Hillary Clinton’s Hobbs Act Conundrum

Recent reports indicate that the FBI is engaged in an ongoing investigation of the Clinton Foundation, with the notoriously-aggressive U.S. Attorney Preet Bharara in the U.S. Attorney’s Office in the Southern District of New York assisting (which, in an interesting twist, appears to be happening contrary to DOJ Main’s desires, suggesting frustration with the appearance of compromise at headquarters following Attorney General Lynch’s airplane rendezvous with Bill Clinton). This news – along with the IRS recently referring a request for an investigation of the Clinton Foundation to its Exempt Organizations Examinations Program at the behest of a congressional inquiry; Vice News Reporter’s Jason Leopold’s ongoing FOIA request battle to obtain some of the once-deleted-but-now-recovered e-mails; and even Clinton-supporter/former Defense Secretary remarking that the Clinton Foundation/State Department connection is “something that, obviously, will continue to be looked at” – adds a new wrinkle in the neverending Clinton saga, one that has not (comparatively) received a lot of media attention before – though this is understandable amidst the fracas about Benghazi dissemblinge-mail deleting, and charges of espionage, among other matters.

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The Clintons responding to pretty much any inquiry into their conduct, ever.

Only time, and full disclosure, will reveal in full detail how the Foundation operated during the years Hillary Clinton served as Secretary of State; as well as what role, if any, the Foundation played in shaping State department policy at that time. Some (e.g., the New York Times) suspect that there may have been an inappropriate intermingling of Foundation activities and State department policies (though, in response to political distortion, others have argued that charges of such intermingling are overblown). Regardless, there certainly was a whole lot of unseemly activity occurring, given what we already know to be true:

The Clinton Foundation accepted millions of dollars from seven foreign governments during Hillary Rodham Clinton’s tenure as secretary of state, including one donation that violated its ethics agreement with the Obama administration . . . . the . . .  agreement did not prohibit foreign countries with interests before the U.S. government from giving money to the charity closely linked to the secretary of state.

“[C]losely linked” is artful understatement, given the charity now bears her name. Furthermore, this acceptance of foreign money flatly contradicts statements from then-Sen. Kerry during Clinton’s Secretary-of-State confirmation hearings, who – in response to a Republican Senator expressing concern about serious conflicts-of-interest that might arise if the Clinton Foundation accepted foreign donations while Hillary was Secretary – stated that, according to Clinton’s testimony, this was not a concern because “there will not be fundraising; there will be no foreign donors.” Sen. Kerry made sure to emphasize this was a “legitimate question,” however, and he himself expressed concern about scenarios that would, in fact, bear out while Hillary Clinton was Secretary of State:

If you are traveling to some country and you meet with the foreign leadership, and a week later or two weeks later or three weeks later the president travels there and solicits a donation, and they pledge to give at some point in the future, but nobody knows, is there an appearance of a conflict? Could there be an appearance of a conflict?

At the time, Hillary Clinton downplayed concerns and acted like this was a far-fetched scenario. That, of course, impugns her credibility and veracity; but it does not necessarily rise to the level of criminal conduct. And, to be sure, none of this would come as a surprise to any red-blooded Republican, given that criticisms and calls to “Lock Her Up” were embarrassingly prevalent at the Republican National Convention (becoming its “unofficial slogan“).

Hillary Clinton Prison

The 2016 GOP’s answer to both foreign and domestic policy issues, evidently. Unfortunately for them, schadenfreude has its limits.

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However, calls to “Lock her up” have, for some time, been coming from rather unlikely sources.

While those protesters take issue specifically with the Clinton Foundation’s “screw up” in Haiti, there are larger questions as to how the Foundation has operated around the world. Sympathetic takes feel that these “screw-ups” – demonstrating “the uniquely Clinton ways they often undermine themselves” – indicate that “[t]he family still doesn’t know how to wield its own power.” Even those takes, however, concede that such “screw-ups”

represent ground zero for the confusing and often conflict-ridden intersection of [Hillary Clinton’s] State Department, the Clinton family’s foundation and both of their foreign policies. (emphasis added)

“[C]onfusing nexus” is a creative way of putting this “conflict-ridden intersection,” for sure. No wonder that Charity Navigator put the Foundation on its watch list before ultimately de-listing the Foundation for its “atypical business model” which “can not be accurately captured in . . . current rating methodology” (the Foundation is reportedly eager to be re-listed). No wonder that, early on, major players within the Foundation were clear to note that the work of the Foundation was “not charity.” And no wonder that a Senior Fellow with the nonpartisan Sunlight Foundation remarked that it “seems like the Clinton Foundation operates as a slush fund for the Clintons.”

I’m pretty skeptical of the “oops” narrative, given that we are talking about a politically-savvy family dynasty that has been in politics for just-shy of forty years now, one that has lived through – but artfully dodged the consequences of – scandal after scandal (after scandal after scandal after scandal…) to once again be on the cusp of being at the helm of the free world. While some recently have launched a general tirade against the Foundation from a moral and ethical angle, I would like to focus specifically on one angle I have not seen explored at length (though I did find this one pre-McDonnell commentary), which is whether Secretary Clinton could be prosecuted for Hobbs Act extortion. You might say I was inspired by Secretary Clinton’s own pledge to “follow the money”:

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Unintended irony is really her knack. The satire just writes itself

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The Hobbs Act (18 U.S.C. 1951) is a federal statute which, in relevant part, states that

Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do . . . shall be fined under this title or imprisoned not more than twenty years, or both.

The statute goes on to define extortion to mean, once again in relevant part, “the obtaining of property from another, with his consent . . . under color of official right.”

According to the DOJ, the Hobbs Act “is frequently used in connection with cases involving public corruption….” Typically, the Act is invoked to prosecute run-of-the-mine quid pro quo arrangements: a public official obtains property – usually money – from an individual, who agrees to give it to the official (or directs it to a third party at the behest of the official) in exchange for a specific favor or benefit from the official. Again, according to the DOJ, “[t]he usual fact situation for a Hobbs Act charge under color of official right is a public official trading his/her official actions in a[n] area in which he/she has actual authority in exchange for the payment of money.”

The Supreme Court has made clear that “the wrongful acceptance of a bribe establishes all the inducement that the statute requires,” with “the coercive element…provided by the public office itself.” Evans v. United States, 504 U.S. 255, 266 (1992).  “[A]n affirmative act of inducement by a public official, such as a demand, is [not] an element of the offense of extortion ‘under color of official right’ prohibited by the Hobbs Act….” Evans, 504 U.S. at 256. Extortion by a public official under the Hobbs Act is “the rough equivalent of what we would now describe as ‘taking a bribe.'” Id. at 260. “[T]he offense is completed at the time when the public official receives a payment in return for his agreement to perform specific official acts; fulfillment of the quid pro quo is not an element of the offense.” Id. at 268. Even “[t]he receipt of [campaign] contributions is … vulnerable under the [Hobbs] Act as having been taken under color of official right…if the payments are made in return for an explicit promise or undertaking by the official to perform or not to perform an official act.” McCormick v. United States, 500 U.S. 257, 273 (1991). And “[t]he official and the payor need not state the quid pro quo in express terms, for otherwise the law’s effect could be frustrated by knowing winks and nods.” Evans, 504 U.S. at 274 (Kennedy, J., concurring). 

Of course, the jurisdictional hook – namely, that the corrupt conduct in question affect commerce – remains an element of the crime that needs to be proven. Nevertheless, “the Hobbs Act‘s interstate commerce requirement has been construed expansively,” which is so because of  “the congressional intent that the Act employ the full federal commerce power.” United States v. Blakey, 607 F.2d 779, 782 (7th Cir. 1979). “[T]he effect of the defendant’s activity on interstate commerce need only be slight….” United States v. Villafranca, 260 F.3d 374, 377 (5th Cir. 2001). Conduct need only have “a de minimis effect on interstate commerce to secure federal jurisdiction” under the Hobbs Act. United States v. Collins, 40 F.3d 95, 99 (5th Cir. 1994). “Both direct and indirect effects on interstate commerce may violate” the Hobbs Act. Id. 

Criminal acts directed toward individuals may violate [the Hobbs Act]…if: (1) the acts deplete the assets of an individual who is directly and customarily engaged in interstate commerce; (2) if the acts cause or create the likelihood that the individual will deplete the assets of an entity engaged in interstate commerce; or (3) if the number of individuals victimized or the sum at stake is so large that there will be some “cumulative effect on interstate commerce.”

Id. at 100. This jurisdictional hook, then, is satisfied where money is obtained from an individual who is normally engaged in conduct that could be described as “interstate commerce,” which, following the New Deal, includes most any conduct an individual could engage in. This, then, is a low bar easily met in cases involving large sums of money and major political players.

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Case law is replete with fact patterns sustaining Hobbs Act convictions. A few examples will suffice to illustrate what this looks like in practice.

In Evans v. United States, 504 U.S. 255, 266 (1992), the defendant, “an elected member of the Board of Commissioners of DeKalb County, Georgia,” id. at 257, was the recipient of a $7,000 payment intended to secure the his “assistance in an effort to rezone a 25-acre tract of land for high-density residential use.” Id. The jury convicted the defendant of violating the Hobbs Act upon finding that he “accepted the cash knowing that it was intended to ensure that he would vote in favor of the rezoning application and that he would try to persuade his fellow commissioners to do likewise.” Id. Even though the defendant “did not initiate the transaction, his acceptance of the bribe constituted an implicit promise to use his official position to serve the interests of the bribegiver.” Id. His conviction was sustained on appeal all the way up to the Supreme Court, which affirmed the jury instructions which stated that “if a public official…accepts money in exchange for [a] specific requested exercise of his or her official power, such a demand or acceptance does constitute a violation of the Hobbs Act regardless of whether the payment is made in the form of a campaign contribution.” Id. at 258.

In United States v. Ganim,  510 F.3d 134 (2d Cir. 2007) (Sotomayor, J.), the former mayor of Bridgeport, Connecticut, appealed from (among other things) a Hobbs Act extortion conviction. Id. at 136. The charges stemmed from the fact that he had obtained “cash, meals, clothing, wine and other gifts” from close associates who essentially functioned as his middlemen, obtaining money and payments from entities seeking to curry favor with, or obtain contracts from, the mayor. Id. at 140. Ganim claimed that he had only obtained these goods from his associates “out of friendship or legitimate lobbying activity.” Id. “He denied receiving any gifts in exchange for official acts, denied entering any fee-sharing agreement with [his associates], denied being ‘partners’ with them…, and claimed that he acted only in the best interest of the City.” Id.  Despite these averments, then-Judge Sotomayor affirmed the conviction, noting that the Hobbs Act criminalized “a government official’s receipt of a benefit in exchange for an act he has performed, or promised to perform, in the exercise of his official authority.” Id. at 141. Quoting Evans, 504 U.S. at 268, she noted that, in order to prove Hobbs Act extortion, “the government ‘need only show that a public official has obtained a payment to which he was not entitled, knowing that the payment was made in return for official acts.'” Ganim, 510 F.3d at 143. The jury instruction given by the district court in the case, which was affirmed by Judge Sotomayor, detailed further that “the government must prove that the defendant obtained a payment to which he was not entitled by use of his office, knowing that the payment was made in return for official acts rather than being given voluntarily or unrelated to the defendant’s official position. The defendant need not have initiated the payments, but he must have known that the payment was made in exchange for a specific exercise of the defendant’s official powers.” Id. at 144. Irrelevant to the Hobbs Act inquiry was “whether the defendant could or did actually perform the service, or whether he actually had a duty to do so.” Id. “[S]o long as the jury finds that an official accepted gifts in exchange for a promise to perform official acts for the giver, it need not find that the specific act to be performed was identified at the time of the promise, nor need it link each specific benefit to a single official act.” Id. at 147. Judge Sotomayor went on to note that “[w]hile it frequently will be true that particular bribes or extorted payments are linked at the time of the corrupt agreement to particular official acts, that will not always be the case—for example, because the opportunity to undertake the requested act has not arisen, or because the payment is one of a series to ensure an ongoing commitment to perform acts to further the payor’s interests.” Id. No more-precise quid pro quo showing is required under the Hobbs Act because, if it were, it “could subvert the ends of justice” and “legalize some of the most pervasive and entrenched corruption, and cannot be what Congress intended.” Id.

More recently, former New York State Assemblyman Sheldon Silver was convicted of public corruption late last year. One of the charges brought against him which he was ultimately convicted of was Hobbs Act extortion. The conduct in question which proved sufficient to support a conviction thereunder was his sending state grant money to a doctor who then referred patients to a law firm where Silver was Of Counsel, receiving proceeds of the fees obtained from those patients. This sort of quid pro quo, you-scratch-my-back-and-I’ll-scratch-yours, was successfully prosecuted as a form of extortion under color of official right in violation of the Hobbs Act. Important to note is that the aforementioned Preet Bharara spearheaded this prosecution effort.

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Though it is clear that the Clinton Foundation has resisted transparency and oversight, and Hillary Clinton has violated her own stated pledges, such conduct does not necessarily rise to the level of criminality. The ultimate question is whether any donations made to the Clinton Foundation (particularly from domestic donors, as the presumption against extraterritoriality may limit application of the Hobbs Act with respect to foreign donors) were made pursuant to an arrangement or understanding with Secretary Clinton (or a Clinton agent) that the donation was made in order to obtain favorable treatment by the State Department or Secretary Clinton. That would establish the quid pro quo which “is the essence of the offense.” Evans, 504 U.S. at 278 (Kennedy, J., concurring). A few actions that raised eyebrows at the time they occurred could constitute Hobbs Act extortion upon further investigation.

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By way of background, this type of conduct goes back to Bill Clinton’s administration. Back when the Clinton Foundation was just an entity ostensibly formed to help fund the construction of the Clinton library, one Marc Rich sought a presidential pardon from Bill Clinton for charges including tax evasion, wire fraud, racketeering, and trading with the enemy. Clinton issued the pardon – with literally hours left in his presidency; while Rich was still a fugitive; and “bypassing the normal process in which the Justice Department vets pardon applications” in issuing the pardon, with nearly no one let in on the plan before it was announced (except future AG Holder and one or two others). Bill alleged that he didn’t know Marc Rich “and wouldn’t know him if he walked in the door.” Instead, he suggested that he felt moved – given his own experiences,  dontcha know! – by what appeared to be prosecutorial abuse (really, not joking). According to Bill, the fact that Rich’s ex-wife had donated $450,000 to Clinton’s presidential library had no effect whatsoever on the decision to pardon her fugitive ex-husband. The left-of-center Slate magazine disagreed, stating unambiguously that “Marc Rich bought his pardon with money and access.” The New York Times called it “[a]n indefensible pardon” and “a shocking abuse of presidential power.” To quote Bill Clinton, his explanation for the Rich pardon is “the biggest load of bull I ever heard”:

It’s a shame, at least in this case, that the statute of limitations on Hobbs Act violations is five years. See 18 U.S.C. 3282(a). Though this could be overcome if the “millions of dollars [showered] on the Clintons in the decade and a half following the scandal” – coming from Rich’s “business partners, lawyers, advisers and friends” – could be shown to have a connection to the pardon.

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Early in Secretary Clinton’s tenure, longtime Clinton supporter Rajiv Fernando “was placed on a sensitive government intelligence advisory board even though he had no obvious experience in the field.” This was after he “lobbied then-Secretary of State Hillary Clinton’s office for a seat on” the International Security Advisory  Board, “telling one of her closest aides that if appointed he would make Clinton ‘look good.'” He also has given at least $1 million to the Clinton Foundation. Unsuspiciously, Fernando resigned less than a week after his controversial appointment became a focus of inquiries. Even the Clinton sycophants over at Media Matters are having a tough time spinning this one, trying to dress up the appointment as legitimate. Hence the resignation, the “professional State Department staff” questioning his “awkward selection for the group,” the “scrambling behind the scenes to explain” the appointment, and Fernando’s refusal to comment when approached at the DNC while he was serving as a Clinton superdelegate, amirite? It’s a hard sell when even other close Clinton allies don’t buy that spin.

To add insult to injury, Clinton recently attended a campaign fundraiser at Fernando’s home.

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Ya think?

Understandably, “Fernando’s lack of experience in those fields has raised questions about whether Clinton made the appointment in order to reward a high-dollar donor.” Even progressive outfit Slate, normally sympathetic to Democratic nominees, referred to the “legitimate questions” about Clinton’s conduct in this matter, and they had this to say:

In addition to the appearance of quid pro quo with a major fundraiser, we also have a clear lack of transparency, Clinton loyalists going to great lengths to protect her, questions over access to sensitive government information, and, of course, Hillary’s private email account.

Yes, the “appearance of quid pro quo” – i.e., that thing that Kennedy called the “essence” of Hobbs Act extortion. “[K]knowing winks and nods” should not be so blatantly allowed to frustrate the purposes of anti-corruption statutes. Conspiracy is a chargeable offense for a reason. While Slate concludes that “while tapping Fernando was highly questionable, it wasn’t illegal,” they ignore the fact that – if done pursuant to a payment made with the understanding that it was to lead to the bestowal of favors such as this – it quite possibly violated the Hobbs Act.

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More recently, there was the Russian uranium deal. A company named Uranium One – “the biggest uranium producer in the United Sates” – owned mining rights to a major uranium deposit in the United States. During the first Obama administration, the Russian atomic energy agency Rosatom gradually acquired that company, leaving it in possession of “one-fifth of all uranium production capacity in the United States.” Before this could happen, however, a number of federal entities – including the State Department – had to sign off on the acquisition. It just so happened that major players involved in Uranium One – particularly Frank Giustra and Ian Telfer – had been generous donors to the Clinton Foundation. Despite analogous precedent (i.e., a blocked attempt of a Chinese acquisition of a Nevada gold mine on account of Treasury concerns about “serious, significant and consequential national security issues,” including concern over “Chinese domination of rare earth elements”) suggesting that the deal should have been blocked, the State Department signed off on the acquisition, all while the Foundation was “collecting millions in donations from people associated with Uranium One.”

Disconcertingly, the Foundation failed to disclose these donations while the approval was being mulled over. Worse yet, key players such as Michael McFaul – the Ambassador to Russia during the latter part of Clinton’s tenure as Secretary – were unaware of this transaction until asked about it after the fact (seriously?!). The Foundation’s response when asked by the Times about all this: no comment.

The Times’ own conclusion regarding the deal is eyebrow-raising:

Whether the donations played any role in the approval of the uranium deal is unknown. But the episode underscores the special ethical challenges presented by the Clinton Foundation, headed by a former president who relied heavily on foreign cash to accumulate $250 million in assets even as his wife helped steer American foreign policy as secretary of state, presiding over decisions with the potential to benefit the foundation’s donors.

As one anonymous individual told the Times, donations are made by individuals who hope “that money will in fact buy influence: ‘Why do you think they are doing it – because they love them?'”

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One final example involves Bill Clinton being named to an honorary position – and receiving a handsome salary – at an entity that later benefited from grants directed to it by entities controlled and influenced in large part by the State Department. As the Daily Caller observed:

Laureate [Education] hired former President Bill Clinton as “honorary chancellor,” paying him $16.5 million over five years. The Baltimore-based company, which operates for-profit universities in 28 countries, also donated between $1 million and $5 million to the Clinton Foundation, according to the foundation’s web site.

While Bill was collecting a paycheck from the company and his wife was secretary of state, the International Finance Corporation (IFC), an arm of the World Bank, invested $150 million in Laureate. It was the largest-ever single IFC investment to an educational company. The United States government is the largest contributor to the IFC. During that same period, the Department of State’s U.S. Agency for International Development awarded $55 million to the International Youth Foundation. Laureate CEO Douglas Becker is on the foundation’s board of directors. International Youth Foundation, the Clinton Foundation and Laureate jointly participated in foundation programs.

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It’s pretty telling that even those who are reluctantly starting to fall in line in support of Clinton continue to have lingering doubts about her ethical fitness, given questions about the Foundation’s activities and its influence over Clinton’s conduct as Secretary of State:

I have issues with Hillary Clinton — and I don’t really mean the emails. Her family’s financial decisions with their foundation are questionable and raise potential ethical problems as she steps into the most powerful role in the world. Her inaccessibility to the press is troubling. And looking back on the 1990s, it seems like she made decisions that protected her own power and standing at the expense of others.

Needless to say, I find “potential ethical problems” and “troubling” to be soft-peddling rhetoric intended to justify the conclusion to endorse Clinton, particularly in light of the available data. It is language that suggests the endorser either did not sufficiently research the individual in question (doubtful in this specific case), or that they legitimately believe those “ethical problems” are simply not problematic enough. I disagree. And a federal prosecutor might as well, provided communications (perhaps deleted ones?) made by or on behalf of Clinton evince the requisite intent.

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James Comey could turn out to be the savviest politician in all of Washington, when all the dust settles. No doubt the current reported investigation developed from, or was at least fed by, the FBI investigation into Hillary Clinton’s e-mail practices, and I’m willing to bet they found something relevant in the “several thousand” work-related e-mails they were able to recover which had been deleted. Presuming that all of her deleted e-mails were retrievable or obtainable in some fashion, as reports seem to indicate, no doubt they contain some pretty insightful material, given Clinton’s transparent lies about the matter:

If Comey’s recommendation against an indictment under the Espionage Act turns out to be merely a prelude to more serious charges being brought against Clinton or her close allies in relation to Clinton Foundation activity, he will have managed to drastically reshape the political landscape while putting his own name and reputation beyond reproach (after all, according to Nancy Pelosi after the non-indictment recommendation, Comey is a “great man” whom we are “very privileged” to have at the helm of the FBI). We’ll see if this happens in time for it to make a difference; but, in any case, if charges are ultimately forthcoming, I suspect the Hobbs Act might be among their number.

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