|
 |
IN
THE UNITED STATES COURT OF APPEALS United States of America, Appellee, v. Mark A. Morgan, Appellant. On
Appeal from the United States District Court No. 99-385-CV-W-5 Hon. Gary A. Fenner - BRIEF FOR APPELLANT - R.
Stan Mortenson Attorneys for Appellant Mark A. Morgan No. 99-2798 SUMMARY OF THE CASE This case concerns the constitutional limits on the federal government to punish purely local conduct. Mr. Morgan pleaded guilty to two counts of a federal indictment charging him under 18 U.S.C. § 666 with conspiring to bribe a Kansas City Councilman to influence his vote on two local ordinances. See Addendum to Appellant’s Brief (“Add.”) 13-24; Joint Appendix (“J.A.”) 54-60, 63-67. The government has never claimed that Mr. Morgan’s conduct in any way threatened “the integrity and proper operation of [any] federal program.” Salinas v. United States, 522 U.S. 52, 61 (1997). Indeed, in stating the factual basis for Mr. Morgan’s guilty plea, the government explicitly denied that any federal funds were involved in the local projects that were the subjects of the bribery schemes. Add. 25-26; J.A. 95-96. A first principle of our federal system is that “the States possess primary authority for defining and enforcing the criminal law.” United States v. Delpit, 94 F.3d 1134, 1149 (8th Cir. 1996). Because a regulation enacted under Congress’ spending authority is valid only if related to the federal interest in a particular program, South Dakota v. Dole, 483 U.S. 203, 206-08 (1987), the application of Section 666 in a case is constitutional only if there is “some connection between a bribe and a risk to the integrity of [a] federally funded program.” United States v. Santopietro, 166 F.3d 88, 93 (2d Cir. 1999). In this case there is “no connection whatsoever between the alleged conduct and either the federal funds that conferred jurisdiction, or the programs those funds authorized,” and thus Section 666 was unconstitutionally applied to Mr. Morgan. United States v. McCormack, 31 F. Supp. 2d 176, 186, 189 (D. Mass. 1998); United States v. Zwick, 1999 U.S. App. LEXIS 32550 *38 (3d Cir. Dec. 15, 1999). Mr. Morgan’s conduct was beyond the power of the federal government to proscribe; he is, therefore, actually innocent and is eligible for habeas relief notwithstanding the fact that he did not appeal his conviction. Latorre v. United States, 193 F.3d 1035 (8th Cir. 1999). Because this case presents a novel and important question of constitutional law, argument should be heard. Twenty minutes per side should be sufficient for presentation of the issues. JURISDICTION This is an appeal from a final judgment denying the motion of Mark A. Morgan under 28 U.S.C. § 2255 to vacate his criminal conviction and sentence. Mr. Morgan pleaded guilty to two counts of conspiring to bribe a public official and on April 21, 1998, was sentenced to an eighteen-month prison term, followed by a two-year term of supervised release. J.A. 106-08. He did not appeal. On April 12, 1999, Mr. Morgan timely filed a motion to vacate his conviction and sentence under 28 U.S.C. § 2555. See J.A. 2. The district court had jurisdiction over Mr. Morgan’s motion under 28 U.S.C. § 1331. On June 14, 1999, the district court denied Mr. Morgan’s Section 2255 motion. Mr. Morgan timely filed a notice of appeal on June 23, 1999. J.A. 125. See generally Fed. R. App. P. 4(a)(1). On December 14, 1999, this Court granted Mr. Morgan a certificate of appealability. J.A. 126. This Court has jurisdiction under 28 U.S.C. § 1291. See generally Brown v. Caspari, 186 F.3d 1011, 1012 (8th Cir. 1999). QUESTIONS PRESENTED In accordance with this Court’s certificate of appealability (J.A. 126), this case presents the following two questions:
STATEMENT OF THE CASE Mr. Morgan pleaded guilty to two counts of conspiring to bribe a public official in violation of 18 U.S.C. § 666 and was sentenced to a term of eighteen months’ imprisonment to be followed by two years’ supervised release. J.A. 106-08. Within one year, Mr. Morgan timely filed a motion to vacate his conviction and sentence pursuant to 28 U.S.C. § 2255, arguing that Section 666 was unconstitutional as applied to his case because his conduct did not threaten the integrity or proper operation of any federal program. On June 14, 1999, the district court denied his motion as procedurally barred because he had not appealed his conviction, and denied it on the merits because Section 666 “integrate[s]” within its language a federal nexus that ensures it is constitutionally applied in all cases. Add. 9-11; J.A. 121-123. This appeal followed. STATEMENT OF FACTS 1. The Charged Offense Conduct. Mark A. Morgan is a real-estate developer in Kansas City. In successive indictments, Mr. Morgan and two co-defendants were charged with participating in two schemes to bribe a Kansas City, Missouri city councilman to influence his votes on two local ordinances. The first charged conspiracy concerned a local ordinance rezoning land adjacent to the Line Creek Parkway in Kansas City to facilitate the construction of a single-family housing development being developed by Mr. Morgan and others (the “Line Creek Parkway ordinance”). According to the superseding indictment, in the Summer of 1992, Councilman Michael B. Hernandez indirectly solicited a $20,000 payment from Mr. Morgan in exchange for his vote to eliminate a condition of the Line Creek Parkway ordinance that would have required the developers to pay half the cost of building the Parkway. With Councilman Hernandez’s vote, the City Council eventually enacted a substitute ordinance omitting that condition. The superseding indictment alleged that Mr. Morgan then arranged for the $20,000 to be paid, through a third party, to charities designated by Councilman Hernandez. Add. 13-19; J.A. 54-60. Councilman Hernandez later converted the money to his own use. The second charged conspiracy involved a local ordinance authorizing the City to purchase land owned by Mr. Morgan and his co-defendants for a Water Department facility near Barry Road (the “Barry Road ordinance”). According to the superseding indictment, the City Council had decided to postpone the purchase because of neighborhood opposition to the development of the site. However, after one of Mr. Morgan’s co-defendants offered Councilman Hernandez a $50,000 bribe in January 1993, the Councilman revived the process and shepherded the Barry Road ordinance through the City Council. The superseding indictment charged that after the City Council had enacted the ordinance, Mr. Morgan participated in the payment of $50,000, again through a third party, to a charity selected by Councilman Hernandez. Add. 20-24; J.A. 63-67. Again, Councilman Hernandez later converted the money to his own use. 2. The Initial Indictment and Motion To Dismiss. On July 25, 1995, a federal grand jury indicted Mr. Morgan and two co-defendants, charging them with two counts of conspiring to bribe a public official (in violation of 18 U.S.C. § 371), two counts of federal-program bribery (18 U.S.C. § 666), and six counts of money laundering (18 U.S.C. §§ 1956 and 1957). Mr. Morgan entered a plea of not guilty and moved to dismiss the indictment. He argued, among other things, that both the United States Constitution and Section 666 itself require the government to demonstrate a connection between the alleged bribes and federal-program funds received by Kansas City. On November 15, 1995, Judge Joseph E. Stevens, Jr. adopted the Report and Recommendation of Magistrate Judge Robert E. Larsen and dismissed the six money-laundering counts, but held that “there is no constitutional requirement that the government show a nexus between the federal funds and the alleged incidents of bribery.” J.A. 51. Accordingly, the court declined to dismiss the bribery and conspiracy counts.[1] Id. 3. The Superseding Indictment and Motion to Dismiss. Almost two years later, on July 17, 1997, the grand jury returned a nine-count superseding indictment against Mr. Morgan and his co-defendants. J.A. 53. Although the underlying factual allegations were the same as those set forth in the initial indictment, the superseding indictment charged seven counts of federal-program bribery under Section 666 instead of only two. As relevant here, Section 666 prohibits the solicitation or payment of bribes to agents of state or local governments in connection with any government “business, transaction, or series of transactions” valued at $5,000 or more (18 U.S.C. § 666(a)) if the government “receives, in any one year period, benefits in excess of $10,000 under a Federal program . . . .” § 666(b). The statute also applies to non-governmental “organization[s]” that receive $10,000 in federal benefits. Id. The superseding indictment alleged that Councilman Hernandez was an “agent” of the City of Kansas City, that the City of Kansas City was a “local government,” and – most importantly – that “[t]he City of Kansas City, Missouri, received federal benefits of over $10,000 under Federal programs involving grants, contracts, subsidies, loans, guarantees, insurance or other forms of assistance” during the relevant period. Add. 13; J.A. 54. See generally 18 U.S.C. § 666(b), (d)(1), (d)(3). The superseding indictment contained no other allegations about federal funding or programs. See J.A. 53-68. Mr. Morgan again moved to dismiss the Section 666 charges as unconstitutional because the government had failed to allege that the bribes had in any way threatened the integrity of federal-program funds. Magistrate Judge Larsen issued a Report and Recommendation finding that “the enactment of § 666 was a proper exercise of Congress’ power under the Spending Power” (J.A. 75) and recommending that the motion be denied. Mr. Morgan filed a timely objection to Magistrate Judge Larsen’s recommendation. J.A. 23. Because the case was resolved before trial, Judge Stevens never addressed Mr. Morgan’s motion to dismiss the superseding indictment. 4. Mr. Morgan’s Guilty Plea And Its Factual Basis. On the eve of trial, Mr. Morgan agreed to plead guilty to the superseding indictment’s two conspiracy counts in exchange for the government’s dismissal of the seven substantive program-bribery charges. Judge Stevens accepted Mr. Morgan’s guilty plea on October 23, 1997. During the change-of-plea hearing, Judge Stevens asked the government to specify what it would have proven if the case had gone to trial. The Assistant United States Attorney prosecuting the case described the alleged conspiracy and then turned to the jurisdictional requirements of Section 666 (Add. 25-26; J.A. 95-96) (emphasis added):
We would be able to prove the City of Kansas City, Missouri, received substantial funds, in the millions of dollars, during that fiscal year. During the remainder of the plea hearing and factual proffer, the government never asserted that any of the “millions of dollars” in federal-program funds received by the City of Kansas City were in any way affected by either the Line Creek Parkway or the Barry Road bribery conspiracies. Nor did it ever contend that the government would have proved that the conspiracies “threat[ened] . . . the integrity or operation of the federal program” through which those funds were dispensed. Salinas, 522 U.S. at 61. Instead the government relied solely on the fact that Kansas City – like thousands of other cities and towns – “received substantial funds . . . during that fiscal year.” Add. 26; J.A. 96. On April 21, 1998, Judge Stevens entered judgment and sentenced Mr. Morgan to eighteen months in prison followed by two years of supervised release, and ordered him to pay a fine of $40,000. Mr. Morgan was also assessed the costs of his confinement and supervision. J.A. 106-10. As an explicit condition of the plea agreement, Mr. Morgan was required to waive “his right to appeal any aspect of his conviction.” J.A. 78. Accordingly, Mr. Morgan did not appeal. 5. The Section 2255 Motion. On April 12, 1999, Mr. Morgan timely filed a motion to vacate his conviction and sentence under 28 U.S.C. § 2555. Mr. Morgan argued that “[t]he government neither alleged nor proved that the conduct for which [he] was indicted, convicted and sentenced had any connection with the expenditure of federal funds or posed any threat to the integrity and proper operation of a federal program.” Memorandum In Support of Motion of Mark A. Morgan to Vacate and Set Aside Sentence Pursuant to 28 U.S.C. § 2255, at 1. Accordingly, “Section 666 was unconstitutionally applied to his conduct.” Id. at 26. The government did not contest that Mr. Morgan’s conduct posed no threat to the integrity of federal funds or programs, and asserted that the requisite federal nexus was provided by Kansas City’s receipt of at least $10,000 in federal benefits. J.A. 113. Without holding a hearing, on June 14, 1999 Judge Gary A. Fenner denied the motion on two grounds. First, Judge Fenner concluded that the claim was procedurally barred because Mr. Morgan had not appealed the issue. Judge Fenner concluded that Mr. Morgan did not qualify for the “actual innocence” exception to that procedural bar because his challenge to the application of Section 666 was a “claim of legal error, rather than factual error.” Add. 9; J.A. 121. Second, Judge Fenner rejected the motion on the merits, finding that the necessary “federal ‘nexus’ [wa]s supplied by [Section 666’s] requirement that the government or agency received at least $10,000 in a year and involved a matter of a value of $5,000 or more.” Add. 11; J.A. 123. Mr. Morgan filed a timely notice of appeal on June 24, 1999. J.A. 125. After Judge Fenner denied a certificate of appealability on July 12 (J.A. 2), Mr. Morgan applied to this Court, which granted the certificate on December 14, 1999. J.A. 126. SUMMARY OF ARGUMENT This case raises fundamental “question[s] of how far Congress has gone, and, under the Constitution, may go” to punish purely local criminal activity. United States v. McCormack, 31 F. Supp. 2d 176, 177 (D. Mass. 1998). A first principle of our federal system is that “the States possess primary authority for defining and enforcing the criminal law,” United States v. Delpit, 94 F.3d 1134, 1149 (8th Cir. 1996), and so Congress may exercise criminal jurisdiction only to the extent authorized by a specific provision of the Constitution. Because a regulation enacted under Congress’ spending authority is valid only if related to the federal interest in a particular program, South Dakota v. Dole, 483 U.S. 203, 206-08 (1987), Section 666 may be constitutionally applied only if there is “some connection between a bribe and a risk to the integrity of [a] federally funded program.” United States v. Santopietro, 166 F.3d 88, 93 (2d Cir. 1999). The bribery conspiracies at issue here involved the votes of a municipal official on local zoning and property ordinances, which are “matter[s] of paramount local concern.” Gardner v. Baltimore Mayor, 969 F.2d 63, 69 (4th Cir. 1992). The government has never disputed that Mr. Morgan’s conduct involved no federal employees or agents, was unrelated to any federal-program funds, and undermined no federal programs. Compare, e.g., McCormack, 31 F. Supp. 2d at 186 (finding Section 666 unconstitutional as applied to a case “involv[ing] no connection whatsoever between the alleged conduct and either the federal funds that conferred jurisdiction, or the programs those funds authorized”). Neither the superseding indictment, nor the prosecution’s factual proffer, nor the defendant’s statements during his change of plea – the only factual sources available to the District Court below – indicated that the two bribery schemes in any way threatened the integrity of federal funds or programs. Instead the government relied (and relies) solely on the fact that Kansas City “received substantial funds . . . during that fiscal year.” Add. 26; J.A. 96, 113. Compare Santopietro, 166 F.3d at 93 (Government may not “use section 666(a)(1)(b) to prosecute a bribe paid to a city’s meat inspector . . . just because the city’s parks department had received a federal grant of $10,000”). Because here there is “no connection whatsoever between the alleged conduct and either the federal funds that conferred jurisdiction, or the programs those funds authorized,” Section 666 was unconstitutionally applied to Mr. Morgan. McCormack, 31 F. Supp. 2d at 186, 189; accord United States v. Zwick, 1999 U.S. App. LEXIS 32550, *38 (3d Cir. Dec. 15, 1999). The proper response to the bribery of Councilman Hernandez is a matter that our Constitution entrusts to the State of Missouri. Federal courts will entertain on habeas the procedurally defaulted claim of a defendant who pleaded guilty if the defendant can demonstrate that he is “probably” actually innocent. Bousley v. United States, 523 U.S. 614, 623 (1998); Latorre v. United States, 193 F.3d 1035 (8th Cir. 1999). Mr. Morgan’s claim that his conduct is “beyond the power of the criminal law-making authority to proscribe” (Bousley, 523 U.S. at 620 (internal quotations and citations omitted)) is quintessentially a claim of actual innocence. Thus, “[Section] 2255 is available for a case in which the defendant argues that the conduct for which he was convicted never rose to the level of a federal offense.” Howard v. United States, 135 F.3d 506, 508 (7th Cir.), cert. denied, 525 U.S. 832 (1998). ARGUMENT I.SECTION 666 MAY NOT CONSTITUTIONALLY BE APPLIED TO PURELY LOCAL CRIMINAL ACTIVITY The District Court relied on two rationales in rejecting Mr. Morgan’s as-applied challenge to the constitutionality of Section 666. First, the District Court held that the necessary “federal interest” to justify application of Section 666 “is integrated with the language of the statute” (Add. 11; J.A. 123) by its textual “requirement that the government or agency receive[] at least $10,000 in a year and involve[] a matter of value of $5,000 or more.” Id. Thus, Section 666 can never be unconstitutionally applied because in any application the transaction is a substantial one and the government, agency, or organization has received the requisite amount of federal funding. Second, the District Court concluded – without the benefit of a hearing, and although both the indictment and the factual proffer were silent on the subject – that Councilman Hernandez “had authority over [City] policy,” and that therefore Mr. Morgan’s conduct “posed a threat to the integrity and proper operation of programs supported by federal funds by virtue of Mr. Hernandez’s ability to influence [City] funds and programs” receiving federal funds. Id. Judge Fenner did not hold an evidentiary hearing. Accordingly, both those determinations are reviewed de novo, and this Court may “affirm[] only if the motion, files, and record conclusively show the movant is not entitled to relief.” Latorre v. United States, 193 F.3d 1035, 1038 (8th Cir. 1999) (emphasis added); United States v. Duke, 50 F.3d 571, 577 (8th Cir. 1995). Because that high standard has not been satisfied in this case, the judgment must be reversed. A. The Constitution Limits the Federal Government’s Ability to Punish Crime Using the Spending Power A bedrock principle of constitutional law is that “[o]ur Constitution is a charter for a federal government of limited powers, and under this charter the ‘States possess primary authority for defining and enforcing the criminal law.’” United States v. Delpit, 94 F.3d 1134, 1149 (8th Cir. 1996) (quoting Engle v. Isaac, 456 U.S. 107, 128 (1982)); Brecht v. Abrahamson, 507 U.S. 619, 635 (1993). The division of authority between the federal and state governments “secures to citizens the liberties that derive from the diffusion of sovereign power” New York v. United States, 505 U.S. 144, 181 (1992) (internal quotations omitted), and serves as the primary bulwark in our constitutional system against “the risk of tyranny and abuse” by either level of government. Gregory v. Ashcroft, 501 U.S. 452, 458 (1991). Accordingly, the federal government may exercise criminal jurisdiction only to the extent authorized by a specific provision of the Constitution. While Congress may “act[] within the scope of [its] delegated powers [to] create offenses against the United States,” Screws v. United States, 325 U.S. 91, 109 (1945) (plurality opinion), jurists and commentators have warned of the dangers of allowing the federal government expansive power to criminalize conduct. On the purely practical level, federalization of crime “[i]ncurs unnecessary expense” because state and local law enforcement is “far more cost-effective”; it “[u]ndermines state experimentation” into alternative methods of attacking crime; and it shifts accountability from the state and local officials who actually prosecute the vast majority (95%) of crimes.[2] But more fundamentally, “[w]hen Congress criminalizes conduct already denounced as criminal by the States, it effects a ‘change in the sensitive relation between federal and state criminal jurisdiction.’” United States v. Lopez, 514 U.S. 549, 561 n.3 (1995) (quoting United States v. Enmons, 410 U.S. 396, 411-412 (1973) (internal quotation omitted). The Chief Justice has thus observed that “[t]he trend to federalize crimes that traditionally have been handled in state courts . . . threatens to change entirely the nature of our federal system.” William H. Rehnquist, “The 1998 Year-End Report of the Federal Judiciary,” The Third Branch, Jan. 1999. Numerous judicial and professional commissions have echoed those concerns.[3] To avoid upsetting the delicate federal-state balance, courts in the first instance will construe a statute against federalization. Gregory, 501 U.S. at 460-61; United States v. Bass, 404 U.S. 336, 349 (1971) (“we will not be quick to assume that Congress has meant to effect a significant change in the sensitive relation between federal and state criminal jurisdiction”); United States v. Frega, 933 F. Supp. 1536, 1540 (S.D. Cal. 1996). But where Congress has exceeded its delegated powers to criminalize conduct, the courts must not hesitate to strike down the offending provision. See, e.g., Lopez, 514 U.S. at 567-68; id. at 578 (Kennedy, J., concurring); McCormack, 31 F. Supp. 2d at 188-89; cf. United States v. Archer, 486 F.2d 670, 678 (2d Cir. 1973) (Friendly, J.) (suggesting courts may “dismiss a prosecution as an abuse of federal power” if it exceeds the scope of valid federal interests). In enacting Section 666, Congress purported to act pursuant to its power under the Spending Clause. United States v. Zwick, 1999 U.S. App. LEXIS 32550, *38 (3d Cir. Dec. 15, 1999); McCormack, 31 F. Supp. 2d at 187-188. See generally U.S. Const., Art. I, § 8, cl. 1 (empowering Congress “to pay the Debts and provide for the . . . general Welfare of the United States”). Thus the jurisdictional “hook” that transforms an act of local bribery into a federal offense is the presence, somewhere, of “benefits in excess of $10,000 under a Federal program,” 18 U.S.C. § 666(b), rather than any affect on interstate commerce. Like Congress’ Commerce Clause authority, compare Lopez, 514 U.S. at 558-59, “[t]he spending power is of course not unlimited, but is instead subject to several general restrictions . . . .” South Dakota v. Dole, 483 U.S. 203, 207 (1987) (citation omitted). The Court has outlined four such restrictions on regulations enacted under the spending power: (1) they must be in furtherance of the general welfare; (2) Congress must spell out any conditions placed on spending unambiguously; (3) those regulations must not violate other independent constitutional restrictions on government activity; and – most relevant here – (4) any regulations “must” (New York, 505 U.S. at 167) be related “to the federal interest in [the] particular national projects or programs” at issue. Dole, 483 U.S. at 207-08; id. at 213 (O’Connor, J., dissenting); Zwick, 1999 U.S. App. LEXIS 32550, *38 (“legislation regulating behavior of entities receiving federal funds must . . . be based upon a federal interest in the particular conduct”); McCormack, 31 F. Supp. 2d at 187-88. The courts must carefully police these limitations on a case-by-case basis lest “the spending power . . . render academic the Constitution’s other grants and limits of federal authority.” New York, 505 U.S. at 167. See generally Franklin v. Gwinnett County Public Schools, 503 U.S. 60, 74 (1992) (declining to allow award of damages under Title IX in cases involving unintentional discrimination because conduct does not afford grant recipient adequate notice of liability); Commonwealth of Virginia Dep’t of Educ. v. Riley, 106 F.3d 559, 560 (4th Cir. 1997) (en banc) (per curiam) (Department of Education lacked authority under Spending Clause to condition Virginia’s receipt of IDEA funding on the continued provision of free education to students suspended or expelled for misconduct). B. Because Mr. Morgan’s Conduct Did Not Threaten the Integrity of Federal Fund or Programs, Section 666 Is Unconstitutional As Applied to This Case Congress clearly identified the federal interest it hoped to further by enacting Section 666: the “interest in assuring the integrity of [federal] program funds.” S. Rep. No. 225, 98th Cong., 2d Sess. 369 (1983), reprinted in 1984 U.S. Code Cong. & Admin. News 3182, 3510; id. at 370 (“the purpose of this section [is] to protect the integrity of the vast sums of money distributed through Federal programs”); see also McCormack, 31 F. Supp. 2d at 188 (“The stated purpose for enacting § 666(a) is to protect the ‘integrity of . . . program funds from theft, embezzlement and acts of bribery.’”); United States v. Wyncoop, 11 F.3d 119, 123 (9th Cir. 1993) (“The statute . . . is not intended to do anything except protect the integrity of federal funds.”). Thus, before the government may seek to enforce the provisions of Section 666, it must show that the prosecution is “relat[ed] to the purpose of the federal [program],” New York, 505 U.S. at 167, that is, that the bribery in question threatened the integrity of federal funds. Congress itself suggested this requirement in stating that Section 666 was enacted to “vindicate significant acts of . . . bribery involving Federal monies.” S. Rep. No. 225 at 369 (emphasis added). 1. The District Court Erred In Concluding that Section 666 Would Be Constitutional As Applied In Every Case The District Court concluded that Section 666 was inherently incapable of unconstitutional application because the requisite “federal ‘nexus’ is supplied by the [textual] requirement that the government or agency received at least $10,000 in a year and [the bribe] involved a matter of a value of $5,000 or more.” Add. 11; J.A. 123. But those bare requirements provide no guarantee whatsoever that particular acts of bribery will be meaningfully “relat[ed] to the purpose” (New York, 505 U.S. at 167) of safeguarding the integrity of federal funds. To begin with, the statute includes within its sweep a multitude of governments and organizations: “All states and thousands of cities, towns, counties and special districts receive federal funds,” many in the requisite amounts. George D. Brown, Stealth Statute – Corruption, the Spending Power, and The Rise of 18 U.S.C. § 666, 73 Notre Dame L. Rev. 247, 276 and nn. 236-44 (1998). “[A]lmost every organization in one way or another receives remote benefits . . . in excess of $10,000 under a federal program.” United States v. LaHue, 998 F. Supp. 1182, 1192 (D. Kan. 1992), aff’d, 170 F.3d 1026 (10th Cir. 1999). The statute makes no effort to limit its sweep to agents of such entities who have authority over – or even access to – federal funds. Nor does the statute contain any textual requirement that the bribe given have any relationship with the federal benefits the entity received.[4] Thus “any corrupt act committed by a[n agent] . . . somehow meeting the $5,000 value requirement, could now fall within the jurisdiction of the federal authorities, even if there were no connection to federal funds.” McCormack, 31 F. Supp. 2d at 186. The District Court’s interpretation thus would permit prosecution of “a bribe paid to a city’s meat inspector in connection with a substantial transaction just because the city’s parks department had received a federal grant of $10,000.” United States v. Santopietro, 166 F.3d 88, 93 (2d Cir. 1999) (holding such a prosecution would be prohibited); United States v. DeLaurentis, 2000 U.S. Dist. LEXIS 578, *17-25 (D.N.J. Jan. 27, 2000) (dismissing § 666 charges because bribe to retain liquor license insufficiently related to federal funds received to pay one additional police officer’s salary) (attached). Similarly, because “nearly every large grocery store chain directly receives more than $10,000 in food stamps as payment from customers” (LaHue, 998 F. Supp. at 1187), the District Court’s interpretation of the statute would permit the federal prosecution of a checkout clerk who stole $5,000 in cash or groceries under Section 666’s related embezzlement provisions. Id. (holding such a prosecution would be prohibited). See generally 18 U.S.C. § 666(a)(1)(A). Unsurprisingly, courts have held such conduct “surely . . . does not constitute federal program fraud.” LaHue, 998 F. Supp. at 1187. Under the District Court’s theory, Section 666 “would essentially become a general federal anti-corruption statute.” McCormack, 31 F. Supp. 2d at 186. Such an interpretation “broadens the range of activity criminalized by the statute and alters the existing balance of federal and state powers by encompassing acts already addressed under state law in which the federal government may have little interest.” Zwick, 1999 U.S. App. LEXIS 32550, *24-25. Such an expansive interpretation would run afoul the constitutional requirement that regulations enacted under the Spending Clause be “relat[ed] to the purpose of the federal [program].” New York, 505 U.S. at 167. To ensure that condition is met, numerous federal courts have held that Section 666 must be read to “require that the government prove a federal interest is implicated by the defendant’s offense conduct.” Zwick, 1999 U.S. App. LEXIS 32550, *39; Santopietro, 166 F.3d at 93 (caselaw “requires at least some connection between the bribe and a risk to the integrity of the federally funded program”); United States v. Foley, 73 F.3d 484, 490, 492 (2d Cir. 1996) (same); DeLaurentis, 2000 U.S. Dist. LEXIS 578, *17-25; Frega, 933 F. Supp. at 1542 (to satisfy statute must show federal funds “were corruptly administered, [or] were in danger of being corruptly administered”); see also McCormack, 31 F. Supp. 2d at 186 (collecting cases). Indeed, the Supreme Court has suggested such a limitation is constitutionally required. In Salinas v. United States, 522 U.S. 52 (1997), the Court faced statutory and constitutional challenges to the application of Section 666 to encompass bribery by a federal prisoner. The prisoner, who was housed at a county jail pursuant to a federal program to quarter prisoners at the facility, had bribed the supervising sheriff to allow him “contact visits” with women visitors. The Supreme Court concluded that the text of the statute “does not require the Government to prove federal funds were involved in the bribery transaction.” 522 U.S. at 60. While the Court also concluded that the statute was constitutional “as applied to the facts of this case,” id., it was careful to note that the statute survived the as-applied challenge because “[t]he preferential treatment accorded to [the federal prisoner] was a threat to the integrity and proper operation of the federal program” to house prisoners at the jail. Id. at 61. As the Second Circuit recently concluded, “Salinas may be read to indicate that the ‘threat to the integrity and proper operation of [a] federal program’ created by the corrupt activity is necessary to assure that the statute is not unconstitutionally applied.” Santopietro, 166 F.3d at 93 (quoting Salinas) (alterations in original; emphasis added). Indeed, every court to have passed on the question since Salinas has concluded that for federal prosecution to be constitutional under the Spending Clause the bribe in question must threaten the integrity of federal funds or programs. The Third Circuit recently has held that “[a]pplying § 666 to offense conduct, absent evidence of any federal interest, would appear to be an unconstitutional exercise of power under the Spending Clause.” Zwick, 1999 U.S. App. LEXIS 32550, *38 (emphasis added). The District Court for the District of Massachusetts likewise has held that it is unconstitutional to apply Section 666 to bribery unless the bribe threatened “the integrity of federal funds given to the [government entity] or . . . the programs those funds were intended to support.” McCormack, 31 F. Supp. at 188-89. 2. Section 666 Is Unconstitutional as Applied to the Facts of This Case Applying Section 666 to the facts of this case represents a vast federal intrusion into the traditional jurisdiction of the states. For any government, “the development of ethical standards and the policing of its own officials is an important aspect of a government’s exercise of sovereignty.” Brown, 73 Notre Dame L. Rev. at 300. The prosecution of acts of corruption at the municipal level is quintessentially a matter of local concern to be left to the state justice system, and thus “any federal enforcement chips away at state autonomy.” Id. at 301. As White House Counsel Charles Ruff, then Director of the Watergate Special Prosecution Force, observed:
Charles F.C. Ruff, Federal Prosecution of Local Corruption: A Case Study in the Making of Law Enforcement Policy, 65 Geo. L.J. 1171, 1215 (1977) (emphasis added). Because federal interests are so weak in this area of traditional state concern, Ruff concluded, the prosecution of local corruption is “perhaps the most sensitive area of potential federal-state conflict.” Id. at 1172 (emphasis added). Federal prosecution is especially offensive to federalism where – as here – the bribes were given to influence decisions on zoning and the disposition of property, which are “matter[s] of paramount local concern.” Gardner v. Baltimore Mayor, 969 F.2d 63, 69 (4th Cir. 1992); FM Props. Operating Co. v. City of Austin, 93 F.3d 167, 173 (5th Cir. 1996). See generally Lopez, 514 U.S. at 580-81 (Kennedy, J., concurring) (noting particular intrusiveness of federal crime covering possession of weapons in school, because, like crime, “education is a traditional concern of the States”). This is not even a case that “involve[s] the misappropriation of federal funds or interference in federal programs.” Ruff, 65 Geo. L.J. at 1215. Mr. Morgan’s conduct involved no federal employees or agents, was unrelated to any federal-program funds, and undermined no federal programs. Compare, e.g., McCormack, 31 F. Supp. 2d at 186 (“[T]his case involves no connection whatsoever between the alleged conduct and either the federal funds that conferred jurisdiction, or the programs those funds authorized.”). The indictment in this case did not allege that the two bribery schemes in any way threatened the integrity of federal benefits received by, or the functioning of federal programs administered by, the City of Kansas City. The indictment did not even allege that Councilman Hernandez had the ability to affect the City’s expenditure of federal funds. Nor did anything said during the change-of-plea hearing indicate the bribery schemes might have had any such affect. Indeed, the government has never contested that Mr. Morgan’s conduct in no way threatened, impeded, or jeopardized federal funds or the “integrity and proper operation of the federal program[s]” through which they were disbursed. See Salinas, 522 U.S. at 61. When Judge Stevens specifically asked whether either of the projects at issue involved federal funds, the government candidly conceded they did not. Add. 25-26; J.A. 95-96. Instead the government relied – and continues to rely – solely on the fact that Kansas City, like thousands of other cities and towns, “received substantial funds . . . during that fiscal year.” Add. 26; J.A. 96, 113. Compare Santopietro, 166 F.3d at 93 (“[E]ven after Salinas, [the Government may not] use section 666(a)(1)(b) to prosecute a bribe paid to a city’s meat inspector in connection with a substantial transaction just because the city’s parks department had received a federal grant of $10,000.”). In other words, Mr. Morgan’s alleged offense involved truly local, non-commercial activity which is beyond the power of the federal legislators to regulate and United States Attorneys to prosecute. Every case since Salinas that has addressed the constitutionality of applying Section 666 under such circumstances has held its use to be unconstitutional. McCormack involved a defendant indicted under Section 666(a)(2) for bribing a police officer in Malden, Massachusetts, to keep the Malden police from investigating him for various state-law offenses. In an exhaustive opinion, the court concluded that application of Section 666 under such circumstances exceeded Congress’ Spending Clause authority. After noting that the Supreme Court in Dole had required that federal intrusions predicated on the expenditure of federal funds be “related” to the federal interest in a program, and emphasizing that “the ‘relatedness’ limit must have some content,” the McCormack court concluded:
Id. at 189. Concluding that bribes paid to local police officers to prevent investigation of state-law crimes were not related to a “legitimate national problem” and did not threaten the integrity of federal-program funds, the court held that prosecution of the defendant’s conduct under Section 666 would violate the Constitution. Id. Even more compelling is the Third Circuit’s recent decision in United States v. Zwick. On facts virtually indistinguishable from these, the Third Circuit reversed the Section 666 conviction of a township commissioner who had solicited bribes primarily for favorable action on zoning matters. There, the township had received funds for “reimbursement for emergency snow removal and funding of a project to prevent stream bank erosion.” Zwick, 1999 U.S. App. LEXIS 32550, *41-42. Because “[t]hese uses bear no obvious connection to [the defendant’s] offense conduct, which involved [receiving bribes in exchange for] sewer access, use permits and landscaping performance bonds,” the court reversed his conviction and remanded for retrial. Id. at *42. Following Zwick, another court dismissed Section 666 charges because the bribe in question (to a local official for help in retaining a liquor license) was insufficiently related to federal money received by the local government to pay the salary of an additional police officer. DeLaurentis, 2000 U.S. Dist. LEXIS 578, *17-25. These authorities all point to the same conclusion in this case: because the government made no showing that Mr. Morgan’s conduct in any way threatened the integrity of federal funds or programs, Section 666 cannot constitutionally be applied here.[5] In this case, the District Court added as an afterthought the perfunctory conclusion that Mr. Morgan’s conduct threatened the integrity of federal programs by corrupting a city councilman who “had authority over the policy, practice and legislation of the City as it [a]ffected all city programs and expenditures” (Add. 11; J.A. 123), including, presumably, programs using federal subsidies. That conclusion is entitled to no deference. First, it was reached without the benefit of any evidentiary hearing, and thus under settled law is subject to de novo review. Latorre, 193 F.3d at 1038. Second, it is wholly unsupported by any evidence in the record. Neither the Superseding Indictment nor any representations during the change-of-plea hearing discussed Councilman Hernandez’s ability to affect City expenditures, or even identified the type of Federal funds the city received as types subject to discretionary spending decisions made by the City Council. Certain types of funding – reimbursement for emergency expenditures, funding to hire additional police officers, or funding for certain autonomous organizations – might be practically beyond the reach of city council members to affect. Cf. Zwick, 1999 U.S. App. LEXIS 32550, *41-42 (federal funds received by town for emergency snow removal and to prevent stream-bank erosion bore “no obvious connection” to bribes taken in connection with zoning matters). But more fundamentally, the District Court is wrong as a matter of law that a federal interest in the integrity of funds is implicated by bribery of a local official who is thereby corrupted and thus might later, in an unrelated case, act corruptly with respect to federal funds. This Court must reject this invitation to “pile inference upon inference in a manner that would bid fair to convert congressional authority under the [Spending] Clause to a general police power of the sort retained by the States.” Lopez, 514 U.S. at 567. The explosion of federal programs over the past thirty years guarantees that virtually every state and local official performs or might perform some auxiliary federal function. Federal funds are now so prevalent that virtually every state or local official – not to mention agents of nongovernmental organizations – has access to them. Brown, 73 Notre Dame L. Rev. at 276 and nn. 236-44. Because of corresponding expansions of the scope of federal criminal law, every state and local police officer down to municipal parking enforcement has the ability to make arrests for federal prosecutions. See Ruff, 65 Geo. L.J. at 1218. Thus, under the District Court’s theory, bribing a city officer to overlook a traffic offense would corrupt him so that during a later traffic stop he might accept a bribe from a drug dealer to ignore a suspicious package, indirectly implicating the integrity of a federal program. As Charles Ruff has noted, “something more than this putative effect on federal [interests] must exist before federal prosecution is warranted. If the theory of corruption as a unitary concept is taken to its logical extreme, it would require the federal prosecutor to serve as the guardian of local [government] integrity – a role that he is simply incapable of performing.” 65 Geo. L.J. at 1218. Such an interpretation would render Section 666 virtually limitless in application, making it “essentially . . . a general federal anti-corruption statute.” McCormack, 31 F. Supp. 2d at 186. C. Section 666’s Legislative History Confirms That There Is No Federal Interest In Targeting Conduct Unless It Threatens Federal Funds or the Integrity of a Federal Program A review of Section 666’s legislative history demonstrates that Congress perceived no federal interest in targeting local acts of bribery unless they threatened federal funds or the integrity of a federal program.[6] Section 666 was enacted for the explicit purpose of overruling specific opinions of the Courts of Appeals – United States v. Del Toro, 513 F.2d 656 (2d Cir. 1975); United States v. Mosley, 659 F.2d 812 (7th Cir. 1981); and United States v. Hinton, 683 F.2d 195 (7th Cir. 1982), aff’d sub nom. Dixson v. United States, 465 U.S. 482 (1984) – that had left gaps in the general federal bribery statute, 18 U.S.C. § 201, by holding that local government employees administering federal funds under federal programs did not qualify as “public officials” within its scope. See S. Rep. No. 225 at 369-70; see also Salinas, 522 U.S. 58-59; Foley, 73 F.3d at 489 (“Section 666 was enacted in an effort to fill these gaps.”). As set forth above, Congress specifically identified the federal interest at stake as “assuring the integrity of [Federal] program funds.” S. Rep. No. 225 at 369. However, Congress expressed no interest in reaching conduct that was not “related to the administration of [a federally funded] program.” S. Rep. No. 307, 97th Cong., 1st Sess. 726, 803 (1981).[7] Indeed, the Senate Report took pains to define the phrase “federal program” in Section 666(b) to require a “specific statutory scheme authorizing the Federal assistance in order to promote or achieve certain policy objectives. Thus, not every Federal contract or disbursement of funds [is] covered.” S. Rep. No. 225 at 370. “The legislative history reveals that . . . Congress . . . intended to limit the statute to be consistent with its underlying purpose to ‘protect the integrity of the vast sums of money distributed through federal programs from . . . undue influence by bribery.’” LaHue, 170 F.3d at 1030; Wyncoop, 11 F.3d at 123 (9th Cir. 1993) (“The statute . . . is not intended to do anything except protect the integrity of federal funds.”). That Section 666 was not designed to reach – and must not be construed to reach – conduct that does not substantially threaten the integrity of federal-program funds is further confirmed by Congress’ express statement that Section 666 was intended “to reach thefts and bribery in situations of the types involved in the Del Toro, Hinton, and Mosley cases.” S. Rep. No. 225 at 370. As the Third Circuit noted in construing Section 666 to apply only when conduct implicates the integrity of federal funds, Zwick, 1999 U.S. App. 32550, *32-33, in each of those three cases the defendant’s bribery had directly imperiled the integrity of federal-program funds. See Del Toro, 513 F.2d at 658-60 (administrator of federal program sought bribe in exchange for favorable consideration on federally-funded lease); Mosley, 659 F.2d at 813 (state employee paid with federal funds to administer federal job referral program solicited bribes from job seekers in exchange for preferential treatment); Hinton, 683 F.2d at 196 (officers of private organization “entirely sponsored by federal funds” solicited bribes in exchange for award of housing rehabilitation contracts). If even Congress saw no federal interest in penalizing acts of bribery with such an attenuated relationship to federal funds, the government is not in any position to assert a broader interest. “In traditionally sensitive areas, such as legislation affecting the federal balance,” courts will not countenance an expansion of federal authority without some “assur[ance] that the legislature has in fact faced . . . the critical matters involved . . . .” Bass, 404 U.S. at 349 (emphasis added); Riley, 106 F.3d at 566-67. Thus in such sensitive areas, the government may not seek to assert a broader federal interest than that asserted by the legislature because it necessarily involves going beyond the balance Congress struck. Because prosecutions under Section 666 must be limited to bribery that affects the integrity of federal program funds, Mr. Morgan’s conviction must be reversed. D. BECAUSE MR. MORGAN IS “ACTUALLY INNOCENT” OF ANY FEDERAL OFFENSE, HIS CLAIM IS NOT PROCEDURALLY BARRED The District Court’s primary basis for rejecting Mr. Morgan’s Section 2255 petition was that it was procedurally barred. Quoting the Supreme Court’s recent opinion in Bousley v. United States, 523 U.S. 614, 622 (1998), the District Court correctly noted that “‘where a defendant has procedurally defaulted a claim by failing to raise it on direct review, the claim may be raised in habeas only if the defendant can first demonstrate either “cause” and actual “prejudice,” . . . or that he is actually “innocent” . . . .’” Add. 8; J.A. 120. According to the District Court, Mr. Morgan’s argument that he had been convicted of an act that federal law did not (and could not) make criminal constituted a claim of legal rather than factual innocence. Add. 9-10; J.A. 121-22. That legal determination is reviewed de novo, and the Court may “affirm[] only if the motion, files, and record conclusively show the movant is not entitled to relief.” Latorre, 193 F.3d at 1038 (emphasis added); Duke, 50 F.3d at 577. It is well established that a defendant may seek collateral review of his conviction even if he has foregone a direct appeal if he can demonstrate that his conviction is a “miscarriage of justice”; in other words, that constitutional error “‘has probably resulted in the conviction of one who is actually innocent.’” Bousley, 523 U.S. at 623 (quoting Murray v. Carrier, 477 U.S. 478, 496 (1986)). See generally McCoy v. Norris, 125 F.3d 1186, 1189 (8th Cir.), cert. denied, 523 U.S. 1008 (1997). It is generally true that “a voluntary and intelligent plea of guilty made by an accused person . . . may not be collaterally attacked.” Mabry v. Johnson, 467 U.S. 504, 508 (1984). Similarly, because habeas review “will not be allowed to do service for an appeal,” Reed v. Farley, 512 U.S. 339, 354 (1994) (internal quotations omitted), failure to raise an issue on direct appeal ordinarily will bar its review on habeas. Neither of those general procedural bars applies, however, where the defendant asserts a claim of actual innocence. See, e.g., Bousley, 523 U.S. at 622; United States v. Apker, 174 F.3d 934, 938-39 (8th Cir. 1999).[8] Under such circumstances, the “overriding individual interest in doing justice” is sufficiently compelling to outweigh the countervailing policy interests – finality, comity, deference to state courts or federal trial courts – that animate procedural default rules. Schlup v. Delo, 513 U.S. 298, 322 (1995). “[P]rinciples of judicial finality, which the government urges and the district court observed, are irrelevant. . . . if a defendant’s ‘conviction and punishment are for an act that the law does not make criminal.’” United States v. Dashney, 52 F.3d 298, 299 (10th Cir. 1995) (quoting Davis v. United States, 417 U.S. 333, 346 (1974)); cf. Teague v. Lane, 489 U.S. 288, 310 (1989) (noting exception to nonretroactivity principle when new rule “place[s] certain kinds of primary conduct beyond the power of the law-making authority to proscribe”). The argument that a federal statute does not, or cannot, reach certain conduct is the paradigmatic example of an “actual innocence” claim: at bottom, the person is asserting that he has been convicted of an act which the federal government has not, or cannot make criminal. As the Supreme Court noted in Bousley, the determination that conduct is “beyond the power of the criminal law-making authority to proscribe, necessarily carr[ies] a significant risk that a defendant stands convicted of an act that the law does not make criminal.” Bousley, 523 U.S. at 620 (internal quotations and citations omitted; emphasis added). “There can be no room for doubt that” when a person has been convicted “for an act that the law does not make criminal,” the situation “‘inherently results in a complete miscarriage of justice’ and ‘present[s] exceptional circumstances’ that justify collateral relief under § 2255.” Davis, 417 U.S. at 346-47. Thus, “[Section] 2255 is available for a case in which the defendant argues that the conduct for which he was convicted never rose to the level of a federal offense.” Howard v. United States, 135 F.3d 506, 508 (7th Cir.), cert. denied, 525 U.S. 832 (1998); Woodruff v. United States, 131 F.3d 1238, 1243 (7th Cir. 1997) (habeas relief is available “where someone has actually pleaded guilty to conduct not made unlawful”), cert. denied, 524 U.S. 956 (1998); Camilo v. Beeler, 30 F. Supp. 2d 805, 810 (D.N.J. 1998) (interpretation of statute that “renders certain conduct no longer criminal” is “often the basis for a colorable showing of ‘actual innocence’”). The Supreme Court’s decision two Terms ago in Bousley is instructive. The petitioner in Bousley had pleaded guilty to “using” a firearm during and in relation to a drug trafficking offense under 18 U.S.C. § 924(c)(1) based on a showing that “guns in the petitioner’s bedroom were in close proximity to drugs [in his garage] and were readily accessible.” Bousley, 523 U.S. at 617. Bousley had appealed his sentence, but had not challenged the validity of his guilty plea. Id. He did, however, challenge the plea in a post-conviction Section 2255 motion, and while his appeal from the district court’s dismissal of that motion was pending, the Supreme Court held in Bailey v. United States, 516 U.S. 137 (1995), that “use” means “active employment of the firearm.” Id. at 144. Because the factual basis for Bousley’s plea did not appear to satisfy the requirement that the firearm be “active[ly] employ[ed],” the Court held that Bousley had made a colorable claim of actual innocence that would excuse his procedural default and permit federal courts to address his claim on the merits. The Court then remanded the case for an evidentiary hearing on whether the petitioner had actively employed a firearm. Id. at 623-24. Following Bousley, this Court has repeatedly instructed district courts to entertain procedurally defaulted Bailey claims. See, e.g., Latorre, supra; Hohn v. United States, 193 F.3d 921 (8th Cir. 1999); United States v. Hellbusch, 147 F.3d 782 (8th Cir. 1998); see also United States v. Garth, 188 F.3d 99, 114 (3d Cir. 1999) (claim that evidence did not reflect active use of firearm “support’s [petitioner’s] claim of ‘actual innocence’”). As this Court noted in Hohn, a petitioner who demonstrates that the conduct of which he was convicted was not, properly understood, a crime “is actually innocent.” Id. at 924. By the same token, Mr. Morgan’s guilty plea to a violation of Section 666 – a violation which, given the constitutional constraints on the statute’s reach, never occurred – is not a bar to the relief he now seeks. In determining whether a defendant is “actually innocent” of a crime to which he has pleaded guilty, “[t]he primary source of information . . . is the plea proffer record.” Latorre, 193 F.3d at 1038; cf. Bousley, 523 U.S. at 624 n.3 (suggesting use of factual proffers in making actual innocence inquiry). In that proffer, the government never claimed that it would have proved that Mr. Morgan’s conduct in any way threatened or impeded the integrity and proper operation of the federal programs through which Kansas City received federal funds. See Add. 25-26; J.A. 95-96. Indeed, when specifically asked whether the Line Creek Parkway project involved federal funds, the government candidly replied “No.” Id. Given the intervening decisions in Salinas, Zwick, McCormack, Santopietro, and DeLaurentis which establish the constitutional restrictions on the use of Section 666 to prosecute local offenses, Mr. Morgan is “actually innocent” of the crime to which he pleaded guilty, and this Court may consider the merits of his constitutional argument.[9] In rejecting his actual innocence claim without an evidentiary hearing, the District Court reasoned that Mr. Morgan was asserting a claim of legal innocence rather than factual innocence. Add. 9-10; J.A. 121-22. Citing this Court’s en banc opinion in Embrey v. Herschberger, 131 F.3d 739 (8th Cir. 1997) – a decision that predates Bousley – the District Court concluded that his claim would not excuse the procedural default and therefore was not cognizable on habeas. Add. 9; J.A. 121. That conclusion misapprehends the nature of Mr. Morgan’s claim and misconstrues this Court’s holding in Embrey. The petitioner in Embrey was arrested after he robbed a bank at gunpoint and then fled across state lines with a hostage. 131 F.3d at 739. Twenty years after being convicted of violating both the Federal Bank Robbery Act (18 U.S.C. § 2113) and the Federal Kidnapping Act (18 U.S.C. § 1201(a)(1)), Embrey argued that Congress intended the Bank Robbery Act to be a comprehensive act encompassing all robbery-related acts that, when charged, applied to the exclusion of all other statutes. Embrey did not claim that he was innocent of kidnapping, just that Congress intended the Bank Robbery Act to be the sole penalty for those who kidnap a person during the course of a bank robbery. 131 F.3d at 739-40. Because Embrey had repeatedly raised that claim before, this Court correctly held it to be procedurally barred, concluding that his claim “at bottom, [wa]s simply a legal not a factual one, and . . . the miscarriage of justice exception is concerned with actual as compared to legal innocence.” Embrey, 131 F.3d at 741 (internal quotation omitted).[10] To be sure, the law requires a defendant to raise a claim of “factual innocence” rather than “mere legal insufficiency” to excuse a procedural default. Bousley, 523 U.S. at 623. But that standard is designed to distinguish between a procedural error that requires reversal (“legal” innocence) and situations in which the defendant’s conduct did not actually constitute a crime (“factual” innocence). Rodriguez v. Johnson, 104 F.3d 694, 697 (5th Cir.), cert. denied, 520 U.S. 1267 (1997). Thus, Mr. Morgan’s claim that his conduct was “beyond the power of the [federal government] to proscribe” (Bousley, 523 U.S. at 620) is a “factual innocence” claim. Because the application of Section 666 to his conduct itself violated a higher law – the Constitution – Mr. Morgan did not violate federal law considered as a whole.[11] See Hohn, 193 F.3d at 924; Howard, 135 F.3d at 508; see also United States v. Sorrells, 145 F.3d 744, 751 (5th Cir. 1998) (“[T]o demonstrate ‘factual innocence’ . . . the petitioner need demonstrate no more than that he did not ‘use’ a firearm as that term is defined in Bailey.”) (internal quotation omitted); Rodriguez, 104 F.3d at 751 (because “the government presented no evidence that [defendant] ‘actively employed’ the gun . . . . [he] cannot be guilty of ‘using’ the firearm”) (emphasis added). Accordingly, Mr. Morgan’s petition is not procedurally barred. CONCLUSION The government has never contended that Mr. Morgan’s conduct in any way threatened the integrity or proper operation of any federal program. Nor would the record support any such claim. Even taking the indictment at face value and interpreting all evidence in the manner most favorable to the government, the record reflects at most an act of local corruption of the sort that has never been thought to implicate any federal interest. In the absence of any “connection between a bribe and a risk to the integrity of [a] federally funded program,” (Santopietro, 166 F.3d at 93), Section 666 cannot constitutionally be applied in this case. In the words of the McCormack court, “whatever other applications of § 666 may be constitutional, this one is not.” 31 F. Supp. 2d at 187. Affirmance in this case would be tantamount to granting the federal government a general police power that has been denied it by the Constitution, Lopez, 514 U.S. at 566, and condone an arrogation of traditional state authority of unprecedented breadth and intrusiveness. The judgment below must be reversed. Respectfully submitted. R.
Stan Mortenson Attorneys for Appellant Mark A. Morgan Dated: August 11, 2000 Notes: [1] The government filed a notice of appeal from that order and from an earlier order suppressing the statements of one of Mr. Morgan’s co-defendants. The government chose to pursue only the appeal from suppression order. This Court reversed that order in August 1996. See United States v. Morgan, 91 F.3d 1193 (8th Cir. 1996). [2] Edwin Meese III and Rhett DeHart, How Washington Subverts Your Local Sheriff, Heritage Institute Policy Review, Jan-Feb. 1996 (available online: http://www.policyreview.com/jan96/meese.html); ABA Task Force on the Federalization of Criminal Law, The Federalization of Criminal Law 18-19, 37, 43 (1998); see also Resolution IX, Conference of Chief Justices, Feb. 10, 1994 (quoted in Federalization of Criminal Law at 42) (recent federalization of traditionally state offenses has resulted in “the needless disruption of effective state and local enforcement efforts”); National Governors Association Policy HR-19, “Federalism and Criminal Justice” (1996) (quoted in Federalization of Criminal Law at 42) (“some attempts to expand federal criminal law into traditional state function . . . could undermine state and local anticrime efforts”); see also United States v. Lopez, 514 U.S. at 581-83 (Kennedy, J., concurring). [3] See, e.g., Commission on Structural Alternatives for the Federal Courts of Appeals, Final Report 6 (Dec. 18, 1998) (counseling “restraint in conferring new jurisdiction on the federal courts, particularly in areas traditionally covered by state law and served by state courts”); Committee on Long Range Planning of the Judicial Conference of the United States, Proposed Long-Range Plan for the Federal Courts 20 (Nov. 1994) (“As Congress continues to ‘federalize’ crimes previously prosecuted in the state courts, . . . the continued viability of judicial federalism is unquestionably at risk.”); Federalization of Criminal Law 27 (expanding federal jurisdiction “is contrary to the American wisdom against concentrating power in any one governmental entity”); id. at 55-56 (arguing that the health of our constitutional system of dual federalism depends on halting “inappropriate federalization”). [4] We continue to believe, as we argued in our original Motion to Dismiss in the District Court, that 18 U.S.C. § 666 is unconstitutional on its face because Congress’ spending power does not permit the federal government to expand its criminal jurisdiction simply by spreading federal funds throughout the land. In our view, the “contract” theory used to evaluate challenged federal regulations in spending-power cases, see Dole, supra, does not support the use of federal spending to manufacture criminal jurisdiction. Ordinarily, restrictions imposed under the Spending Clause only apply to grant recipients who are considered to voluntarily assent to them by accepting federal funding; thus, for example, “school officials may not be sued in their individual capacity under Title IX,” also enacted pursuant to Congress’ spending power, because “they are not grant recipients.” Kinman v. Omaha Public Sch. Dist., 171 F.3d 607, 611 (8th Cir. 1999). It is inherently problematic to extend federal restrictions on fund recipients under the “contract” theory to nonconsenting third parties such as Mr. Morgan, and we are unaware of any other attempt to impose criminal liability on individuals under the spending power. See generally David E. Engdahl, The Spending Power, 44 Duke L. J. 1, 86, 92 (1994) (it is incorrect to assume that federal criminal jurisdiction “should tag along after federal money like a hungry dog”); Brown, 73 Notre Dame L. Rev. at 292-93 (discussing constitutional basis of Section 666). While states may “contract” to have certain restrictions placed on themselves in exchange for federal funding, it is settled law that they cannot “contract” away their preeminence in defining criminal conduct: “State officials . . . cannot consent to the enlargement of the powers of Congress beyond those enumerated in the Constitution.” New York, 505 U.S. 182. If Congress may exploit the power of the purse to expand the reach of its federal prosecutors, then it is not clear that any principled line remains between those crimes that Congress may “federalize” and those it may not. It would be difficult “to posit any activity by an individual that Congress [would be] without power to regulate,” Lopez, 514 U.S. at 564, and “the spending power could render academic the Constitution’s other grants and limits of federal authority.” New York, 505 U.S. 167. [5] It is well established that to avoid unnecessary adjudication of constitutional questions, “‘federal statutes are to be so construed as to avoid serious doubt of their constitutionality.’” United States v. Garfinkel, 29 F.3d 451, 455 (8th Cir. 1994) (quoting CFTC v. Schor, 478 U.S. 833, 841 (1986)). Thus implicit within this Court’s inquiry into “whether the application of 18 U.S.C. Sec. 666 in this case was unconstitutional” (J.A. 126) is the necessarily antecedent question of whether the statute is susceptible of a narrowing construction that will render it constitutional. This Court therefore retains the option of joining the numerous federal courts that have interpreted the statute to “require that the government prove a federal interest is implicated by the defendant’s offense conduct.” Zwick, 1999 U.S. App. LEXIS 32550, *39; Santopietro, 166 F.3d at 93 (caselaw “requires at least some connection between the bribe and a risk to the integrity of the federally funded program”); United States v. Foley, 73 F.3d 484, 490, 492 (2d Cir. 1996) (same); DeLaurentis, 2000 U.S. Dist. LEXIS 578, *17; Frega, 933 F. Supp. at 1542 (to satisfy statute must show federal funds “were corruptly administered, [or] were in danger of being corruptly administered”); see also McCormack, 31 F. Supp. 2d at 186 (collecting cases). If this Court were to place such a narrowing construction on Section 666, Mr. Morgan would be actually innocent of the crime charged in the indictment, necessitating reversal of the District Court’s judgment. See Section II, infra. [6] Many recent federal court decisions have relied on Section 666’s legislative history in concluding that the statute’s reach is limited. See, e.g., Zwick, 1999 U.S. App. LEXIS 32550, *27 n.10 (“Examination of and references to the legislative history are not uncommon among the decisions that analyze § 666”) (collecting authorities); United States v. LaHue, 170 F.3d 1026, 1030 (10th Cir. 1999); United States v. Copeland, 143 F.3d 1439 (11th Cir. 1998); United States v. Cicco, 938 F.2d 441 (3d Cir. 1991); Foley, 73 F.3d at 489-90. [7] Senate Report No. 225, the main report on Section 666, specifically adopted “the discussion [of theft and bribery] at pages 726 and 803 of S. Rept. No. 97-1307 (97th Cong., 1st Sess.).” See S. Rep. No. 225 at 369 n.1. [8] Cf., e.g., United States v. Adesida, 129 F.3d 846 (6th Cir. 1997) (“If an indictment does not charge a cognizable federal offense, then a federal court lacks jurisdiction to try a defendant for violation of the offense. . . . Matters of jurisdiction may be raised at any time, because if a court lacks subject-matter jurisdiction, it does not have the power to hear the case.”), cert. denied, 523 U.S. 1112 (1998); United States v. O’Mara, 827 F. Supp. 1468, 1472 (C.D. Cal. 1993) (holding that constitutional challenge to federal gun statute was not procedurally barred under § 2255 because it was “jurisdictional”); United States v. Osiemi, 980 F.2d 344, 345 (5th Cir. 1993) (holding claim that indictment failed to charge an offense was not waived by guilty plea and could be raised for the first time in a Section 2255 petition because “such an error divests the court of jurisdiction”). [9] Both the government (Response to Motion to Vacate and Set Aside Sentence Pursuant to 28 U.S.C. § 2255 at 5-7) and the District Court (Add. 5-7; 117-119) discuss at great length Mr. Morgan’s concessions that the government “would be able to make [its] proof” (Add. 5; J.A. 119) and that he had “do[ne] those things” alleged. Id. Mr. Morgan’s statements during the plea colloquy do not affect his entitlement to relief as one “actually innocent” of the offense charged. Although Mr. Morgan – like Mr. Bousley – acknowledged doing the conduct that constituted the factual basis for the plea, see J.A. 89, 100-01, the defendant’s mere “agreement to the bare legal conclusion that he” had committed the crime “is insufficient to foreclose his claim of actual innocence.” Latorre, 193 F.3d at 1039. What matters is whether there is any evidence in the record to suggest that Mr. Morgan’s admitted conduct constituted a federal offense, that is, whether it in any way threatened the integrity and proper operation of the federal programs through which Kansas City received federal funds. There is no evidence in the record to support that conclusion. [10] To the extent this Court suggested in Embrey that the “actual innocence” exception was limited to cases in which the petitioner sought to introduce new evidence of his innocence erroneously excluded at trial, 131 F.3d at 741, that suggestion is invalid in light of Bousley and its progeny. The petitioner in Bousley did not present any “new evidence,” nor did he claim that evidence of his innocence had been incorrectly excluded. Instead, Bousley presented precisely the kind of actual-innocence claim that Mr. Morgan does: that a penal statute, properly construed, did not apply to the facts of his case. Since Bousley was decided, this Court has applied Bousley’s “actual innocence” analysis repeatedly without even mentioning Embrey, or insisting on the presentation of new evidence of innocence. See, e.g., Latorre, supra; Hohn, supra; Apker, 174 F.3d at 938-41; Hellbusch, supra. See generally Wabun-Inini v. Sessions, 900 F.2d 1234, 1241 n.4 (8th Cir. 1990) (“While an earlier decision is binding on this panel, we are compelled to follow intervening Supreme Court precedent.”). [11] The exception to normal procedural bar rules for conduct which is “beyond the power of the criminal law-making authority to proscribe” can be traced to Justice Harlan’s concurring opinion in Mackey v. United States, 401 U.S. 667, 693 (1971). To illustrate the principle, Justice Harlan cited cases involving convictions for symbolic flag burning, Street v. New York, 394 U.S. 576 (1969), interracial marriage, Loving v. Virginia, 388 U.S. 1 (1967), selling contraceptives to married couples, Griswold v. Connecticut, 381 U.S. 479 (1965), and privately possessing obscene materials, Stanley v. Georgia, 394 U.S. 557 (1969). It cannot be doubted that the defendants in those cases, although they performed the acts alleged, were “actually innocent” of any crime because the laws under which they had been convicted were in conflict the Constitution. The same is true in this case. |
