United States v. Timothy Whiteagle , 759 F.3d 734 ( 2014 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 12-3554
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
TIMOTHY G. WHITEAGLE,
Defendant-Appellant.
Appeal from the United States District Court for the
Western District of Wisconsin,
No. 11-cr-65-wmc — William M. Conley, Chief Judge.
ARGUED JUNE 6, 2013 — DECIDED JULY 21, 2014
Before WOOD, Chief Judge, and POSNER and ROVNER, Circuit
Judges.
ROVNER, Circuit Judge. A jury found Timothy G. Whiteagle
guilty of (among other offenses) bribing and conspiring to
bribe a Ho-Chunk Nation legislator in order to secure favor-
able treatment for three different vendors wishing to do
business with the Nation. The district court ordered him to
2 No. 12-3554
serve a prison term of 120 months. Whiteagle now appeals his
conviction and sentence. We affirm.
I.
The Ho-Chunk Nation of Wisconsin, known formerly as the
Wisconsin Winnebago Nation, is a federally recognized Indian
tribe headquartered in Black River Falls, in the west-central
region of the State. About half of the Nation’s roughly 7,200
enrolled members live in Wisconsin. Among the Nation’s four
branches of government, its legislature possesses the authority
to enter into contracts on behalf of the Nation. Clarence
Pettibone served as one of those legislators from 1995 until
2011. During the time period relevant to this case, the legisla-
ture was comprised of eleven elected representatives; the total
has since been enlarged to thirteen.
The Ho-Chunk Nation has been active in the gaming
industry for over 30 years. Judge Crabb’s decision in Oneida
Tribe of Indians of Wisconsin v. Wisconsin, 518 F. Supp. 712,
719–20 (W.D. Wis. 1981), held that once Wisconsin’s constitu-
tion was amended in 1973 to legalize bingo games licensed by
the State, the State ceded its authority to restrict and regulate
bingo on Native American reservations. Thereafter, many of
Wisconsin’s tribes and bands turned to bingo halls as a source
of badly-needed revenue. The Ho-Chunk Nation established its
first such hall in 1983, in a used trailer on tribal land in the
Wisconsin Dells. See Bill Lueders, Wisconsin Center for
Investigative Journalism, Casino profits give Ho-Chunk new
outlook, WIS. STATE JOURNAL, Mar. 3, 2014, at A1. With the
Supreme Court’s decision in California v. Cabazon Band of
Mission Indians, 480 U.S. 202, 107 S. Ct. 1083 (1987), congressio-
No. 12-3554 3
nal enactment the following year of the Indian Gaming
Regulatory Act, P.L. 100-497, 102 Stat. 2467 (1988), and Wiscon-
sin’s creation of a state lottery in 1987, the door was opened to
the operation of full-fledged casinos by the tribes. By June
1992, the Governor of Wisconsin had entered into gaming
compacts with all eleven of the State’s tribes and bands,
including the Ho-Chunk Nation, authorizing a range of
gaming activities at tribal casinos including blackjack, elec-
tronic video games, slot machines, and “pull-tab” gambling
tickets. Today, the Nation operates a network of six casinos in
the State, at sites in or near Black River Falls, Madison,
Nekoosah, Tomah, Baraboo (Wisconsin Dells), and Wittenburg.
Wis. Legislative Reference Bureau, Research Bull. 97-1, The
Evolution of Legalized Gambling in Wisconsin 21-27 (Sept. 1997).
The casinos have proven to be highly lucrative for the Ho-
Chunk Nation. Currently it nets over $200 million annually
from its gambling operations. The profits have enabled the
Nation to establish a relatively generous set of benefits for its
members, including annual per-capita stipends of $12,000 for
adults and one-time payouts of up to $200,000 from a chil-
dren’s trust fund when a youth turns 18 and graduates from
high school. See Lueders, Casino profits give Ho-Chunk new
outlook; Ho-Chunk may change how they dole out trust funds,
DAILY HERALD (Arlington Hts., Ill.), May 6, 2014.
Cash Systems, Inc.
The large amount of revenue generated by casino gaming
naturally attracts vendors seeking a share of the pie, along with
influence peddlers who claim an ability to pave the way for
such vendors among tribal officials. Cash Systems, Inc. fell into
4 No. 12-3554
the former category. Cash Systems was one of a number of
firms that specialize in what are described as cash-access or
cash-resources services, which principally involve issuing cash
to casino customers via automated teller machines and kiosks,
check-cashing, and credit- and debit-card advances. (Cash
Systems was acquired by a competitor in 2008 after it lost its
contract with the Ho-Chunk Nation.) Key to the profitability of
casino operations is maximizing the amount of cash on the
casino floor—in other words, cash that customers have in their
hands ready to spend. This is why cash-access services are
important to casino operators: by making it easy for customers
to access cash on the spot, they encourage customers to gamble
away more of their money. In the early 2000s, Cash Systems
was ahead of its peers in some of the services that it offered: it
not only had the ability to process cash advances against a
customer’s credit or debit card, but it was pioneering the use
of hand-held, mobile devices that enabled cash-access transac-
tions to take place anywhere on the casino floor.
Timothy Whiteagle fell into the category of influence
peddlers. Whiteagle, a member of the Ho-Chunk Nation, held
himself out as an insider whose relationships with other tribal
members and legislators offered interested vendors an entrée
into the tribe’s governance and gaming operations and, once
there, a means of preserving the firm’s business relationship
with the tribe. Whiteagle conducted his business in part
through his limited-liability company, Wolfbow Big Game
Sources.
Cash Systems engaged Whiteagle in 2002 as a confidential
consultant as the company was attempting to win a contract
with the Nation to provide Ho-Chunk casinos with cash-access
No. 12-3554 5
services. (Cash Systems was already serving as a subcontractor
to the Nation’s existing cash-access vendor, Bank Plus.) The
firm agreed to pay Whiteagle a monthly salary of $22,500.
Whiteagle’s job was to engage in a behind-the-scenes effort to
win the contract and, once the Nation engaged Cash Systems
as its vendor in 2002, to help maintain that relationship. Cash
Systems served as the Nation’s cash-access services vendor for
the next six years. During that time, it reaped over seven
million dollars in revenue from the services it provided to the
Nation. And over the course of those six years, it paid
Whiteagle just under two million dollars.1 That figure included
both Whiteagle’s monthly salary as well as a series of pay-
ments that Whiteagle solicited from Cash Systems on Petti-
bone’s behalf. The total represented nearly 30 percent of the
company’s gross revenue on the contract.
The “in” with the tribal legislature that Whiteagle held out
to Cash Systems was his relationship with Clarence Pettibone.
Whiteagle’s and Pettibone’s parents were related and their
families had known and socialized with one another for many
years. Pettibone, as we have noted, had been serving in the Ho-
Chunk legislature since 1995. During his tenure, he served on
the legislature’s finance and development committees and
twice held the office of Vice President of the Nation. Pettibone
1
Revenues were derived from the transaction fees that customers were
charged for check cashing, cash advances, and other services. A Cash
Systems employee would later testify that the company reaped a total of $6
million in fees on a total of $235 million in transactions processed in one
year at Ho-Chunk casinos. Of that $6 million, Cash Systems passed along
$4 million to the Nation, paid approximately $500,000 in fees to credit and
debit card companies, and kept the balance of $1.5 million for itself.
6 No. 12-3554
was actively involved in cash access services. As Ho-Chunk
legislator Ona Garvin testified, “If it had anything to do with
check cashing, Clarence was on it.” R. 187 at 66. Whiteagle
represented to Cash Systems personnel that he would secure
Pettibone’s assistance in having Cash Systems selected (and
maintained) as a vendor to the Nation by convincing Pettibone
to serve as Cash System’s champion in the Ho-Chunk legisla-
ture.
Cash Systems was one of three firms seeking to become the
Nation’s new cash-access vendor in 2002. The government
presented testimony at trial indicating that when the matter
came before the Ho-Chunk legislature in May 2002, there was
no true consensus among the legislators as to which company
among the three should be selected. As it turned out, a vote on
the matter was called when a legislator who was outspoken in
his opposition to Cash Systems left the chamber. Pettibone
moved that the legislators present give their preliminary
approval to enter into a contract with Cash Systems. The
motion carried unanimously.
Whiteagle’s mission from this point forward was to ensure
that the contract with Cash Systems was finalized and to
preserve the company’s status as the Ho-Chunk Nation’s cash-
access vendor. To that end, he and Pettibone conferred
regularly on the company’s status with the Nation and
specifically regarding the possibility that Cash Systems might
be replaced by another cash-access provider. Kristine Fortney,
who was married to Pettibone from 1994 to 2008, could
remember overhearing at least 20 such conversations between
her husband and Whiteagle. As Fortney recalled the discus-
sions, Whiteagle would give Pettibone advice, if not instruc-
No. 12-3554 7
tion, as to what needed to be done to preserve Cash Systems’
position. Whiteagle also wrote multiple emails to Pettibone
giving him advice on how to ward off potential competitors to
Cash Systems. See, e.g., Gov. Exs. 3-1(c) - (f). In one email,
Whiteagle warned Pettibone that the two of them had to get a
Cash Systems competitor “killed off” or they would “pay big
time soon.” Gov. Ex. 3-2(b). A natural inference from that
statement is that Pettibone, like Whiteagle, stood to suffer
financially if Cash Systems lost its contract with the Nation.2
Over the course of the next six years, Whiteagle would
periodically ask Cash Systems personnel for money, over and
above his monthly salary, to pay Pettibone, with the express
purpose of ensuring that Pettibone would pursue favorable
treatment for Cash Systems in the Ho-Chunk legislature. On
occasion, Whiteagle would ask that these amounts be added to
the balance of a series of loans Whiteagle had taken from the
company. Cash Systems typically would accede to the re-
quests, usually issuing the payments to Whiteagle’s LLC.
Whiteagle in turn converted the bulk of the payments into cash
or cashier’s checks. So in most instances, there is no direct
evidence confirming that Whiteagle in fact transmitted the
money to Pettibone. And as we shall see, one of Whiteagle’s
arguments is that he was simply shaking down Cash Systems
for money that he kept for himself, and that he in fact never
bribed Pettibone. As the ensuing account reveals, there
2
There was also some testimony that Whiteagle attempted to remove the
political opponents of himself and Pettibone (and Whiteagle’s clients) from
the Ho-Chunk legislature. For example, he tried to have legislator Ona
Garvin recalled, although the recall effort failed.
8 No. 12-3554
certainly is ample evidence that Whiteagle told Cash Systems
personnel he was bribing Pettibone; there is also, as we have
just mentioned, substantial evidence that Whiteagle strategized
with Pettibone as to the company’s status as a vendor to the
Nation. Although the proof confirming that Pettibone actually
was bribed is, not surprisingly, less extensive, there is nonethe-
less sufficient evidence confirming that Pettibone had a corrupt
relationship with Whiteagle and, in fact, was bribed to give
favorable treatment to Cash Systems.
Bearing that out is the available documentary evidence
confirming the transmission of at least some financial benefits
from Cash System to Pettibone.
Between September 2002 and May 2006, Cash Systems
wrote three checks that were directly payable either to Petti-
bone or to Park Institute Black River Falls (“Park Institute”), a
charitable organization that operated the small tae kwon do
school that Pettibone operated to serve Ho-Chunk children.
The record indicates that one of these payments, a check for
$10,000 to Park Institute, was written at the specific behest of
Whiteagle. In September 2005, Roscoe Holmes, an employee of
Cash Systems, sent an email relaying Whiteagle’s request to
John Glaser, who had just been hired as the company’s
Executive Vice President for Sales and Marketing. Holmes
described Pettibone to Glaser as “our allies [sic] political
proponents [sic] at Ho-Chunk Nation” and indicated that the
solicited donation to Pettibone’s tae kwon do school was
intended to “maintain[ ] the good faith relationship we have
developed and … help foster a more direct bond from a
mutually gratifying prospective [sic].” Gov. Ex. 6-1. Cash
Systems issued the check to Park Institute three weeks later.
No. 12-3554 9
Apart from such direct payments between Cash Systems
and Pettibone’s charity, Park Institute, there is also some
evidence supporting an inference that the cash payments that
Whiteagle solicited from Cash Systems on behalf of Pettibone
were transmitted by Whiteagle to Pettibone. For example, on
May 5, 2003, Cash Systems wired $6,000 to Whiteagle; and on
the same day, Whiteagle withdrew $4,000 from his account to
obtain a cashier’s check in that amount payable to Pettibone
(which Pettibone subsequently cashed). Gov. Ex. 16-2. One
week later, Pettibone, in his capacity as the Ho-Chunk Nation’s
Vice-President, signed a final, one-year renewable contract
with Cash Systems, formalizing the Nation’s relationship with
the company.3 Financial records document at least four other
instances in which there were wire-transfers of money by Cash
Systems to Whiteagle, followed by the purchase of cashier’s
checks or money orders payable to Pettibone by Whiteagle. See
Gov. Exs. 16-3 (wire transfer of $7,000 to Whiteagle, followed
by Whiteagle’s purchase of $5,000 cashier’s check payable to
Pettibone); 16-7 (wire transfer of $8,000 to Whiteagle, followed
by Whiteagle’s purchase of $5,000 cashier’s check to Pettibone);
16-9 (wire transfer of $22,500 to Whiteagle, followed by
Whiteagle’s purchase of a $1,500 cashier’s check to Pettibone);
Gov. Exs. 16-4 & 16-5 (wire transfer of $4,267 to Whiteagle,
followed by Whiteagle’s issuance of $2,600 check to his
daughter, who worked as his bookkeeper; his daughter in turn
3
Representatives of Cash Systems later took Pettibone and Whiteagle out
to celebrate at a Minneapolis strip club, spending more than $27,000 to
entertain the two men over the course of two and a half hours. “It [was]
unethical, but we did it,” Cash Systems’ Brian Johnson later testified. R. 155
at 4.
10 No. 12-3554
cashed the check and purchased five money orders each in the
amount of $500 payable to Pettibone).
Cash Systems and its proponents (including Whiteagle and
Pettibone) were taken by surprise in the Spring of 2006 when
the President of the Ho-Chunk Nation, as head of its executive
branch, unilaterally replaced Cash Systems with Certegy, a
competitor in the cash-services field. Whiteagle emailed Brian
Johnson at Cash Systems on May 2 reporting that “I talk[ed] to
our man last night and he will be talking to the prez … but he
said the prez couldn’t do that . . . . . . . . . . to sign the contract.
I will be in Wittenberg today at the Legislative Meeting to
make sure CS doesn’t get kicked out.” Gov. Ex. 9-4. (CS, of
course, stood for Cash Systems.) On May 13, Pettibone cashed
a $1,500 cashier’s check from Whiteagle dated April 29, 2006.
Three days later, Pettibone moved in the legislature to both
terminate the contract with Certegy and reinstate the agree-
ment with Cash Systems, arguing to his colleagues that the
contract with Certegy had been signed improperly without the
requisite legislative review. Both of his motions carried
unanimously. But Cash Systems was reinstated on a month-to-
month basis only; gone was the renewable one-year contract it
had previously enjoyed.4
Cash Systems naturally wanted to regain the security of a
longer-term contract. Whiteagle advised Cash Systems
personnel that in pursuit of that goal, he needed additional
funds to assure Pettibone’s support for the company. In late
4
Cash Systems previously had held a right of first refusal that enabled it
to meet the more favorable terms that another vendor might offer to the
Nation.
No. 12-3554 11
December 2006, Whiteagle sent an email to Glaser, Cash
Systems’ Executive Vice-President, advising him of a proposal
that he had discussed with Pettibone over the Christmas
holiday. Whiteagle indicated that Pettibone was prepared to
shepherd a two-year contract with Cash Systems through the
Ho-Chunk legislature the following March; Pettibone (whom
Whiteagle referred to by the initial C) believed he had the votes
necessary in the legislature to approve such a contract. In
return, Pettibone expected financial support from Cash
Systems:
To do this, funds for his Mother who is suffering
terribly from diabetes are needed for her future
treatment at home. She has lost several fingers
already. C wanted $17,750.00 for diagnostic and
treatment equipment so her trips for Dialysis in
Marshfield Wisconsin are limited. It[‘]s a very
extreme hardship for the family and C. to take his
mother to Marshfield Wisc. everyday at 6am which
is a 120 mile roundtrip.
Plus C. would need $14,000 for his political cam-
paign in January 2007.
These funds would be added to my $75,000 loan
from CS. Wisconsin state campaign laws do not
apply to reservation properties as proven over the
years thru US Supreme rulings. This amount would
be an addendum to my loan agreement or contract
with CS. I want to pay for these expenses and help
C. as he has help[ed] me and CS for nothing. I can
12 No. 12-3554
send these funds to him based upon ancient tribal
custom and C. being a blood relative of mine.
I stress to CS this is my strategy to get the CS con-
tract signed in March 2007.
Gov. Ex. 3-3(c) at 1 (emphasis in original). Cash Systems
complied with the request by wiring the requested amounts of
$14,000 and $17,750 to Whiteagle in early January; and records
reveal that after the first of the two wire transfers was com-
plete, Whiteagle immediately withdrew $1,500 in cash from his
bank account. Gov. Exs. 16-17(a) & (b).
Similar requests from Whiteagle and payments by Cash
Systems became a pattern over the next 18 months. Whiteagle
would contact Cash Systems indicating that Pettibone needed
additional money, typically for his campaign. In a number of
emails, Whiteagle emphasized how important Pettibone was
to the interests of Cash Systems. Pettibone’s ongoing need for
campaign funds “cost little money compare[d] to what he is
capable of doing for us,” Whiteagle wrote in a February 2007
email. Gov. Ex. 3-1(i). He added, more ominously, “If C is out
CS is out.” Id. (emphasis in original). In a June 2007 email
asking for an $8,000 advance on his monthly salary to help
defray legal expenses that Pettibone had incurred in connec-
tion with his campaign, Whiteagle admonished Glaser that the
ability of Cash System to stay on as the Nation’s cash-access
provider depended on Pettibone’s reelection (“I[f] we don’t
have C we don’t have a man inside to protect and promote our
interests.”) and that Pettibone would not overlook the favor.
(“C doesn’t forget a favor . . . . . . . ever!!!!”) Gov. Ex. 4-10. In a
February 2008 email, Whiteagle sounded a note of urgency,
No. 12-3554 13
indicating that he needed $7,500 right away to prevent a vote
against Cash Systems in the legislature. “I need to do my
work,” Whiteagle wrote. “Each day gets worse as Mr. C is only
one man and he is doing his best. By me working to lobby on
CS[‘] behalf and get the support for Mr. C.[—] that has been a
winning and financially rewarding formula.” Gov. Ex. 9-13.
Cash Systems complied with these requests and remained
as the Nation’s cash-access vendor until 2008, although the
promised two-year contract never did materialize. Typically,
wire transfers to Whiteagle were followed in short order by
cash withdrawals by Whiteagle. And in one instance the
evidence indicates that Whiteagle used the withdrawn funds
to purchase roughly $1,500 worth of buttons and other cam-
paign materials for Pettibone.
In seeking these and other payments from Cash Systems,
Whiteagle frequently sought the assistance of Johnson, who
worked as an account manager in Cash Systems’ customer
service department. Johnson, who found it frustrating to deal
with these requests, asked Whiteagle to reward him with a
25-percent cut of the amounts Whiteagle received. Whiteagle
agreed. Over time, the kickbacks to Johnson amounted to more
than $31,000. These payments would ultimately prove to be a
key piece of evidence in the undoing of the scheme.
After Glaser joined Cash Systems and became familiar with
Whiteagle’s periodic requests for funds to pay Pettibone, he
asked that Whiteagle support his requests with invoices in
order to give the appearance that the payments were reim-
bursements for legitimate expenses. Whiteagle complied with
Glaser’s request by submitting invoices for items such as
14 No. 12-3554
advertising, travel, legal, and promotional expenses. The
invoices were false, as Whiteagle himself later admitted in his
testimony, and their falsity was almost immediately apparent
to Johnson, as the invoices were typically handwritten and
devoid of receipts and other backup documentation. Yet, the
company nonetheless honored the invoices and paid Whiteagle
the requested amounts.
Money Centers of America
Notwithstanding the significant sums of money that Cash
Systems was paying to Whiteagle and Pettibone, its status as
the Nation’s cash-access vendor came to an end in mid-2008,
when the Nation replaced Cash Systems with Money Centers
of America (“MCA”). As it turned out, at the same time
Whiteagle was telling Cash Systems he was working on its
behalf, he was also working on behalf of MCA.
Whiteagle had been introduced to MCA’s CEO, Chris
Wolfington, in 2005. Soon thereafter, Whiteagle agreed to
become a behind-the-scenes consultant for MCA. Wolfington
arranged to pay Whiteagle for his services through Support
Consultants, a consulting company owned by Kevin MacDon-
ald. MacDonald had arranged the introduction between
Whiteagle and Wolfington. According to MacDonald, MCA
through Support Consultants ultimately paid Whiteagle a total
of more than $650,000 between July 2008 and September 2009.
MCA’s director of corporate administration, Lauren Anderson,
would later describe the indirect method of paying Whiteagle
as “unique” in her experience with MCA and its outside
consultants. R. 178 at 28.
No. 12-3554 15
MCA made an initial bid for the Nation’s business in 2006,
but was unsuccessful: Cash Systems remained as the Nation’s
provider of cash-access services. Nonetheless, MCA perserver-
ed in its efforts to establish a business relationship with the
tribe, and toward that end, Wolfington maintained his behind-
the-scenes relationship with Whiteagle. Ultimately, in 2008, the
legislature voted to replace Cash Systems with MCA.
As with Cash Systems, Whiteagle would periodically make
demands of MCA on Pettibone’s behalf (as well as his own),
although, so far as the record reveals, Whiteagle and Pettibone
were not actually paid anything until the company obtained
the contract in 2008. Nonetheless, Whiteagle made multiple
demands—mostly for cash—before MCA was awarded the
contract. In February 2007, for example, Whiteagle solicited a
payment of $40,000 for Pettibone’s re-election campaign,
reminding Wolfington in an email that “[o]ur man C. did a lot
for you over the months” and admonishing him that “C needs
cash now not promises.” Gov. Ex. 4-2. There is no evidence that
MCA complied with this particular demand, and, indeed, an
email that Whiteagle sent to Wolfington on March 10, 2008,
suggested that while he and Pettibone were optimistic about
MCA’s prospects with the Ho-Chunk Nation, it was past time
that the company finally demonstrate some financial apprecia-
tion for both Whiteagle and Pettibone:
Altho its been a while for you to get in the door with
the HCN we have kept our word , you are in!! We
have devoted many months to prepare your way
into the HCN without pay and be assured the next
5 days will determine what we do next with you
with the HCN. Mr. C and I have discussed this
16 No. 12-3554
thoroughly too that [i]f what you say changes and
it[’]s a continued pattern we will need to review our
relationship. …
Gov. Ex. 4-20 at 1 (emphasis in original). Pettibone was copied
on this email.
A key point that distinguished MCA’s bid for the Nation’s
business was its willingness to offer the Nation a license of its
propriety “ONswitch” software, which would enable the
Nation at some point in the future to provide its own cash-
access services. In the March 10 email to Wolfington, Whiteagle
had also suggested that MCA seek an up-front fee of $2.5
million for that license. “The tribe can be very fickle,”
Whiteagle would later testify in explaining why he suggested
that MCA insist on payment in advance. R. 182 at 67. On
March 19, Pettibone made a motion in the Ho-Chunk legisla-
ture to approve the recommendation of the Nation’s business
department that the Nation enter into a contract with MCA.
That motion, which carried unanimously, paved the way for
negotiation of the contract terms.
Whiteagle continued to demand that Wolfington reward
himself and Pettibone for their assistance with the MCA
contract. In mid-March, he began to press Wolfington to hire
Pettibone’s cousin, Jon Pettibone, at an annual salary of
$50,000. Jon Pettibone had been working for Cash Systems in
a managerial position. In June, having still not heard whether
Wolfington would comply with the request, Whiteagle sent
two emails to Wolfington indicating that Pettibone wanted to
know when “[Jon] P. or JP” would be hired, Gov. Ex. 4-32, and
asking Wolfington to let Whiteagle know so that he could relay
No. 12-3554 17
the information to Pettibone, Gov. Ex. 4-33. After the second of
these emails, Wolfington hired Jon Pettibone at the requested
salary of $50,000 per annum. Although it was not uncommon
for MCA to hire some of its predecessor’s employees, MCA’s
Anderson would later testify that the decision to hire Jon
Pettibone puzzled her, as he was ostensibly hired to do the
same job that an existing employee (who in Anderson’s view
was “excellent”) was already doing. R. 178 at 23. For his part,
Whiteagle would later testify that he was lying when he said
that Pettibone had requested or had anything to do with the
employment of his cousin.
Money also remained a recurring topic of Whiteagle’s
communications with MCA during this time period. For
example, a March 21, 2008 email to Wolfington stated:
Of course we know our brother will make it right
and we trust you. But I think we should have a
reasonable portion of … everything [i.e., the increase
in MCA’s value as a result of its contract with the
Ho-Chunk Nation] in cash. What is your sugges-
tions?????????
… I strongly suggest we are treated well. HOW-
EVER. . . . . If you aren’t going to do anything we
need to know that now … and soon too. Your silence
will be taken as a NO.
Gov. Ex. 4-22. In reply to the email, Wolfington suggested that
Whiteagle telephone him the following week to discuss the
matter. Gov. Ex. 4-23.
18 No. 12-3554
On June 16, 2008, MCA signed a contract with the Ho-
Chunk Nation. The news prompted Whiteagle to send an email
to Wolfington which closed as follows:
SEND THE CONTRACT TO ME WITH SIGNA-
TURES. . . . . . . MR. C AND I ARE GOING TO
HAVE LUNCH. . . . AND IT[’]S HIS VICTORY
TOO. . . . YAAAAAAAAAA!!!!
Gov. Ex. 4-31.
At this point, however, the Ho-Chunk legislature had not
yet signed off on payment to MCA. On July 12, 2008, Whiteagle
advised Wolfington by email that a special legislative meeting
regarding the MCA contract was likely to take place the
following week. Whiteagle asked Wolfington to provide him
with any negative information Wolfington had regarding an
MCA competitor, so that he could pass the information along
to Pettibone.
On July 16, 2008, the Ho-Chunk legislature approved
payment in the total amount of $4,535,700 to MCA for cash-
access services, including the $2.5 million upfront fee for the
license of MCA’s ONswitch software. Pettibone seconded the
motion that resulted in that action. MCA received its payment
shortly thereafter. Two days later, MCA wired $309,600 to
Support Consultants; and on the day after that, Support
Consultants wired $261,900 to Whiteagle. (MacDonald retained
the difference as a referral fee for having introduced Whiteagle
and Wolfington, but he kicked back $10,000 of that amount to
Wolfington.) On the same day he received those funds,
Whiteagle had his bank issue a cashier’s check payable to
No. 12-3554 19
“Park Institute BRF” in the amount of $45,000. We shall have
more to say about that particular check below.
The Nation terminated MCA’s contract in late August,
2009. MCA continued making payments to Whiteagle until
shortly after that date.
Trinity Financial Group
Trinity Financial Group (“Trinity”), a Kentucky financial
services firm, was interested in entering into a contract with
the Ho-Chunk Nation to finance the construction of housing on
tribal lands and to provide mortagages to the Nation’s mem-
bers. Much of the Nation’s housing stock was substandard,
and the demand for housing far exceeded the available supply:
the Nation had a waiting list for housing that encompassed
more than 1,000 families. At the same time, many of the
mortgages on exisiting homes, which were underwritten by the
Nation itself, were in arrears. The Nation had issued a request
for proposal or RFP seeking an outside company to take over
the Nation’s mortgage portfolio. Trinity was pursuing a much
more ambitious, multi-million dollar contract with the Nation
that would not only assume responsibility for the mortgages
on existing homes but which also proposed a dramatic
expansion of the Nation’s housing stock through the construc-
tion of 1,200 new homes over a period of several years, at a cost
to the Nation of $125,000 per home. Trinity stood to make
several million dollars in profit from the sweeping contract it
was proposing.
In 2006, Deborah Atherton, who at the time had a romantic
relationship with Whiteagle, entered into a consulting arrange-
ment with Trinity. Atherton was charged with identifying
20 No. 12-3554
someone in the Ho-Chunk legislature who would champion
Trinity’s interests, and Trinity agreed that it would pay
Atherton up to $650,000 in consulting fees if Trinity succeeded
in obtaining the contract it sought with the Ho-Chunk Nation.
Whiteagle helped Atherton draft the contract with Trinity and
played an active, behind-the-scenes role in Trinity’s effort to do
business with the Nation. When Whiteagle and Atherton met
with Trinity’s CEO in the Spring of 2006, Whiteagle remarked
that his role had to remain secret; otherwise, he warned
Trinity, the firm might not get in the door with the Nation.
In April 2006, Trinity’s representatives came to Wisconsin
to meet with Atherton and Whiteagle. Whiteagle in turn
arranged to have the representatives meet Pettibone over
dinner at an Olive Garden restaurant. When Pettibone arrived
at the restaurant, he asked Whiteagle in front of the others,
“Are these the ones you want me to pick?” R. 188 at 28.
Whiteagle replied, “Yes, these are the ones I want you to pick.”
Id. Whiteagle assured the Trinity representatives that Pettibone
had the votes in the Ho-Chunk legislature “to get it pushed
through with his people,” R. 188 at 28–29, although Whiteagle
added that he had to make sure their opponents did not block
a vote. Later, in the Fall of 2006, Atherton told Fortney (Petti-
bone’s wife at the time), that she wanted to give Pettibone
$100,000 “if everything goes through with the Legislature
getting Trinity in.” R. 185 at 134–35. Fortney later told Pettibo-
ne what Atherton had said (although Atherton had asked her
not to). According to Fortney, Pettibone had no response,
audible or visible, to Fortney’s revelation.
Trinity’s aggressive proposal met with resistance in the Ho-
Chunk legislature. Apart from a reluctance among tribal
No. 12-3554 21
officials to outsource the development and financing of
housing, Trinity likely did itself no favor by submitting a
proposed budget to the Nation’s attorney which included a
$650,000 line-item for “consulting fees.” (This, of course, was
the amount Trinity had agreed to pay Atherton and
Whiteagle.) When he learned about that submission, Whiteagle
emailed Trinity’s CEO, Brent Frederickson, expressing the
hope that the Nation’s legislature had not seen that budget and
reminding Frederickson that he had previously suggested on
multiple occasions spreading the consulting fees among other
budget items in a way that “doesn’t identify us”—i.e., that
would hide the consultants and the fees they were to be paid.
Gov. Ex. 21-1(a).
In view of the opposition to the proposal, when Pettibone
met privately with Frederickson in November 2006, he
suggested that Trinity pursue a much more modest contract
with the Ho-Chunk Nation at that time. Specifically, Pettibone
suggested that Trinity propose to conduct a preliminary study
to assess the Nation’s housing needs. Pettibone asked whether
Trinity could perform such a study for $250,000, and Trinity’s
CEO agreed that it could. Whiteagle understood the smaller
contract as “a prelude, a door-opener” to the much larger
project that Trinity had proposed. R. 189 at 92.
Thereafter, on November 21, 2006, Pettibone moved in the
Ho-Chunk legislature to approve entering into a contract with
Trinity to conduct the sort of housing study he had discussed
with the company’s CEO. That motion carried, and the Nation
entered into the agreement with Trinity. Trinity thereafter paid
Atherton and Whiteagle a smaller consulting fee commensu-
rate with the magnitude of the contract it had entered into.
22 No. 12-3554
When Trinity received its initial payment of $125,000 from the
Nation in December 2006, it conveyed $19,000 of that amount
to Atherton’s company, Thoroughbred Business Solutions, and
Atherton in turn split the fee with Whiteagle. As it turned out,
however, the subject of a reward for Pettibone’s assistance
became a bone of contention between Trinity and its consul-
tants.
Whiteagle wanted to give Pettibone a Pontiac Firebird that
he had acquired earlier in 2006 in acknowledgement of the
help that Pettibone had given to Trinity in securing the
contract, and Whiteagle wanted $6,000 from Trinity as reim-
bursement for the cost of the car. When Atherton relayed the
request to David Payne, a contractor who was working for
Trinity as a kind of Man Friday, Payne rejected the idea as
“total bribery.” R. 188 at 38. “It’s not going to happen,” Payne
told Atherton. Id. Whiteagle himself then contacted the com-
pany’s CEO by telephone and instructed him in no uncertain
terms to comply with the request. “He just told me that I was
going to pay the money,” Frederickson testified. R. 187 at 150.
He described Whiteagle’s tone as “angry and threatening.” Id.Atherton pursued a more conciliatory approach with the CEO,
proposing that Trinity pay Whiteagle $3,000 immediately and
the balance two months later, with the money flowing through
Atherton’s consulting firm. “Obviously, no funds/gifts can be
directly given to Clarence,” Atherton wrote in an email, “but
they can be channeled through Thoroughbred Business
Solutions, LLC as a bonus.” Gov’t Ex. 21-1(b). Atherton
stressed that the “bonus” was necessary to “keep Clarence
happy” and to “keep Clarence’s support.” Id. “Bottom line is,
it has to be done.” Id. (In a later email, she noted that Whiteagle
No. 12-3554 23
was displeased by Frederickson’s resistance and had commu-
nicated his displeasure to Pettibone.) Trinity’s CEO continued
to view the proposed payment as a bribe, and refused to
contribute any funds to the Firebird. He described himself as
“shocked and angry” with Atherton’s email. R. 187 at 151.
Frederickson instructed Atherton to communicate with him
thereafter only in writing; and he admonished his staff not to
communicate at all with Atherton or Whiteagle.
Whiteagle nonetheless gave the Firebird to Pettibone as he
had intended, conveying title to the car through his
(Whiteagle’s) daughter. When Pettibone brought the car home
in the Summer of 2007, he told his family it was a gift from
Whiteagle. Fortney angrily admonished her husband that the
gift could be construed as a bribe. The car was later discovered
in Pettibone’s possession during the execution of a search
warrant on a storage locker leased by Pettibone. Whiteagle and
his daughter would later testify that the Firebird was given to
Pettibone with the intent that it be raffled off to benefit the tae
kwon do school; but Fortney and others testified that they were
aware of no such plan.
Trinity went on to complete its housing study for the Ho-
Chunk Nation. When the firm received the balance of the
$250,000 that the Nation had agreed to pay Trinity for the
study in January and March 2007, Atherton in turn received
$38,000, which she again shared with Whiteagle. Trinity
remained interested in doing additional business with the
Nation, and Atherton and Whiteagle continued to pursue that
possibilty with Pettibone throughout 2007 and into 2008.
24 No. 12-3554
In August 2007, Payne, who had found himself out of work
and in dire straits financially after Trinity’s work with the
Nation came to an end, worked briefly for Whiteagle as a
personal trainer. On one occasion during that period, when
Payne, Atherton, and Whiteagle were in the kitchen of
Whiteagle’s home, Whiteagle asked Payne to deliver to
Pettibone a brown paper bag containing cash. Payne balked,
telling Whiteagle, “I can’t do that, Tim . . . . It’s wrong. It’s
bribery. I can’t do it.” R. 188 at 59. Whiteagle told Payne, “You
need to do this. This is how deals are done up here,” R. 188 at
58, and walked away from Payne. The two had a falling out
not long after that incident, and Payne left Whiteagle’s employ.
During the summer of 2008, Atherton was still in pursuit of
another contract for Trinity. In a July 15, 2008, email to Petti-
bone, Atherton acknowledged that there was no money in the
Ho-Chunk budget for housing at that time, nor was there any
interest within the legislature for pursuing the construction of
senior housing, another possibility that Trinity had pursued.
Atherton nonetheless assured Pettibone in explicit terms that
if the door were opened to a follow-up contract for Trinity, he
would benefit financially:
Clarence, if personal compensation was/is a concern
for you, let me put your mind at ease. . . We cannot
compensate you outright, as in a direct payment,
however, Trinity can pay me, then I can compensate
you, we must be careful to protect your position as
paying you directly is a criminal offense… What
ever arrangement you have with anyone else, I can
assure you, the Trinity team will beat. . . . . Would
$5000 to $7000 a month contribution to T.K.D. [an
No. 12-3554 25
apparent reference to Pettibone’s tae kwon do
school] be satisfactory? Dave [Payne] will personally
see to this … And another thing. . . . you would have
never been out of the loop for supporting elder
housing with the Trinity team … you were and still
are always included … in compensation.
Gov. Ex. 10-1. In an email to Whiteagle the following month
regarding an elder-housing proposal from another client,
Bailey & Associates, Atherton addressed the need to compen-
sate Pettibone, telling Whiteagle, “Sandwiched in between the
compensation for all parties involved, Mr. C will be ‘taken care
of’ discretely.” Gov. Ex. 4-38.
Ultimately, however, the efforts to secure additional work
for Trinity went nowhere; and by the summer of 2008, the
Federal Bureau of Investigation was hot on the trail of
Whiteagle and his co-conspirators.
As early as July 2007, federal agents were looking into the
relationship between Whiteagle and Cash Systems. That
month, FBI agents approached Cash Systems’ Brian Johnson
and asked him whether he had received any money from
Whiteagle. (Recall that Whiteagle had been giving kickbacks to
Johnson on the payments that Johnson had helped him obtain
from Cash Systems.) Johnson lied to the agents and told them
he had not. Several days later, Johnson met Whiteagle at a
gasoline station and told him about the interview. Whiteagle
advised Johnson to tell the FBI that the sums of money he had
given to Johnson were loans.
By the following summer, the FBI had obtained records
documenting the payments from Whiteagle to Johnson. When
26 No. 12-3554
they confronted Johnson with the proof, he admitted that he
had lied previously to them, confessed to the kickbacks, and
agreed to cooperate with the investigation of Whiteagle.
Among other things, he gave the FBI access to his email
correspondence with Whiteagle.
Fortney, Pettibone’s soon-to-be ex-wife, also came to the aid
of the government’s investigation. While snooping on her
husband’s computer in mid-July 2008, she discovered Ather-
ton’s July 15 email discussing the possibility of compensating
Pettibone in the event Trinity were able to obtain another
contract with the Nation. She printed a copy of the email and
delivered it to the FBI.
On August 5, 2008, agents executed a search warrant at
Whiteagle’s home. They imaged the contents of his personal
computer and, as a result, obtained copies of his electronic
correspondence with Cash Systems, MCA, Atherton, and
Pettibone. Separately, agents also discovered the Pontiac
Firebird that Whiteagle had given to Pettibone in the storage
locker that Pettibone had leased.
When Pettibone was interviewed by federal agents, he
denied any knowledge of Whiteagle’s affairs. Specifically, he
professed ignorance of what Whiteagle did for a living,
whether Whiteagle had any business relationship with Cash
Systems, whether Whiteagle had received any money from
Cash Systems, and whether Whiteagle and Atherton had any
relationship with Trinity.
We noted earlier that when the Ho-Chunk legislature
approved compensation in the amount of more than $4.5
million to MCA in July 2008, Whiteagle received compensation
No. 12-3554 27
from MCA in the amount of $261,900 through Support Consul-
tants. On the same day that he received that money, Whiteagle
obtained a cashier’s check in the amount of $45,000 payable to
Park Institute BRF, the charitable organization that funded
Pettibone’s tae kwon do school. Whiteagle was still in posses-
sion of that cashier’s check the following month, when the
search warrants were executed on both his home and
Pettibone’s. Apparently, Whiteagle concluded that it was not
in his interest to turn the check over to Pettibone’s charity. In
December 2008, Whiteagle created a new company by the
name of “Park Institute Black River Fund, Ltd.” and opened a
new bank account in that company’s name. He then deposited
the cashier’s check into that account, and then withdrew most
of the proceeds from the acccount in cash.
Nearly three years later,5 a grand jury indicted Whiteagle,
Pettibone, and Atherton on charges that they had conspired in
violation of 18 U.S.C. § 371 to commit the offense of bribery in
connection with the contracts that Cash Systems, MCA, and
Trinity entered into with the Ho-Chunk Nation. The indict-
ment also charged all three defendants with engaging in
substantive acts of bribery in violation of 18 U.S.C. § 666.
Whiteagle was also charged with tax offenses, as a result of his
failure to report his income to the Internal Revenue Service,
and with witness tampering, based on his advice to Brian
Johnson to tell the FBI that the kickbacks he had given to
Johnson were loans. Pettibone pleaded guilty to corruptly
accepting the Pontiac Firebird from Whiteagle with the intent
5
The delay was apparently due to the difficulty of assembling the
extensive document trail.
28 No. 12-3554
to be influenced in connection with the Trinity contract, in
violation of section 666(a)(1)(B). Separately from the indictment
in this case, Atherton had been charged along with Whiteagle
of conspiring to fraudulently obtain a loan. She ultimately
pleaded guilty to that charge, but in pleading guilty stipulated
to the facts establishing her participation in the corrupt efforts
on behalf of Trinity to enter into contracts with the Ho-Chunk
Nation.
For his part, Whiteagle maintained his innocence and
proceeded to trial, where he testified in his own defense.
Confronted with his own emails, Whiteagle admitted that he
had solicited money and other things of value for Pettibone
from the three companies who had hired him. But he denied
that he had ever transmitted any bribes to Pettibone, that
Pettibone had made any of the demands for money and other
things of value that Whiteagle had presented to his clients as
if they were made on Pettibone’s behalf, or that Pettibone had
entered into any corrupt agreement with him (and Atherton)
to favor his clients in the Ho-Chunk legislature. Whiteagle
insisted that both Pettibone and he had advocated for
Whiteagle’s clients based on what they believed to be the
genuine merits of those clients as vendors to the Ho-Chunk
Nation. He also denied having the influence over Pettibone
that he had represented to his clients. And he explained the
demands for money he had made of his clients, purportedly on
Pettibone’s behalf, as resulting from his own insatiable desire
for money. “Clarence never asked me for a dime,” Whiteagle
testified. R. 189 at 4.
No. 12-3554 29
[I]t was my own personal greed. I just wanted to
keep the money coming. It was like an intoxication
and I misused his name terribly. Terribly.
R. 182 at 123.
After an eight-day trial, a jury found Whiteagle guilty on all
twelve counts of the superseding indictment in which he was
named.
At sentencing, the district judge calculated Whiteagle’s
offense level using the bribery guideline rather than the
guideline governing gratuities; he also determined that the loss
resulting from the bribery offenses was between $2.5 million
and $7.0 million, and increased Whiteagle’s offense level
accordingly. Finding that Whiteagle had committed perjury
when he testified at trial, the judge also enhanced Whiteagle’s
offense level for obstruction of justice. As a result of these
determinations, the Sentencing Guidelines advised a sentence
in the range of 235-292 months. The court ordered Whiteagle
to serve a sentence of 120 months, explaining its decision to
impose a below-Guidelines sentence as follows:
The court would have little trouble imposing a
sentence within the guideline range but for consid-
eration of the defendant’s age and medical condi-
tions; the fact that this is his first real encounter with
the criminal justice system; the sentences and lack of
prosecution of others involved in these crimes; and
the extreme sums of money that are regularly paid
to lobbyists and others, as well as contributed to
campaigns, by special interest groups ostensibly to
influence legitimately, rather than corruptly, the
30 No. 12-3554
votes of public officials at virtually every level of
government in this nation. Even so, the defendant
was the ringleader of a blatantly deliberate, calcu-
lated and elaborate scheme not just to influence, but
to bribe and sell a key tribal legislator’s support and
votes. For that, he is deserving of a substantial form
of imprisonment. Taking into consideration these
factors pursuant to §§ 5H1.1, 5H1.4 and 5K2.0 of the
guidelines, as well as § 3553(a) of Title 18, I am
persuaded that a custodial sentence of ten years is
reasonable and no greater than necessary to satisfy
the statutory purposes of sentencing. Such a sen-
tence will reflect the seriousness of the offense, serve
to hold the defendant accountable, provide the
defendant the opportunity for rehabilitative pro-
grams and achieve parity with the sentences of
similarly situated offenders.
R. 213 at 5; see also R. 225 at 31–32.
II.
Whiteagle does not challenge his convictions on the tax
charges or on the charge of witness tampering. His appeal is
focused on his convictions on the conspiracy and substantive
bribery counts of the superseding indictment. Primarily
because Whiteagle believes there is little or no evidence
establishing Pettibone’s knowing participation in the charged
conspiracy and acts of bribery, Whiteagle contends that the
evidence is insufficient to support his own convictions on those
counts. He also argues that the district court committed
prejudicial error in allowing into evidence the falsified invoices
No. 12-3554 31
he submitted to Cash Systems as well as the false protestations
of ignorance that Pettibone made when he was first inter-
viewed by the FBI. Last, he challenges the district court’s
estimation of the loss amount for sentencing purposes, as well
as its decision to treat the moneys conveyed to Pettibone as
bribes rather than gratuities.
A. Sufficiency of the Evidence
We begin our review with Whiteagle’s challenge to the
sufficiency of the evidence underlying his convictions on the
conspiracy and substantive bribery counts. In addressing these
claims, we are, of course, obligated to view the evidence in the
light most favorable to the government. E.g., United States v.
Garcia, — F.3d —, 2014 WL 2624809, at *6 (7th Cir. June 13,
2014). Only if no jury could find the essential elements of the
offense beyond a reasonable doubt will we reverse the convic-
tion. E.g., United States v. Chapman, 692 F.3d 822, 825 (7th Cir.
2012).
1. Conspiracy
Count 1 of the superseding indictment charged Whiteagle
with violating 18 U.S.C. § 371 by engaging in a conspiracy with
Pettibone, Atherton, and others to commit an offense against
the United States, namely bribery in violation of 18 U.S.C.
§ 666.6 The government’s theory of the case was that Whiteagle
conspired to solicit bribes for Pettibone from the companies
wishing to do business with the Ho-Chunk Nation in exchange
6
Our references and citations to the superseding indictment are to the
superseding indictment as redacted for the jury, which involved some
renumbering of the counts. R. 94-1.
32 No. 12-3554
for Pettibone’s efforts as a member of the Nation’s legislature
to secure favorable treatment for the interested companies.
To convict Whiteagle of this charge, the jury had to find
that there was an agreement to commit an illegal act (in this
case, bribery), that Whiteagle knowingly and deliberately
became a party to that agreement, and that he or a co-conspira-
tor committed an overt act in furtherance of the conspiracy.
E.g., United States v. Jones, 371 F.3d 363, 366 (7th Cir. 2004). The
essence of conspiracy, of course, is the agreement to commit an
offense, e.g. United States v. Vallone, — F.3d —, 2014 WL
1999034, at *6 (7th Cir. May 16, 2014), and this agreement may
be proved circumstantially, e.g., United States v. King, 627 F.3d
641, 651 (7th Cir. 2010).
In view of the evidence, it would be difficult, to say the
least, for Whiteagle to contend that he was not engaged in an
effort to market Pettibone’s services as a Ho-Chunk legislator
to companies willing to pay bribes to Pettibone, through
Whiteagle, in exchange for Pettibone’s efforts. Whiteagle’s own
statements and emails held himself out as Pettibone’s agent,
demanding cash and other remuneration on Pettibone’s behalf
in exchange for the action that Pettibone would take or had
taken on the companies’ behalf in the legislature.
Whiteagle instead contends that Pettibone was wholly
unaware that Whiteagle was soliciting bribes on his behalf, that
he had no knowledge of the charged conspiracy, and that
Pettibone never accepted a bribe, because Whiteagle pocketed
all of the money. This is not an uncommon defense in bribery
cases: the middleman who has solicited a bribe on behalf of a
public official contends that he was merely puffing or
No. 12-3554 33
“rainmaking”when he held himself out as an agent of the
official, the aim being to extract money from someone hoping
to corruptly influence the official and keep the bribes for
himself, without the official knowing of or participating in the
scheme. See, e.g., United States v. Shields, 999 F.2d 1090, 1099
(7th Cir. 1993) (citing United States v. Turchow, 768 F.2d 855, 864
(7th Cir. 1985)).
As the government points out, the possibility that Pettibone
might not have known what Whiteagle was doing or agreed to
accept bribes does not necessarily foreclose the possibility that
the conspiracy existed and that Whiteagle was guilty of
participating in that conspiracy. The jury could have found
that Whiteagle agreed with one or more officials of a company
wishing to do business with the Nation (Glaser and Johnson of
Cash Systems, for example, or Wolfington of MCA) to bribe
Pettibone, and that the company transmitted a bribe to
Whiteagle for that purpose, without having to additionally find
that Pettibone was, in fact, bribed. Cf. Vallone, 2014 WL
1999034, at *6 (as it is the agreement to commit a crime that is
the essence of conspiracy, proof that conspiracy succeeded in
its illicit aim is not a prerequisite to conviction) (citing United
States v. Jimenez Recio, 537 U.S. 270, 274–75, 123 S. Ct. 819, 822
(2003)). The ample evidence regarding Cash Systems’ efforts to
obtain favorable treatment in the Ho-Chunk legislature by
complying with Whiteagle’s multiple demands for money to
pay Pettibone, for example, would have supported such
findings. But, contrary to Whiteagle’s argument, there was
34 No. 12-3554
indeed sufficient evidence that Pettibone not only knew of, but
participated in, the charged conspiracy.7
To begin with, Whiteagle’s emails and other statements
represented that it was Pettibone on whose behalf Whiteagle
was soliciting bribes and promising favorable treatment in the
Ho-Chunk legislature in exchange for those bribes. As a
member of that legislature, Pettibone obviously was in a
position both to exercise his own vote in favor of a vendor
wishing to do business with the Ho-Chunk Nation and to use
his influence to persuade his colleagues in the legislature to do
the same. Although Whiteagle testified that he was lying when
he said that he was soliciting bribes on Pettibone’s behalf, the
jury of course was not required to believe him. It could have
accepted at face value the representations that Whiteagle made
to the vendors and inferred from them that Pettibone indeed
was a participant in the conspiracy. But beyond Whiteagle’s
own statements about Pettibone, there were several communi-
cations to which Pettibone was a party, and actions that
Pettibone himself took, from which the jury could reasonably
infer that he was a knowing participant in the conspiracy.
First, Pettibone was copied on the March 10, 2008 email that
Whiteagle sent to MCA’s CEO, Wolfington, reminding him
that “[w]e have devoted many months to prepare your way
into the HCN without pay and be assured the next 5 days will
determine what we do next with you with the HCN.” Gov. Ex.
4-20 at 1 (emphasis in original). Whiteagle added that “Mr. C
7
Although Pettibone did plead guilty to one of the bribery charges, he did
not testify against Whiteagle at trial.
No. 12-3554 35
and I have discussed this thoroughly too that [i]f what you say
changes and it[’]s a continued pattern we will need to review
our relationship.” Id. The jury could readily infer from this
email, a copy of which was sent to Pettibone at his Park
Institute email address, that Pettibone was aware that
Whiteagle was soliciting financial remuneration for both
himself and Pettibone and that Pettibone’s favorable treatment
of MCA in the Ho-Chunk legislature was contingent upon the
expectation of a financial reward. Four months after this email,
Pettibone seconded the motion approving payment to MCA of
more than $4 million.
Likewise, in 2008, as Atherton was pursuing the possibility
of a second contract between Trinity and the Ho-Chunk
Nation, she sent an email to Pettibone assuring him, “Clarence,
if personal compensation was/is a concern for you, let me put
your mind at ease … We cannot compensate you outright, as
in a direct payment, however, Trinity can pay me, then I can
compensate you [but] [w]e must be careful to protect your
position as paying you directly is a criminal offense. …” Gov.
Ex. 10-1. That email leaves little to the imagination; and,
needless to say, the jury could reasonably have deduced that
Atherton would not be so openly discussing the prospect of
compensation with Pettibone were he not a knowing and
active participant in the conspiracy.
Second, the testimony of Fortney, who was married to
Pettibone during the time period of the charged conspiracy,
supplied evidence both that Pettibone was coordinating his
legislative efforts with Whiteagle, and that he was aware of an
intent to reward him financially for those efforts. Fortney
36 No. 12-3554
testified that she overheard more than 20 conversations
between Whiteagle and Pettibone regarding Cash Systems.
They would always talk about it more when it was,
like, on the legislative agenda and/or if the company
was going to be talked about being replaced by the
legislators by a different company, then Tim would
be talking to Clarence, … we need to do this and
this, we need to talk to these people, we need to get
these things done to keep them in there, and things
like that.
R. 185 at 125. When asked to describe Pettibone’s role in these
conversations, Fortney indicated that her former husband
“would say, yeah, we need to talk to this person or, you know,
he would kind of agree what needed to be done.” R. 185 at 126.
Fortney also recalled that when the subject of the conversation
was the possibility that the Ho-Chunk legislature might replace
Cash Systems as its vendor, Whiteagle became “worked up
about it” and would “talk to Clarence a lot and say, ‘We need
to get these things done,’ you know … .” R. 185 at 129.
Whiteagle’s own emails to Pettibone, suggesting various
strategies that Pettibone should pursue on behalf of Cash
Systems, reinforce the notion that the two men were coordinat-
ing their efforts.
Fortney also recounted Atherton’s statement to her, during
the time period that Atherton and Whiteagle were working
with Pettibone to secure a contract for Trinity Financial, that
she and Whiteagle wanted to pay Pettibone $100,000 “if
everything goes through with the legislature getting Trinity
in.” R. 185 at 134–35. When Fortney repeated Atherton’s
No. 12-3554 37
remark to Pettibone (against Atherton’s expressed wish),
Pettibone neither questioned what Atherton meant, expressed
surprise, or denied the obvious implication that Atherton
meant to reward him for his efforts on behalf of Trinity.
Instead, he said nothing. “He didn’t say anything. He didn’t
have any comment. He didn’t have any response at all.” R. 185
at 135.
Third, when Whiteagle introduced Pettibone to Trinity’s
representatives in April 2006, Pettibone, remarkably, asked
Whiteagle “Are these the ones you want me to pick?” R. 188 at
28. And Whiteagle, of course, told him they were. It was
Pettibone himself, when he subsequently met Trinity’s CEO,
who suggested that Trinity get its foot in the door with the
Nation with a more modest proposal to perform a $250,000
preliminary housing assessment.
Fourth, although Whiteagle’s heavy use of cash makes it
impossible to know when and how much Pettibone was paid
for his corrupt assistance to Whiteagle’s clients, there are
several pieces of evidence that support an inference that he
was, in fact, paid. There is, of course, Payne’s testimony that
Whiteagle once asked him to deliver a paper bag full of cash to
Pettibone. When Payne protested that this constituted bribery,
Whiteagle told him, “You need to do this. This is how deals are
done up here.” R. 188 at 58; see also id. at 60. There is also the
testimony and evidence surrounding the gift of the Pontiac
Firebird to Pettibone, which Payne, Trinity’s CEO, and Petti-
bone’s wife, Fortney, all objected to on the ground that it
amounted to a bribe. Although the transfer of the automobile
was effectuated through Whiteagle’s daughter, and the defense
contended that the automobile was conveyed to Pettibone in
38 No. 12-3554
order to be raffled off for the benefit of his tae kwon do school,
the jury could reasonably have concluded that the car was
given to Pettibone by Whiteagle as a reward for his assistance
with Trinity. Finally, apart from the checks that Cash Systems
and Whiteagle both issued to the charitable foundation that
funded Pettibone’s tae kwon do school, Whiteagle in a number
of instances used the funds he solicited from Cash Systems to
purchase cashier’s checks and money orders payable to
Pettibone. Those payments could also be understood as both
furthering and confirming the existence of a corrupt relation-
ship between Pettibone and Whiteagle (and Whiteagle’s
clients).
Fifth and finally, when Pettibone was first questioned by
the FBI in August 2008, he denied any knowledge of what
Whiteagle did professionally, whether he had any business
relationship with Cash Systems, whether Whiteagle had been
compensated by Cash Systems, and whether Whiteagle and/or
Atherton had a relationship with Trinity. Pettibone’s profes-
sions of ignorance on these subjects were obviously false. (For
example, Pettibone’s wife testified that he had told her years
earlier what Whiteagle did for a living.) And, as such, these lies
suggest that Pettibone had culpable knowledge of the conspir-
acy and was attempting to distance himself from it. See United
States v. Rose, 12 F.3d 1414, 1421 (7th Cir. 1994); United States v.
Rajewski, 526 F.2d 149, 158 (7th Cir. 1975).
2. Causing Cash Systems to agree to bribe Pettibone
Counts 2, 3, and 5 of the superseding indictment charged
Pettibone with corruptly causing an executive of Cash Systems
(whom the evidence revealed to be Glaser) to agree to give a
No. 12-3554 39
bribe to Pettibone, an official of an Indian tribal government,
with the intent to influence and reward Pettibone in connection
with the business and transactions of the Ho-Chunk Nation
involving a value of $5,000 or more, in violation of 18 U.S.C.
§§ 666(a)(2) and 2. Section 666(a)(2) made it a crime for Glaser
to agree to bribe Pettibone; section 2(b) made it a crime for
Whiteagle to wilfully cause Glaser to enter into that agreement.
Our review of the evidence reveals the ample proof that
Whiteagle solicited bribes from Glaser for the purpose of
influencing and rewarding Pettibone’s efforts to help Cash
Systems win and maintain its contract with the Nation.
Whiteagle nonetheless argues that the evidence is insufficient
to support his conviction on these counts because the govern-
ment proved neither that Whiteagle intended for Pettibone to
know about the bribes Whiteagle was soliciting in Pettibone’s
name nor that the bribes ever made their way into Pettibone’s
pocket.
We have already disposed of the first of these arguments in
reviewing the evidence establishing that Pettibone both knew
of and participated in the conspiracy charged in Count 1. That
evidence amply supports the inference that Pettibone had
agreed to accept, and was accepting, bribes in return for
exercising his influence within the Ho-Chunk legislature for
the benefit of Whiteagle’s clients.
Whiteagle’s second argument, regarding the lack of
evidence that he ever conveyed the specific bribes referenced
in these counts to Pettibone, is misplaced to the extent it was
meant to raise an issue distinct from Pettibone’s knowledge of
the bribes. It was not necessary for the government to prove as
to these counts that Pettibone actually received the bribes. Cf.
40 No. 12-3554
United States v. Agostino, 132 F.3d 1183, 1190 (7th Cir. 1997)
(noting that section 666(a)(2) focuses on the offer of a bribe,
whereas section 666(a)(1)(b) criminalizes the receipt of the
bribe). Because it is phrased in the disjunctive, section 666(a)(2)
separately proscribes giving, offering, or agreeing to give a
thing of value to someone with the corrupt intent to influence
a transaction covered by the statute. United States v. Pacchioli,
718 F.3d 1294, 1300–01 (11th Cir.), cert. denied, 134 S. Ct. 804(2013). Thus, as relevant here, what section 666(a)(2) proscribes
is agreeing to give a bribe to a tribal official with the intent to
influence or reward him in connection with tribal business.
And there is ample evidence that Whiteagle wilfully caused
Glaser to do precisely that.
Count 2 charged that in late December 2006 and early
January 2007, Whiteagle caused a Cash Systems executive to
agree to give payments of $17,500 and $14,000 to Pettibone
with the intent to influence and reward Pettibone in connection
with Cash Systems’ contract to provide cash access services to
the Nation. Whiteagle’s December 26, 2006 email to Glaser
requested these same amounts from Glaser—the former to
help Pettibone cover his mother’s medical expenses and the
latter for Pettibone’s upcoming campaign—in exchange for
Pettibone’s help in securing a two-year contract for Cash
Systems. Bank records confirm that Cash Systems wired these
amounts to Whiteagle on January 8 and 11, 2007; and
Whiteagle withdrew $1,500 in cash from his account immedi-
ately after the first of these wire transfers.
Count 3 alleged that in late February and early March 2007,
Whiteagle caused Cash Systems to agree to pay a bribe of
$8,500 to Pettibone in connection with the Cash Systems
No. 12-3554 41
contract. Whiteagle sent an email to Glaser on February 21,
2007, advising Glaser that “the things C [Pettibone] is doing
cost little money compare[d] to what he is capable of doing for
us. C needs another $8,500 for his campaign . . . . If C is out, CS
[Cash Systems] is out.” Gov. Ex. 3-1(i). In follow-up emails sent
to Glaser on March 7 and March 12, Whiteagle reported that
Pettibone favored a three-year contract for Cash Systems and
asked about the status of the requested campaign funds for
purposes of a meeting that Whiteagle would be having with
Pettibone. On March 13, Cash Systems wired the $8,500 to
Whiteagle, and two days after that, Whiteagle withdrew $3,500
from his account in cash. On March 19, Atherton ordered
promotional materials for Pettibone’s campaign. Whiteagle
admitted in his testimony that these materials were paid for
using the funds that he had solicited from Cash Systems. R. 182
at 128.
Count 5 of the superseding indictment charged Whiteagle
with having caused Cash Systems in June and July of 2007 to
transmit to him for the purpose of bribing Pettibone another
payment in the amount of $8,000. It was Whiteagle’s email of
June 28, 2007, which solicited that bribe, again for the purpose
of helping to defray Pettibone’s campaign expenses. In that
email, Whiteagle assured Glaser “t]here is no doubt now that
CS will be in for another 3 to 6 months. . . . C implied that your
present contract albeit if is only for a 30 day or month to month
agreement is a SOLID contract” Gov. Ex. 4-10. Whiteagle went
on to stress the importance of Pettibone’s re-election. “I think
you know while I may have a lot of voters behind C IF we
don’t have C we don’t have a man inside to protect and
promote our interests . . . . Plus if we help C then that’s all the
42 No. 12-3554
more C would help CS. C doesn’t forget a favor … ever!!!!” Id.Several days later, on July 2, Cash Systems wired $8,000 to
Whiteagle, and over the next several weeks, Whiteagle
withdrew $3,100 of that payment in cash.
Thus, in all three instances, the evidence established that
Whiteagle expressly sought money from Cash Systems on
Pettibone’s behalf; and the evidence regarding the solicitations
charged in Counts 3 and 5 exemplified Whiteagle’s ongoing
promises and warnings that Pettibone’s presence in the Ho-
Chunk legislature was essential to Cash Systems’ contractual
relationship with the Nation. Cash Systems’ compliance with
these solicitations by wiring the requested amounts to
Whiteagle demonstrates its agreement to pay the solicited
bribes with the intended purposes of influencing and reward-
ing Pettibone’s actions as a tribal legislator in connection with
the Cash Systems contract. As the district court put it in
denying Whiteagle’s post-trial motion for a judgment of
acquittal, “Combined with other evidence of Whiteagle
claiming to exert influence over Pettibone, the jury could
reasonably have found [that] Whiteagle caused Gla[s]er to do
exactly what appears: funnel bribes to Pettibone through
Whiteagle.” R. 208 at 10.
3. Aiding and abetting Pettibone’s solicitation of a bribe
from MCA
Count 6 charged Whiteagle with aiding and abetting
Pettibone’s corrupt solicitation of a bribe from a
company—which the evidence revealed to be MCA—on or
about March 10, 2008, in violation of sections 666(a)(1)(B) and
2(a). This charge was based on the email that Whiteagle sent to
No. 12-3554 43
MCA’s Wolfington on that date soliciting a bribe. Whiteagle
contends that the evidence did not support a finding that
Pettibone had any awareness of Whiteagle’s dealings with
MCA and thus that this was a bribe that Pettibone was soliciting
(which solicitation Whiteagle was aiding and abetting).
Whiteagle’s March 10 email establishes otherwise, however.
As we have noted, Whiteagle openly copied Pettibone on the
email, in which Whiteagle made rather direct statements to
Wolfington about the expectations for financial reward that
both Whiteagle and Pettibone had:
Altho its been a while for you to get in the door with
the HCN [Ho-Chunk Nation] we have kept our
word, you are in!! We have devoted many months to
prepare your way into the HCN without pay and be
assured the next 5 days will determine what we do
next with the HCN. Mr. C and I have discussed this
thoroughly too that [i]f what you say changes and
it[’]s a continued pattern we will need to review our
relationship. …
Gov. Ex. 4-20 at 1 (emphasis in original). The jury could have
inferred that although Whiteagle was the author of this email,
he was speaking for Pettibone as well as himself, and that
Whiteagle was, in essence, presenting Pettibone’s demand for
money as a condition for continuing to pave the way for MCA
within the Ho-Chunk legislature. Copying Pettibone on the
email could be understood as both notice to Pettibone of what
Whiteagle was doing on his behalf (an inference Whiteagle
essentially acknowledged as accurate in his testimony) and as
confirmation to Wolfington that Whiteagle was serving as
44 No. 12-3554
Pettibone’s agent. The jury reasonably could have concluded
that Pettibone, by virtue of being copied on this email, was a
party to Whiteagle’s demand for money.
4. Corrupt solicitation of a job for Pettibone’s cousin
Counts 7 and 8 differed from the other section 666 bribery
charges in that they were based not on solicitations of cash but
on the requested employment of Jon Pettibone, Clarence
Pettibone’s cousin. In Count 7, Whiteagle was charged with
aiding and abetting Pettibone to “corruptly solicit[ ] and
demand[ ] for the benefit of a relative that [MCA] employ the
relative at a salary of $50,000 per year, intending to be influ-
enced and rewarded,” in violation of sections 666(a)(1)(B) and
2(a). R. 94-1 at 18. In Count 8, Whiteagle was charged with
“corruptly caus[ing] an officer of [MCA] to agree to employ …
a relative of Clarence P. Pettibone, an elected legislator …, with
intent to influence or reward Pettibone,” in violation of
sections 666(a)(2) and 2(b). R. 94-1 at 19. Whiteagle challenges
his conviction on these counts on the ground that neither he
nor Pettibone acted “corruptly,” with the intent to influence or
reward Pettibone, in soliciting his cousin’s employment. See
Agostino, supra, 132 F.3d at 1192–93.
The argument is premised on the notion that because
Whiteagle and Pettibone articulated a legitimate business
rationale for MCA to hire Jon Pettibone, there is insufficient
proof that they acted with the corrupt intent that the statute
requires. It was Whiteagle’s March 18, 2008 email that con-
veyed to Wolfington Pettibone’s request that MCA hire both
his cousin and another individual, both of whom were then
employees of Cash Systems. Whiteagle stated:
No. 12-3554 45
I talked to Mr. C … Mr. C. also wanted [Jon] Petti-
bone would [sic] continue to work for the new
[check-cashing] booths along with Roxanne Choka.
The wage for [Jon] Pettibone would be $50,000 per
year with Roxanne Choka getting $40,000 per year.
They are verrrry valuable to you as they can do
things politically that I could not do an[d] they
would be very loyal. [Cash Systems] will fire them
soon.
Gov. Ex. 4-39. In Whiteagle’s view, this email and the balance
of the evidence that the government presented as to Counts 7
and 8 “showed that Whiteagle merely suggested that MCA
hire Jon Pettibone because doing so was a good business
decision.” Whiteagle Br. 32.
Certainly the March 18 email identified a value that
employing Jon Pettibone would have for MCA beyond keeping
the company in the good graces of Clarence Pettibone and, in
turn, the Ho-Chunk legislature, and more than one witness
testified that Jon Pettibone was a good employee; but the jury
nonetheless reasonably could have construed the employment
request as yet another bribe solicitation. The email on its face
sought employment of Pettibone’s relative at a specified,
substantial salary. And coming as it did amongst other emails
from Whiteagle to Wolfington making express financial
demands on MCA as a condition of Pettibone’s assistance in
securing a contract with the Ho-Chunk nation, it would be
natural to read the email as a demand for a bribe and not
merely a suggestion for MCA’s chief executive to consider in
the exercise of his independent business judgment. Whiteagle’s
subsequent emails—on June 20, advising Wolfington that
46 No. 12-3554
“[Clarence Pettibone] wanted to know ASAP when [Jon] P or
JP will be hired,” Gov. Ex. 4-32, and on June 22, asking
Wolfington to telephone Whiteagle “so I can relay the message
to [Clarence Pettibone] . . . . . what your decision is on [Jon]
Pettibone,” Gov. Ex. 4-33—reinforce the inference that this was
not merely a suggestion that MCA was free to accept or reject
without consequence as to its prospects for doing business
with the Nation. MCA, of course, complied and hired Jon
Pettibone at the salary Whiteagle had specified. And from the
additional testimony of MCA’s Lauren Anderson—that she did
not understand the purpose of hiring Jon Pettibone, given that
his position duplicated that of an existing MCA employee—the
jury reasonably could have inferred that MCA did so to
influence or reward Clarence Pettibone for his assistance with
the contract rather than for independent and legitimate
business reasons. The evidence thus supports the notion that
both Whiteagle and Clarence Pettibone shared a corrupt
purpose in seeking the job for Jon Pettibone; the jury thus
could rationally convict Whiteagle of both aiding and abetting
Clarence Pettibone in soliciting the employment from MCA
and of causing MCA to agree to employ Jon Pettibone.
B. Admission of False Invoices
Whiteagle contends that the district court erred in denying
his motion for a new trial based on what he contends was the
erroneous admission of two pieces of evidence: (1) the obvi-
ously false invoices that Whiteagle submitted to Cash Systems
nominally seeking reimbursement for expenses he had
incurred in lobbying on Cash Systems’ behalf, and (2) the false
statements that Pettibone made denying any knowledge about
Whiteagle’s occupation and connection to Cash Systems when
No. 12-3554 47
Pettibone was first interviewed by the FBI. Whiteagle argues
that the admission of the invoices unduly prejudiced him both
because they constituted improper propensity evidence and
because they invited the jury to speculate, without evidence
connecting the invoices to the scheme, that Whiteagle used the
money obtained by way of the invoices to bribe Pettibone. As
to Pettibone’s false statements to the FBI, Whiteagle contends
that these statements similarly invited the jury to speculate that
Pettibone in fact was a member of the conspiracy without
actual evidence establishing that this was true.
We review the district court’s denial of Whiteagle’s request
for a new trial for abuse of discretion. E.g., United States v.
Smith, 674 F.3d 722, 728 (7th Cir. 2012). This is a deferential
standard of review; and where the defendant is complaining
that the district court committed an evidentiary error, he must
establish not only that the court’s decision was unreasonable
but that the error in admitting or excluding the evidence in
question affected his substantial rights. United States v. Causey,
748 F.3d 310, 316 (7th Cir. 2014); United States v. Simon, 727 F.3d
682, 696 (7th Cir. 2013). Whiteagle has not shown that the court
abused its discretion in admitting the false invoices.
The invoices were properly admitted as evidence of the
charged conspiracy and substantive acts of bribery. As our
summary of the trial evidence reveals, Whiteagle on a number
of occasions sought and obtained specific sums of money from
Cash Systems—apart from the regular salary that Cash
Systems paid him—to reward and influence Pettibone for his
efforts in the Ho-Chunk legislature in connection with the
contract between the Nation and Cash Systems. At Glaser’s
request, Whiteagle began to submit invoices to Cash Systems
48 No. 12-3554
seeking reimbursement for various expenses that he had
purportedly incurred as the company’s lobbyist. The expenses
claimed in the invoices were obviously a fabrication, and this
was almost immediately apparent to Cash Systems personnel
like Brian Johnson. It is a natural and obvious inference that
Whiteagle prepared and submitted the invoice to supply cover
for the bribes he was soliciting on Pettibone’s behalf. The
invoices were thus proof not simply that Whiteagle was lying
about his expenses, but that he was doing so for the purpose of
attempting to conceal and facilitate the illegal efforts that he
and Pettibone were making to obtain bribes from Cash
Systems. And the context in which these invoices were
submitted to Cash Systems belies Whiteagle’s contention that
there was no evidence connecting these invoices to the charged
conspiracy and bribery offenses: Whiteagle’s own emails
setting forth the demands for money to influence and reward
Pettibone, and Cash Systems’ compliance with these demands
by wiring to Whiteagle the specific sums he sought, shed all
the illumination that was necessary to support an inference
that Whiteagle prepared and submitted the false invoices to
Cash Systems in furtherance of the charged offenses. The
defense was obviously free to put a different spin on the
invoices, as it did: it argued that the invoices were consistent
with Whiteagle making false claims about influencing Petti-
bone and pocketing the cash rather than using it to bribe the
legislator (a defense that rings hollow in light of the evidence
we have discussed previously). In any case, Whiteagle is
wrong that the invoices amounted to mere propensity evidence
and that only speculation could connect them to the offenses
with which he was charged. The district court did not abuse its
No. 12-3554 49
discretion either in admitting the invoices or in denying
Whiteagle’s request for a new trial to the extent it was based on
the admission of the invoices.
Nor was Whiteagle entitled to a new trial based on the
admission of the false statements that Pettibone made about
Whiteagle when first interviewed by the FBI. The statements
were not admitted for their truth; in light of the other evidence
presented in the case, the statements were quite obviously
false. Consequently, they did not constitute hearsay, as
Whiteagle contends. See Anderson v. United States, 417 U.S. 211,
219–20, 94 S. Ct. 2253, 2260 (1974); United States v. Santos, 20
F.3d 280, 285 (7th Cir. 1994); United States v. Adkins, 741 F.2d
744, 746 (5th Cir. 1984).8 And the fact that Pettibone falsely
8
Our holding on this point is not contrary to the majority opinion in Lyle
v. Koehler, 720 F.2d 426, 431–35 (6th Cir. 1983), on which Whiteagle relies.
The letters at issue in Lyle solicited the recipients’ cooperation in creating a
false alibi for the defendant and his co-defendant (the author of the letters).
The Lyle court accepted that the statements regarding the alibi were not
admitted for their truth, as the alibi was obviously false. See id. at 432. The
court was instead concerned that the letters’ pursuit of a false alibi, coupled
with their identification of the defendant, amounted to out-of-court
statements implicating the defendant in the charged offense; and because
the author of the letters was the co-defendant, the defendant was unable to
cross-examine him. “[The letters] were introduced because by inference
they assert the proposition of fact that Kemp and Lyle committed the
robbery and hence need[ed] an alibi. Accordingly, we conclude that the
letters are hearsay and that their use implicated Lyle’s right to confront and
cross-examine the witnesses against him.” Id. at 433 (footnote omitted).
Here, Pettibone’s false statements, although they supported an inference of
his own participation in the conspiracy, did not expressly inculpate
Whiteagle in the inflammatory way that the letters at issue in Lyle incrimi-
(continued...)
50 No. 12-3554
claimed ignorance of things that he in fact knew about
Whiteagle tended to show that he was, contrary to Whiteagle’s
defense, a knowledgeable and culpable participant in the
bribery conspiracy and was attempting to cover up his
involvement. See United States v. Rosen, 716 F.3d 691, 702 (2d
Cir. 2013). Pettibone’s statements were properly admitted, and
did not unduly prejudice Whiteagle.
C. Sentencing
Whiteagle raises two objections to the district court’s
Guidelines calculations. First, he contends that the court erred
in applying the bribery guideline, § 2C1.1, rather than the
gratuity guideline, § 2C1.2 , in calculating his offense level. He
also argues that the court assigned an excessive monetary
value to his bribery offenses. These errors, he contends,
resulted in an inappropriately high Guidelines range such that
the sentence imposed, although well below that range, must be
vacated and reconsidered.
We may quickly dispose of the first of these objections: the
district court properly employed the bribery guideline in
determining Whiteagle’s offense level. What distinguishes a
bribe from a gratuity is a purpose to corruptly influence the
recipient’s actions as a public official. See United States v.
Anderson, 517 F.3d 953, 961 (7th Cir. 2008); § 2C1.1, comment.
(backg’d). Consistent with that distinction, we have observed,
“If the payer's intent is to influence or affect future actions,
8
(...continued)
nated the defendant there; and they were, of course, his own statements
rather than those of a co-defendant whom he could not cross-examine.
No. 12-3554 51
then the payment is a bribe. If, on the other hand, the payer
intends the money as a reward for actions the payee has
already taken, or is already committed to take, then the
payment is a gratuity.” Anderson, 517 F.3d at 961 (quoting
Agostino, supra, 132 F.3d at 1195). Whiteagle reasons that
because many, if not most of the payments that the govern-
ment characterizes as bribes were tendered after the pertinent
legislative action had already occurred, the payments necessar-
ily constituted gratuities. See United States v. Arroyo, 581 F.2d
649, 658 (7th Cir.1978) (Swygert, J., dissenting). But whether to
characterize the payments as gratuities or bribes presented a
fact question for the court to resolve, see Anderson, 517 F.3d at961–62, and the court did not clearly err in finding that the
payments were bribes. The timing of the payments by no
means precludes the inference that the payments were both
solicited and tendered for a corrupt purpose— in other words,
that Pettibone, in anticipation of these payments, would agree
to take actions favorable to companies tendering them. The
payments were part of an ongoing course of conduct, and there
was ample evidence in this case supporting the inference that
Whiteagle solicited money and other things of value on
Pettibone’s behalf with the express understanding that Petti-
bone would take future actions favorable to the companies
from which the payments were sought. The district court itself
found that Whiteagle solicited money and other things of value
from his clients, and funneled the same to Pettibone and his
family members, in order to corruptly influence Pettibone’s
actions as an elected member of the Ho-Chunk legislature.
R. 223 at 3. The court therefore applied the correct guideline.
52 No. 12-3554
Whiteagle’s second contention is that the district court
assigned an incorrect dollar value to the bribery in this case.
The bribery guideline specifies the following with respect to
the loss or other value associated with the bribes:
If the value of the payment, the benefit received or
to be received in return for the payment, the value of
anything obtained or to be obtained by a public
official or others acting with a public official, or the
loss to the government, whichever is greatest,
exceeds $5,000, increase [the offense level] by the
number of levels from the table in § 2B1.1 (Theft,
Property Destruction, and Fraud) corresponding to
that amount.
§ 2C1.1(b)(2). Pursuant to this provision, the district court
increased Whiteagle’s base offense level by 18 levels, finding
that the relevant value was between $2.5 million and $7
million. See § 2B1.1(b)(1)(J). The court reasoned that either of
two different measures of the bribery justified this conclusion.
First, Whiteagle’s clients received contracts worth at least $7
million that they theoretically might have received without
Whiteagle’s corrupt assistance but which, in the court’s view,
likely would have gone to others. See R. 223 at 3. Second,
Whiteagle received payments from those clients exceeding $2.5
million, and overwhelming evidence indicated that he would
not have received those payments absent his ability to deliver
Pettibone’s support, which was facilitated through bribery. Id.
Whiteagle contends that either measure was an incorrect
reference point for the court to use. He views the total value of
the contracts with Cash Systems, MCA, and Trinity Financial
No. 12-3554 53
as excessive for two reasons: (1) given that all but one of the
relevant votes in the Ho-Chunk legislature were unanimous,
there is no evidence that Pettibone’s corrupt influence was the
but-for cause of the decisions to award the contracts to these
companies; and (2) given that the Nation did receive significant
value from the services provided by those companies, the
monetary value of Whiteagle’s offenses necessarily must be a
figure well below the total contract amounts, even if the
selection process was corrupted by the bribery of Pettibone.
Whiteagle also sees the total of the payments he received from
those companies as an inappropriate measure, because the
companies willingly paid those sums to him as a consultant as
a cost of doing business with the Nation.
Whiteagle suggests that the true value that the court should
have used was the sum of the bribes that the evidence shows
were transmitted to Pettibone. These include the Firebird
automobile, which had an estimated value of $8,000; the
$16,000 in payments that Whiteagle made directly to Petti-
bone’s tae kwon do school; the $13,500 in payments that Cash
Systems paid directly to Pettibone’s school; and the $45,000
cashier’s check that Whiteagle purchased in the name of the
not-for-profit organization (Park Institute) that funded the tae
kwon do school9—for a total of $82,500.10 That total would call
9
As discussed above, Whiteagle later redirected that check into his own
account; but for this purpose Whiteagle apparently concedes that the check
was originally meant for Pettibone.
10
Defendant’s brief cites the total as $92,500, but the individual amounts
he includes in his loss calculation add up to only $82,500. See Whiteagle Br.
(continued...)
54 No. 12-3554
for an eight-level increase in the base level rather than an 18-
level increase. Of course, Whiteagle is excluding from his
calculation the additional monies that he sought and received
on Pettibone’s behalf, but as to which there is no paper trail to
confirm that money made its way into Pettibone’s pocket.
These sums would have boosted the relevant total beyond
$82,500. Nonetheless, we take his point: if the relevant figure
is limited to the bribes themselves, the increase called for by
section 2C1.1(b)(2) would have been significantly less than the
18-level increase the district court applied.
We can sustain the district court’s assessment based on the
second of the two alternative measures it relied on: the total
amount of money paid to Whiteagle by the companies seeking
to do business with the Nation. It was reasonable to infer, as
the district court did, that the three companies were willing to
pay Whiteagle such large sums of money specifically because
of his relationship with Pettibone and his professed ability to
deliver Pettibone’s vote and influence within the Ho-Chunk
legislature. For example, Roscoe Holmes, a former Cash
Systems employee, himself thought that the monthly salary
being paid to Whiteagle was excessive compensation for a
lobbyist and advisor on tribal affairs (which is what Holmes
understood Whiteagle’s role to be); and the amounts paid to
Whiteagle were eye-popping relative to Cash Systems’
revenue. Moreover, Whiteagle’s insistence that his role be kept
quiet (recall MCA’s laundering of his compensation through
Support Consultants, and Whiteagle’s suggestions that Trinity
10
(...continued)
39; Reply Br. 16.
No. 12-3554 55
hide the proposed consulting fees meant for Atherton and
himself in other expenses) supported an inference that his
compensation was not legitimately earned. It is also a fair
inference, given the evidence presented at trial, that it was the
bribes Whiteagle transmitted to Pettibone, rather than
Whiteagle’s persuasiveness as a lobbyist, that secured Petti-
bone’s favorable action as a legislator: Whiteagle’s own
communications with the vendors give rise to that inference.
In short, it was perfectly reasonable for the court to conclude
that Whiteagle would not have been able to command his
ample, even exorbitant compensation from the companies
absent his corrupt relationship with Pettibone. That renders the
total compensation he received a reasonable monetary measure
of the value of the bribery in this case. And as there is no
dispute that Whiteagle was paid in excess of $2.5 million by the
three companies, the court did not err in increasing
Whiteagle’s offense level by 18 levels.
III.
For the foregoing reasons, we AFFIRM the convictions and
sentence.