United States v. Robert McCabe
4th Cir. (Published Opinion) (2024)
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Rule of Law:
An 'explicit' quid pro quo in bribery involving campaign contributions does not require an 'express' verbal or written agreement, and the 'stream-of-benefits' theory for bribery—where a public official receives a pattern of favors in exchange for a pattern of official actions on an 'as-needed basis'—remains a valid basis for prosecution post-McDonnell.
Facts:
- In 1993, Robert James McCabe was elected Sheriff of the City of Norfolk, Virginia, and served from 1994 through 2017, overseeing jail contracts for medical and food services, which were subject to a competitive bidding process.
- From approximately 1994 to 2016, McCabe maintained corrupt relationships with John Appleton, CEO of ABL Management, Inc. (food services), and Gerard Francis Boyle, CEO of Correct Care Solutions, LLC (CCS) (medical services).
- In 1995, McCabe provided Appleton with a major competitor's bid sheet for the Jail's food services contract, enabling ABL to modify its bid, undercut the competition, and secure the $1.3 million contract.
- Throughout his tenure, McCabe ensured ABL and CCS obtained lucrative contracts, modified contract terms to their financial benefit, and unilaterally extended contracts without competitive bidding, in exchange for substantial benefits.
- McCabe received numerous benefits from Appleton and Boyle, including campaign contributions, free catering, fully-expensed travel, entertainment expenses, and cash payments, totaling at least $261,000.
- In 2010, McCabe privately alerted Boyle that a competitor (Prime Care) would be the low bidder for the medical services contract; CCS then lowered its bid by $200,000, narrowly winning the contract.
- In 2016, Boyle gave McCabe a $12,500 check, falsely labeled 'Consulting,' which McCabe directed his friend James E. Baylor to deposit into Baylor's personal account, and Baylor then used $7,500 to fund fraudulent 'straw donor' campaign contributions to McCabe's mayoral campaign.
- McCabe failed to publicly disclose any of the payments and benefits received from Appleton and Boyle on his annual Statements of Economic Interests or campaign finance reports, as required by Virginia law.
Procedural Posture:
- On October 24, 2019, a federal grand jury in Norfolk indicted Sheriff McCabe and codefendant Boyle on 11 federal offenses.
- Sheriff McCabe filed pretrial motions to dismiss the indictment for failure to allege a quid pro quo and to dismiss the money laundering offense (Count Eleven).
- Codefendant Boyle filed a motion to sever his trial from Sheriff McCabe's.
- On March 19, 2020, the district court (Eastern District of Virginia) denied McCabe's motion to dismiss the indictment for failure to allege a quid pro quo and his motion to dismiss the money laundering offense, but dismissed the money laundering charge (Count Eleven) as to Boyle only.
- In April 2020, the district court granted a severance of trials for Sheriff McCabe and Boyle, ruling that McCabe's trial would be conducted first.
- Sheriff McCabe's jury trial began in Norfolk on August 3, 2021, and lasted about three weeks.
- During the trial, the prosecution sought to admit out-of-court statements (Hughey Statements) from a deceased Undersheriff; McCabe objected on grounds of hearsay (Rule 801(d)(2)(D)), unfair prejudice (Rule 403), and the Sixth Amendment Confrontation Clause, but the district court overruled these objections in a mid-trial Order.
- The trial concluded on August 24, 2021, with the jury finding McCabe guilty on all 11 counts.
- On May 20, 2022, the district court conducted McCabe's sentencing hearing, during which McCabe objected to an 18-level sentencing enhancement recommended by the Presentence Report (PSR), which was based on the $5.2 million in net profits made by ABL and CCS.
- The district court overruled McCabe's objection to the sentencing enhancement and sentenced him to 144 months in prison on each conviction, plus three years of supervised release, to run concurrently.
- Sheriff McCabe timely appealed his convictions and sentences to the United States Court of Appeals for the Fourth Circuit.
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Issue:
Did the district court commit plain error by instructing the jury that an 'explicit' quid pro quo in bribery involving campaign contributions need not be 'express' and that a 'thing of value' in a bribery scheme does not need to be correlated to a specific official action but can be given to retain a public official's services on an 'as-needed' basis, thereby undermining the requirements of McCormick and McDonnell?
Opinions:
Majority - Circuit Judge King
No, the district court did not commit plain error in its jury instructions. The court correctly instructed the jury that, while a quid pro quo in bribery involving campaign contributions must be 'explicit,' it does not need to be 'express.' The terms 'explicit' and 'express' have distinct meanings: 'explicit' refers to something obvious and unambiguous, while 'express' means reduced to words. The Supreme Court's McCormick decision requires an 'explicit promise or undertaking,' but not an 'express' agreement, to prevent corrupt public officials from escaping liability through 'knowing winks and nods.' Several sister circuits have consistently affirmed this distinction. Furthermore, the district court did not err in instructing the jury on the 'stream-of-benefits' theory of bribery. The McDonnell decision clarified the definition of an 'official act' but did not overturn the validity of the 'stream-of-benefits' theory, which allows bribery to be proven by an ongoing course of conduct where favors and gifts are exchanged for a pattern of official actions favorable to the donor on an 'as-needed basis.' This court's precedent in United States v. Jennings remains valid and harmonious with McDonnell. Lastly, the sentencing court correctly applied an 18-level enhancement based on the $5.2 million in estimated net profits ABL and CCS gained from the corrupt contracts, rather than the $261,000 McCabe personally received, as the Guidelines allow for the greater of the value of the bribe, the benefit received, or the loss to the government, and this approach is consistent with precedent like United States v. Kant. Therefore, McCabe's contentions of error lack merit, and his convictions and sentences are affirmed.
Analysis:
This case significantly clarifies the Fourth Circuit's interpretation of public corruption laws, particularly following the Supreme Court's decisions in McCormick and McDonnell. It reinforces that proving bribery does not require a verbal or written 'express' agreement, acknowledging the subtle nature of corrupt exchanges and making it harder for officials to avoid liability through indirect communications. By upholding the 'stream-of-benefits' theory, the decision provides a robust framework for prosecuting long-term, systemic corruption that involves continuous exchanges of favors for official influence, rather than just isolated transactions. Furthermore, its affirmation of using contractors' illicit profits, rather than just the direct bribe amount, for sentencing purposes establishes a broader measure of harm in public corruption cases, potentially leading to more severe penalties.
