UNITED STATES of America, Appellee, v. Darrell Chip WADENA, Appellant. UNITED STATES of America, Appellee, v. Jerry Joseph RAWLEY, Jr., Appellant. UNITED STATES of America, Appellee, v. Rick CLARK, Appellant.
Nos. 96-4141, 96-4145 and 96-4146
United States Court of Appeals, Eighth Circuit
Decided Aug. 11, 1998
Rehearing and Suggestion for Rehearing En Banc Denied Aug. 27, 1998
152 F.3d 831
Daniel L. Gerdts, Minneapolis, MN, argued and on the brief (John C. Brink, Minneapolis, MN, on the brief), for Chip Wadena.
Ronald I. Meshbesher, Meshbesher & Spence, Minneapolis, MN, for Rick Clark.
Charles N. Ek, Minneapolis, MN, argued and on the brief (Peter B. Wold, Minneapolis, MN, on the brief), for Jerry Rawley.
Before McMILLIAN, LAY, and BEAM, Circuit Judges.
AMENDED OPINION
LAY, Circuit Judge.
In June 1996, Rickie Lee Clark, Jerry Joseph Rawley, Jr., and Darrell “Chip” Wadena were convicted in federal district court of conspiracy, in violation of
Clark, Rawley, and Wadena appeal their convictions. On appeal, they jointly and severally challenge the federal court‘s jurisdiction to prosecute the charges against them. They also raise several trial and procedural errors. For the reasons discussed below, we affirm all judgments of conviction.
I. Background
The 880,000-acre White Earth Reservation (“Reservation“) is located in northwest Minnesota. The Reservation is home to the White Earth Band (“Band“), one of the six constituent bands of the Minnesota Chippewa Tribe. The Band consists of 22,000 members. Approximately 3,800 of the Band‘s enrolled members live on the Reservation, and the remaining members live throughout the United States. The Reservation Tribal Council (“RTC“) (formerly known as the Reservation Business Committee) governs all aspects of the Band, including its economic activity.2
The RTC consists of five members who serve four-year terms. The Band elects the members by general elections held every two years. To be eligible for election, a candidate must be an enrolled member who resides on the Reservation. During the time frame relevant to this case, Clark, Rawley, and Wadena all served on the RTC. Wadena served as Chairman, Rawley served as Treasurer, and Clark served as Councilman.
The offenses for which Clark and Rawley were convicted arose from three conspiracies: (1) the construction conspiracy; (2) the commissions conspiracy; and (3) the election conspiracy. Wadena‘s convictions arose solely from the construction conspiracy and the commissions conspiracy. We detail these conspiracies below.
A. The Construction Conspiracy
In 1985, Congress enacted the White Earth Reservation Land Settlement Act (“WERLSA“).
The RTC appointed Clark to oversee construction of the Casino.3 The RTC also hired Indian-owned Gordon Construction, Inc. (“Gordon“) to act as general contractor for the project. Gordon subcontracted with Northern Drywall and Construction, Inc. (“Northern“) for installation of drywall and various painting services. Northern did not submit a formal bid for the subcontract. Prior to the subcontract in question, Northern had only worked on small construction projects, and in the years prior to the Casino project, Northern‘s gross revenues never ex-
Construction of the Casino began in mid-1991 and was completed within one year. The Casino was quite successful; it created more than 1000 jobs and generated millions of dollars in revenue. In 1993, for example, the Band grossed $50 million, a majority of which came from the operation of the Casino. The RTC had control over the Band‘s spending of all non-federal revenue such as the revenue from the Casino.
In 1993, the civil examination unit of the Internal Revenue Service (“IRS“) conducted an audit of Northern. During the audit, examiner Greg Nygren discovered Northern had made payments to Wadena totaling over $428,000. Northern made the first payment to Wadena in July 1991, about four months before the drywall subcontract was publicized. In response to inquiries about the payments, Clark and Wadena claimed Wadena held an undisclosed ownership interest in Northern, and the payments represented Wadena‘s share of profits from Northern. However, Wadena never mentioned this alleged ownership interest on his 1990 financial statements or on loan applications he submitted in 1990. Further, Northern‘s accountant did not know of Wadena‘s alleged interest. Later, Clark falsified and backdated Northern‘s corporate minutes and stock certificates in an attempt to document Wadena‘s ownership interest in the company.
In 1992, Northern also made a payment to Rawley in the amount of $15,000. Clark and Rawley claimed the payment was for consulting services. In reality, Northern made the payment to Rawley to secure Rawley‘s silence about Northern‘s payments to Wadena, who was Rawley‘s long-time political rival.
The government indicted Clark, Rawley, and Wadena on August 29, 1995. The Indictment charged defendants with eighteen counts arising from the construction of the Casino. Count 1 alleged that all three defendants conspired to misapply tribal funds, in violation of
B. The Commissions Conspiracy
The RTC members created two commissions of which they were the sole members: the Gaming Control Commission and the Fishing Commission (“Commissions“). The RTC members assumed no additional duties by serving on the Commissions, and the Commissions themselves were essentially functionless.5 Nonetheless, Clark, Rawley, and Wadena received substantial payments for their service on the Commissions.6 At irregular intervals, and when the desire arose, Clark, Rawley, and Wadena directed the issuance of tribal funds to themselves, and they directed the Band‘s accounting department to code the checks as payment for commission meetings. These payments were made from the Band‘s general treasury, and when combined with Clark‘s, Rawley‘s and Wadena‘s RTC salaries for the years 1990 to 1993, the payments amounted to over $1.2 million.
In the 1995 Indictment, the government charged Clark, Rawley, and Wadena with ten counts arising from the Commissions conspiracy. Count 19 alleged the defendants conspired to misapply tribal funds, in violation of
In addition to the convictions set forth above, Rawley and Clark were also found guilty under
In the 1995 Indictment, the government charged Clark and Rawley with sixteen counts relating to the election conspiracy. The government did not charge Wadena with any counts relating to the election conspiracy. Count 29 alleged that Clark and Rawley conspired to injure and oppress voters, in violation of
two or more persons [to] conspire to injure, oppress, threaten, or intimidate any person in any State [or] Territory . . . in the free exercise or enjoyment of any right or privilege secured to him [or her] by the Constitution or laws of the United States, or because of his [or her] having so exercised the same. . . .
The object of this conspiracy was to procure the election of certain candidates to tribal positions by causing election officials to corruptly discharge their duties and by causing fraudulent ballots to be cast. Counts 30 through 44 alleged various acts of misapplication of funds, mail fraud, false statements, and obstruction of justice.9 The jury convicted Rawley of all counts relating to the election conspiracy. The jury convicted Clark of all counts relating to the election conspiracy except for one count of using tribal funds to pay people to assist him and others in gaining re-election.
II. Overall Jurisdiction
Each defendant challenges his convictions on various grounds. First, we address the defendants’ overall challenge of the federal court‘s jurisdiction to prosecute them for the charged offenses. The defendants make two basic challenges: (1) the only federal law applicable to the defendants, as Native Americans, are those encompassed within the Indian Country Crimes Act,
The defendants’ first jurisdictional challenge is broad-based and if true, would require this court to dismiss all charges. This particular jurisdictional claim is allegedly derived from historic interpretation of the “patchwork” of federal statutes and early case law affecting the sovereignty of Indian tribes in America. This area of the law is not easily discerned and has arisen in numer-
The general laws of the United States were made applicable to Indian Country through the Indian Country Crimes Act,
In sum, the defendants argue that the only crimes which may be the basis for federal court jurisdiction are those within the Indian Country Crimes Act and the Indian Major Crimes Act. As the defendants acknowledge, this court has rejected this claim on several occasions. See, e.g., Blue, 722 F.2d at 384-86;
First, many courts of appeal15 recognize that federal courts may enforce general federal criminal laws against all persons, including Indians within Indian country.16 Federal statutes of general applicability, those in which situs of the offense is not an element of the crime, are not encompassed within the Indian Country Crimes Act. As a result, the Indian-against-Indian exception contained in the Indian Country Crimes Act does not apply to federal criminal laws of general applicability.
The Second Circuit in Markiewicz, 978 F.2d 786, and the Seventh Circuit in Smith, 562 F.2d 453, emphasized that only federal laws which seek to protect a “peculiar” federal interest may be prosecuted.17 For example, in Smith, the offense was charged under
At the time that the Indian Country Crimes Act was passed, it may have been assumed, as Felix Cohen points out, that federal laws outside of enclave laws were not applicable to the Indian Country. See Cohen, supra, at 296-97. However, as Indian law evolved, that premise was discarded. General federal criminal laws directed to all persons became recognized as applying equally to Native Americans within Indian
Moreover, the Indian Country Crimes Act speaks only to the “general laws of the United States as to the punishment of offenses committed in any place within the sole and exclusive jurisdiction of the United States. . . .”
The Indian-against-Indian exception contained in the Indian Country Crimes Act manifested, as Cohen observes, “a broad respect for tribal sovereignty, particularly in matters affecting only Indians.” Cohen, supra, at 290 (citing Quiver, 241 U.S. 602, and Crow Dog, 109 U.S. 556). However, the application of general federal laws to Native Americans in this case does not implicate the tribal concerns of sovereignty addressed by the Indian Country Crimes Act exception. There may be other federal-law prosecutions that would implicate important tribal interests. However, we fail to see how tribal interests are paramount to the federal interests implicated in the various criminal charges involved here. Although the defendants are Native Americans, and their conduct took place within Indian country, tribal interests do not outweigh the federal interest in prohibiting offenses such as mail fraud, money laundering, bribery, and conspiracy. Moreover, Indian tribes are not totally independent of the United States. Federal jurisdiction over the offenses committed here is imperative for the protection of all Native Americans who are U.S. citizens living on Indian reservations.
Public Law 280
The alternative jurisdictional argument raised by the defendants may be summarily rejected. Defendants assert that even if general federal laws are applicable, under Public Law 280, the federal government has surrendered to the State of Minnesota its criminal jurisdiction over all federal offenses committed on Indian lands. As the defendants acknowledge, this court has rejected this exact argument in two recent cases: Stone, 112 F.3d 971, and United States v. Pemberton, 121 F.3d 1157 (8th Cir. 1997), cert. denied, 522 U.S. 1113, 118 S.Ct. 1046, 140 L.Ed.2d 111 (1998). As this court observed in Pemberton: “Crimes of general applicability—that is, actions that Congress has declared illegal regardless of where they occur—are not affected by the enactment of Public Law 280 and remain within the subject-matter jurisdiction of the federal courts.” 121 F.3d at 1164.
III. Jurisdictional Challenge to the Election Conspiracy
Clark and Rawley do not challenge the sufficiency of the evidence to sustain their convictions relating to the election fraud, and the evidence of their guilt is overwhelming. However, both Clark and Rawley vigorously assert that the exercise of federal
The district court held that the conspiracy law under
Clark and Rawley also challenge federal jurisdiction on the ground that the tribe exists as an independent nation over which the federal government has no jurisdiction concerning a local tribal election. There is no question that Indian tribes are quasi-sovereigns and enjoy rights and privileges of self-government and local culture. However, the Supreme Court observed early on in Talton v. Mayes that while Indian Nations are “possessed of attributes of local self government, when exercising their tribal functions, all such rights are subject to the supreme legislative authority of the United States.” 163 U.S. 376, 384, 16 S.Ct. 986, 41 L.Ed. 196 (1896) (citing Cherokee Nation v. Southern Kansas Ry. Co., 135 U.S. 641, 10 S.Ct. 965, 34 L.Ed. 295 (1890)). In this regard, tribal sovereignty “exists only at the sufferance of Congress and is subject to com-
The ICRA was passed with the declared purpose “to secur[e] for the American Indian the broad constitutional rights afforded to other Americans.” Santa Clara, 436 U.S. at 61 (quoting S.Rep. No. 841, 90th Cong. 1st Sess. 5-6 (1967)). The passage of the ICRA resulted from congressional concern in the early 1960s that individual Native Americans had no constitutional rights under their tribal governments. See Alvin J. Ziontz, In Defense of Tribal Sovereignty: An Analysis of Judicial Error in Construction of the Indian Civil Rights Act, 20 S.D. L.Rev. 1, 1-2 (1975). The congressional subcommittee first considering the legislation “heard a great deal of testimony
Section 241 prohibits a conspiracy to deny any person the enjoyment of a right or privilege secured by the Constitution or laws of the United States. It is the government‘s position that the conspiracy under
Citing an eighty-year-old case, United States v. Bathgate, 246 U.S. 220, 225, 38 S.Ct. 269, 62 L.Ed. 676 (1918), the defendants argue that federal election fraud statutes do not extend to fraud in a general state election, and therefore should not apply to a tribal election either. But since the Bathgate decision, the Supreme Court has construed
In Townsley, our court specifically held that even though the objective of the conspiracy was to influence a local rather than federal election, that did not defeat the specific intent necessary to establish a conspiracy against the rights of citizens under
The specific question we must then address is whether the ICRA, as a law of the United States, contains a prohibition which allows enforcement of
All members of the Minnesota Chippewa Tribe shall be accorded by the governing body equal rights, equal protection, and equal opportunities to participate in the economic resources and activities of the Tribe, and no member shall be denied any of the constitutional rights or guarantees enjoyed by other citizens of the United
States, including but not limited to freedom of religion and conscience, freedom of speech, the right to orderly association or assembly, the right to petition for action or the redress of grievances, and due process of law.
(emphasis added). By direct incorporation, these rights are now explicitly protected by the ICRA. We hold they are enforceable under
In addressing ballot-box stuffing in federal or state elections, the Seventh Circuit observed in United States v. Olinger, 759 F.2d 1293, 1303 (7th Cir.1985):
[T]he right of suffrage, whether in an election for state or federal office, is one that qualifies under the Equal Protection Clause of the Fourteenth Amendment for protection from impairment, “when such impairment resulted from dilution by a false tally, cf., United States v. Classic, 313 U.S. 299, 61 S.Ct. 1031, 85 L.Ed. 1368 (1941); or by a refusal to count votes from arbitrarily selected precincts, cf., United States v. Mosley, 238 U.S. 383, 35 S.Ct. 904, 59 L.Ed. 1355 (1915), or by a stuffing of the ballot box, cf., Ex parte Siebold, 100 U.S. 371, 25 L.Ed. 717 (1879); United States v. Saylor, 322 U.S. 385, 64 S.Ct. 1101, 88 L.Ed. 1341 (1944).” Baker v. Carr, 369 U.S. 186, 208 and 247-48, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962). This was bluntly stated in Reynolds v. Sims, 377 U.S. 533, 554-55, 84 S.Ct. 1362, 12 L.Ed.2d 506 (1964): “[T]he Constitution of the United States protects the right of all qualified citizens to vote, in state as well as in federal elections. . . . The right to vote can neither be denied outright, . . . nor diluted by ballotbox stuffing. . . .”
We believe it is clear this protection against voter fraud has been carried over into the ICRA, as it is applies to the facts of this case. This court previously recognized the one-man-one-vote principle applies to tribal elections through the ICRA. See White Eagle v. One Feather, 478 F.2d 1311, 1314 (8th Cir. 1973); Daly v. United States, 483 F.2d 700, 704-05 (8th Cir.1973); Means v. Wilson, 522 F.2d 833, 839 (8th Cir.1975).21
The defendants urge that these cases have all been implicitly overruled by the Santa Clara decision. In Santa Clara, a female tribe member brought an action for injunctive and declaratory relief against the Pueblo tribal government, alleging that a Pueblo ordinance which denied tribal membership to children of female members who married outside the tribe was a violation of equal protection under the ICRA. 436 U.S. at 52-53. The Supreme Court found that suits against the tribe under the ICRA were barred by the tribe‘s sovereign immunity, because nothing on the face of the ICRA purported to subject the tribes to the jurisdiction of federal courts in civil actions for declaratory or injunctive relief. Id. at 58-59. Additionally, the Court found that the ICRA did not impliedly authorize a private right of action against the Pueblo government. Id. at 72.
There are several reasons why the Santa Clara ruling does not control this case. First, in the case at hand, the government is asserting jurisdiction under
Second, in Santa Clara the Court was faced with a challenge to a duly enacted ordinance of the tribal government. In such
Third, in Santa Clara, the Court stressed that tribal courts are available to vindicate rights created by the ICRA and are the appropriate forums to do so. 436 U.S. at 65. But again, this is stated in the context of a civil action. In a criminal context—when the entire tribal system allegedly is controlled by a few corrupt individuals—there is no effective tribal forum available to protect an individual tribal member‘s civil rights.
Finally, even if jurisdiction in this case was asserted under the ICRA, Santa Clara would not be dispositive, because the absence of a private right of action does not mean absence of criminal jurisdiction. Rawley argues that “no voter could be a victim of a § 241 conspiracy if that voter could not enforce his or her voting rights under federal law in a civil action in a federal court.” Rawley Br. at 28. If by this the defendant means to imply that criminal jurisdiction cannot exist without a corresponding private right of action, his premise is incorrect. Courts repeatedly have held that there is no private right of action under
For these reasons, Clark and Rawley cannot rely on the Santa Clara decision to support their argument that federal jurisdiction under
In Stone, this court recently recognized that tribal sovereignty is “necessarily limited” and “must not conflict with the . . . overriding sovereignty of the United States.” 112 F.3d at 974 (quoting United States v. Sohappy, 770 F.2d 816, 819 (9th Cir.1985)). “Federal laws of general applicability [such as § 241] ‘are applicable to the Indian unless there exists some treaty right which exempts the Indian from the operation of the particular statutes in question.‘” Id. (quoting Burns, 529 F.2d at 117). No such treaty right—to be free to conduct fraudulent elections against their people—is asserted here by the defendants.
Contrary to the Clark and Ramsey‘s argument, we find there is no reason why federal criminal jurisdiction over election fraud would work to undermine the sovereignty of the tribe or its political integrity. First, no tribal custom or tradition is being threatened by the enforcement of criminal conspiracy laws. There is no tribal custom or tradition of the Band of fraudulently using the election system to maintain positions of power for a few corrupt individuals.
Finally, it is relevant to note that tribal governments are dependent sovereigns—not independent foreign ones. As part of this dependent status, the U.S. government serves as a trustee and has a direct responsibility as a trustee to protect the civil rights granted by Congress to the Native Americans living on the reservations. We believe failure of the United States to assert criminal jurisdiction over activity on a reservation when the tribal government no longer operates legitimately would be an abrogation of the U.S. government‘s trustee relationship with tribes such as the Chippewa. We thus conclude that Clark and Rawley may be prosecuted in federal court under
IV. Defendants’ Other Challenges
A. Joinder and Severance
Before trial, Clark and Wadena22 moved to sever Counts 1 through 28 (the nonelection counts) from Counts 29 through 44 (the election counts), alleging the two groups involved separate and unrelated acts and transactions and were improperly joined. The defendants also argued they would be prejudiced by the joinder of the offenses because during trial, such joinder would allow the introduction of evidence that is not relevant to some of the conspiracies. For example, the defendants asserted that evidence related to the election fraud conspiracy is not relevant to the conspiracies involving the Casino or the Commissions. The government asserted joinder was proper, alleging Clark, Rawley, and Wadena joined in multiple conspiracies to misapply tribal funds for their personal use.
Following a hearing on the defendants’ pre-trial motion for severance, the district court referred the matter to a federal magistrate judge for a report and recommendation. In his report and recommendation, the magistrate judge concluded that on the face of the Indictment, the government did not allege a “single, common purpose connecting the election fraud allegations to the casino and fishing commission allegations.” United States v. Wadena, Crim. No. 3-95-102 (D.Minn. Jan. 24, 1996) (magistrate judge‘s report and recommendation on defendants’ pretrial motions). The magistrate judge recommended that the district court sever Counts 1 through 28 from Counts 29 through 44. Id.
The district court23 disagreed, concluding the Indictment alleged three conspiracies that were a part of a series of acts or transactions, and joinder was proper. United States v. Wadena, No. 3-95-102 (D. Minn. April 11, 1996) (order adopting portions of magistrate judge‘s report and recommendation). The court also noted that although “a joint trial may result in evidence being admitted against one defendant that would otherwise be irrelevant in the trial of a co-defendant, the Court finds that any prejudice that may result may be avoided through limiting instructions to the jury.” Id. The district court denied the defendants’ motion to sever, finding severance was not warranted. Id. During trial, the district court continued to deny defendants’ motions to sever.
In the present appeal, Clark and Wadena dispute the district court‘s joinder of Counts 1 through 28 with Counts 29 through 44. Alternatively, they dispute the district court‘s denial of their motion to sever the counts.
1. Joinder under Federal Rule of Criminal Procedure 8
This Court reviews de novo claims of misjoinder. An error involving misjoinder “‘affects substantial rights’ and requires reversal only if the misjoinder results in actual prejudice because it ‘had substantial and injurious effect or influence in determining the jury‘s verdict.‘” United States v. Lane, 474 U.S. 438, 449, 106 S.Ct. 725, 88 L.Ed.2d 814 (1986) (quoting Kotteakos v. United States, 328 U.S. 750, 776, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946)).
a. Propriety of Joinder with Respect to Clark
Clark asserts joinder under
We disagree with Clark‘s contentions. In this case, the government charged Clark with all of the offenses relating to both the non-election conspiracies and the election conspiracy. The government asserted Clark joined in the non-election conspiracies to misapply tribal funds for his personal gain. The government also contended Clark joined in the election conspiracy to ensure his and others’ elections and his continued access to tribal funds. On its face, the Indictment alleges more than a mere overlap in personnel and the common objective of making money. We deem it clear that the Indictment alleges Clark participated in a series of acts or transactions with the sole purpose of furthering a common scheme of using his and others’ positions in tribal government to access tribal funds and misapply those funds for his personal gain. Thus, joinder of all counts was proper under
Moreover, were we to find joinder improper with respect to Clark, such error
We disagree with Clark‘s contentions for several reasons. First, during trial, the government presented evidence of the charged conspiracies in three discrete phases. Second, although the government presented numerous witnesses who testified they did not vote in the last tribal election, it is difficult to see how this testimony, which was specific to the election conspiracy, influenced the jury‘s findings with respect to the construction conspiracy and Commissions conspiracy. Third, the district court instructed the jury that each defendant was entitled to be treated separately, and the jury must return a separate verdict for each defendant and for each crime charged. See, e.g., Jury Inst. 12, United States v. Wadena, No. 3-95-102 (D. Minn. June 24, 1996). The jury ultimately acquitted one defendant of all charges and acquitted Clark and Rawley of one charge each. Finally, the government presented potent evidence of Clark‘s guilt of the charges for which he was convicted. In sum, we conclude that any alleged misjoinder did not have a substantial and injurious effect or influence on the jury‘s verdict with respect to Clark. See Lane, 474 U.S. at 449.
b. Propriety of Joinder with Respect to Wadena
Like Clark, Wadena argues joinder in this case was improper. In particular,
Wadena alleges the government turned his trial into an “election fraud circus” by calling 136 election fraud witnesses to the stand, introducing nearly 600 election fraud exhibits, and stating in its closing argument that all the defendants were guilty of “controlling the ballot box in order to control the cashbox.” See Wadena Br. at 22-23. Wadena asserts he suffered “overwhelming” prejudice in this “politically charged” trial. Id. at 23.
We disagree. As noted above, the government presented evidence relating to the three conspiracies in three distinct phases. When the government referred to the election conspiracy in its opening statement, case-in-chief, and closing argument, it specifically referred to the involvement of Clark and Rawley in that conspiracy. While Wadena correctly asserts that the government presented numerous witnesses who testified in the election conspiracy phase of the trial, as we stated above with respect to Clark, the majority of those witnesses simply testified they did not actually vote in the 1994 election even though ballots were cast in their names.27 Further, a large portion of the exhibits presented during the election conspiracy phase of the trial consisted solely of various absentee ballots. Overall, we do not believe the evidence presented in relation to the election conspiracy caused the jury to convict Wadena of the charges arising from the other two conspiracies.
2. Severance under Rule 14
a. Propriety of the Refusal to Sever with Respect to Clark
Clark contends the district court‘s refusal to sever the offenses and the defen-
From our review of the record, and for the reasons discussed above with respect to joinder, we conclude the district court‘s refusal to sever did not deprive Clark of an appreciable chance of acquittal. Therefore, the district court‘s refusal to sever was within its discretion. See Crouch, 46 F.3d at 875; Koskela, 86 F.3d at 126.
b. Propriety of Refusal to Sever with Respect to Wadena
Wadena contends that when the district court repeatedly refused to sever his trial from that of the other defendants, it abandoned its duty under Rule 14 and abused its discretion. In support of this argument, Wadena makes essentially the same contentions he made with respect to joinder. From our review of the record, and for the reasons discussed above with respect to joinder, we conclude the district court‘s refusal to grant Wadena‘s Rule 14 motion to sever did not cause him severe prejudice. See Crouch, 46 F.3d at 875; Koskela, 86 F.3d at 126.
B. Alleged Misuse of Civil IRS Audit
Clark and Wadena contend that in late 1993, the IRS conducted a civil audit of Northern with the express and undisclosed purpose of gathering information for a crimi-
Clark and Wadena complain the IRS‘s simultaneous investigations violated their Fourth and Fifth Amendment rights. During trial, Clark and Wadena made various motions to suppress the evidence obtained from the civil audit and any evidence derived therefrom. The district court denied the motions. On appeal, Clark and Wadena claim the district court erred in denying their motions. We review for clear error the facts supporting a district court‘s denial of a motion to suppress. See United States v. Cunningham, 133 F.3d 1070, 1072 (8th Cir.1998) (citing Ornelas v. United States, 517 U.S. 690, 116 S.Ct. 1657, 1663, 134 L.Ed.2d 911 (1996)), cert. denied by, 523 U.S. 1131, 118 S.Ct. 1823, 140 L.Ed.2d 960 (1998). We review de novo the legal conclusions based upon those facts. Id.
“[T]he IRS may not develop a criminal investigation under the auspices of a civil audit.” United States v. Grunewald, 987 F.2d 531, 534 (8th Cir.1993).
Evidence obtained in the course of a criminal investigation, where the defendant has not been apprised of the nature of the investigation, may be suppressed only if the defendant establishes that: (1) the IRS had firm indications of fraud by the defendant, (2) there is clear and convincing evidence that the IRS affirmatively and intentionally misled the defendant, and (3) the IRS‘s conduct resulted in prejudice to defendant‘s constitutional rights.
An IRS auditor conducting a civil audit who detects a firm indication of fraud must suspend the audit and refer the case for evaluation by the CID. See Grunewald, 987 F.2d at 534 (citing Audit Guidelines for Examiners, CCH Internal Revenue Manual (Audit), §§ 4231, 4564.21, 9322.1). A firm indication of fraud is different than an initial indication that fraud exists, and it is more than a mere suspicion of fraud. See Groder v. United States, 816 F.2d 139, 143 (4th Cir.1987). Whether Nygren (the civil auditor) had a firm indication of fraud and failed to suspend the civil audit is a question of fact we review for clear error. See Cunningham, 133 F.3d at 1072. Clark and Wadena do not present any evidence showing that Nygren had a firm indication of fraud and failed to suspend the civil audit of Northern. Further, Nygren specifically denied he suspected any fraud when he mailed the audit letter to Northern. Our review of Nygren‘s trial testimony pertaining to the simultaneous investigations likewise does not indicate Nygren had a firm indication of fraud and failed to refer the case to the CID. Thus, neither Clark nor Wadena have established the first Grunewald factor.
“[T]he mere failure of an IRS agent to inform a defendant that information developed in an audit may result in a further criminal investigation does not indicate affirmative and intentional deceit by the IRS.”
C. Count 19 as a Cognizable Offense
As noted above, Count 19 of the Indictment charged Clark, Rawley, and Wadena with conspiring to misapply tribal funds, in violation of
Before trial, the defendants moved to dismiss Count 19. The district court denied their motions. In the present appeal, Clark and Wadena contend the district court erred in not dismissing Count 19, because the count fails to allege a cognizable offense.29 They argue that all of the overt acts alleged to have been committed in Count 19 were official actions taken pursuant to their capacities as members of the RTC, and the RTC as an entity or governmental body cannot conspire with itself. Clark and Wadena base this contention on Runs After v. United States, 766 F.2d 347, 354 (8th Cir.1985), which they claim controls this case.
In Runs After, several members of the Cheyenne River Sioux challenged the validity of two resolutions passed by the Cheyenne River Sioux Reservation Tribal Council (Tribal Council). 766 F.2d at 349. The two resolutions, passed by a vote of the Tribal Council, barred certain tribal members from running in future tribal elections. Id. The plaintiffs challenged the resolutions under various federal civil rights statutes. The court rejected the plaintiffs’ challenges, concluding, in part, that “individual members of the Tribal Council, acting in their official capacity as tribal council members, cannot conspire when they act together with other tribal council members in taking official action on behalf of the Tribal Council.” Id. at 354 (citing Herrmann v. Moore, 576 F.2d 453, 459 (2d Cir.1978) (stating there is no conspiracy if the conspiratorial conduct is essentially a single act by a single corporation acting exclusively through its own directors, officers, and employees, each acting within the scope of his or her employment)).
Runs After is a civil suit involving a dispute between tribal members. It is not a criminal case alleging violations of federal criminal law by a tribal entity or by members of a tribal entity. More importantly, Runs After involved the conduct of tribal council members regarding two official acts of the entire tribal council—the passing of two resolutions. In the present case, it appears there was an official act of the RTC to create the Commissions. It also appears there was an official act by the RTC to approve a commission payment range for each member. However, these are not the only overt acts alleged by Count 19. The count also alleges numerous overt acts in which Clark, Rawley, and Wadena, when they wanted money for purchases, debts, etc., individually directed the tribe to issue them checks labeled as commission payments. These individual payments were not collectively approved or is-
D. Interstate Nexus in Money Laundering Counts
The Indictment charged Clark and Wadena with various counts of money laundering, in violation of
In the present appeal, Clark and Wadena contend the district court erred in denying their Rule 29 motions. In response, the government claims the defendants waived their right to challenge the denial of their motion when they failed to renew the motion at the close of evidence, and even if this court concludes the defendants did not waive their right to appeal the denial of their motion, the government nonetheless presented sufficient evidence to prove the element of an interstate commerce nexus. We address the government‘s waiver argument first.
Generally, a defendant waives the right to appeal a denial of a motion for acquittal if the defendant fails to renew the motion at the close of all of the evidence. See Edwards v. United States, 333 F.2d 588, 589 (8th Cir.1964). Such a waiver limits the scope of appellate review to a determination of whether there was plain error or a defect affecting the substantial rights of the defendant. See id. It appears neither Wadena nor Clark renewed their motion for acquittal at the close of the evidence. Thus, it is likely they waived their right to appeal the denial of the motion. See id. Nonetheless, because the government‘s alleged failure to prove an essential element of the money laundering offenses would be a defect affecting the sub-
It appears this court has not determined the quantum of evidence necessary to prove the element of an interstate commerce nexus in
E. Admission of Government‘s Exhibit 97
During trial, the government presented exhibit 97 for admission into evidence. Exhibit 97 consisted of a Northern check numbered 3657 in the amount of $15,000, signed by Clark, and made payable to Jerry Rawley. The exhibit also consisted of the check‘s register stub bearing the number 3657, the name Jerry Rawley, and the amount of $15,000. Significantly, the stub also contained a partially-erased pencil notation “gift.” Before trial, Rawley raised three objections to the admission of the check stub portion of the exhibit into evidence: (1) failure to authenticate; (2) hearsay; and (3) denial of his
On appeal, Rawley contends we must reverse his convictions of Counts 1, 3, and 4, because the district court erred in admitting exhibit 97. We review for abuse of discretion the district court‘s decision that exhibit 97 was authenticated and did not constitute inadmissible hearsay. See United States v. Henneberry, 719 F.2d 941, 948 (8th Cir.1983); United States v. Jackson, 67 F.3d 1359, 1364 (8th Cir.1995). We review de novo the district court‘s decision that admission of exhibit 97 did not violate Rawley‘s Sixth Amendment rights. See United States v. Johnson, 56 F.3d 947, 953 (8th Cir.1995).
We address Rawley‘s authentication argument first. A party authenticates a document by presenting evidence sufficient to support a finding that the document is what the party claims it to be. See
Rawley‘s next contention is that the district court abused its discretion when it concluded the partially-erased word “gift” on the check register was not hearsay. A written statement that would ordinarily be defined as hearsay is not hearsay if the statement is offered against a party, and it is a statement of a co-conspirator of that party made during the course of and in furtherance of a conspiracy. See
F. Jury Instructions
The defendants allege four errors relating to the district court‘s instructions to the jury. First, Clark30 and Wadena allege the district court invaded the province of the jury by instructing the jury that the government had already proven the essential elements of two charged offenses: theft or bribery concerning programs receiving federal funds, in violation of
1. Instructions Regarding Essential Elements of Offenses
In jury instruction 29, the district court cited to the jury pertinent aspects of
A court may err when it instructs a jury that a fact essential to a defendant‘s conviction has already been established. See Sullivan v. Louisiana, 508 U.S. 275, 277, 113 S.Ct. 2078, 124 L.Ed.2d 182 (1993). However, an error of this type is subject to harmless error review. See United States v. Raether, 82 F.3d 192, 194 (8th Cir.1996). Clark and Wadena have vigorously asserted throughout this appeal that the federal courts lack jurisdiction over this entire case because of the Band‘s status as an independent sovereign and their statuses as members of the Band. Given this position, we do not see how the court‘s errors in jury instructions 29 and 33, if any, could have harmed either Clark or Wadena. Thus, without addressing whether the district court‘s jury instructions 29 and 33 were in fact erroneous, we conclude the claimed error was harmless.
2. Failure to Instruct on Intent
Clark and Wadena claim that the district court failed to instruct the jury that, with respect to violations of
3. Instructions on Minnesota Notary Law
In jury instruction 53, the district court stated: “In taking an acknowledgment, verification, or witnessing a signature a notary must determine, that the person appearing before him or her is the person whose true signature is on the instrument. You are instructed that to do otherwise is a violation of state law.” Jury Inst. 53, United States v. Wadena, No. 3-95-102 (D. Minn. June 24, 1996). Rawley objected to this instruction
4. Rawley‘s Proposed Theory of Defense Instruction
With respect to the tribal election notarization process, Rawley also proposed a jury instruction indicating, in part:
Under the laws of the Minnesota Chippewa Tribe and the White Earth Band, a violation of the requirement that an absentee vote be marked and signed in the presence of a notary public did not invalidate any absentee vote prior to the June 14, 1994, election. Accordingly, in order to find that a defendant had the intent to have a false vote cast in the 1990 or 1994 election(s), you must find that the government proved such intent, beyond a reasonable doubt, by showing evidence that the defendant intended to cast false votes in the election other than with evidence of a mere violation of the requirement that an absentee vote be marked and signed in the presence of a notary public.
See Addendum to Rawley Br. Rawley contends he was entitled to this instruction because it was timely, supported by the evidence and set forth a correct statement of the law (i.e.
G. Sentencing Enhancement for Abuse of Trust in Money Laundering Offenses
Section 3B1.3 of the sentencing guidelines allows for a two-level increase “[i]f the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense.”31 Legal application of the guidelines to the facts is reviewed de novo. See, e.g., United States v. Evans, 30 F.3d 1015, 1020 (8th Cir.1994). However, the district court‘s application of § 3B1.3 is a factual finding, reviewed for clear error. See United States v. Johns, 15 F.3d 740, 744 (8th Cir.1994) (stating abuse of trust adjustment is entitled to great deference and will not be disturbed unless clearly erroneous).
In sentencing Clark and Wadena, the district court refused to group the money laundering counts (Counts 10-18) with the remaining charges and convictions, finding that “the money laundering counts in this case were not an integral part of an overall scheme” to perpetuate theft or bribery. United States v. Clark, No. 3-95-102 (D.Minn. Nov. 26, 1996) (Statement of Reasons for Imposing Sentence), at 4. Despite this finding, the district court still used § 3B1.3 to apply a two-level enhancement to the money laundering charges for abuse of a position of public trust.
The government contends that the enhancements were correct because, while the money-laundering charges were grouped separately, the theft and fraud counts—which involved an abuse of trust—can be considered “relevant conduct” with respect to the
The first problem with this reasoning is that, while the government argues Clark and Wadena‘s abuse of positions of trust to obtain illegal proceeds was relevant conduct, the district court specifically found the money laundering activity was not related to the theft and bribery schemes. Additionally, § 2C1.2 of the sentencing guidelines specifically states that when a crime involves giving or receiving a bribe or gratuity, a sentencing court should “not apply the adjustment in § 3B1.3 (Abuse of Position or Trust or Use of a Special Skill).” U.S.S.G. § 2C1.2, comment. (n.2) (1997).32 In other words, if the district court had grouped the money laundering and gratuity charges together, the guidelines would have directly prohibited an abuse of trust enhancement under § 3B1.3. By using the abuse of trust involved in the “related” bribery conduct to enhance the money laundering charges, the district court would be indirectly doing what § 2C1.2 of the guidelines directly prohibits.
Second, we find there is no evidence to support the assertion that the defendants’ positions as public officials “significantly facilitated” the acts of money laundering. The indictment charges that, on nine separate occasions, Clark gave checks from Northern Drywall to Wadena, who subsequently deposited the checks into his personal accounts at the First National Bank of Detroit Lakes, and the Farmers State Bank of Winger. There is no proof presented that the banks or the bank tellers knew Wadena was chair-
In sum, the government has failed to carry its burden of proving Wadena and Clark‘s positions significantly facilitated the commission or concealment of the money-laundering activities. For this reason, we reverse the two-level abuse of discretion enhancement under § 3B1.3, and remand Clark and Wadena‘s sentences to the district court.
The judgments of conviction for each defendant are AFFIRMED. The sentences of Clark and Wadena are remanded to the district court for resentencing.33
BEAM, Circuit Judge, concurring and, in part, dissenting.
I concur in the result reached by the court in Part II and, with qualification,34 Part IV. I disagree, however, with the court‘s conclusion in Part III that we have jurisdiction to prosecute Clark and Rawley for a violation of
In asserting subject-matter jurisdiction under this general federal criminal law, the court not only disregards the longstanding federal policy of advancing tribal self-determination, but blatantly fails to apply circuit precedent. We have held that “if a particular Indian right or policy is infringed by a general federal criminal law, that law will be held not to apply to Indians on reservations
Jurisdiction over a dispute arising on an Indian reservation “is governed by a complex patchwork of federal, state, and tribal law.” Duro v. Reina, 495 U.S. 676, 680 n. 1, 110 S.Ct. 2053, 109 L.Ed.2d 693 (1990). Because Indian tribes pre-existed the Constitution, they “still possess those aspects of sovereignty not withdrawn by treaty or statute, or by implication as a necessary result of their dependent status.” United States v. Wheeler, 435 U.S. 313, 323, 98 S.Ct. 1079, 55 L.Ed.2d 303 (1978). One aspect of this retained sovereignty includes the power to
The court correctly finds no basis for jurisdiction in the Indian Country Crimes Act and the Indian Major Crimes Act. See
Assuming that Congress intended to include American Indians within the scope of laws which, by their terms, are applicable to all persons, we have applied general federal laws to tribal crimes. See, e.g., Stone v. United States, 506 F.2d 561, 563 (8th Cir. 1974). However, we have refused to extend this source of jurisdiction to purely internal tribal matters because that would intrude upon tribal sovereignty. See, e.g., United States v. White, 508 F.2d 453, 455 (8th Cir. 1974) (stating that “areas traditionally left to tribal self-government, those most often the subject of treaties, have enjoyed an exception from the general rule that congressional enactments, in terms applying to all persons, includes Indians and their property interests“); see also Felix S. Cohen, Felix S. Cohen‘s Handbook of Federal Indian Law, 286 (1982 ed.) (stating that “the Supreme Court has consistently recognized the unique status of tribes, Indians, and their lands, and has required that the congressional purpose of a conflicting law clearly require that it
The court mischaracterizes this inquiry by looking to whether there is a tribal right to use the election system fraudulently in order to maintain a position of power. Ante at 846. Obviously, no such right exists. What the court fails to appreciate, however, is that the tribal right at issue is the exclusive right to prosecute tribal election offenses, which is necessary to maintain political integrity. See Montana v. United States, 450 U.S. 544, 566, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981) (discussing the inherent tribal power to regulate activities that “threatens or has some direct effect on the political integrity . . . of the tribe“). Intently focused on abating the corrupt actions of a few individuals, the court overlooks the important interest of the tribe in abating corruption within its own government. Monitoring tribal elections is an area traditionally left to tribal government and any contrary holding would violate the federal policy of respecting tribal sovereignty in the absence of express congressional authority.
Of course, Congress could remove this aspect of sovereignty and interject federal election policies and remedies into tribal elections. The wisdom of such a decision is best left to Congress, which is obviously better positioned to determine its potential impact. Rather than deferring to Congress, the court recklessly adopts a newly minted balancing test, not fairly supported as near as I can find anywhere within the recorded annals of American Indian litigation, weighing federal interests against tribal interests. See ante at 842. The result is a vague and incoherent test for jurisdiction. We should simply limit our inquiry to whether, on a case-by-case basis, the application of a general criminal law would infringe on tribal sovereignty. See Blue, 722 F.2d at 385.
I recognize that the oppression of tribal voting rights constitutes a fundamental assault on a democratic society and a serious violation of the civil rights of tribal members. Nonetheless, only Congress can remove this
Even if we did have jurisdiction, I would disagree with the court‘s unprecedented extension of a federal election statute (
Similarly, we have applied section 241 to a local election, but only where the conspirators destroyed absentee ballots that also included votes that had been cast for federal candidates. See United States v. Townsley, 843 F.2d 1070, 1080 (8th Cir.1988). Contrary to the court‘s reading of Townsley, see ante at 844-45, we have never endorsed the application of section 241 to purely local, much less tribal, elections. We cautioned that “we do not reach the question left undecided by the Supreme Court—whether
Accordingly, I respectfully dissent from Part III of the court‘s decision.
DONALD P. LAY
UNITED STATES CIRCUIT JUDGE