United States v. Halloran
821 F.3d 321
| 2d Cir. | 2016Background
- Daniel J. Halloran, a New York City Council member (2010–2013), was convicted by a jury of two counts of wire fraud (honest-services), two counts under the Travel Act, and one count of conspiracy for participating in two bribery schemes: (1) diverting City “member items” discretionary funds to a fictitious entity (Discretionary Funds Scheme), and (2) brokering payments to Republican county chairs to obtain Wilson‑Pakula authorizations enabling a Democrat (Malcolm Smith) to seek the Republican mayoral nomination (Wilson‑Pakula Scheme).
- The government’s case relied heavily on recorded conversations and undercover FBI agents posing as a developer ("Raj") and a cooperating co-conspirator (Moses “Mark” Stern). Halloran accepted cash payments and sent official letters on City Council letterhead promising funding allocations.
- For the Discretionary Funds Scheme, key evidence included explicit promises to direct $40,000–$80,000 in member-item funds to Raj’s entity (2Holdings), two letters on official letterhead, and cash payments totaling at least $15,000.
- For the Wilson‑Pakula Scheme, Halloran arranged introductions, advised on how to disguise payments (e.g., retainers), and helped secure cash payments to county chairs; recordings showed discussions about specific cash amounts and delivery methods. One county chair (Isaacs) reported the approach to a third party, triggering investigation and arrests.
- Procedurally: co-defendants moved over Brady issues related to delay in production of Stern’s wiretap calls; Halloran elected to proceed after a short continuance. He was sentenced principally to 120 months’ imprisonment; he appealed challenging sufficiency, statutory interpretation, vagueness, sentencing, Brady, and jurisdictional elements.
Issues
| Issue | Plaintiff's Argument (Gov't) | Defendant's Argument (Halloran) | Held |
|---|---|---|---|
| Sufficiency of intent for Discretionary Funds Scheme (wire fraud / Travel Act) | Recordings, letters on official letterhead, cash payments, and continued dealings support intent to divert city funds to bribe‑payers. | Halloran never intended to follow through; he planned to "yes to death" and take payments without arranging funds; no concrete steps taken before arrest. | Affirmed — jury could infer genuine intent from promises, letters, cash, and continued conduct; evidence sufficient. |
| Whether New York Penal Law §§ 200.45/200.50 cover payments to obtain a Wilson‑Pakula (Travel Act predicate) | "May be designated or nominated" language covers agreements that make a person eligible to compete (possibility/permission reading); Wilson‑Pakula makes nomination possible and is statutory gatekeeping power. | A Wilson‑Pakula merely permits someone to compete, not a designation/nomination; statutes should be read to reach only actual procurements of nominations. | Affirmed — statutes' use of "may" reasonably includes making a person eligible (possibility/permission); bribing for Wilson‑Pakula falls within §§ 200.45/200.50. |
| Honest‑services wire fraud (§§ 1343, 1346) — vagueness re: fiduciary duty as applied to county chairs accepting Wilson‑Pakula payments | Fiduciary duty can be found under federal and New York law by de facto control, reliance, and dominance; chairs exercised de facto control and acted as party fiduciaries regarding Wilson‑Pakulas. | § 1346 is vague as applied: unclear whether unpaid party chairs owe a fiduciary duty to the party; ambiguity whether federal or state standard governs. | Affirmed — Halloran’s conduct (quid pro quo for official party authority) is clearly proscribed; jury could find fiduciary duties based on de facto control; no as‑applied vagueness. |
| First Amendment argument re: political speech / Citizens United | Bribery/quid‑pro‑quo is not protected by Citizens United; Citizens United preserved anti‑corruption interests. | Citizens United blurred protected speech vs. bribery; compensating usual political activity could be criminalized. | Rejected — Citizens United does not protect quid‑pro‑quo bribery; statute targets official acts (issuing Wilson‑Pakula, allocating funds). |
| Brady / late production of Stern wiretap calls | Government produced Stern calls after court order; continuance allowed effective use at trial; no reasonable probability outcome would differ. | Late disclosure violated Brady and warranted dismissal. | Rejected — no showing materiality that would have changed verdict; continuance cured prejudice; dismissal would be extreme. |
| Jurisdictional elements (wire/Travel Act interstate use) | Halloran communicated with an out‑of‑state agent and caused interstate text routing; use of interstate facilities was voluntary and linked to his acts. | Claimed manufactured jurisdiction because FBI caused interstate communications. | Affirmed — defendant took affirmative steps (texting while agent out of state, routing) so jurisdictional elements satisfied. |
Key Cases Cited
- United States v. Facen, 812 F.3d 280 (2d Cir.) (standard for viewing evidence after guilty verdict)
- United States v. Binday, 804 F.3d 558 (2d Cir.) (exceedingly deferential sufficiency review)
- Skilling v. United States, 561 U.S. 358 (U.S.) (honest‑services fraud limited to bribery and kickback schemes)
- Leocal v. Ashcroft, 543 U.S. 1 (U.S.) (textual canon: give effect to every word of a statute)
- Citizens United v. Federal Election Commission, 558 U.S. 310 (U.S.) (does not protect quid‑pro‑quo bribery; recognizes anti‑corruption interest)
- United States v. Jenkins, 943 F.2d 167 (2d Cir.) (Travel Act does not require a substantial‑step element)
- United States v. Milovanovic, 678 F.3d 713 (9th Cir.) (fiduciary defined by duty to act for benefit of another)