There is an interesting decision out of Chicago in which  Judge William Bauer (left) finds that a Chicago zoning inspector is innocent of federal bribery because the bribes were too modest to constitute the prescribed crime. Dominick Owens was convicted under a federal statute  for taking two $600 bribes to issue certificates of occupancy for four homes.  However, the federal law states a $5000 threshold and the court ruled that the value of the bribes fell below that definition. It is a curious bribery statute that effectively distinguishes between federal non-criminal and criminal bribes on the basis of their worth.

At the center of the case is a uniquely Chicago figure who worked as an “expediter.” For those of us from Chicago, someone known as an expediter is inherently suspicious. Here is how the court explained it:

Christoir McPhillip, the government cooperator in this case, was an acquaintance of Owens and an “expediter” —someone who performs the “legwork” of the zoning process on behalf of developers, contractors, and members of the public by making appointments, completing paperwork, and attending meetings with Zoning Department employees. Prior to the bribes at issue in this case, McPhillip had paid Owens bribes for the expedited issuance of certificates of occupancy on at least eight occasions.

In the summer of 2006, McPhillip became a confidential informant for the FBI and recorded phone calls and two In the summer of 2006, McPhillip became a confidential informant for the FBI and recorded phone calls and two meetings with Owens that led to the charges in this case. On July 10, 2006, McPhillip called Owens and said that he needed certificates of occupancy for two single- family homes. After learning the addresses of the two homes, Owens created computer records indicating that both homes had passed inspection; neither home, however, was ever inspected. The next day, after several recorded phone calls, McPhillip and Owens met on the side of a road, and McPhillip paid Owens $600 in cash. Owens acknowledged after his arrest that he accepted the money on July 11 “in exchange for issuing quick certificates of occupancy” and “expediting the process for [McPhillip].”

It is not clear why Owens was not prosecuted under state law. The federal program bribery statute prohibits agents of federally funded entities from soliciting or accepting “anything of value . . . intending to be influenced . . . in connection with any business, transaction, or series of transactions . . . involving any thing of value of $5,000 or more[.]” 18 U.S.C. § 666(a)(1)(B).

Many would ask why any bribe in a federal program is not sufficient for a prosecution and why more modest thieves effectively get a pass from prosecution. However, the case is particularly interesting in the discussion of how to value a bribe:

The easiest and most obvious way is by looking at how much someone in the market was willing to pay for the benefit and an official was willing to take to provide the benefit—the value of the bribe. This means that the bribe amount “may suffice as a proxy for value; at least it provides a floor for the valuation question.” Robinson, 663 F.3d at 275; see also United States v. Townsend, 630 F.3d 1003, 1012 (11th Cir. 2011) . . . This method of valuation does not help the Government meet its burden in this case; Owens’ acceptance of two $600 bribes in exchange for the issuance of the certificates falls far short of the $5,000 threshold.

Another approach to valuing the subject matter of the bribe is by looking to the value of the benefit the bribe-giver will receive if the bribe is successful. . . This method of valuation is not limited to the bribe-giver; courts may also consider the value of the benefit to related parties “with an immediate interest in the transaction.” See United States v. Hines, 541 F.3d 833, 837 (8th Cir. 2008).

The government advanced a “benefit-of-the-bribe approach” that was pretty loose and undefined — insisting that the mortgage values and construction costs for the homes, “coupled with the fact that homes could not be occupied without certificates” could be simply accepted as creating “the reasonable inference that the certificates involved something valued at $5,000 or more.” The Seventh Circuit didn’t buy it. The panel held “[s]uch a broad reading of “involving” would render the $5,000 threshold meaningless.” The result is that Owen accepted bribes but did not commit the federal crime of bribery — one lucky corrupted man.

A bizarre outcome to be sure but in my view the correct one. The problem is with the threshold amount not the court’s rather straightforward interpretation. The case proves the genius of E.F. Schumacher’s “Small is Beautiful” and the observation that “[t]he fundamental task is to achieve smallness within the large organization.” Just ask Dominick Owens.

Here is the opinion: United States v. Owens