Whoa: SCOTUS unanimously overturns Bridgegate fraud convictions

Good news, or a depressing reminder of how difficult it is to prosecute abuses of power? In a unanimous decision, the Supreme Court overturned the two criminal convictions resulting from the infamous 2013 “Bridgegate” scandal, but not because the two New Jersey officials did nothing wrong. Instead, in a decision that echoes an earlier unanimous opinion in McDonnell, the court ruled that an abuse of power does not fit under federal fraud statutes.

“Not every corrupt act by state or local officials,” Justice Elena Kagan wrote for the entire court, “is a federal crime.” That’s, er, a comforting thought — but maybe only to bureaucrats like Bridget Kelly and Bill Baroni:

The court said in a unanimous decision Thursday that the government had overreached in prosecuting two allies of then-New Jersey Gov. Chris Christie, Bridget Kelly and Bill Baroni, for their roles in a political payback scheme that created massive traffic jam to punish a Democratic mayor who refused to endorse the Republican’s reelection. Kelly was Christie’s onetime deputy chief of staff. Baroni was a top Christie appointee to the Port Authority, the operator of the New York area’s bridges, tunnels, airports and ports.

Kelly and Baroni were convicted of fraud and conspiracy for scheming in 2013 to change the traffic flow onto the George Washington Bridge between New York City and New Jersey to artificially create gridlock in New Jersey’s Fort Lee. The traffic change came after Fort Lee’s mayor declined to endorse Christie.

“For no reason other than political payback, Baroni and Kelly used deception to reduce Fort Lee’s access lanes to the George Washington Bridge — and thereby jeopardized the safety of the town’s residents. But not every corrupt act by state or local officials is a federal crime. Because the scheme here did not aim to obtain money or property, Baroni and Kelly could not have violated the federal-program fraud or wire fraud laws,” Justice Elena Kagan wrote for the court.

The court opinion did not treat the defendants kindly, but they did put it in perspective. In order to prove fraud under the statues applied to these two officials, the federal government has to prove that they profited by taking property for their own possession, rather than just abused regulatory power for political ends. The Department of Justice tried to argue that the pair “took” the additional traffic lanes to “profit” off of the political misery the traffic jam created. Nice try, Kagan wrote:

Baroni and Kelly indeed “plotted to reduce [Fort Lee’s] lanes.” Id., at 34. But that realignment was a quintessential exercise of regulatory power. And this Court has already held that a scheme to alter such a regulatory choice is not one to appropriate the government’s property. See Cleveland, 531 U. S., at 23. By contrast, a scheme to usurp a public employee’s paid time is one to take the government’s property. But Baroni’s and Kelly’s plan never had that as an object. The use of Port Authority employees was incidental to—the mere cost of implementing— the sought-after regulation of the Bridge’s toll lanes.

Start with this Court’s decision in Cleveland, which reversed another set of federal fraud convictions based on the distinction between property and regulatory power. The defendant there had engaged in a deceptive scheme to influence, to his own benefit, Louisiana’s issuance of gaming licenses. The Government argued that his fraud aimed to deprive the State of property by altering its licensing decisions. This Court rejected the claim. The State’s “intangible rights of allocation, exclusion, and control”—its prerogatives over who should get a benefit and who should not— do “not create a property interest.” Ibid. Rather, the Court stated, those rights “amount to no more and no less than” the State’s “sovereign power to regulate.” Ibid.; see id., at 20 (“[T]he State’s core concern” in allocating gaming licenses “is regulatory”). Or said another way: The defendant’s fraud “implicate[d] the Government’s role as sovereign” wielding “traditional police powers”—not its role “as property holder.” Id., at 23–24. And so his conduct, however deceitful, was not property fraud.

The same is true of the lane realignment. Through that action, Baroni and Kelly changed the traffic flow onto the George Washington Bridge’s tollbooth plaza. Contrary to the Government’s view, the two defendants did not “commandeer” the Bridge’s access lanes (supposing that word bears its normal meaning). They (of course) did not walk away with the lanes; nor did they take the lanes from the Government by converting them to a non-public use. Rather, Baroni and Kelly regulated use of the lanes, as officials responsible for roadways so often do—allocating lanes as between different groups of drivers. To borrow Cleveland’s words, Baroni and Kelly exercised the regulatory rights of “allocation, exclusion, and control”—deciding that drivers from Fort Lee should get two fewer lanes while drivers from nearby highways should get two more. They did so, according to all the Government’s evidence, for bad reasons; and they did so by resorting to lies. But still, what they did was alter a regulatory decision about the toll plaza’s use—in effect, about which drivers had a “license” to use which lanes. And under Cleveland, that run-of-the-mine exercise of regulatory power cannot count as the taking of property.

In McDonnell, the court also narrowed the interpretation of federal corruption statutes to rein in the DoJ. In that case, the court also ruled that property not only had to transfer but had to have an explicit quid pro quo to official acts in order to qualify as bribery — under federal law, anyway. This is yet another emphatic statement about the limits of federal prosecutors in pursuing corrupt politicians who abuse power. Or at the very least, a rebuke to prosecutors who arguably abuse their own power to punish corrupt officials who are actually outside their legitimate reach.

This raises a couple of questions. First, why did this come to the DoJ in the first place, rather than the state of New Jersey? These were not federal officials, after all. One has to wonder whether the Obama-era DoJ saw an opportunity to embarrass a Republican presidential contender, a point Christie emphasized in his claim of vindication this morning:

In a statement on Thursday, Mr. Christie said he had been vindicated.

“As many contended from the beginning, and as the Court confirmed today, no federal crimes were ever committed in this matter by anyone in my administration,” he said. “It is good for all involved that today justice has finally been done.”

He went on blame the Justice Department under President Barack Obama and the U.S. attorney who prosecuted the case, Paul J. Fishman.

He added: “This case was driven by a U.S. attorney and Justice Department in search of a predetermined and biased outcome. In recklessly pursuing that outcome, they violated the oath sworn by every member of the Department of Justice.”

Ahem. This isn’t a vindication; the court didn’t dispute the fact that Christie’s lieutenants abused their power for political ends. It just ruled that those facts don’t fit within federal fraud statutes. Christie may be right that this was a political hit job as a prosecution, but that doesn’t do anything to lift the scandal off his record as governor.

However, it raises yet another point about the nature of the regulatory state. Thanks to ever-increasing expansion of agency law, legislatures keep passing more and more of their authority to executives with less and less oversight. That sets up situations where that authority can get easily abused, and unless legislatures pass strict laws governing the use of that power and demand enforcement of them, we will continue to see bureaucrats turn into martinets or worse with no accountability at all. Legislatures should start turning the agency-law ship around and task itself with managing its own statutes. Bridgegate isn’t the only abuse of regulatory power, after all; it was just the most politic one to target at the time.

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John Stossel 5:30 PM | July 13, 2024