Private actors and public corruption: why courts should adopt a broad interpretation of the Hobbs Act.

• Author: DeMarco, Megan
• Position: NOTE

Federal prosecutors routinely charge public officials with "extortion under color of official right" under a public-corruption statute called the Hobbs Act. To be prosecuted under the Hobbs Act, a public official must promise official action in return for a bribe or kickback. The public official, however, does not need to have actual authority over that official action. As long as the victim reasonably believed that the public official could deliver or influence government action, the public official violated the Hobbs Act. Private citizens also solicit bribes in return for influencing official action. Yet most courts do not think the Hobbs Act applies to private citizens, even those who also create and exploit a belief that they have the ability to influence official action. This Note argues that interpreting "extortion under color of official right" to exclude private actors is incorrect. The test for anyone acting under color of official right should be whether the victim reasonably believes that person can influence official action.

TABLE OF CONTENTS Introduction I. Private Actors Escape Hobbs Act Convictions for Extortion Under Color of Official Right A. The Development of the Hobbs Act as a Public-Corruption Statute B. The Supreme Court's Approach C. Other Courts' Approaches to Extortionate Acts by Private Actors II. The Hobbs Act Should Apply to Private Citizens A. The Text of the Hobbs Act Supports a Broad Reading B. Legislative History Supports the Application of the Hobbs Act to Private Actors C. The Supreme Court Construes the Hobbs Act Broadly III. The Reasonable-Impression Test Should Apply in All Official-Right Extortion Cases A. Public Officials and the Reasonable-Impression Test B. Private Actors and the Reasonable-Impression Test C. The Public/Private Distinction Leads to Logical Inconsistency Conclusion * J.D., May 2016, University of Michigan Law School. Many thanks to Professor Gabriel Mendlow and MLR Vol. 113 Notes Editor Brian Howe for overseeing this piece from the beginning. Thanks also to the many Vol. 115 editors who contributed hard work and insightful edits, especially Erin Chapman, Andrew Kramer, Claire Lally, Thomas Martecchini, Andi Scanlan, and Matthew Wallace. And finally, thanks to my MLR support system: Tim Ford, Mary Miller, and Sommer Engels.

INTRODUCTION

In 2001, Monte D. McFall, a lobbyist and former public official, worked to raise money and political support for a friend running for public office in California. (1) Thanks in part to McFall and his associates, the friend, Lynn Bedford, won the vacant county supervisor seat. (2) Shortly after Bedford's appointment, McFall and his partners formed two entities to maximize their financial interests through Bedford, including SMTM Partners, LP--short for "Show Me The Money." (3)

As soon as Bedford was appointed to the seat, McFall started telling people that he was Bedford's proxy. (4) In 2001, McFall contacted an attorney who represented a development company and invited him to a fundraiser for Bedford. (5) Bedford, McFall, and the developer met a few weeks later, and Bedford indicated that McFall could help the developer secure the necessary permits for his project. (6) Later, McFall told the developer that he could deliver Bedford's vote if the developer paid McFall between $50,000 and $100,000. (7)

As a result, prosecutors charged McFall with attempted "extortion under color of official right" under a public-corruption statute known as the Hobbs Act. (8) McFall proceeded to trial, was convicted, and received a sentence of 121 months in prison. (9) On appeal, McFall argued that he was improperly convicted because as a private citizen, not a public official, he could not act under color of official right without aiding and abetting a public official. (10) The Ninth Circuit reversed the Hobbs Act conviction. Because McFall himself was not a public official, the court reasoned, he could be held liable only if he acted in concert with a public official. (11) On re-sentencing for other charges, McFall received 78 months, a significant decrease from his original sentence of 121 months. (12)

This scenario is all too common. Private citizens act under the guise of official authority and solicit payouts in return for the delivery of official action. Yet they escape extortion charges because most federal courts apply the requisite extortion statute, the Hobbs Act, only to public officials. (13) These courts exclude private citizens who, like McFall, use their corrupt influence over official actions to solicit bribes from victims. (14)

In the context of the Hobbs Act, courts have interpreted extortion to be, essentially, what most people think of as bribery. (15) The legal difference between extortion and bribery is the culpability of the parties. (16) In bribery cases, both the person who receives the bribe and the person who pays it are criminally culpable. (17) By way of contrast, in extortion cases the person who pays is considered instead a victim coerced by the extortioner, so only the person who receives the bribe is legally culpable. (18) There is a federal bribery statute, (19) but it applies only to corruption by federal officials, (20) whereas the Hobbs Act applies to state and local officials.

In Hobbs Act cases, the phrase "under color of official right" is notoriously ambiguous, and courts disagree on its meaning. (21) Many courts find that only a public official can act under color of official right. (22) Other courts find that the Act reaches beyond officials to include public employees. (23)

Some find private citizens liable under accomplice liability. (24) And finally, a handful of district courts have upheld convictions for private citizens charged with extortion under color of official right, (25) including an explicit endorsement of applying the Act to private citizens in United States v. Phillips, a Northern District of Illinois case. (26) In 2011, the Third Circuit called the question of Hobbs Act applicability to private actors a "significant and novel question." (27) The Supreme Court has never explicitly addressed this issue.

Although disagreement exists, the large majority of courts interpret the Hobbs Act to apply only to public officials. Prosecutors started using the Hobbs Act to target public corruption in 1972. (28) Since then, federal courts have overturned convictions of or dismissed charges against a number of different kinds of private actors: private attorneys who solicited bribes from their clients to influence public officials; (29) a businessman who took a $250,000 loan in return for influencing a U.S. Senator's office; (30) and candidates for office who took a $27,500 bribe in return for official actions once elected. (31) In all of these cases, courts dismissed the charges or overturned the convictions because the defendants, private citizens, were not acting under color of official right.

By way of contrast, a public official may be liable under the Hobbs Act if she accepts a bribe in return for official action, even if she has no authority over that action. (32) This principle stems from United States v. Mazzei, a seminal Third Circuit case.33 For example, the Third Circuit recently upheld the conviction of a New Jersey mayor who accepted a bribe to influence a school board contract--an action that, as the mayor, he lacked the authority to take. (34) Under the Mazzei principle, however, as long as the victim believes the public official has the ability to influence the action, the public official has committed extortion under color of official right.

Thus, when evaluating prosecutions of public officials, courts look to the victim's perception; yet when evaluating prosecutions of private citizens, courts do not consider whether the victim believed that the private citizen had the ability to influence official action. (35) This Note contends that the Mazzei reasonable-impression test should inform all color-of-official-right cases, regardless of the defendant's actual authority.

This more expansive test is appropriate because anyone who contributes to the problem of public corruption, whether public official or private citizen, should be penalized. Public corruption is "one of the most serious offenses in any organized political system." (36) It continues to infect government at high levels. Federal prosecutors have, for example, convicted the mayor of Detroit (37) and several state-level officials in New York. (38)

Specifically, public corruption undermines the public's faith in its elected officials. (39) And, according to Attorney General Loretta Lynch, corruption disproportionately affects poor communities and minorities. When Lynch was a U.S. Attorney, she noted that convicted public officials often represent constituents from historically underrepresented communities, "who place their faith in their elected officials." (40) When private citizens create the belief that they can influence official action, victims of extortion believe official results are for sale. Whether grounded in truth or not, this belief undermines faith in government.

This Note argues that the Hobbs Act applies to extortion by private citizens acting under the guise of official authority. Courts should address this problem by applying a "reasonable impression" test--that is, a test that asks whether the extortioner created and exploited the reasonable impression that she had the ability to influence an official action--regardless of her status as a public official or her actual authority. Part I traces the problem of private actors escaping punishment for acts of extortion. Part II asserts that the text of the Hobbs Act suggests that both public officials and private citizens can act under color of official right. Part III argues that the reasonable-impression test currently applied to public officials should extend to private citizens as well, because private citizens also undermine the public's...