rights are
    
    protected by the mail fraud and wire fraud statutes as they then
    
    stood.
    
          Because of the emphasis that the majority opinion places on
    
    the circumstance of the employment relationship between Brumley and
    
    the   TWCC,    it   should   be   noted    that   in   Carpenter   the   Court
    
    characterized an employer’s contractual right to an employee’s
    
    honest and faithful services as "an interest too ethereal in itself
    
    to fall within the protection of the mail fraud statute."                 Id.
    
                                          27
    Consequently, Carpenter foreclosed the use of the "intangible right
    
    of honest services" doctrine in private employment relationships,
    
    just as McNally had foreclosed the use of that doctrine as to the
    
    defrauding of "citizens of their intangible rights to honest and
    
    impartial government."
    
    
    
                  PRINCIPLES OF STATUTORY CONSTRUCTION
    
         On the last day of the 100th Congress in October 1988,
    
    Congress passed a highly publicized and much debated omnibus drug
    
    bill.   Attached to that omnibus bill, as one of some 30 other
    
    unrelated provisions, was a provision containing the text of what
    
    has now been codified as 18 U.S.C. § 1346.    See Pub. L. 100-690,
    
    Title VII, § 7603(a), Nov. 18, 1988, 102 Stat. 4508.     Our first
    
    task is to decide whether the language used by the Congress in §
    
    1346 satisfies the admonition of the Supreme Court in McNally that
    
    Congress "speak more clearly than it has."
    
         As with any statutory question, analysis begins with the
    
    language of the statute.   Kellogg v. United States, (In re West
    
    Texas Marketing Corp.), 
    54 F.3d 1194
    , 1200 (5th Cir.), cert.
    
    denied, ___ U.S. ___, 
    116 S. Ct. 523
    , ___ L.Ed.2d ___ (1995).   In
    
    determining a statute's plain meaning, the courts assume that,
    
    absent any contrary definition, "Congress intends the words in its
    
    enactments to carry their ordinary, contemporary, common meaning."
    
    Pioneer Investment Services v. Brunswick Associates, 
    507 U.S. 380
    ,
    
                                    28
    388, 
    113 S. Ct. 1489
    , 1495, 
    123 L. Ed. 2d 74
     (1993) (internal
    
    quotation marks omitted).    As the Supreme Court has stated: "There
    
    is, of course, no more persuasive evidence of the purpose of a
    
    statute than the words by which the legislature undertook to give
    
    expression to its wishes."    Griffin v. Oceanic Contractors, Inc.,
    
    
    458 U.S. 564
    , 571, 
    102 S. Ct. 3245
    , 3250, 
    73 L. Ed. 2d 973
     (1982)
    
    (internal quotation marks omitted). If the language is clear, then
    
    "the inquiry should end."    United States v. Ron Pair Enterprises,
    
    
    489 U.S. 235
    , 241, 
    109 S. Ct. 1026
    , 1030, 
    103 L. Ed. 2d 290
     (1989).
    
         In United States v. Bass, 
    404 U.S. 336
    , 
    92 S. Ct. 515
    , 
    30 L. Ed. 2d 488
     (1971), the Supreme Court stated the principles which
    
    the Court has long followed in construing criminal statutes passed
    
    by Congress:
    
              First, as we have recently reaffirmed, "ambiguity
              concerning the ambit of criminal statutes should be
              resolved in favor of lenity."      Rewis v. United
              States, 
    401 U.S. 808
    , 812 [(1971)].... In various
              ways over the years we have stated that "when
              choice has to be made between two readings of what
              conduct Congress has made a crime, it is
              appropriate,   before   we   choose   the   harsher
              alternative, to require that Congress should have
              spoken in language that is clear and definite."
              United States v. Universal CIT Credit Corp., 
    344 U.S. 218
    , 221 [(1952)]....      This principle is
              founded on two policies that have long been part of
              our tradition. First, "a fair warning should be
              given to the world in language that the common
              world will understand of what the law intends to do
              if a certain line is passed. To make the warning
              fair, so far as possible the line should be clear."
              McBoyle v. United States, 
    283 U.S. 25
    , 27
              [(1931)].... Second, because of the seriousness of
              criminal penalties and because criminal punishment
              usually represents the moral condemnation of the
    
                                     29
              community, legislatures and not courts should
              define criminal activity.     This policy embodies
              "the instinctive distaste against men languishing
              in prison unless the lawmaker has clearly said they
              should." H. Friendly, Mr. Justice Frankfurter and
              the Reading of Statutes in BENCHMARKS, 196, 209
              (1967).
    
    Id. at 522-23 (other internal citations omitted).
    
         Therefore, the Supreme Court has recognized that criminal
    
    statutes must be construed narrowly.      Moreover, the Court has
    
    emphasized a second critical principle:
    
              Unless Congress conveys its purpose clearly, it
              will not be deemed to have significantly changed
              the federal-state balance....       As this Court
              emphasized only last term in Rewis v. United
              States, [401 U.S. at 812,] we will not be quick to
              assume that Congress has meant to effect a
              significant change in the sensitive relation
              between federal and state criminal jurisdiction.
              In   traditionally   sensitive   areas,   such   as
              legislation affecting the federal balance, the
              requirement of clear statement assures that the
              legislature has in fact faced, and intended to
              bring into issue, the critical matters involved in
              the judicial decision. In Rewis, we declined to
              accept an expansive interpretation of the travel
              act.    To do so, we said then, "would alter
              sensitive federal state relationships [and] could
              overextend limited federal police resources."
              While we noted there that "[i]t is not for us to
              weigh the merits of these factors," we went on to
              conclude that the "fact that they are not even
              discussed in the legislative history... strongly
              suggests that Congress did not intend that [the
              statute have the broad reach]." 401 U.S. at 812...
              As in Rewis, the legislative history provides
              scanty basis for concluding that Congress faced
              these serious questions and meant to affect the
              federal state balance in the way now claimed by the
              government.
    
    
    
    
                                   30
    Id. at 523 (internal footnotes and citations omitted) (alterations
    
    in original).      When legislation has the potential of altering the
    
    relationship between state and federal police powers, this Court
    
    must adopt a narrow interpretation of the statute.
    
         It is clear, of course, that, under the Supremacy Clause, the
    
    Congress may legislate in areas traditionally regulated by the
    
    States.    Nevertheless, the Court has emphasized that "[t]his is an
    
    extraordinary power in a federalist system.     It is a power that we
    
    must assume Congress does not exercise lightly."          Gregory v.
    
    Ashcroft, 
    501 U.S. 452
    , 460, 
    111 S. Ct. 2395
    , 2400, 
    115 L. Ed. 2d 410
    
    (1991).     "If Congress intends to alter the usual constitutional
    
    balance between the States and the Federal Government, it must make
    
    its intention to do so unmistakably clear in the language of the
    
    statute."        Id. at 461 (internal citations omitted) (emphasis
    
    added).
    
    
    
                      INTERPRETING THE TEXT OF SECTION 1346
    
    The text of § 1346 is only one sentence in length and reads as
    
    follows:
    
                For the purposes of this chapter, the term "scheme
                or artifice to defraud" includes a scheme or
                artifice to deprive another of the intangible right
                of honest services.
    
    18 U.S.C. § 1346.      A plain reading of the statutory text produces
    
    numerous ambiguities and questions:
    
                a.     Who is the "deprivor" and who is the "deprivee?"
    
                                       31
               b.   What is an "intangible right?"
               c.   What are "honest services?"
               d.   What is "the intangible right of honest services?"
    
    If a criminal statute is to satisfy the "fair warning" test of
    
    Bass, answers to these questions must be available to the "common
    
    world" in a fashion which is clear and readily understandable so
    
    that the line where permitted conduct ends and prohibited conduct
    
    begins is certain.
    
         The answer to the first question, "Who is the deprivor?,"
    
    should be clear to the common man.     The chapter referred to is
    
    Chapter 63 of Title 18 entitled "Mail Fraud," and the term "scheme
    
    or artifice to defraud" appears in four sections:    Section 1341,
    
    Mail Fraud; Section 1342, Fictitious Names or Addresses; Section
    
    1343, Fraud by Wire, Radio or Television; and Section 1344, Bank
    
    Fraud.   The pronoun "whoever" is the pronoun used at the beginning
    
    of each of these sections.    Section 1 of Title I of the United
    
    States Code, relating to rules of construction, contains the
    
    following definition:
    
               In determining the meaning of any Act of Congress,
               unless the context indicates otherwise --
    
               "person"   and  "whoever"  include  corporations,
               companies,   associations,  firms,  partnerships,
               societies, and joint stock companies, as well as
               individuals; ....
    
         If one substitutes for the pronoun "whoever" its statutory
    
    definition, and if one also inserts the definition of § 1346 in §
    
    
    
    
                                     32
    1343 (Wire Fraud), which is the relevant section involved in this
    
    case, the statute reads as follows:
    
         WHO              [any      person,      individual,
                          corporation, company, association,
                          firm, partnership, society or joint
                          stock company who],
    
         PROHIBITED
         CONDUCT          having devised or intending to
                          devise          s c h e m e o r
                          artifice [to deprive another of
                          the    intangible    right   of
                          honest services]
    
                          transmits or causes to be
                          transmitted by means of
                          wire, radio or television
                          communication           in
                          interstate    or   foreign
                          commerce   any   writings,
                          signs, signals, pictures
                          or sounds
    
         MOTIVE           for   the    purpose  of
                          executing such scheme or
                          artifice; etc.
    
    The answer to the first question, therefore, is that the deprivor
    
    is "any person, individual, corporation, company, association,
    
    firm, partnership, society or joint stock company."
    
         The answer to the second question, "Who is the deprivee?," is
    
    not clear.    The word "another" is not defined anywhere in the
    
    United States Code.    The dictionary says that the first and most
    
    frequent use of "another” as a pronoun is "one more; an additional
    
    one."3   Grammarians teach that the word "another," when used as a
    
    
    
    
               WEBSTER'S COLLEGIATE DICTIONARY, Random House, 1992.
    
                                      33
    pronoun, is an indefinite pronoun which has no specific meaning in
    
    and of itself but draws its meaning from the context in which it is
    
    used.   A logical argument could be made, therefore, that the
    
    pronoun "another," as incorporated by § 1346 into § 1343, would
    
    have the same meaning as the lists of nouns incorporated into §
    
    1343 by the Title 1, § 1 definition of "whoever."   If this second
    
    insertion is made, the first portion of § 1343 (wire fraud) reads
    
    as follows:
    
              [Any person, individual, corporation, company,
              association, firm, partnership, society or joint
              stock company who], having devised or intending to
              devise any scheme or artifice [to deprive any other
              person,    individual,    corporation,     company,
              association, firm, partnership, society or joint
              stock company of the intangible right of honest
              services] etc.
    
    With these insertions, § 1343 as amended by § 1346 can certainly be
    
    read to clearly define the deprivor and the deprivee, setting aside
    
    for the time being the definitional problem of what constitutes a
    
    "deprivation of an intangible right of honest services." But these
    
    insertions do not solve the interpretation problem in this case,
    
    because the indictment charged Brumley with conspiring to defraud
    
    and defrauding "the citizens of the State of Texas, including
    
    members of the Texas Industrial Accident Board, an agency of the
    
    State of Texas, from receiving the intangible right to honest
    
    services," and defrauding "the citizens of the State of Texas
    
    including the Industrial Accident Board and its successor (the
    
    Texas Workman’s Compensation Commission), a state agency, of the
    
    
                                    34
    intangible right to good, faithful and honest service."               There is
    
    nothing in the definition of "whoever" in § 1 of Title 1 which
    
    could even remotely be interpreted or construed to mean "a state,"
    
    "the citizens of a state," "a political subdivision of a state,"
    
    "a governmental agency," or "an employee or official of a govern-
    
    mental agency."   Moreover, the majority opinion impliedly concedes
    
    that none of the nouns listed in the definition of § 1 of Title 1
    
    could be construed to include a "state or state agency" when it
    
    states that "the statute does not allow prosecution of a state or
    
    state agency."    Maj. Op. at 6.
    
          The answers to the questions "What is an intangible right?",
    
    "What are honest services?," and what is "the intangible right of
    
    honest services"    are   not   clear    nor   is   their   meaning    readily
    
    available to the average citizen.        The term "intangible right" is
    
    not defined in the United States Code, is not defined in BLACK’S LAW
    
    DICTIONARY, and, prior to its use in § 1346, had never been used in
    
    any other statute of the United States. The term "honest services"
    
    is not defined anywhere in the United States Code, is not defined
    
    in BLACK’S LAW DICTIONARY, and had never been used in the United States
    
    Code prior to its use in § 1346.        The phrase "the intangible right
    
    of   honest   services"   is,   therefore,     inherently    undefined    and
    
    ambiguous.    There is no listing in the United States Code of all
    
    "intangible rights;" therefore, there is nothing which could be
    
    identified as "the intangible right of honest services."
    
    
    
                                        35
         It is therefore incomprehensible to us that the majority can
    
    conclude, as it must in order to uphold this conviction, that the
    
    inclusion of the words "[f]or the purposes of this chapter, the
    
    term 'scheme or artifice to defraud' includes a scheme or artifice
    
    to deprive another of the intangible right of honest services,"
    
    reflects a clear statement of a Congressional intention to protect
    
    the citizenry of a state from corrupt state officials.               Given this
    
    certain ambiguity of statutory words, there is surely no call for
    
    us to proceed further into legislative history to demonstrate that
    
    Congress has failed to satisfy the requirements delineated in Bass
    
    and Ashcroft.    Nonetheless, the egregious error of the majority in
    
    applying this     statute    to   the    instant    facts   is   emphasized   by
    
    reference   to   legislative      history.         The   legislative   history
    
    demonstrates     conclusively     that       the   United   States   House    of
    
    Representatives was unwilling to pass a criminal statute to reach
    
    the conduct alleged in the instant indictment.
    
    
    
                                LEGISLATIVE HISTORY
    
         The specific text of what has become 18 U.S.C. § 1346 was
    
    inserted in the Omnibus Drug Bill for the first time on the very
    
    day that the Omnibus Drug Bill was finally passed by both the House
    
    and the Senate.4    The text of what is now § 1346 was never included
    
    
                   For an excellent discussion of the legislative
    history of § 1346, see Adam H. Kurland, The Guarantee Clause as a
    Basis for Federal Prosecutions of State and Local Officials, 62 S.
    
                                            36
    in any bill as filed in either the House of Representatives or the
    
    Senate.   As a result, the text of § 1346 was never referred to any
    
    committee of either the House or the Senate, was never the subject
    
    of any committee report from either the House or the Senate, and
    
    was   never    the   subject   of   any       floor   debate   reported   in   the
    
    Congressional Record.
    
          There are only two items of legislative history pertinent to
    
    the text of § 1346 as actually passed.            First, there are remarks on
    
    the floor of the House entered by Representative Conyers regarding
    
    various provisions in the Omnibus Drug Bill, including the section
    
    of that bill which added the new § 1346 to Title 18.                       After
    
    describing the Supreme Court decision in McNally and its effect on
    
    various   prior      federal   Circuit    Court       opinions,   Representative
    
    Conyers stated:
    
                       This amendment restores the mail fraud
                  provision to where that provision was before the
                  McNally decision.   The amendment also applies to
                  the wire fraud provision and precludes the McNally
                  result with regard to that provision.
    
    
                       The amendment adds a new section to 18 U.S.C.
                  63 that defines the term "scheme or artifice to
                  defraud to include a scheme or artifice to defraud
                  another   of  the   intangible   right  of  honest
                  services."   Thus, it is no longer necessary to
                  determine whether or not the scheme or artifice to
                  defraud involved money or property. This amendment
                  is intended merely to overturn the McNally
                  decision. No other change in the law is intended.
    
    
    
    CAL. L. REV. 367, 487-91 (1989).
    
                                             37
    134 Cong. Rec. H11,108-01 (daily ed. Oct. 21, 1988) (emphasis
    
    added).
    
         It    is   significant   that   in   this   statement   Representative
    
    Conyers does not use the word "state," nor the words "citizens of
    
    a state," nor the words "state official," nor the words "public
    
    official," nor the words "state employee."            What Representative
    
    Conyers does refer to as the change made by the amendment is that
    
    it eliminates the necessity "to determine whether or not the scheme
    
    or artifice to defraud involved money or property."5
    
         Second, several weeks after the passage of the Omnibus Drug
    
    Bill, the Senate Judiciary Committee prepared and entered into the
    
    Congressional Record a report regarding all of the provisions in
    
    the Anti-Drug Abuse Act of 1988 which were within the jurisdiction
    
    of the Senate Judiciary Committee, for the purpose of detailing
    
    "Congress' intent in enacting these provisions."             Regarding the
    
    text of what is now 18 U.S.C. § 1346, this report states as
    
    follows:
    
                Section 7603.     Intangible Rights for Mail and Wire
                Fraud.
    
                     This section overturns the decision of McNally
                v. United States in which the Supreme Court held
    
    
    
                   In the case of Representative Conyers’ remarks,
    affording them any weight is dubious, as he voted against the final
    omnibus drug bill. See Geraldine Szott Moohr, Mail Fraud and the
    Intangible Rights Doctrine: Someone to Watch Over Us, 31 Harv. J.
    Leg. 153, 169 n.69 (1994).     Likewise, there is nothing in the
    Congressional Record which identifies Representative Conyers as the
    sponsor of this amendment.
    
                                         38
                that the mail and wire fraud statutes protect
                property but not intangible rights.      Under the
                amendment, those statutes will protect any person's
                intangible right to the honest services of another,
                including the right of the public to the honest
                services of public officials.6    The intent is to
                reinstate   all  of   the   pre-McNally  case   law
                pertaining to the mail and wire fraud statutes
                without change.7
    
    134 Cong. Rec. S17,360-02 (daily ed. Nov. 10, 1988) (footnotes
    
    added).
    
         Such   post-enactment     legislative   history,     however,   is    not
    
    entitled to great weight.      See Consumer Products Safety Comm’n v.
    
    GTE Sylvania, Inc., 
    447 U.S. 102
    , 118 (1980). Moreover, additional
    
    legislative history reveals that, on at least two occasions,
    
    Congress    was   unwilling   to   specifically   enact   a   statute     that
    
    expressly spoke to the conduct of public officials. The first such
    
    occasion was H.R. 3050, 100th Cong., 1st Sess., filed July 29,
    
    1987, which provided for the addition of a new section in Chapter
    
    63 of Title 18 of the United States Code, which would have read:
    
    
    
    
              The phrase "including the right of the public to the
    honest services of public officials" in this report is pure
    conjecture at best.   Surely the staff of the Senate Judiciary
    Committee knew that Section 2 of S2973 (public corruption) was
    rejected by the House of Representatives See our discussion of
    S2973 hereinafter.
    
                   The majority correctly notes that the pre-McNally
    case law was "uneven" and was "not a unified set of rules."
    Therefore, the federal statute could not have intended to
    "reinstate all of the pre-McNally case law." To do so would have
    required a truly extraordinary statute, in which the substantive
    force of the statute varied in each judicial circuit.
    
                                         39
              Section 1346.   Definition of Defraud for Certain
              Sections.
    
                   As used in Sections 1341 and 1343, the term
              "defraud" includes the defrauding of the citizens
              of a body politic --
    
                        1.   of their right to the conscientious,
                   loyal, faithful, disinterested and unbiased
                   performance of official duties by a public
                   official thereof; or
    
                        2.   of their right to have the public
                   business conducted honestly, impartially, free
                   from bribery, corruption, bias, dishonesty,
                   deceit, official misconduct and fraud.
    
    This bill was referred to the House Committee on the Judiciary but
    
    was never further acted upon in any way.   Had this bill become law,
    
    Congress would have declared in clear and unmistakable language
    
    that the "citizens of a body politic" are protected by federal law
    
    from dishonest public servants.
    
         Second, the most comprehensive vehicle by which Congress
    
    sought to change the McNally decision in a manner sufficient to
    
    satisfy the tests of McNally was Senate Bill 2793 (S2793), titled
    
    the "Anti-Corruption Act of 1988." This bill was introduced in the
    
    Senate on September 7, 1988, referred to the Judiciary Committee,
    
    reported favorably by that committee without a report, and passed
    
    later by the Senate on October 14, 1988.    This bill was then sent
    
    to the House of Representatives, where it was referred to the House
    
    Judiciary Committee on October 19, 1988.     Concurrently with its
    
    passage by the Senate, S2793 was designated by a unanimous consent
    
    agreement of the Senate as one of a large number of amendments to
    
                                      40
    "comprise the joint leadership package" which would be attached as
    
    amendments to H.R. 5210, the Drug Initiative Act of 1988, Omnibus,8
    
    which was then before the Senate, having earlier been passed by the
    
    House.   H.R. 5210 (with S2793 included) was then passed by the
    
    Senate and sent back to the House.   On October 22, 1988, the House
    
    of Representatives reconsidered H.R. 5210 with the leadership
    
    package of amendments attached in the Senate and made various
    
    amendments thereto, and then passed the revised bill.   One of the
    
    amendments made by the House of Representatives was to delete the
    
    text of S2973 and substitute in its place the language which now
    
    appears codified as 18 U.S.C. § 1346.    H.R. 5210 as then amended
    
    was sent back to the Senate, which concurred in those amendments
    
    later on October 22, 1988.
    
         Because of the direct relevance of S2973 to the text of what
    
    was ultimately passed as 18 U.S.C. § 1346, a copy of that bill is
    
    appended as an addendum to this dissent.    Section 2 of this bill
    
    (pages 1-6 of addendum) would have created a new Section 225,
    
    entitled "Public Corruption," to be inserted in Chapter 11 of Title
    
    18 of the United States Code.        This new section would make
    
    criminal: (a) depriving or defrauding the inhabitants of a state or
    
    a political subdivision of a state of the honest services of an
    
    official or employee of such state or subdivision and (b) depriving
    
    
    
                   It should be noted that H.R. 5210 as previously
    passed by the House did not contain any section dealing with the
    McNally decision nor the concept of "honest services."
    
                                    41
    or defrauding the inhabitants of a state or political subdivision
    
    of a state of a fair and impartially conducted election process in
    
    any primary, runoff, special or general election.                          On its face
    
    Section   2    of    S2793      would    have    been   a   fairly     comprehensive,
    
    articulate and clear attempt to define criminal conduct which would
    
    satisfy the requirements of McNally that the Congress speak "more
    
    clearly than it has" and, in the area of federal/state relations,
    
    that Congress clearly express its intent to affect such relations.
    
    If   Section    2       of    S2793   had    been   adopted      by     the    House   of
    
    Representatives, there would not now be any need for determining
    
    whether   the       word      "another"     means   a   "state        or   a   political
    
    subdivision of a state."              There is no report in the legislative
    
    history explaining why the House of Representatives declined to
    
    accept the full text of S2793 as part of the omnibus Anti-Drug Act
    
    of 1988 (H.R. 5210).
    
          We may conclude from the demise of these more comprehensive
    
    bills (H.R. 3050 and S2793) that the House of Representatives was
    
    unwilling to join the Senate in the comprehensive definition of
    
    crime involving "public corruption" as set forth in Section 2 of
    
    S2793.
    
          Section       3    of     S2793,      entitled    "White        Collar    Crime,"
    
    contemplated the addition of a new § 1346, entitled "Scheme or
    
    Artifice to Defraud," which would be added to Chapter 63 of Title
    
    18 of the United States Code.                It is apparent that Section 3 of
    
    
    
                                                42
    S2793 is a progenitor in some respects of the text of 18 U.S.C. §
    
    1346, which was ultimately adopted by both Houses. Change the word
    
    "organization" to "another" and put a period after the words
    
    "honest services," and one has the text of what was ultimately
    
    passed.
    
         The legislative history likewise does not reveal any report or
    
    statement as to why the House of Representatives opted to make the
    
    changes it made in the portion of Section 3 of S2793 which the
    
    House of Representatives retained as Section 7603 of the Omnibus
    
    Crime Bill.    The word "organization" is defined in Section 18 of
    
    Title 18 as meaning "a person other than an individual."              The
    
    substitution of the pronoun "another" for the noun "organization"
    
    would work some enlargement of the class of potential victims,
    
    since   the   word   "organization"    by   definition   does   not   mean
    
    individual persons.    But the critical question to our inquiry here
    
    is whether simply by making this one word change the House intended
    
    to accomplish the same results that would have been accomplished if
    
    Section 2 of S2793 had also been adopted.           Simply to pose the
    
    question is to answer it.     If the House of Representatives truly
    
    agreed with the Senate that "depriving the inhabitants of a state
    
    or political subdivision of a state of the honest services of an
    
    official or employee of such state or subdivision" should become a
    
    federal crime when use was made of the mails or interstate wire,
    
    radio or television communications, then the clearest and most
    
    comprehensive way to do that (and satisfy the Supreme Court's tests
    
                                      43
    in McNally) would have been to adopt the entirety of Section 2 of
    
    S2793.   The House of Representatives was unwilling to do that.9
    
         Given this legislative history, the following conclusions must
    
    be drawn:
    
                1.   Both the House and the Senate certainly knew how to
    
         "speak clearly and definitively" on the subject of fraud
    
         depriving the citizens of a state or political subdivision of
    
    
                   A conclusion that the House of Representatives
    during the 100th Congress in 1988 was consciously unwilling to pass
    Section 2 of S2793 is corroborated by two other sources. First,
    the Public Integrity Section of the Department of Justice stated in
    its 1988 Report to Congress:
    
                     Also, the Section pushed for and
                     ultimately obtained congressional
                     attention    to   the    obstacle   to
                     effective   corruption     prosecution
                     posed by the Supreme Court decision
                     in McNally v. United States. That
                     decision largely invalidated the use
                     of the mail fraud statute to combat
                     state    and    local      corruption.
                     Unfortunately,     the     legislation
                     passed by Congress in 1988 did not
                     completely address the problems
                     posed by the McNally decision, and
                     the   Section   will    continue   its
                     efforts to see that this valuable
                     weapon    against     corruption    is
                     restored. (Emphasis added).
    
              Second, in subsequent Congresses, the Senate passed and
    included in its version of various crime bills provisions almost
    verbatim the same as the provisions of Section 2 of S2793. See 135
    Cong. Rec. S12,430-32 (daily ed. Oct. 3, 1989) (statement of Sen.
    Biden); 136 Cong. Rec. S6638-39 (daily ed. May 21, 1990) (statement
    of Sen. Biden); 137 Cong. Rec. S9382-83 (daily ed.
    July 9, 1991); 138 Cong. Rec. S6911-03 (daily ed. May 19, 1992).
    But none of these bills passed
    by the Senate were ever adopted by the House of Representatives.
    
                                      44
         the intangible right of good and honest government, but the
    
         House refused to do so; and
    
               2.     None      of    the     bills   containing       any    such   express
    
         provisions       received        a   majority   vote     of    both     houses    of
    
         Congress. Instead, what was passed by both houses of Congress
    
         was a last minute, "bobtailed" compromise which had never been
    
         the subject of hearings in either house.
    
         The wording of § 1346 simply does not effect a change in the
    
    portion of the McNally opinion which held that the mail fraud
    
    statute does not reach "schemes to defraud citizens of their
    
    intangible   rights      to      honest    and    impartial    government."           The
    
    legislative history reinforces this view.
    
    
    
                       SECTION 1346 FAILS TO GIVE NOTICE
    
         The majority opinion seems to make the test of "speaking more
    
    clearly" simply Congress’ evidencing an intention to overrule
    
    McNally.     But overruling McNally does nothing to place in the
    
    statutory language the necessary words, phrases and language which
    
    would notify the average citizen that these statutes have been
    
    dramatically     extended        to     include   conduct     and    activities       not
    
    previously stated therein. Clearly, when the Supreme Court decided
    
    McNally,   all   of    the       preexisting      Circuit   Court        constructions,
    
    interpretations       and     applications        went   down       the    drain;     the
    
    convictions of many defendants who had been prosecuted under the
    
    
                                                45
    pre-McNally law had to be vacated, and conduct occurring prior to
    
    the effective date of § 1346 could no longer be prosecuted under
    
    the old law.
    
           McNally placed the burden on Congress to put down in statutory
    
    form   whatever     expanded   scope   it   chose   to   give   to   the   fraud
    
    statutes.      In effect, Congress was charged with codifying in
    
    statutory form the definitions of the conduct which would be
    
    prohibited     by    the   concepts    of   "intangible    rights,"    "honest
    
    services," and "good and honest government," and to expressly
    
    indicate whether Congress intended to extend these concepts to the
    
    conduct of state officials. The requirement imposed by the Supreme
    
    Court to speak more clearly was not for the benefit of the Circuit
    
    Courts which had, in fact, given birth to these concepts in the
    
    first place.        Rather, the requirement to speak more clearly, in
    
    addition to addressing federalism concerns, was for the benefit of
    
    the public, the average citizen, the average mid-level state
    
    administrator like Brumley, who must be forewarned and given notice
    
    that certain conduct may subject him to federal prosecution.                The
    
    staff of the Senate Judiciary Committee and the Department of
    
    Justice clearly understood these requirements and drafted S2793
    
    (see addendum) which would satisfy them.             This bill passed the
    
    Senate, but the House was unwilling to specifically regulate the
    
    conduct of state officials.       In its place, the House substituted a
    
    one-sentence statement that did not define the word "another," did
    
    
                                           46
    not define the term "intangible right," and did not define the term
    
    "honest services."        It is difficult to understand how the majority
    
    can conclude that the statutory language of § 1346 "plainly reaches
    
    state officials such as Brumley."
    
    
    
                                   HONEST SERVICES
    
         Finally,   we    have    to   register   our    disagreement   with   the
    
    fundamental premise upon which the majority opinion seems to be
    
    based, i.e., that Congress can delegate to the federal courts the
    
    task of defining the key terms and coverage of a criminal statute.
    
    We   have   found    no    Supreme   Court    case    which   supports     that
    
    proposition, and the majority opinion cites no authority, either
    
    constitutional, statutory or decisional, for that premise.                 The
    
    majority pays lip service to the principle that Congress must
    
    define the criminal conduct when it states:
    
                We will not lightly infer that Congress intended to
                leave to courts and prosecutors, in the first
                instance, the power to define the range and quality
                of services a state employer may choose to demand
                of its employees.
    
    Maj. Op. at 10.       Surprisingly, the majority flatly contradicts
    
    itself when it states that the passage of § 1346 has set the Courts
    
    "back on a course of defining honest services, and we turn to that
    
    task." As stated earlier, research indicates that the term "honest
    
    services" has never been used by the United States Congress in any
    
    statute prior to its use in § 1346, and that the term is nowhere
    
    
    
                                          47
    defined by Congress.      Likewise, there is nothing in the words of
    
    the statute itself nor in any of the legislative history of § 1346
    
    which would indicate any Congressional intent to delegate to the
    
    Courts the task of defining the words "honest services," even if
    
    Congress could constitutionally do so.
    
         The     majority’s     attempt     to     define "honest services"
    
    demonstrates why such ad hoc definitions cannot possibly satisfy
    
    the requirements of "fair notice" to our fellow citizens as to
    
    where the line between permitted and prohibited conduct is drawn.
    
    On the one hand, the majority says that "the statute contemplates
    
    that there must first be a breach of a state owed duty," but on the
    
    other hand, it states that "the mere violation of a gratuity
    
    statute, even one closer to bribery than the Texas statute, will
    
    not suffice."   Likewise, at one point the majority states that "we
    
    do not reach the question of whether a breach of duty to perform
    
    must violate the criminal law of the state," but in another point
    
    the majority supports its evidentiary analysis by saying that
    
    "Brumley violated a Texas criminal statute."                Finally, at two
    
    points the    majority    recognizes    that   the   case   law   on   "honest
    
    services" prior to McNally was "not a unified set of rules" and was
    
    "uneven."    From its review of the pre-McNally cases, the majority
    
    found "two uncertainties regarding the draw by this federal statute
    
    upon state law, specifically in defining the statutory element of
    
    honest services."   Maj. Op. at 10.      It is obvious, therefore, that
    
    
                                       48
    the majority has recognized that the term "honest services" has not
    
    achieved the status of a commonly accepted and recognized term of
    
    art which Congress could have been relying upon in using these
    
    words.   The majority makes a labored effort to infuse some sort of
    
    meaning to these words; but in truth and in fact, the majority
    
    finds that meaning in its own subjective notions and not in the
    
    words of Congress.
    
    
    
                                     CONCLUSION
    
         Because our colleagues in the majority (1) have closed their
    
    eyes to obvious ambiguities in the text of 28 U.S.C. § 1346; (2)
    
    have chosen to completely ignore and avoid the legislative history
    
    of § 1346 which that undermines the majority's conclusion; (3) have
    
    concluded, without analysis or reference to any principles of
    
    statutory   construction,    that    §    1346     "plainly    reaches    state
    
    officials such as Brumley;" and (4) now legislate the definition of
    
    honest   services,   we   find   ourselves    in    total     and   fundamental
    
    disagreement with the majority opinion.          We therefore respectfully
    
    dissent.
    
    
    
    
                                         49
    

Document Info

DocketNumber: 94-40560

Citation Numbers: 59 F.3d 517

Filed Date: 8/1/1997

Precedential Status: Precedential

Modified Date: 4/10/2017

Authorities (34)

Matter of West Texas Marketing Corp. , 54 F.3d 1194 ( 1995 )

United States v. Brumley , 59 F.3d 517 ( 1995 )

United States v. Waymer , 55 F.3d 564 ( 1995 )

United States v. Castro , 89 F.3d 1443 ( 1996 )

McBoyle v. United States , 283 U.S. 25 ( 1931 )

United States v. Universal CIT Credit Corp. , 344 U.S. 218 ( 1952 )

Rewis v. United States , 401 U.S. 808 ( 1971 )

United States v. Bass , 404 U.S. 336 ( 1971 )

Consumer Product Safety Comm'n v. GTE Sylvania, Inc. , 447 U.S. 102 ( 1980 )

Hoffman Estates v. Flipside, Hoffman Estates, Inc. , 455 U.S. 489 ( 1982 )

Griffin v. Oceanic Contractors, Inc. , 458 U.S. 564 ( 1982 )

Dowling v. United States , 473 U.S. 207 ( 1985 )

McNally v. United States , 483 U.S. 350 ( 1987 )

Carpenter v. United States , 484 U.S. 19 ( 1987 )

United States v. Ron Pair Enterprises, Inc. , 489 U.S. 235 ( 1989 )

Gregory v. Ashcroft , 501 U.S. 452 ( 1991 )

Pioneer Investment Services Co. v. Brunswick Associates Ltd.... , 507 U.S. 380 ( 1993 )

United States v. Lanier , 520 U.S. 259 ( 1997 )

United States v. Sawyer , 85 F.3d 713 ( 1996 )

United States v. Czubinski , 106 F.3d 1069 ( 1997 )

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