Southern District of New York Holds that an Explicit Quid Pro Quo Is an Essential Element of Bribery and Fraud in Campaign Fundraising-Related Public Corruption Prosecutions

Earlier this week, the Southern District of New York dismissed bribery and honest services wire fraud charges brought against New York’s former lieutenant governor, Brian Benjamin, based upon the Indictment’s failure to allege an explicit quid pro quo arrangement with respect to campaign contributions, instead of an agreement by implication.   The decision marks the first time that a New York federal court has held that an express agreement is required before an individual can be convicted of bribery and wire fraud in a campaign contribution case, and the Government’s swift appeal to the United States Court of Appeals signals that further guidance on the reach of the bribery and wire fraud statutes in this context will soon be forthcoming.

Benjamin served as lieutenant governor—the second highest-ranking position in the State of New York—from his inauguration on September 9, 2021 until April 12, 2022, the date that a five-count indictment was brought against him for bribery, honest services wire fraud, and falsification of records charges.  The crux of the Indictment concerned allegations that while a state senator, Benjamin solicited and received campaign contributions for a failed Comptroller campaign from a New York real estate developer and, in exchange, secured but never sent $50,000 in state funds for that developer’s non-profit organization.  According to the Indictment, Benjamin received numerous contributions between October 2019 and January 2021, all coordinated by the real estate developer months after Benjamin offered to procure $50,000 in state funds for his non-profit and many of which were submitted in the names of people who had not authorized or paid for them.  But when local media noticed these discrepancies and began questioning the legitimacy of donations to Benjamin’s campaign, Benjamin declined to disburse the funds that had been secured for the real estate developer’s non-profit organization, such that the funds were never received.

The Indictment charged that it could be inferred from the course of conduct between Benjamin and the real estate developer that the two had entered into an agreement for Benjamin to secure funds for his non-profit organization in exchange for campaign contributions in violation of the federal bribery and honest services wire fraud statutes.  Benjamin moved to dismiss those charges, arguing that under Supreme Court and Second Circuit precedent, at least in campaign-contribution related cases, the existence of an explicit quid pro quo is required, instead of merely an implicit agreement like the one alleged in the Indictment.

Benjamin’s argument centered on the definition of quid pro quo as established by a pair of Supreme Court cases: McCormick v. United States, 500 U.S. 257 (1991) and Evans v. United States, 504 U.S. 255 (1992). McCormick held that receipt of a campaign contribution violated federal bribery laws only if the government could prove an explicit quid pro quo, meaning “only if the payments are made in return for an explicit promise or undertaking by the official to perform or not perform an official act.”  Just one year after deciding McCormick, however, the Supreme Court arguably softened that standard in Evans, holding that the object of the quid pro quo agreement need not be fulfilled for the offense to be complete, and that the “Government need only show that a public official has obtained payment to which he was not entitled, knowing that the payment was made in return for official acts.”

As Judge Oetken pointed out in his opinion on the motion to dismiss, McCormick and Evans set forth two distinct definitions what constitutes a quid pro quo.  “A quid pro quo under McCormick must involve a payment made in return for an ‘explicit promise or undertaking.’”  By contrast, “[a] quid pro quo under Evans can be proven inferentially, based on the implication that an official has knowingly accepted a payment intended to compensate him for an official act.”  Thus, the sufficiency of the Government’s bribery and wire fraud charges against Benjamin—which alleged only that an agreement between Benjamin and the real estate could be an inferred, and not that Benjamin had made an “explicit promise” to provide funding in exchange for campaign contributions—depended upon whether McCormick’s or Evans’s definition of quid pro quo controlled.

Judge Oetken held that under binding Second Circuit precedent, McCormick governed bribery prosecutions involving campaign contributions, and therefore that the Indictment’s failure to allege an express agreement was fatal to its bribery and wire fraud charges.  Judge Oetken acknowledged that the interplay between McCormick and Evans remained a subject of disagreement amongst courts around the country, and that it was “unclear … whether Evans is best read as limiting or overruling McCormick’s ‘explicit quid pro quo’ standard in the context of campaign contributions.”  But Judge Oetken did not need to wade into that question because he concluded that the Second Circuit had already decided the issue (albeit in slightly different circumstances):  binding appellate precedent established that the “implicit” Evans modified the standard for quid pro quo in non-campaign contribution cases only.  Accordingly, “[u]nless and until the Second Circuit expresses a different view,” Judge Oetken concluded that an express quid pro quo is required to establish bribery and wire fraud in campaign contribution public corruption cases, and dismissed the bribery and honest wire fraud claims of the indictment against Benjamin for failure to satisfy that indispensable element. (The remaining falsification of records charge against Benjamin survived.).

The District Court’s dismissal of the bribery and wire fraud charges against Benjamin comes just one week after the United States Supreme Court held oral argument in Percoco v. United States, a case which will consider whether a former senior aide to Government Andrew Cuomo can be convicted of federal corruption laws when he was not a government official or employee.  Benjamin’s case may not be far behind:  on the same day that Judge Oetken issued its decision, the United States filed their Notice of Appeal to the United States Court of Appeals for the Second Circuit, assuring that a prosecution of an individual with ties to the Office of the Governor of New York will, once again, help shape the limits of federal public corruption laws.

We will continue to monitor for any developments in this case or the law as the case progresses.

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