March 20, 2020

Second Circuit Reins in Hobbs Act and Honest Services Fraud Prosecutions – Again

John L. Brownlee | Angela M. Jimenez

Nearly four years ago, the U.S. Supreme Court in its unanimous McDonnell decision confirmed that not all actions taken by public officials are "official acts" for purposes of the federal bribery laws.1 Official action, the court held, is limited to a "decision or action" on a "question, matter, cause, suit, proceeding or controversy," and must "involve a formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee."2 To qualify, the alleged official action "must also be something specific and focused that is 'pending' or 'may by law be brought' before a public official."3 In vacating former Virginia Gov. Robert McDonnell's convictions, the court held that "[s]etting up a meeting, talking to another official, or organizing an event (or agreeing to do so) – without more – does not fit that definition of 'official act[ion].' "4 Because McDonnell's conduct was limited to those types of benign acts – and, importantly, he never asked or pressured anyone to perform an official act – federal prosecutors declined to retry the former governor and the case was dismissed.5 

In January 2020, the U.S. Court of Appeals for the Second Circuit, relying on McDonnell, once again rejected prosecutors' overly broad reading of the federal bribery statutes. In United States v. Sheldon Silver (Silver II), the Second Circuit reviewed the government's application of the "as opportunities arise" theory of liability for honest services fraud and Hobbs Act extortion convictions.6 The Second Circuit, in Silver II, reversed Silver's convictions on those charges (three of the seven total charges) and held that the government must prove that "at the time Silver accepted the extorted property, he understood that he was expected, in exchange for those payments, to take official action on a specific and focused question or matter as the opportunity to do so arose."7 The court warned that "[i]nstructing a jury that an official need only understand her official action to benefit the payer creates a situation where an official could accept a payment – lawful or otherwise – and later incur criminal liability by voting on any legislation or performing any official act on any topic that benefits the payer."8 This open-ended instruction, the court made clear, does "not define criminal liability."9 It said for these offenses "a public official must do more than promise to take some or any official action beneficial to the payer as the opportunity to do so arises; she must promise to take official action on a particular question or matter as the opportunity to influence that same question or matter arises."10 The court emphasized that "a promise so vague as to be meaningless" would make clear that the "official has failed to offer a quo."11
Sheldon Silver is a former Speaker for the New York State Assembly and a part-time lawyer. Federal prosecutors in Manhattan accused Silver of participating in two bribery schemes in which he received referral fees from law firms in exchange for help in obtaining state research grants.12 In 2016, Silver was convicted of honest services (mail and wire) fraud, Hobbs Act extortion and money laundering. The government alleged these two schemes together generated more than $3.5 million in referral fees for Silver.

In the first scheme, Silver allegedly performed official acts beneficial to a medical doctor who referred mesothelioma patients to Silver's law firm. The government alleged that in the fall of 2003, Dr. Robert Taub, a physician and researcher who specialized in mesothelioma at Columbia-Presbyterian Hospital, encountered Silver at an event and asked him to encourage his law firm to donate money to mesothelioma research.13 At the event, Silver advised Dr. Taub that he could not arrange for his law firm to donate money to mesothelioma research.14 However, within two weeks, Silver asked Dr. Taub to refer mesothelioma cases to his law firm through him.15 After Silver's request, Dr. Taub began referring mesothelioma patients to Silver for legal representation with the intention of developing a relationship with Silver who would hopefully assist him in receiving state research funding.16

According to the government, Silver received his first referral fees check in March 2005 from his law firm, and within a few months he approved a state grant to support Dr. Taub's research.17 Dr. Taub received a second state grant in August 2006.18 However, due to a change in New York law on the public disclosure of research grants to eliminate conflicts of interests between legislators and recipient of legislative grants, Silver informed Dr. Taub that any further request for state grants would not be approved.19 Nonetheless, Dr. Taub continued to send mesothelioma referrals to maintain their relationship and in hopes of incentivizing Silver to support future matters.20 Although Silver did not approve further state grants, the government alleged that he engaged in the following official acts in exchange for the referrals:21

  • May 2011 – Silver had his staff prepare an Assembly resolution with an official proclamation commending Dr. Taub; Silver sponsored the resolution on the floor of the Assembly and presented it to Dr. Taub at a public event22
  • Fall 2011 – Silver agreed to help Dr. Taub "navigate" the process of securing permits for a proposed New York charity race in Silver's district to benefit mesothelioma research; the law firm, working with Dr. Taub to organize the race, decided not to pursue the event and the race never took place23
  • 2012 – Silver helped Dr. Taub's son obtain a job with OHEL Children's Home and Family Services, a nonprofit organization devoted primarily to providing social services to Jewish populations and that received millions in discretionary state funding controlled solely by Silver; Silver called OHEL's chief executive officer twice and sent him a letter on Assembly letterhead; Silver had not previously asked, nor did he subsequently ask, OHEL to hire anyone else24

First, although the court held that the resolutions and proclamations by Silver were "official acts" under McDonnell, because "the resolution honoring Dr. Taub was a clear exercise of governmental power on a specific matter: it was brought to the floor of the Assembly by Silver and subsequently passed by the Assembly[,]"25 the court rejected them as a basis for a federal crime because "the prolific and perfunctory nature of these resolutions make them de minimis quos unworthy of a quid pro quo."26

Second, the court found that a rational jury could have concluded that Silver did not engage in official acts when he agreed to help Dr. Taub with permits for his charity race.27 The court noted that the evidence at trial showed that 1) Dr. Taub, along with others, met with Silver at Silver's New York office regarding the race and 2) Silver then sent Dr. Taub a letter on Assembly letterhead offering to "help navigate the process if needed."28 The court reasoned that under the McDonnell framework the jury would have to find that Silver used his "official position to exert pressure on another official to perform an 'official act' – in this case, to issue permits to Dr. Taub." However, the court concluded that, under the facts presented, the jury could find that Silver's letter was offering general assistance with an event occurring in the district and did not meet the standards for an "official act" under McDonnell.29

As to the OHEL letter sent in support of Dr. Taub's son, the court found that Silver's letter to OHEL did not satisfy the standards for an "official act" under McDonnell.30 The court reasoned that "using government letterhead is not, by itself, a formal exercise of government power on a matter similar to a hearing or lawsuit."31 The court found that there was no evidence that by using government letterhead Silver used "his official position to 'exert pressure' on the chief executive officer of OHEL" or that "Silver or anyone else threatened to withhold OHEL funding."32 The court held that a jury on these facts could not conclude beyond a reasonable doubt that Silver's actions on behalf of Dr. Taub's son met the definition of "official acts" under McDonnell.33

Thus, the court concluded that "only the Assembly resolution clearly remains an 'official act' under McDonnell. As such, the jury may have convicted Silver by relying on acts ... that are no longer 'official' under McDonnell."34

In the second scheme, Silver allegedly performed official acts beneficial to two real estate developers who had hired a different law firm that paid referral fees to Silver. The government alleged that Silver induced Glenwood Management and the Witkoff Group to engage the law firm of Goldberg & Iryami, wherein Silver's former staffer and friend, Jay A. Goldberg, agreed to pay Silver a percentage of the resulting legal fees.35 In support of this scheme, the government alleged that Silver took the following official acts:

  • Through a proxy, Silver voted, as one of three members of the Public Authorities Control Board (PACB), to approve Glenwood's requests for tax-exempt status for many of its projects. These votes occurred repeatedly over the course of Silver's tenure as Speaker.36
  • In June 2011, Silver met with Glenwood lobbyists in advance of negotiating pending real estate legislation to ensure that Glenwood was satisfied with the terms of the legislation. He then supported and voted in favor of the Rent Act of 2011 and tax abatement renewal legislation later that month, both of which benefited Glenwood.37
  • Later in 2011, Silver publicly opposed the relocation of a methadone clinic that was to be located near one of Glenwood's rental buildings in Silver's district.

The court found that Silver's conduct concerning the methadone clinic were not official acts.38 The court noted that Silver only drafted one letter to be distributed publicly that expressed his strong opposition to the clinic.39 The court concluded that "taking a public position on an issue, by itself, is not a formal exercise of governmental power, and is therefore not an official act under McDonnell."40 Second, the court found that Silver's meeting with Glenwood lobbyists to discuss the terms of the Rent Act of 2011, without more, does not qualify as a decision or action.41 The court concluded that a meeting on its own is not official action under McDonnell.42

As to the PACB's votes, the court found that a rational and properly instructed, jury may not have concluded that Silver's votes were official acts under McDonnell.43 The court reasoned that (1) there was little evidence connecting Silver's passage of real estate legislation to the developer's referral fees; and (2) the PACB's approvals were not particularly controversial because the PACB approved every financing request.44 Therefore, the court concluded that it was not clear beyond a reasonable doubt that a rational jury would have convicted Silver if given proper instructions under McDonnell. The court reversed Silver's convictions finding that the district court's jury instructions were erroneous under McDonnell's more narrow definition of "official act." After this reversal and remand to the trial court, the government retried Silver, and he was convicted again. Silver, for a second time, appealed his convictions to the Second Circuit.

On this second appeal, Silver II, Silver advanced two principal arguments challenging the district court's jury instructions: (1) the court erroneously omitted from its instructions the required element of "agreement" or "meeting of the minds" between Silver and the alleged bribe payers; and (2) the "as the opportunities arise" theory of bribery is no longer valid in the wake of McDonnell, which Silver argued requires identification of the particular act to be performed at the time the official accepts a payment or makes a promise.45

With respect to his first challenge, Silver argued that the district court erred in rejecting his request to instruct the jury that both Hobbs Act and honest services fraud convictions required "a quid pro quo agreement between Mr. Silver and the alleged bribe payers."46 Silver argued that both offenses require that the bribe payer and receiver share a common corrupt intent – i.e., a "meeting of the minds" as to the official acts to be procured by the payment.47 However, the Second Circuit rejected this argument finding that neither the Hobbs Act nor honest services fraud convictions require evidence of a meeting of the minds between the payer and the official as to the corrupt purpose of the payments.48 Rather, the Second Circuit found that the government was only required to prove that either "the extorted party was motivated, at least in part, by the expectation that as a result of the payment, Mr. Silver would exercise official influence or decision-making for the benefit of the extorted party"49 or that "it is the official's conveyed intent – not actual intent – that is determinative in an honest services fraud conviction."50

However, the Second Circuit did agree with Silver's second challenge asserting that the district court's jury instructions erroneously failed to convey the proper requirements for the "as opportunities arise" theory of liability for both the Hobbs Act and honest fraud convictions.51 Silver argued that McDonnell completely eliminated the "as opportunities arise" liability theory, which permits a conviction even in instances where a public official fails to promise to perform any specific official acts at the time of payment.52 The Second Circuit reasoned that although bribery does not require identification of the particular official act to be performed, it does require that an official understand the particular question or matter to be influenced at the time of payment.53

The Second Circuit further explained that McDonnell stands for the proposition that bribery requires that the public official promise to act on a specific, concrete, or focused question, matter, cause, suit, proceeding or controversy.54 The court based this rationale on the fact that "without a requirement that an official must promise to influence a particular question or matter, any official who accepts a thing of value and then later acts to the benefit of the donor, in any manner, could be vulnerable to criminal prosecution."55 For this reason, the Second Circuit found that the district court's jury instructions for Silver's convictions under the "as opportunities arise" theory of liability for the Hobbs Act and honest services fraud were erroneous and vacated those convictions.56

The Second Circuit's Silver II decision brings much needed clarification to the "as opportunities arise" theory of liability. The court made clear that an "offered quo must have enough definition and focus to be properly understood as promising, in return for some quid, the formal exercise of governmental power."57 Thus, public officials should take caution – and now, at least, so should federal prosecutors.


1 See United States v. McDonnell, 136 S.Ct. 2355 (2016).

2 Id. at 2372.

3 Id.

4 Id.

5 U.S. Department of Justice Press Release, Justice Department Moves to Dismiss McDonnell Charges, September 8, 2016).

6 See United States v. Silver (Silver II), No. 18-2380, 2020 WL 284426, at *2 (2nd Cir. Jan. 21, 2020).

7 Id. at *34.

8 Id. at *22.

9 Id.

10 Id. at *8 (emphasis in original).

11 Id. at *11.

12 See United States v. Silver (Silver I), 864 F.3d 102 (2nd Cir. 2017).

13 Silver I, 864 F.3d at 107 (2nd Cir. 2017).

14 Id. at 107

15 Id.

16 Id.

17 Id.

18 Id.

19 Id. at 108.

20 Id.

21 Id. at 120-22 (holding that "[o]nly three acts proven by the government fall within the statute of limitations.")

22 Id. at 108.

23 Id.

24 Id.

25 Id.

26 Id.

27 Id. at 120.

28 Id.

29 Id. at 120.

30 Id.

31 Id.

32 Id.

33 Id.

34 Id. at 120.

35 Id.

36 Id. at 110.

37 Id.

38 Id. at 123.

39 Id.

40 Id.

41 Id.

42 Id.

43 Id.

44 Id.

45 "Silver II", No. 18-2380, 2020 WL 284426, at *3.

46 Id.

47 Id.

48 Id. at *6.

49 Id.

50 Id. at *7.

51 Id. at *8.

52 Id.

53 Id.

54 Id. at *11.

55 Id.

56 Id. at *13.

57 Id. at *12.

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