United States v. Edward Vrdolyak ( 2010 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 09-1891
U NITED S TATES OF A MERICA,
Plaintiff-Appellant,
v.
E DWARD R. V RDOLYAK,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 07 CR 298—Milton I. Shadur, Judge.
A RGUED D ECEMBER 10, 2009—D ECIDED JANUARY 29, 2010
Before P OSNER, M ANION, and H AMILTON, Circuit Judges.
P OSNER, Circuit Judge. Edward Vrdolyak pleaded
guilty to conspiracy to commit mail and wire fraud and
agreed in the plea agreement that the loss intended by
his fraud was between $1 million and $2.5 million. He
was sentenced to five years of probation, with a
community-service obligation but no confinement, and
to pay a $50,000 fine (a modest amount, because the
defendant has a high income, and a net worth in excess
2 No. 09-1891
of $1 million if his large loans to members of his family
are included). The government appeals, contending that
the judge miscalculated the sentencing-guidelines range
applicable to the defendant’s crime and committed other
errors. Although a judge is no longer required to give a
guidelines sentence, he is required to make a correct
determination of the guidelines sentencing range as the
first step in deciding what sentence to impose. Gall v.
United States, 552 U.S. 38, 50 (2007); United States v.
Gibbs, 578 F.3d 694, 695 (7th Cir. 2009).
The Chicago Medical School (as it was then known)
wanted to sell a property in Chicago that it owned con-
sisting of a lot with a building on it. Stuart Levine was a
trustee of the medical school and the chairman of the
board’s real estate committee, and he agreed with the
defendant to use his position as a trustee to steer the
sale of the property to a buyer of the defendant’s
choice. The defendant lined up Smithfield Properties to
be the favored buyer in exchange for a $1.5 million fee
that Smithfield agreed to pay him, and he in turn agreed
to give Levine half the fee. The medical school was not
told about this corrupt arrangement. Levine like the
defendant has pleaded guilty to his part in the fraud
and has agreed not to contest a prison sentence of up to
67 months that the sentencing judge might impose.
Smithfield’s initial offer for the building—$9.5 mil-
lion—was lower than two other potential buyers—the
Farley Group and Loyola University—were willing to
pay. The defendant advised Smithfield to up its offer, and
it did, to $15 million. Farley and Loyola remained inter-
No. 09-1891 3
ested in buying the property. To head them off, Levine
arranged for an “emergency” meeting of the medical
school’s board of trustees to consider offers for the prop-
erty. At the meeting, although Farley had offered
$15 million and Loyola $15.5 million for the property,
the board, persuaded by Levine, decided to accept Smith-
field’s offer and negotiate no further with Farley or
Loyola. The board discounted Loyola’s bid because
Loyola had not actually inspected the property before
bidding—Levine had seen to that. The board rejected
Farley’s bid because Levine strongly urged approval of
Smithfield’s bid, noting that Farley’s was lower because
it included a 4 percent brokerage fee that would be de-
ducted from the amount paid to the school. This was
misleading, because Smithfield’s bid was contingent on
obtaining zoning approvals and Farley’s was not. And a
week later Farley upped its bid to $16 million, which
in pure dollar terms was higher than Smithfield’s even
after deduction of the brokerage fee. Farley was told that
it was too late.
The government was prepared to offer an affidavit
from Loyola’s broker that Loyola would have increased
its offer had it been given an opportunity to do so. And a
representative from Farley was prepared to testify that if
necessary Farley would have increased its offer to some-
where between $18 and $20 million. By convening the
emergency meeting Levine had made sure that Smith-
field’s bid would be accepted and that he and the defen-
dant would split the finder’s fee. Although we use “bid”
and “bidder” as synonyms for “offer” and “offeror,”
4 No. 09-1891
no formal auction was ever contemplated and so there
was no reason to consider Farley’s higher bid untimely.
The district judge concluded that the defendant’s fraud
had inflicted neither actual nor intended loss on the
medical school. His finding that it had inflicted no
actual loss was based on the fact that Smithfield’s bid was
the highest one considered at the “emergency” meeting.
The judge gave no weight to Farley’s week-later offer of
$16 million and refused to consider the evidence that
Farley would have bid $18 million to $20 million if
given the chance and that Loyola was also prepared to
offer more than $15.5 million. These rulings were errone-
ous. No emergency required the medical school’s board
of trustees to act with haste to award the sale contract.
The “emergency” was a ruse to preclude competition
with Smithfield.
The judge’s refusal to consider the evidence of what
Loyola or Farley would have done if given the chance to
sweeten their bids was based on his belief that uncommu-
nicated intentions are unworthy of consideration by a
finder of fact. That is not correct. No rule of evidence
or principle of common sense makes a person’s testi-
mony about his own intentions—testimony uniquely
based on his personal knowledge—inadmissible in a
sentencing proceeding any more than in any other pro-
ceeding in which intention is material. United States v.
Young, 247 F.3d 1247, 1252–53 (D.C. Cir. 2001). Who better
than a potential buyer knows what he would bid for a
property?
The judge himself speculated at the sentencing hearing
about the defendant’s uncommunicated intentions in
No. 09-1891 5
conspiring with Levine to defraud the medical school—
that he had acted out of friendship for Levine. A defen-
dant’s testimony about his uncommunicated intentions
is no more credible than the testimony of an honest
third party about his uncommunicated intentions. To
believe the former and refuse even to listen to the
latter is error.
The weight to be given a piece of evidence is one thing,
and is ordinarily within the discretion of the trier of fact
to determine. Admissibility is another matter. A judge
is not permitted to have his own rules of admissibility—to
say for example that “[i]n my court no exceptions to the
hearsay rule will be recognized.” As we shall be empha-
sizing throughout this opinion, our concern is not with
the leniency of the defendant’s sentence as such but
with procedural errors committed by the judge en route
to the determination of the sentence.
The judge’s refusal to listen to the evidence of the
potential buyers was an egregious error because the
evidence was corroborated. The medical school’s
property had recently been appraised for $15 million on
the assumption that its best use was as a luxury
residential development, a use that would require
tearing down the building on the property. If the
building was not torn down (an expensive undertaking),
the land alone, according to the appraisal, was worth
$16.5 million. Loyola didn’t want to tear the building
down; it wanted to use it for student housing. It had
every reason therefore to offer more than Smithfield.
Farley had no intention of demolishing the building
6 No. 09-1891
either, and its intention to top Smithfield’s bid was cor-
roborated by the $16 million offer that it made for the
property.
The judge was impressed by the fact that the defendant
had told Smithfield that $9.5 million was too low an
offer. By doing so, the judge reasoned, he had conferred
a benefit on the school. But that was not the defendant’s
intention. His intention was to make sure that Smith-
field was the winning bidder, since the finder’s fee was
contingent on Smithfield’s getting the property. Whether
in an honest bidding process the school would have
obtained more than $15 million from Farley or Loyola or
perhaps from some other potential buyer can’t be deter-
mined with certainty because Levine prevented Farley
and Loyola from keeping the bidding going and prevented
everyone else who had expressed interest from even
making offers.
The judge thought the defendant’s interests perfectly
aligned with the school’s—thought that the more Smith-
field bid, the more the school would receive, as well as the
defendant. That is not true. The defendant did want
Smithfield to be the high bidder, but he also wanted the
bidding process to be rigged, to make sure Smithfield
was the high bidder so that he would get his fee. The
result of the rigging was to prevent the medical school
from considering higher bids from Farley and Loyola
and perhaps others.
In determining pecuniary loss for purposes of calcu-
lating a sentencing-guidelines range, the judge is required
to determine the loss that the defendant “reasonably
No. 09-1891 7
should have known, was a potential result of the of-
fense.” U.S.S.G. § 2B1.1, Application Note 3(A)(iv). That
potential loss in this case was the amount above
$15 million that another bidder might have decided to
pay for the property had the bidding been fair and open.
As an experienced lawyer and businessman, the
defendant must have known that a fair and open bidding
process might well yield a higher price than Smithfield
offered. In fact he knew that both Loyola and Farley
wanted to pay more than Smithfield, which made sense
because, as we said, both bidders wanted to use the
building on the property rather than tear it down.
The judge’s finding that the defendant had caused
no loss blocked the alternative measure of loss in cases
in which there is a loss but the precise amount of the
loss cannot be determined: in such a case the criminal’s
gain is treated as the measure of loss. U.S.S.G. § 2B1.1,
Application Note 3(B); United States v. Serpico, 320 F.3d
691, 698 (7th Cir. 2003); United States v. Bhutani, 266 F.3d
661, 668 (7th Cir. 2001); United States v. Chatterji, 46 F.3d
1336, 1340 (4th Cir. 1995). That makes good sense in
this case. Smithfield was willing to pay $1.5 million to
the defendant to obtain the property, and it must have
thought that if it didn’t pay that amount it would have
to up its bid by at least that much to win an unrigged
bidding contest. Only on that assumption did the kick-
back make sense from Smithfield’s standpoint. From the
defendant’s standpoint, the more Smithfield paid, the
better; but from Smithfield’s standpoint, the goal of
paying a finder’s fee was to enable Smithfield to obtain
8 No. 09-1891
the property for a smaller total outlay (price plus finder’s
fee) than it would have had to pay otherwise.
There was at the very least a probable loss, and that is
“loss” within the meaning of the guideline. United States v.
Johnson, 16 F.3d 166, 170 (7th Cir. 1994); United States v.
Schneider, 930 F.2d 555, 558 (7th Cir. 1991); United States v.
Stanley, 12 F.3d 17, 21 (2d Cir. 1993). It is true that cases
involving probable loss usually are ones in which the
illegal scheme is interrupted, so that its consequences
cannot be determined with certainty. Here it was not
interrupted. But the consequences still cannot be deter-
mined with certainty, and it would be even more anoma-
lous to give the defendant a sentencing break when
there is no interruption by some outside force but
instead the very nature of the scheme precludes a
certain determination of loss.
The gain (and thus alternative measure of the loss) was
the $1.5 million finder’s fee. It is true that when
originally negotiated, the fee was contingent on certain
factors. But by the time of the defendant’s sentencing,
the contingencies had been dispelled and the defendant
would have been entitled, had the scheme not been
detected, to the full $1.5 million. That the fee was to be
split with a coconspirator is of no significance. U.S.S.G.
§ 1B1.3(a); United States v. Thomas, 199 F.3d 950, 952-54
(7th Cir. 1999); United States v. Boatner, 99 F.3d 831, 834-37
(7th Cir. 1996). Dividing the gain by the number of con-
spirators would mean that the larger the conspiracy,
the milder the punishment of each one. Anyway the
defendant stood to gain $750,000 from his crime—not a
negligible haul.
No. 09-1891 9
The zero loss found by the district judge created a
guidelines sentencing range of zero to six months in
prison; the correct loss figure of $1.5 million (which
incidentally was within the range that the defendant
agreed in the plea agreement was the intended loss attrib-
utable to his crime) ups the sentencing range to 33 to
41 months.
Ordinarily we would stop here and remand for
resentencing. But the judge went on to rule that if he was
wrong and there was a loss of $500,000, which would
create a guidelines range of 27 to 33 months in prison,
he would give the defendant a below-guidelines sen-
tence of no prison—in fact the identical sentence that
he imposed on the assumption of zero loss.
But $500,000 was also error. And while a judge can
give a below-guidelines sentence, the sentence cannot
stand if it is based on a legal, factual, or analytic (con-
necting law and fact) error that is not harmless. The
court of appeals must “ensure that the district court
committed no significant procedural error, such as
failing to calculate (or improperly calculating) the Guide-
lines range, treating the Guidelines as mandatory, failing
to consider the § 3553(a) factors, selecting a sentence based
on clearly erroneous facts, or failing to adequately
explain the chosen sentence—including an explanation
for any deviation from the Guidelines range.” Gall v.
United States, supra, 552 U.S. at 51. “The allowable band
of variance [in sentencing] is greater after Booker than
before, but intellectual discipline remains vital.” United
States v. Kirkpatrick, 589 F.3d 414, 416 (7th Cir. 2009); see
10 No. 09-1891
also United States v. Peña-Hermosillo, 522 F.3d 1108, 1112
(10th Cir. 2008).
The judge committed three errors in his alternative
ruling. First, the $500,000 figure was erroneous for the
reasons we’ve given already. The correct figure was
$1.5 million and the guidelines range was therefore
higher than the judge thought. Second, repeating an
error in his computation of loss, the judge thought that
the defendant deserved leniency because he had
intended no harm to the medical school, but on the con-
trary had intended a benefit—that the school should
receive the highest bid from Smithfield. Notice the equivo-
cation implicit in “highest bid from Smithfield.” The
highest bid from Smithfield is the bid that gets Smith-
field the property; it is not the highest bid the seller
would have obtained had the bidding process not been
contaminated by the defendant’s kickback.
The judge’s third error was to give, without adequate
articulated consideration, enormous weight to letters
urging leniency for the defendant, while virtually
ignoring the evidence that tugged the other way. There
were 48 letters in all, some from members of the defen-
dant’s family and others from persons for whom he had
done favors of a charitable nature, including gifts of
money.
The judge committed three errors en route to
deciding that the letters weighed more heavily in favor
of leniency than the defendant’s ethical violations as a
lawyer, pointed out by the government, weighed in
favor of severity. One error was his failure to discuss
No. 09-1891 11
any of the evidence that showed the defendant’s
character in a bad light. A sentencing judge is not
required to mention every bit of evidence presented in
the sentencing hearing, but an arbitrarily one-sided
commentary on the evidence raises a warning flag. The
judge did not remark the defendant’s discussing the
kickback scheme with Levine and telling him, “If two
fucking schemers like you and I can’t figure this out,
then we got a problem.” He did not mention the con-
spirators’ decision to evade taxes by the defendant’s
giving Levine’s wife a “loan” at a very high interest
rate with the understanding that that there was no ob-
ligation to repay; Levine’s cut would come from the loan.
He did not mention Ridge Chrysler Jeep, LLC v.
DaimlerChrysler Financial Services Americas LLC, 516
F.3d 623 (7th Cir. 2008), where our defendant assisted in
a fraud by litigants who had, we said, “behaved like a
pack of weasels.” Id. at 627. He did not mention the lie
that the defendant had told a district judge in 2002
when he was class counsel in a successful case and the
judge had asked him whether he would be collecting
any fees other than those set aside in a special
lawyer’s fund and he replied he would not—despite
collecting $150,000 from the named plaintiffs under
his contingency-fee agreement with them. The defendant
had a history of ethical misconduct to which the judge
without explanation gave negligible weight. Official
judgments of misconduct were discounted in favor of
letters procured by the defendant.
Second, the judge appears to have given no weight to
the fact that the defendant is by normal standards (not
12 No. 09-1891
Warren Buffett or Bill Gates standards) wealthy; his
annual income in recent years has sometimes exceeded
$1 million. Wealthy people commonly make gifts to
charity. They are to be commended for doing so but
should not be allowed to treat charity as a get-out-of-jail
card. United States v. Repking, 467 F.3d 1091, 1095-96 (7th
Cir. 2006) (per curiam); United States v. Ali, 508 F.3d 136,
149 (3d Cir. 2007); United States v. Cooper, 394 F.3d 172, 176-
77 (3d Cir. 2005). As the court in Repking put it (quoting
Cooper), “charitable works must be exceptional before
they will support a more-lenient sentence, for . . . ’it is
usual and ordinary, in the prosecution of similar white-
collar crimes involving high-ranking corporate execu-
tives . . . to find that a defendant was involved as a leader
in community charities, civic organizations, and church
efforts.’ ” 467 F.3d at 1095. People “who donate large
sums because they can should not gain an advantage
over those who do not make such donations because
they cannot.” United States v. Thurston, 358 F.3d 51, 80
(1st Cir. 2004), vacated on other grounds, 543 U.S. 1097(2005); cf. United States v. Stefonek, 179 F.3d 1030, 1038
(7th Cir. 1999). “To allow any affluent offender to point
to the good his money has performed and to receive a
downward departure from the calculated offense level on
that basis is to make a mockery of the Guidelines.
Such accommodation suggests that a successful criminal
defendant need only write out a few checks to charities
and then indignantly demand that his sentence be re-
duced. The very idea of such purchases of lower sentences
is unsavory, and suggests that society can always
be bought off, even by those whose criminal misconduct
No. 09-1891 13
has shown contempt for its well-being.” United States
v. McHan, 920 F.2d 244, 248 (4th Cir. 1990).
Third, the judge ignored the fact that the defendant
was for many years an influential Chicago alderman.
Politicians are in the business of dispensing favors; and
while gratitude like charity is a virtue, expressions of
gratitude by beneficiaries of politicians’ largesse should
not weigh in sentencing. See United States v. Wright,
363 F.3d 237, 248-49 (3d Cir. 2004); United States v. Serafini,
233 F.3d 758, 773 (3d Cir. 2000); cf. United States v. Morken,
133 F.3d 628, 630 (8th Cir. 1998).
We are not laying down rules of sentencing. The sen-
tencing discretion of federal judges is broad and our
concern is not with the judge’s having taken account of
the defendant’s good works but with his failure to
consider the full range of evidence pertinent to a just
sentence. That was an error, just like the judge’s erro-
neous calculation of the applicable guidelines sen-
tencing range. Appellate review of errors committed in
sentencing is plenary. Gall v. United States, supra, 552 U.S.
at 51; United States v. Gibbs, supra, 578 F.3d at 695 (“we
review the procedures followed by the district court
de novo”). Review turns deferential when the issue is the
substantive reasonableness rather than the procedural
regularity of the sentencing determination. The cascade
of errors and omissions that we have identified cannot
be dismissed as harmless, and so requires that the de-
fendant be resentenced.
And in fairness to the government, which is entitled to
the same consideration as other litigants, the resentencing
should be by a different judge. (The government did not
14 No. 09-1891
ask us to order the case remanded to a different
judge; repeat litigants—litigants who expect to appear
before the same judge in the future—are for obvious
reasons reluctant to request such relief. We commonly
issue such orders, as we are authorized by our Circuit
Rule 36 to do, without a request by a litigant.) One
cannot read the 168-page transcript of the sentencing
hearing, and the two memoranda attempting to justify
the sentence that the judge issued after he had
announced the sentence at the conclusion of the hearing,
without sensing that the judge had committed him-
self irrevocably to a noncustodial sentence for the defen-
dant. He pretty much announced this at the outset of the
hearing, and he repeatedly expressed his anger with the
government’s lawyers over matters that did not warrant
anger, such as the government’s reference to the fraud
as having been conducted by “insiders” (plural—Levine
and the defendant). The judge said that Levine was
indeed an insider by virtue of being a member of the
fraud victim’s board of trustees but that the defendant
was not, and he excoriated the government’s lawyer for
calling him an insider. But all the lawyer had meant
was that the defendant is a prominent “insider” in the
Chicago, legal, business, and political communities. For
the lawyer had merely said “I will use the term insider
for Mr. Vrdolyak, in the sense of someone who is con-
nected in this City to people who are in power.” And the
judge kept hectoring the government’s lawyers about
what he viewed as their misunderstanding of the real
estate business; but we cannot fathom what that mis-
understanding was.
No. 09-1891 15
Despite patient explanation by the government’s law-
yers, the judge would not waver in his conviction that
the defendant had acted with the best interests of the
medical school in mind—which is untrue because the
school’s interest was to have an honest bidding process
and the defendant knew it—and that the defendant had
acted out of friendship for Levine, who had financial
problems. (That was the Robin Hood defense.) The defen-
dant could have assisted Levine financially without
defrauding a medical school. Given the defendant’s
prominence, his affluence, and his professional status as
a lawyer, his crime was especially gratuitous. When
Levine asked for assistance in defrauding the medical
school, the defendant did not hesitate and was quickly
able to find a company willing to pay the kickback. He
did not cooperate with the government in the investiga-
tion of the crime and did not plead guilty until the eve
of trial.
The gratuity of the crime suggests that there can be no
assurance that if let off with a slap on the wrist, the defen-
dant will not commit a future crime. He has lost his law
license, but the crime of which he has been convicted did
not require a law license. He did not benefit from
the crime—but only because he was caught.
The judge’s errors in calculating the guidelines range
are indicative of an idée fixe that the defendant was not to
receive a custodial sentence, even (as the government
urged in the alternative) home confinement. In United
States v. Peña-Hermosillo, supra, 522 F.3d at 1117, the Tenth
Circuit held that “impos[ing] the same sentence under
16 No. 09-1891
an alternative rationale” had been a “procedural error,”
explaining that “it is hard for us to imagine a case where
it would be procedurally reasonable for a district court
to announce that the same sentence would apply even
if correct guidelines calculations are so substantially
different, without cogent explanation. In the absence of
explanation, we might be inclined to suspect that the
district court did not genuinely ‘consider’ the correct
guidelines calculation in reaching the alternative ratio-
nale.” Id. See also our decision in United States v.
Anderson, 517 F.3d 953, 965-66 (7th Cir. 2007), where
we expressed concern with “blanket” sentences.
The judgment is reversed and the case remanded for
resentencing before a different judge, pursuant to 7th
Cir. Rule 36. We intimate no view on what a proper
sentence would be.
R EVERSED AND R EMANDED.
H AMILTON, Circuit Judge, dissenting. I agree that the
district court erred in the guideline loss calculation, but
I respectfully dissent because that error was harmless.
The record shows an experienced district judge con-
sidering a difficult case thoroughly and exercising his
discretion reasonably under 18 U.S.C. § 3553(a) to craft a
sentence to fit both the crime and the criminal. The error
No. 09-1891 17
in the guideline calculation did not affect the final
decision, and I find no abuse of discretion in the final
decision about the sentence.
As the majority explains, given the nature of Vrdolyak’s
and Levine’s crime, it is more accurate to say that there
was a loss that cannot be determined reliably than to
say that there was no loss to the victim of the crime.
Where the crime makes it so difficult to determine with
confidence the amount of the loss, the guidelines and
cases from this and other circuits establish that the in-
tended gain for the conspirators is a useful substitute
for loss in applying the guidelines to gauge the severity
of the crime. Application Note 3(B) to U.S.S.G. § 2B1.1
provides: “The court shall use the gain that resulted
from the offense as an alternative measure of loss only
if there is a loss but it reasonably cannot be determined.”
That approach has been used, for example, in United
States v. Briscoe, 65 F.3d 576, 589-90 & n.16 (7th Cir. 1995)
(affirming sentence of union president who defrauded
union through kickback scheme with lender to union
members; loss calculation based on defendant’s gain), as
well as in United States v. Vinyard, 266 F.3d 320, 332 (4th
Cir. 2001) (affirming sentence in kickback scheme based
on defendant’s gain), and United States v. Yeager, 331
F.3d 1216, 1224-26 (11th Cir. 2003) (affirming sentence
based on defendant’s gain through scheme to divert
drug sales through unauthorized dealers at lower prices).
But the guideline calculation is only the beginning of
the story, for both the district court and this court. Pursu-
ant to United States v. Booker, 543 U.S. 220, 259-60 (2005),
18 No. 09-1891
after calculating the applicable sentencing guideline
range, the district court was required to look beyond the
guidelines and to consider the case under 18 U.S.C.
§ 3553(a). Congress has instructed:
The court shall impose a sentence sufficient, but not
greater than necessary, to comply with the purposes
set forth in paragraph (2) of this subsection.
Paragraph (2) of subsection (a) requires the court to
consider:
the need for the sentence imposed—
(A) to reflect the seriousness of the offense, to promote
respect for the law, and to provide just punish-
ment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the
defendant; and
(D) to provide the defendant with needed educational
or vocational training, medical care, or other
correctional treatment in the most effective man-
ner. . . .
18 U.S.C. § 3553(a). The district court was required to
consider the guidelines, but it was prohibited from pre-
suming that a guideline sentence would be a reasonable
sentence. Rita v. United States, 551 U.S. 338, 351 (2007).
At the end of the lengthy sentencing hearing in this
case, the district judge addressed the factors and pur-
poses under section 3553(a). He explained how and why
he had concluded that a sentence of five years’ probation
No. 09-1891 19
(which was above the guideline range he calculated),
plus 2500 hours of community service and a fine, was
sufficient but not greater than necessary to serve those
purposes. The defendant committed a serious crime, but
there were a number of factors that the district court
could and did consider in mitigation. The defendant is
71 years old, had no prior criminal record, and posed
little risk of repeat offenses. He had given up his law
license. The crime of fraud did not involve violence,
and there was no element of public corruption. The
defendant had agreed to help a friend by committing
the crime, but he was not the instigator of the crime
and did not actually benefit from it. The district court
was also impressed by a surprising volume of informa-
tion showing the defendant’s character was very dif-
ferent from his public image in the media. That informa-
tion showed generosity with time, money, and influence
to help people in need, especially where the defendant
had no moral or other obligation to help them and
where he received no publicity or recognition for his
kindnesses. That is not the entire picture, of course, but
those are all factors that could reasonably lead the dis-
trict court to exercise its discretion under section 3553(a)
to impose the sentence that it did. See Gall v. United
States, 552 U.S. 38, 48-49 (2007) (affirming below-
guideline sentence of probation and recognizing sub-
stantial restrictions on liberty imposed by sentence
of probation).
Under Booker and Gall the district court is required to
calculate the applicable sentencing guidelines for the
crime and the criminal, and an error in the calculation is
20 No. 09-1891
a procedural error in sentencing that may require a re-
mand. Booker, 543 U.S. at 259-60; Gall, 552 U.S. at 49-51.
At the same time, however, it is clear that errors in cal-
culating the advisory guideline calculations are subject
to harmless error analysis. E.g., United States v. Abbas,
560 F.3d 660, 666-67 (7th Cir. 2009) (holding guideline
error was harmless); United States v. Anderson, 517 F.3d
953, 965-66 (7th Cir. 2008) (same); see generally Williams
v. United States, 503 U.S. 193, 203 (1992) (stating before
Booker that guideline errors were subject to harmless
error analysis). In both Abbas and Anderson, the district
courts recognized the disputed guideline issues, stated
that their sentences would be the same regardless of
how the guideline issues were decided, and provided
thoughtful explanations of their reasoning. In such cases,
because the sentencing guidelines are no longer manda-
tory, appellate courts should readily find that guideline
errors are harmless.
Correct application of the guidelines can present many
difficult or esoteric questions, including many that have
little to do with the ultimate legal and moral judgment
about an appropriate sentence. Since Booker, this court
has often recognized that the sentencing judge may
impose a reasonable sentence under section 3553(a)
regardless of how a difficult guideline issue might be
resolved. “When a judge proceeds in this manner, she
must make clear that the § 3553(a) factors drive the sen-
tence without regard as to how the prior conviction
fits under a particular guideline. Doing so will make the
often nit-picking review of issues like this under our
now advisory guideline scheme unnecessary.” United
No. 09-1891 21
States v. Sanner, 565 F.3d 400, 406 (7th Cir. 2009) (affirming
above-guideline sentence without regard for correct
resolution of guideline issue); Abbas, 560 F.3d at 666-67(finding that district court erred in guideline calcula-
tion but holding error was harmless based on judge’s
explanation of alternative basis for same sentence).
In this case, the judge considered the relevant factors
thoughtfully and made his intentions and reasons clear.
The precise level of loss in the judge’s alternative guide-
line calculation did not drive the final decision.
As Abbas and Anderson make clear, this is not to say
that a district court can insulate any sentence from ap-
pellate review by saying a few magic words about
section 3553(a). Abbas, 560 F.3d at 666-67; Anderson,
517 F.3d at 965; accord, United States v. Peña-Hermosillo,
522 F.3d 1108, 1118 (10th Cir. 2008) (finding guideline
error was not harmless where district court provided
only “perfunctory” explanation for alternative rationale);
see generally United States v. Williams, 431 F.3d 767, 773-
76 (11th Cir. 2005) (Carnes, J., concurring) (encouraging
district courts to provide alternative sentencing rationales
where resolution of disputed guideline issues would not
affect sentences). But where the record shows that the
district court considered the disputed guideline issue,
considered the prospect that its decision on the issue
might be wrong, and provided a thoughtful explanation
of its reasons under section 3553(a), it should be
relatively easy to find that an error in calculating an
advisory guideline was harmless, as I believe this one
was. In some important respects, this case provides a
22 No. 09-1891
mirror-image of United States v. Spano, 476 F.3d 476 (7th
Cir. 2007), a public corruption case in which the district
court imposed a sentence on one defendant that was
substantially higher than the proper guideline range. The
district court imposed an upward departure of four
levels for extraordinary abuse of trust, and this court
held that the decision was an error. We found that the
error was harmless, however, because the judge ex-
plained why he thought a guideline sentence that
did not take into account the egregious abuse of trust
would not be adequate. Despite the guideline error, we
upheld the above-guideline sentence as a proper and
sensible exercise of the district court’s discretion under
section 3553(a). Id. at 480-81. In this case involving
private corruption, the district court imposed a sen-
tence below the correct guideline range, but with a rea-
sonable exercise of that same discretion.
The majority identifies three reasons why the loss
calculation error should not be deemed harmless and
concludes further that the case should be remanded to
another district judge under Circuit Rule 36 to ensure the
government a fair hearing. In my view, the criticisms
here are not warranted, and the government received a
fair hearing before the district court.
First, the majority criticizes the district court for basing
the alternative sentencing rationale on the assumption
that the guideline loss could have been no higher than
$500,000, which would put the sentencing guideline
range two offense levels lower than the correct range
No. 09-1891 23
here.1 The district court’s thorough discussion of the
factors relevant to sentencing under section 3553(a)
showed that the two-level difference would not have
made any difference in the court’s ultimate decision, so
the error in calculating the loss under the guidelines
had no effect. The sentencing range that is 14 levels
below level 20 (the correct level) is the same as the
range that is 14 levels below the level 18 the district court
considered as its alternative—zero to six months in
prison. And in fact, though we reach the conclusion
from opposite directions, the majority and I agree
that there is no point in remanding the case to
Judge Shadur for a new guideline calculation and imposi-
tion of the same sentence as before. Where the majority
sees a “cascade of errors and omissions,” I see just one
harmless error in the advisory guideline calculation.
Second, the majority criticizes the district court for
believing the defendant intended no harm to the
medical school and actually intended to benefit it by
arranging for the highest bid from Smithfield. This criti-
1
The correct guideline calculation starts with a base offense
level of 6 under U.S.S.G. § 2B1.1(a)(2), adds 16 levels under
§ 2B1.1(b)(1)(I) for a loss of more than one million dollars,
and subtracts two levels for acceptance of responsibility under
§ 3E1.1(a), for a total offense level of 20. With Vrdolyak’s
criminal history category of I, the sentencing guideline range
is 33 to 41 months in prison. Using a loss of $500,000, the
district court assumed an upward adjustment of 14 and a total
offense level of 18, with a guideline range of 27 to 33 months
in prison.
24 No. 09-1891
cism does not accurately reflect the record. On the first
point, the district court pointed out correctly that there
was no evidence that the defendant intended to hurt the
medical school, see Gov’t App. at 25, and the govern-
ment itself had submitted evidence showing that the
defendant had wanted Smithfield to pay “top dollar” for
the property. See Def. Reply Mem. at 8 (quoting recorded
conversation on March 31, 2006). The district court neces-
sarily recognized, however, that the defendant must
have realized that his help for his friend Levine would
hurt the medical school by distorting the sale process
in favor of the corrupt side deal to benefit Levine and
the defendant. That’s why the defendant is guilty.
That’s why the district court accepted his plea of guilty.
On the second point, the furthest the district judge
went was to note several times that the defendant’s
“finder’s fee” (10 percent of the purchase price, to be
split with Levine) would go up as Smithfield’s
purchase offer went up. Gov’t App. 21-22, 25. I do not
find in the record any indication that the district judge
thought that the defendant, who had pled guilty to a
serious crime and whom he was sentencing for that
crime, acted with the intent to benefit the medical
school. The district judge understood how Levine and
Vrdolyak had corrupted the sale process—Vrdolyak had
pled guilty, after all.
Third, the majority criticizes the district court for
giving too much weight to numerous letters urging
leniency in sentencing while giving too little weight to
information that hurt the defendant’s cause. On this
topic, the majority identifies three more specific errors:
No. 09-1891 25
failing to discuss adequately the information weighing
against the defendant, failing to consider the
defendant’s wealth and its effect on his ability to show
mitigating good works, and ignoring the defendant’s
earlier work as an influential Chicago alderman.
These criticisms are not warranted. The record shows
that the district court gave careful and discriminating
consideration to the mitigating and aggravating infor-
mation. The letters in mitigation came from the
defendant’s family and friends, and from others who
described ways in which the defendant had helped
them over the years. The district judge said that those
letters were an “extraordinary outpouring that’s not
matched—at least in my recollection—in any other
case that I have had coming up to be 29 years on the
bench.” Gov’t App. 76.
Like victim impact statements, such letters are
entirely appropriate in a sentencing hearing. Cf. Gall,
552 U.S. at 43 (affirming below-guideline sentence of
probation where district court relied in part on “small
flood” of letters from family, friends, neighbors, and
business associates). The district court has an obligation
to consider such letters when considering the history
and characteristics of the defendant. See 18 U.S.C.
§ 3553(a)(1). Such letters often add little to the relevant
picture of the defendant and his crime, but sometimes
they can provide unexpected information and add new
insights into the defendant’s character.
This was such a case. The veteran district judge was
surprised by what he learned. Like almost everyone
26 No. 09-1891
who has lived in Chicago over the past three or
four decades, the judge had been generally aware of the
reputation of “Fast Eddie” Vrdolyak, leader of the opposi-
tion to Mayor Harold Washington and power broker in
Chicago politics. The judge did his best to put aside
those preconceptions and to approach the sentencing
decision with an open mind. He explained candidly:
When I first encountered the case, and throughout
its pendency, I never expected that I was going to
reach the destination that I find called for here. And
as I have indicated, I had (as I suspect anybody who
has seen the political environment in Chicago over a
long time frame probably shared) a perception of our
defendant today that I suppose is epitomized by
the moniker “Fast Eddie,” indeed from the so-called
Council Wars that existed during the Harold Washing-
ton mayoralty.
Gov’t App. 135-36. In explaining that he would have
reached the same result regardless of the guideline loss
calculation, the judge said:
In any event, the point I think that is most important
is that when I applied 3553(a) I would reach the
same result whichever of those views [about loss
under the guidelines] is taken. And that’s because
I again surprised myself in terms of how I looked at
this thing coming in, with the absence of a full ap-
preciation or full understanding or disclosure of
what the thing involved. I would not have dreamed
of imposing a noncustodial sentence. But I have got
to tell you that when you look at the 3553(a) factors,
No. 09-1891 27
it seems to me that the reasonable result, the one
that is called for taking all of the considerations
into account, is just what I have indicated.
Id. at 138. These frank observations of the judge—about
the ways in which the facts overcame the defendant’s
public reputation and persuaded the judge to reach a
result he had not expected to reach—deserve substantial
weight.
Contrary to the majority’s criticisms about failing to
consider the defendant’s wealth and influence, the
district judge was discriminating in weighing the letters
about the defendant’s character. During the defense
presentation, the judge commented:
I am not sure that things that are done for family
members carry—or for that matter for what’s called a
public persona carries—much weight. At least as I read
these letters, the thing that I found frankly most persuasive
on his part were the things that were not visible, and things
in which at least according to these people he reached out
in situations where he need not have done so. He had no
obligation to do that either morally or otherwise and did it
anyway. And that’s frankly the reason that I character-
ized the letters that I received—not simply in terms of
volume, but in terms of impact—as giving the kind
of astonishingly different portrayal than what you
have characterized as public persona.
Gov’t App. 93 (emphasis added).
The most important mitigating information here in-
volved not the “checkbook charity” that can be easy for
28 No. 09-1891
the wealthy, but many instances in which the defendant
provided hands-on help in long-term relationships with
people in need, or where he provided generous help
anonymously. The district judge’s comments show that
he was much more impressed by these many instances
of the defendant’s generosity and kindness with his
time and influence in situations where there was no
visibility or public reward for his actions.2
Even with the appropriate discounting desired by the
majority, the letters still have unusual persuasive
weight, and the district court was not required to ignore
or discount the evidence of past good works. The major-
ity’s observation that wealthy defendants should not
get a break compared to poor ones merely because
they have given away some of their wealth is certainly
true but misses the district court’s real point in
weighing this mitigating information.
The majority writes that the district court “ignored the
fact that the defendant was for many years an
2
“But, surely, if ever a man is to receive credit for the good
he has done, and his immediate misconduct assessed in the
context of his overall life hitherto, it should be at the moment
of his sentencing, when his very future hangs in the balance.
This elementary principle of weighing the good with the bad,
which is basic to all the great religions, moral philosophies,
and systems of justice, was plainly part of what Congress had
in mind when it directed courts to consider, as a necessary
sentencing factor, ‘the history and characteristics of the defen-
dant.’ ” United States v. Adelson, 441 F. Supp. 2d 506, 513-14
(S.D.N.Y. 2006), aff’d mem., 301 Fed. Appx. 93 (2d Cir. 2008).
No. 09-1891 29
influential Chicago alderman.” Slip op. at 13. This fact is
relevant, the majority asserts, because politicians are in
the business of dispensing favors, so that later ex-
pressions of gratitude for politicians’ largesse should not
be given weight in a sentencing decision. This criticism
is not warranted. The defendant left public office more
than 20 years ago, long before most of the events cited in
mitigation. His history in Chicago politics and public
life certainly did not escape the district judge’s notice.
The district judge’s comment quoted above—discounting
letters about things the defendant had done for his “public
persona”—shows that the district court was quite con-
scious of precisely the point the majority faults him for
ignoring. See also Gov’t App. 137 (court referring to “the
extraordinary volume and character of the things that
I received in support of Mr. Vrdolyak, the kinds of
thing that the public persona would never have
dreamed existed, and I certainly not”). In other words,
the letters that impressed the court most were those
addressing private actions that were not designed to
help the defendant himself, in his private or public life.3
3
The letters of Dr. Mark Siegler and others described several
instances in which the defendant intervened to enable needy
people to obtain live-saving medical care that was not other-
wise available to them. See Def. Ex. N (Siegler). The letter of
Jonathan Kleinbard, a former vice president of the University
of Chicago, told of a case in which Vrdolyak represented a
plaintiff suing the University of Chicago Medical Center for
medical malpractice. Vrdolyak failed in his effort to settle the
(continued...)
30 No. 09-1891
The majority criticizes the district court for not saying
more about evidence putting the defendant’s character
in a bad light. The district court showed that it was
familiar with the evidence the government had
submitted, including the incidents cited from the defen-
dant’s legal career. The court acknowledged the “sub-
stantial information that’s unfavorable to Vrdolyak” and
said it was reminded of Dr. Jekyll and Mr. Hyde, as
defense counsel urged a sentence for Dr. Jekyll and the
government urged a sentence for Mr. Hyde. Gov’t App. 76.
The court specifically asked the defense to address the
lawyer disciplinary matters, id. at 127, and the defense
provided explanations that offered at least some
mitigating effect. Id. at 128-29. Criticism of the district
court for having failed to say more about these
events, which had been the subject of two censures and
one short suspension from practice, demands too
much from an oral sentencing explanation.
Based on what is described as a “cascade of errors and
omissions,” the majority orders a remand under Circuit
Rule 36 to another district judge for a fresh look at the
sentence. I see instead just one harmless error, and I do not
believe the government was denied a fair hearing. The
majority concludes that Judge Shadur “had committed
himself irrevocably to a noncustodial sentence for the
3
(...continued)
case with Kleinbard’s help, and he eventually won a judgment
“in the millions of dollars.” Kleinbard reported that Vrdolyak
then donated his entire legal fee to the University of Chicago
Medical Center. Def. Ex. Z.
No. 09-1891 31
defendant.” Slip op. at 14. The majority criticizes the
judge for having announced this view near the outset of
the sentencing hearing, before the government had a
chance to argue for a custodial sentence. This criticism
is off target for two reasons.
First, it fails to acknowledge how much work the
parties and the district court had put into the sen-
tencing decision before the hearing itself. In detailed
written briefs, the parties had set forth their positions on
the guideline issues, the section 3553(a) factors, and the
sentence that would be appropriate. The district judge’s
comments throughout the sentencing hearing show that
he fully understood the parties’ positions from the out-
set. Having done such extensive preparation, it would have
been unusual for the judge not to have had a good idea
how he intended to sentence the defendant, and why, at
the beginning of the sentencing hearing.
Second, the fact that the judge signaled his informed
inclinations early in the hearing does not call for criticism.
Most lawyers appreciate knowing more rather than less
about the judge’s thinking while there is still an opportu-
nity to persuade the court. This criticism is no more
warranted than would be criticism that an appellate
judge had a view of the case at the beginning of an
oral argument. Such views do not mean that minds are
closed to further persuasion by probative evidence and
legal argument. See also Gov’t App. 76-77 (district court
inviting views and stating “I really have not reached a
conclusion”). Judges must keep their minds open to
new information that will change their thinking, as the
district judge did in this case. And where the majority
32 No. 09-1891
finds in the record a district judge who was without
justification impatient and angry with the government,
I find a frank and wide-ranging discussion of the issues
in the case, and some reasonable annoyance with overly
aggressive arguments and invitations to speculate.4
Perhaps the most remarkable thing about the way this
case has proceeded on appeal is that the government’s
briefs did not challenge the reasonableness of the
sentence or ask for remand to a different judge. In its
opening brief, the government argued only the guide-
line loss error. The government did not even bother to
mention the district court’s alternative guideline calcula-
tion and analysis under 18 U.S.C. § 3553(a). Where the
district court has stated such an alternative basis, we
should treat the appellant’s silence as at least a
forfeiture of the issue. And it is hard to believe that the
government’s approach to this appeal was not carefully
considered in every respect. We would be justified in
finding a waiver based on the government’s failure to
address the alternative calculation and its failure to
challenge the reasonableness of the sentence.
Finally, although it is evident that the majority views
the sentence here as simply not heavy enough to punish
4
The majority criticizes the district court for refusing to
consider after-the-fact evidence from other interested buyers
about how much more they would have been willing to offer
for the property. I see no abuse of discretion in the dis-
trict court’s decision not to spend time on the government’s
speculative effort to show the likely result of an honest
effort to have sold the property for the best available price.
No. 09-1891 33
this crime adequately, we should not overlook an impor-
tant dimension of this sentence that may in the end be
more powerful than a shorter prison term. The idea of a
person as prominent as Ed Vrdolyak doing 2500 hours
of community service in Chicago has elements of public
shaming and service that were well within the district
court’s discretion in deciding how best to accomplish
the purposes of sentencing with a sentence “sufficient,
but not greater than necessary,” as section 3553(a) di-
rects. It is hard to imagine that this defendant’s com-
munity service could be completed without considerable
news media attention, which would add to the
deterrent effect of that portion of the sentence.
In sum, the record here shows that an experienced
judge considered the case thoughtfully and learned
information that overcame his initial inclinations in the
case (and many public reactions to the case). The judge
exercised his discretion under section 3553(a) and
imposed a sentence reasonably tailored to fit both the
crime and the criminal. Though the majority and I
disagree with the district judge on the loss calculation
under the advisory sentencing guidelines, that error was
harmless because it did not drive the final sentencing
decision under section 3553(a). I would affirm the
district court’s judgment.
1-29-10