[00:00:04] Speaker 04:
Good morning, Your Honors, and may it please the Court.

[00:00:06] Speaker 04:
Alyssa Bell, on behalf of Appellant Dr. Mark Ridley-Thomas, I would like to reserve five minutes of my time for rebuttal, and I will endeavor to watch the clock.

[00:00:14] Speaker 05:
All right, thank you, Counsel.

[00:00:16] Speaker 04:
Your honors, at the heart of this case is an unprecedented bribery theory that has no corollary in the pre McNally paradigm.

[00:00:23] Speaker 04:
From indictment through post trial motions, the government asserted that Ridley Thomas exchanged a vote in favor of the telehealth amendment for what prosecutors dubbed, quote, secret funneling.

[00:00:36] Speaker 04:
And that is an agreement to have USC help move money between Ridley-Thomas' ballot committee and a nonprofit headed by his son in order to avoid the nepotistic optics of a direct donation.

[00:00:56] Speaker 04:
But as a matter of law, the so-called funneling cannot serve as a predicate for any of Ridley Thomas's convictions.

[00:01:05] Speaker 04:
Flynn's assistance did not personally enrich Ridley Thomas, and personal enrichment is the hallmark of traditional bribery.

[00:01:12] Speaker 04:
Rather,

[00:01:13] Speaker 04:
Flynn helped Ridley Thomas to make his donation, which complied fully with state campaign finance laws and public disclosure requirements without appearing nepotistic.

[00:01:24] Speaker 04:
As the government explained it to the jury, Ridley Thomas, quote, was afraid it would look bad.

[00:01:30] Speaker 04:
Look nepotistic for a politician to use his committee funds to benefit his son.

[00:01:34] Speaker 04:
That's at 9ER 1753 to 54.

[00:01:39] Speaker 04:
They claimed that because Ridley Thomas knew there would be, quote, political optics around funneling or sending to an organization that impacted his son, he did not directly donate.

[00:01:49] Speaker 04:
He did it in a circuitous way.

[00:01:52] Speaker 05:
Counsel, was there any evidence presented at trial about the vote on the telehealth program?

[00:01:59] Speaker 04:
Yes, there was evidence presented at trial.

[00:02:02] Speaker 04:
Two supervisors testified for the defense, and those supervisors testified that Ridley Thomas exerted no pressure on them at all.

[00:02:12] Speaker 05:
But that wasn't part of the government's theory as well?

[00:02:16] Speaker 04:
What was not, Your Honor?

[00:02:17] Speaker 05:
That the telehealth vote was part of what they call the scheme.

[00:02:24] Speaker 04:
Yes.

[00:02:25] Speaker 04:
The government charged in the indictment and argued throughout trial that what Ridley-Thomas exchanged for his vote on the telehealth amendment was the secret funneling.

[00:02:34] Speaker 04:
And that alleged thing of value is a legally inadequate predicate for any of Ridley-Thomas' convictions.

[00:02:42] Speaker 05:
Under the cases, what is the thing of value?

[00:02:44] Speaker 05:
How have we defined that?

[00:02:47] Speaker 04:
The cases have not defined thing of value.

[00:02:49] Speaker 02:
However- What about Renzi?

[00:02:51] Speaker 02:
What about Renzi?

[00:02:52] Speaker 04:
Renzi also did not define thing of value.

[00:02:55] Speaker 02:
I think it talked about what the defendant considers to be valuable, what's valuable to the defendant, the subjective look.

[00:03:04] Speaker 04:
Yes, Renzi considers the subjective value of the item received, but Renzi was a cash bribe case.

[00:03:11] Speaker 02:
Renzi did not deal with the avoidance of nepotism as the value- I understand that, but it did explain this broad rule with a subjective view.

[00:03:20] Speaker 02:
and it's not limited to cash, so I'm trying to figure out, it seems to me this is the toughest case for you to be plain, although if you've got other case law you want me to, I mean we've got a lot of case law, and so I'm really interested to hear what you have to say about that.

[00:03:33] Speaker 02:
I don't think it's limited to cash.

[00:03:36] Speaker 04:
It's not limited to cash, your honor.

[00:03:38] Speaker 04:
However, in the pre McNally paradigm to which skilling limits the reach of section 1346, personal enrichment is what's at the heart of traditional bribery.

[00:03:49] Speaker 04:
I think the government frankly would agree with that.

[00:03:51] Speaker 04:
They've offered no meaningful rebuttal to that point.

[00:03:54] Speaker 04:
And the first line of their brief says Ridley Thomas exchanged private gain

[00:03:59] Speaker 04:
abused the power of his public office for private gain.

[00:04:03] Speaker 04:
And so what's at the heart of honest services fraud is personal enrichment, as we've termed it, consistent with skillings language or private gain, as the government has termed it.

[00:04:12] Speaker 04:
But either way, the core is what you find in the pre McNally paradigm, and that's cash, commissions, miscellaneous financial perks.

[00:04:20] Speaker 04:
I still don't hear you getting around Renzi, but we can circle back to it.

[00:04:23] Speaker 02:
Go ahead.

[00:04:24] Speaker 00:
Well, I wanted to follow up on Renzi as well.

[00:04:28] Speaker 00:
So Renzi involved cash, but it wasn't technically a cash benefit.

[00:04:32] Speaker 00:
It was cash already owed.

[00:04:35] Speaker 00:
So how should we distinguish that aspect of Renzi from this case given that it wasn't actual enrichment?

[00:04:43] Speaker 04:
Renzi is one of many loan cases, and a loan is categorically different than the alleged benefit at issue here.

[00:04:50] Speaker 04:
So a loan offers immediate use of someone else's cash at a time when you need it most.

[00:04:56] Speaker 04:
And the court in Renzi was clear that there were two elements to the thing of value that they were evaluating there.

[00:05:03] Speaker 04:
The first was the objective value.

[00:05:06] Speaker 04:
of that quid, it was cash, it had objective value.

[00:05:10] Speaker 04:
And it also had subjective value to Mr. Renzi because his argument essentially was this cash did not enrich me sufficiently because it was owed to me.

[00:05:18] Speaker 00:
And that is- Okay, but for purposes of the, we've got a couple different statutes here, but purposes of the incorporation of Section 201 into the honest services.

[00:05:32] Speaker 00:
Is it enough, or do you believe the government established that Mr. Ridley Thomas' son was the recipient and the beneficiary or his organization of the $100,000?

[00:05:47] Speaker 04:
The $100,000 that PRPI received was Ridley-Thomas' $100,000.

[00:05:51] Speaker 04:
I mean, that's the key that makes this case- Okay.

[00:05:55] Speaker 04:
But it's not the answer to Judge Johnson's question.

[00:05:57] Speaker 00:
Yeah.

[00:05:57] Speaker 00:
So we've got time to talk through these other things, but I'd ask one thing at a time.

[00:06:01] Speaker 00:
This is pretty complicated.

[00:06:03] Speaker 00:
So a thing of value under the agreement was that Mr. Ridley-Thomas' son would receive, his organization would receive $100,000 that they were seeking.

[00:06:17] Speaker 00:
Does that not, is that not contemplated by Section 201's incorporation in honest services?

[00:06:23] Speaker 00:
It doesn't have to go back to Mr. Ridley-Thomas, in other words, correct?

[00:06:28] Speaker 04:
Let me break down your honor's question.

[00:06:31] Speaker 04:
So I agree section 201, the concept of thing of value is incorporated from section 201.

[00:06:36] Speaker 04:
I think your honor's characterization of the thing of value is a bit different from the government's here.

[00:06:42] Speaker 04:
What the government argued is that the funneling, which was the movement of Ridley-Thomas's own money from point A to point B was the thing of value.

[00:06:51] Speaker 04:
Flynn's agreement to do so, the district court called it

[00:06:54] Speaker 04:
agreement.

[00:06:55] Speaker 04:
That was the thing of value.

[00:06:57] Speaker 04:
The agreement itself, the government has characterized it variously as an agreement or as a service.

[00:07:02] Speaker 04:
So it's not the money itself.

[00:07:04] Speaker 04:
It is the service that is the thing of value.

[00:07:06] Speaker 00:
OK.

[00:07:07] Speaker 00:
I suspect Judge Christin now has a question.

[00:07:09] Speaker 02:
Well, it's just the flip side of this.

[00:07:12] Speaker 02:
I think that the picture presented, and truly this is so you can respond, it seemed that the government's theory in the picture presented is that the reason the money was transferred, or funneled is your word, and to avoid optics is that the defendant was trying to provide, I think he's had a safe landing, a landing for his son.

[00:07:32] Speaker 02:
And so going back to Renzi, we're looking at was this subjectively valuable to the defendant?

[00:07:41] Speaker 02:
And I know that you've repeatedly said that you think that there's this optics, avoiding optics or negative publicity was, of course, the government has disavowed that.

[00:07:51] Speaker 02:
And I think to Judge Johnstone's point, the question is whether that is a part of the scheme that we're talking about here.

[00:08:01] Speaker 02:
Isn't it part of the subjective value?

[00:08:04] Speaker 04:
Well, two answers to that, Your Honor.

[00:08:06] Speaker 04:
Though the government has tried to distance themselves from their own theory, it is charged in the indictment.

[00:08:11] Speaker 04:
I mean, I would point.

[00:08:12] Speaker 02:
I appreciate that.

[00:08:14] Speaker 02:
But could I just get you to focus on this?

[00:08:18] Speaker 02:
It's a very specific question, and it's not intended to be a trick question.

[00:08:22] Speaker 02:
It's not just that the money was being funneled, to use your word, but it was being moved to a place where it could benefit the defendant's son.

[00:08:29] Speaker 02:
And I think that's what Judge Johnston was speaking to.

[00:08:34] Speaker 04:
Right, Your Honor, there's no question that PRPI received the money.

[00:08:38] Speaker 04:
I don't think Renzi is broad enough to cover the circumstances at issue here because Renzi is dealing specifically with the cash bribe and the court is careful to analyze that in two ways.

[00:08:51] Speaker 04:
the cash has objective value because it is cash and subjected value because it is someone else's money when the defendant needed at most an early repayment of a large outstanding personal debt.

[00:09:06] Speaker 04:
And that is categorically different than the circumstance we have at issue here.

[00:09:11] Speaker 00:
Why is the PRPI not cash?

[00:09:14] Speaker 00:
Just because it wasn't cash that went to

[00:09:17] Speaker 00:
his son personally, but went to the organization for the son's benefit.

[00:09:22] Speaker 04:
That is not our argument.

[00:09:24] Speaker 04:
The government erected as a straw man argument the notion that we were arguing that because the money ultimately landed with PRPI, that it could not be a benefit to Ridley Thomas.

[00:09:38] Speaker 00:
We agree that the- But you've said that there wasn't cash, and I'm just trying to, how is there not cash here?

[00:09:43] Speaker 00:
That is the cash at issue, is it not?

[00:09:45] Speaker 04:
Well, no, Your Honor.

[00:09:46] Speaker 04:
The money was Ridley Thomas's own money.

[00:09:49] Speaker 04:
And the reason the government termed funneling is because otherwise they would have been placed in the unfortunate position of arguing that Ridley Thomas bribed himself with his own money.

[00:09:59] Speaker 04:
In order to avoid that, they had to coin a term to describe this transaction.

[00:10:05] Speaker 05:
Counsel, didn't the jury instructions reference the $100,000 as one of the value thing of value?

[00:10:16] Speaker 04:
Yes, Your Honor.

[00:10:17] Speaker 05:
So the $100,000 was provided to the jury as an option for a thing of value, correct?

[00:10:23] Speaker 04:
Well, not exactly, Your Honor.

[00:10:24] Speaker 04:
I think the government tells only part of the story of that jury instruction.

[00:10:28] Speaker 05:
Well, the jury instructions speak for themselves, correct?

[00:10:31] Speaker 04:
Yes, the beginning of that instruction says the thing of value does not have to be tangible.

[00:10:36] Speaker 04:
And the reason it says the thing of value does not have to be tangible is the jury asked, does the thing of value have to be tangible?

[00:10:44] Speaker 04:
Or can it be an action or information?

[00:10:49] Speaker 04:
That's at ECF 287.

[00:10:51] Speaker 04:
The government has not included that in their excerpts of record.

[00:10:56] Speaker 04:
The jury was grappling with the government's funneling theory.

[00:11:01] Speaker 04:
The jurors wanted to know, could funneling, could this agreement, this service be a thing of value?

[00:11:08] Speaker 04:
And the government then agrees to the district court's response, which starts with the funneling does not have to be, I'm sorry, which starts with the thing of value does not have to be

[00:11:18] Speaker 04:
Tangible.

[00:11:19] Speaker 04:
If the government is proceeding on a cash bribe theory, if their theory is what they've tried to make it out to be on appeal, which is this is a cash bribe, then that response and their agreement to that response is nonsensical.

[00:11:32] Speaker 04:
So is the use of the term funneling.

[00:11:34] Speaker 04:
If proceeding on a cash bribe theory, the government did not need a catchphrase to describe it.

[00:11:40] Speaker 04:
Instead, they had a scenario where there was no cash bribe.

[00:11:44] Speaker 04:
Ridley Thomas did not take cash from USC.

[00:11:48] Speaker 00:
Ms.

[00:11:48] Speaker 00:
Bell, if we, hypothetically, if Renzi did control some or part of the honest services count, Renzi, I think, was an honest services case.

[00:11:58] Speaker 04:
Yes, Your Honor.

[00:12:00] Speaker 00:
Can you give us a reason why it would not also control the government contract count?

[00:12:11] Speaker 04:
Our contention is that the funneling is not a thing of value and that that would apply across the board.

[00:12:18] Speaker 00:
And if conversely, if it is, it would apply across the board.

[00:12:21] Speaker 00:
There would be no distinction what would keep us from extending the logic of Renzi to in the same similar text to 666.

[00:12:29] Speaker 04:
We've made a statutory construction argument there, Your Honor, that the thing of value can be no broader in 666 than traditional notions of property, and that Ridley Thomas's hiding of the use of his own money

[00:12:45] Speaker 04:
to benefit a non-profit is akin to the accurate information theory that the Supreme Court has recently found is not a valid thing of value.

[00:12:57] Speaker 04:
It's not a traditional notion of property.

[00:13:00] Speaker 04:
I would note that the government has not responded to that argument at all.

[00:13:04] Speaker 00:
In which case is that that you're referring to?

[00:13:07] Speaker 04:
The accurate information.

[00:13:08] Speaker 04:
Yes.

[00:13:09] Speaker 04:
Siminelli.

[00:13:13] Speaker 05:
OK.

[00:13:13] Speaker 05:
So what's our standard of review here?

[00:13:15] Speaker 04:
This is a sufficiency of the evidence claim, Your Honor, because what the court must decide is whether the conduct of conviction fits within the statutory boundary of the crime.

[00:13:26] Speaker 04:
And here it does not.

[00:13:27] Speaker 04:
This was not a cash bribe theory.

[00:13:30] Speaker 04:
No one told the jury that.

[00:13:32] Speaker 04:
What the government told the jury over and over again, what's charged in the indictment is the funneling.

[00:13:38] Speaker 04:
That's where they coined this term.

[00:13:40] Speaker 04:
It's over at Acts 47 to 78 that described the movement of Ridley Thomas' own money from his ballot committee to this nonprofit.

[00:13:50] Speaker 04:
And USC comes in,

[00:13:52] Speaker 04:
in order to avoid the appearance of nepotism.

[00:13:57] Speaker 04:
That is USC's value add.

[00:13:58] Speaker 04:
The undisputed evidence showed that it was perfectly legal, perfectly permissible for Ridley Thomas to donate the funds directly from his ballot committee to United Way.

[00:14:08] Speaker 00:
Was there, I guess, evidence or argument on USC's authority over the $100,000 once it was in possession of it?

[00:14:16] Speaker 00:
In other words,

[00:14:18] Speaker 00:
Did USC not have legal title to do whatever it wanted with the $100,000 once the first transfer was made?

[00:14:26] Speaker 04:
Yes, Your Honor.

[00:14:26] Speaker 04:
There was both evidence and argument.

[00:14:28] Speaker 04:
The evidence showed that Ridley Thomas used the word discretion in his donation letter so that those funds... Excuse me, was the donation letter admitted?

[00:14:39] Speaker 04:
The donation letter I believe it was your honor, but I would have to double check and I can provide your honor with a record.

[00:14:44] Speaker 02:
I just want to make sure you're speaking of evidence that was admitted.

[00:14:47] Speaker 02:
So there's there's also this SCR 502 and that's the letter acknowledging receipt is that the evidence you're speaking to right now the evidence of.

[00:14:54] Speaker 04:
I have them both.

[00:14:58] Speaker 02:
My question, again, I didn't mean to interrupt.

[00:15:00] Speaker 02:
My question is just whether both of those letters are what you're talking about right now in response to Judge Johnstone's question.

[00:15:04] Speaker 04:
The letter that I'm referring to right now is what the government characterized as the sham letter.

[00:15:09] Speaker 04:
So that's where Ridley Thomas, it's his letter.

[00:15:12] Speaker 02:
I got that right here and that was admitted.

[00:15:14] Speaker 04:
Yes.

[00:15:15] Speaker 02:
Okay.

[00:15:15] Speaker 02:
And then is it also correct?

[00:15:17] Speaker 02:
Am I also correct to understand the SCR 502 was admitted?

[00:15:20] Speaker 02:
That's the letter from Flynn acknowledging receipt of the money?

[00:15:24] Speaker 02:
Yes, Your Honor.

[00:15:24] Speaker 02:
Okay.

[00:15:25] Speaker 02:
Forgive me for interrupting.

[00:15:26] Speaker 00:
And just because we're short on time and I want to make sure you have time for rebuttal.

[00:15:31] Speaker 00:
Under the terms of this USC had full authority to decide whether or not then to reconvey Or to convey another hundred thousand dollars to the organization.

[00:15:42] Speaker 00:
Is that right?

[00:15:43] Speaker 04:
No, I don't think that's right.

[00:15:44] Speaker 00:
Your honor Is that a matter of law of fact?

[00:15:47] Speaker 00:
How are we supposed to talk your honor?

[00:15:48] Speaker 04:
So the funds were deposited into the Dean's discretionary account so that Dean Flynn would have discretion over those funds.

[00:15:56] Speaker 04:
And the government's theory very much was that Ridley-Thomas had discretion over those funds, not Flynn.

[00:16:04] Speaker 04:
I can point the court to one- But what's your position?

[00:16:07] Speaker 05:
At that point, as a matter of law, what's your position as to who had discretion over those funds once they were transferred to USC?

[00:16:15] Speaker 05:
as a matter of law who had discretion over those funds, USC or the defendant.

[00:16:25] Speaker 04:
Lynn and Ridley Thomas agreed that she would help move his funds to PRPI to avoid his appearing nepotistic.

[00:16:33] Speaker 04:
We don't dispute that.

[00:16:34] Speaker 04:
That is the government's theory, and on a sufficiency challenge, the inferences are drawn in their favor.

[00:16:39] Speaker 04:
The problem comes in that that funneling, the movement of his own money, is not a legally cognizable thing of value.

[00:16:45] Speaker 05:
In your view, was USC obligated to move those funds, or could it have decided to do something else with those funds if it were discretionary?

[00:16:53] Speaker 05:
The government's theory was that- What's your view of the evidence?

[00:16:58] Speaker 04:
My view of the evidence is that the two reached an agreement, that that is what would happen, and that is what happened.

[00:17:06] Speaker 05:
My question was, at the point that the money was transferred to USC, could USC, because it was a discretionary gift, could USC have chosen

[00:17:16] Speaker 05:
to do something else with the money?

[00:17:18] Speaker 04:
I imagine Marilyn Flynn could have changed her mind, yes.

[00:17:22] Speaker 04:
I think it's critical for the court, however, to understand that that is not what the government told the jury, and that that is not the basis for the conviction.

[00:17:33] Speaker 00:
Well, I guess we're trying to distinguish here, at least as I understand it, between what the terms of the agreement at issue are, the crime, and what the underlying obligations would have been in the absence of the agreement.

[00:17:46] Speaker 00:
which would be, for example, whether USC had full use and enjoyment of those funds and so that, in fact, it was a transfer of USC's funds to the organization.

[00:17:57] Speaker 04:
In a hypothetical alternative scenario where there was no agreement, then it would have been a donation that USC could use as its discretion.

[00:18:07] Speaker 04:
But there also would be no bribe, right?

[00:18:09] Speaker 04:
There would be no alleged bribe in this case if there were no agreement because the agreement is the bribe.

[00:18:14] Speaker 04:
I do want to point the court to one ER 196.

[00:18:20] Speaker 04:
I have many record sites for this, but for example, the government said it would be really bad for Marilyn Flynn if he had donated $100,000 and she couldn't get it out of the university.

[00:18:30] Speaker 04:
That's the whole point, funneling the money.

[00:18:33] Speaker 04:
And there are pages and pages and pages of similar arguments where the government's theory is Marilyn Flynn has no discretion over these funds.

[00:18:41] Speaker 04:
She's working at Ridley-Thomas' direction.

[00:18:44] Speaker 04:
And she is funneling the money for him in order to make sure that it arrives at its destination.

[00:18:52] Speaker 04:
And this agreement, the funneling, is the thing of value.

[00:18:56] Speaker 05:
But you agree with that, that there was an agreement between them regarding how the money was going to be dispersed.

[00:19:03] Speaker 04:
I absolutely agree that there was an agreement.

[00:19:05] Speaker 04:
My contention here is that the agreement is the thing of value, not the cash.

[00:19:09] Speaker 04:
This is not a cash bribe of USC's funds.

[00:19:11] Speaker 04:
That's a complete about face from what the government argued below.

[00:19:15] Speaker 02:
Did the jury hear evidence?

[00:19:16] Speaker 02:
I think this is right, that Mr. Ridley-Thomas tried to send or did send a $100,000 check directly and then it was returned, right?

[00:19:26] Speaker 02:
So he sent one directly to United Way and then it was returned and then

[00:19:29] Speaker 02:
and that was all before contacting Ms.

[00:19:33] Speaker 02:
Flynn, is that right?

[00:19:34] Speaker 04:
He sent a $100,000 donation to community partners, so to a different entity.

[00:19:39] Speaker 02:
Oh, forgive me, yes.

[00:19:40] Speaker 02:
Well, actually, that's a United Way entity, but I think you've answered my question.

[00:19:45] Speaker 02:
That's the one that was returned when he sent it directly.

[00:19:47] Speaker 04:
Yes, yes, Your Honor.

[00:19:48] Speaker 04:
And the reason it was returned, Sherry Dunbarry is the key witness who testified to this, the reason that was returned was because of political optics.

[00:19:55] Speaker 04:
That organization, it was not within their mission statement to fund passion projects, essentially, and they didn't like the political optics of Ridley Thomas' ballot committee funds being used to fund a nonprofit under their auspices.

[00:20:11] Speaker 04:
That would look nepotistic.

[00:20:12] Speaker 04:
That was their concern.

[00:20:14] Speaker 04:
And the avoidance of nepotism is the only benefit of Flynn's assistance in this case.

[00:20:20] Speaker 04:
There was no legal impediment, no practical or other impediment to his making a direct donation.

[00:20:25] Speaker 02:
I think you've made this point.

[00:20:26] Speaker 04:
Yes.

[00:20:26] Speaker 04:
OK.

[00:20:27] Speaker 04:
Very well, Your Honor.

[00:20:27] Speaker 05:
Thank you, Councilor.

[00:20:28] Speaker 05:
You've exceeded your time, but we'll give you a couple of minutes for the final.

[00:20:30] Speaker 04:
I appreciate it, Your Honor.

[00:20:31] Speaker 05:
Thank you.

[00:20:42] Speaker 03:
Good morning, counsel.

[00:20:43] Speaker 03:
Good morning.

[00:20:43] Speaker 03:
May it please the court?

[00:20:44] Speaker 03:
Lindsay Greer-Dotson on behalf of the United States.

[00:20:47] Speaker 03:
This argument raised for the first time on appeal that perceived reputational benefit was the quid fails for four reasons.

[00:20:54] Speaker 03:
The first is one the court has discussed, which is there is a jury instruction here.

[00:20:57] Speaker 03:
Jury instruction, counsel omits from their opening brief, their excerpts of record, and devotes but one sentence to in their reply that the fourth quid was a quote, $100,000 payment

[00:21:09] Speaker 03:
from USC to the Sun's nonprofit.

[00:21:12] Speaker 03:
The defense cannot dispute and does not dispute that a payment is an item of value.

[00:21:17] Speaker 03:
Renzi controls in this case.

[00:21:19] Speaker 02:
Well, but that's, it's complicated in this case.

[00:21:22] Speaker 02:
It's not that he picked up the phone or alleged to have picked up the phone and said, I want you to spend $100,000 of university money.

[00:21:29] Speaker 02:
So is opposing counsel correct that the government characterized this as funneling?

[00:21:33] Speaker 02:
A funneling of payment?

[00:21:34] Speaker 02:
Absolutely.

[00:21:35] Speaker 02:
That's my read of the record as well.

[00:21:37] Speaker 02:
Yes.

[00:21:37] Speaker 02:
So what about that?

[00:21:38] Speaker 02:
Her entire argument really rests on this point, that that doesn't satisfy Renzi.

[00:21:44] Speaker 02:
It's not a thing of value because

[00:21:47] Speaker 02:
because Mr. Ridley Thomas sent $100,000 of his campaign funds.

[00:21:51] Speaker 02:
Right.

[00:21:51] Speaker 03:
So the first argument is that the jury instruction says the payment.

[00:21:54] Speaker 02:
Secondly, every reference to... Can you slow down?

[00:21:57] Speaker 02:
Sure.

[00:21:58] Speaker 03:
The first point is that the jury, we've got the jury instructions.

[00:22:01] Speaker 03:
How does that help me, please?

[00:22:02] Speaker 03:
So that's the payment.

[00:22:03] Speaker 03:
And every time the government referenced funneling, that is inherently a reference to securing that $100,000 check.

[00:22:10] Speaker 03:
That's the whole point of funneling the money, is to get USC to issue a check.

[00:22:13] Speaker 02:
We understand that, counsel, but when you came to the podium, I heard you say this is that they're arguing for the first time on appeal.

[00:22:20] Speaker 02:
Yes.

[00:22:21] Speaker 03:
They're arguing for the first time in appeal that there's legal inadequacy with respect to the fourth quid, which is the jury instructions told the jury was a payment.

[00:22:30] Speaker 02:
All right.

[00:22:30] Speaker 02:
And you've got four reasons why that's wrong.

[00:22:31] Speaker 02:
Absolutely.

[00:22:32] Speaker 02:
And the first one is that a jury instruction?

[00:22:33] Speaker 03:
There's a jury instruction that says the fourth quid was a payment.

[00:22:36] Speaker 00:
Which one is that?

[00:22:37] Speaker 03:
That's at SCR 2.

[00:22:41] Speaker 03:
Second, yes, the government referred to funneling in argument.

[00:22:44] Speaker 03:
That's what's also said in the indictment as along with the payment.

[00:22:47] Speaker 03:
And that's because every time there's a reference to funneling that is inherently a reference to that payment, to getting that check, that's the whole point.

[00:22:54] Speaker 03:
We appreciate that.

[00:22:56] Speaker 03:
Third, even if you could divorce the service of funneling,

[00:23:00] Speaker 03:
from that ultimate check that $100,000 payment services are items of value that Schwartz.

[00:23:06] Speaker 02:
So this is what I need to understand.

[00:23:07] Speaker 02:
What is the government's position on this?

[00:23:09] Speaker 02:
Because you did argue funneling the transcript shows us that and we appreciate that it was his money and your and your theory is that but you have expressly disavowed the optics theory.

[00:23:19] Speaker 02:
You said that's not the thing of value.

[00:23:20] Speaker 03:
The thing of value, correct.

[00:23:22] Speaker 02:
Go ahead.

[00:23:23] Speaker 03:
The thing of value has never been nepotism or optics.

[00:23:27] Speaker 03:
That's why he engaged in what he did.

[00:23:29] Speaker 02:
Well, I think there's sound bites in the record that make that a little bit muddy.

[00:23:32] Speaker 02:
Please tell me what's the thing of value.

[00:23:35] Speaker 03:
The thing of value is the $100,000 payment as instructed in the jury instructions.

[00:23:40] Speaker 03:
The government, when it referenced funneling in its arguments,

[00:23:43] Speaker 03:
inherently is referencing that attempt to get USC to issue a check.

[00:23:48] Speaker 03:
And the reason that that was important to the defendant and it had value was because the defendant could not get his money to benefit his son otherwise.

[00:23:57] Speaker 02:
Right, and so this is the, but I read your brief to be backing off pretty overtly.

[00:24:03] Speaker 02:
We're not arguing, as I understand your brief, the government's not arguing that the thing of value was avoiding the publicity, the optics.

[00:24:10] Speaker 02:
Am I correct on that?

[00:24:11] Speaker 03:
Certainly that's that's his motive throughout.

[00:24:13] Speaker 02:
Okay, so so now you're saying when you referred to funneling you that is the the thing of value is the service Well transferring the money is that it there are two things when we talk about funneling Yes, there is the service the help but it's ultimately to secure the $100,000 payment.

[00:24:33] Speaker 02:
Oh, he had a hundred thousand dollars.

[00:24:34] Speaker 02:
He's that's what's different about this case.

[00:24:36] Speaker 02:
Mr Ridley Thomas started with a hundred thousand dollars and he had tried to send it and

[00:24:40] Speaker 02:
to the United Way agency, and it came back for the reasons that that agency wasn't willing to do this.

[00:24:45] Speaker 02:
And so now he's, according to the indictment and the evidence of trial, trying again.

[00:24:50] Speaker 02:
And he's enlisting help from the dean instead.

[00:24:53] Speaker 02:
And so your theory is that that is a thing of value because?

[00:24:56] Speaker 03:
Because it is a payment.

[00:24:57] Speaker 03:
And Renzi says payments are items of value.

[00:24:59] Speaker 03:
And I do want to be clear about something.

[00:25:02] Speaker 02:
So can I go back to that for just a minute?

[00:25:03] Speaker 02:
Certainly.

[00:25:04] Speaker 02:
When you say because it's a payment and Renzi was a payment, I think this harkens back to Judge Johnstone's question.

[00:25:11] Speaker 02:
The payment in Renzi was, of course, a loan that was already due.

[00:25:15] Speaker 02:
So in that way, I think, you know, we're not just talking about, as I said, calling the dean to say, send $100,000 over.

[00:25:23] Speaker 02:
But in Renzi, there was also not really, they weren't really starting from a blank slate either.

[00:25:27] Speaker 02:
That debt in Renzi was owed and it was paid.

[00:25:30] Speaker 02:
early and it wouldn't otherwise have come to the defendant at that time.

[00:25:36] Speaker 02:
But I don't know, I can't tell if you're relying on that.

[00:25:40] Speaker 03:
Well, Renzi's important in multiple ways.

[00:25:42] Speaker 03:
Here's why.

[00:25:42] Speaker 03:
Renzi says, any payment that has subjective value to the defendant is a thing of value.

[00:25:46] Speaker 03:
We read that broadly, too.

[00:25:49] Speaker 03:
Arguably, that money was already owed to the public official.

[00:25:52] Speaker 03:
It doesn't matter whether it's his money or not.

[00:25:54] Speaker 03:
The fact is that there is a payment and a payment is a thing of value.

[00:25:58] Speaker 03:
And the loan cases in particular that the government cites make clear that the immediate use of money, whether it's owed to somebody or not, that is a thing of value, a payment that allows immediate use of the cash.

[00:26:10] Speaker 03:
And defense counsel concedes that, and that's the point here.

[00:26:13] Speaker 03:
Because the defendant needed to get money for his son, to the nonprofit, to hire the employee, to provide a salary to his son.

[00:26:20] Speaker 03:
And the non-profit wasn't going to accept it.

[00:26:23] Speaker 02:
So again, is the thing of value the service of getting the money from point A to point B?

[00:26:28] Speaker 03:
The thing of value is the $100,000 payment as instructed.

[00:26:33] Speaker 03:
And even if the service were also part... The value added, he started with $100,000.

[00:26:37] Speaker 02:
So what's the value add?

[00:26:39] Speaker 03:
The value added is employment for his son.

[00:26:41] Speaker 03:
He can't get the money to his son otherwise.

[00:26:43] Speaker 03:
The nonprofit's going to reject it.

[00:26:45] Speaker 03:
The value is getting money to his son.

[00:26:47] Speaker 03:
The value is getting money to the nonprofit so it can get off the ground.

[00:26:51] Speaker 00:
Then it sounds like the service, and this was a lawful transaction, according to the testimony, setting aside, in other words, moving the ballot committee funds to his son.

[00:27:04] Speaker 00:
It wasn't illegally nepotistic.

[00:27:06] Speaker 00:
So how are we supposed to know what value, if it doesn't rely simply on the payment, I understand that's your first argument, but if we look to the value, Renzi, for example, there's at least the time value of money.

[00:27:20] Speaker 00:
There's a financial value here.

[00:27:21] Speaker 00:
Is there any proof here that the service that you're alleging had financial value to do something that was perfectly legal?

[00:27:31] Speaker 03:
Absolutely.

[00:27:31] Speaker 03:
So the value is first getting the check, getting the $100,000.

[00:27:35] Speaker 03:
In addition, the jury was perfectly reasonable to conclude that it had value in the sense that it got employment for his son, that it got- So that's the subjective value.

[00:27:44] Speaker 00:
But we've said in some of the cases, there has to be both financial and subjective value.

[00:27:48] Speaker 00:
If the financial value- So your friend argues that this was a boomerang transaction.

[00:27:54] Speaker 00:
He was bribing himself.

[00:27:56] Speaker 00:
The money was to the benefit of himself or his family.

[00:27:59] Speaker 00:
So, if the $100,000 is off the table, do you have any basis to succeed then if we're simply looking at the value of the funneling services?

[00:28:09] Speaker 03:
Absolutely.

[00:28:10] Speaker 03:
Schwartz is a case on point there that assistance in securing a merger, that assistance is a thing of value.

[00:28:18] Speaker 03:
In addition, there have been a number of cases before this.

[00:28:20] Speaker 00:
The merger is a financial transaction as well.

[00:28:23] Speaker 00:
Then we're back to the fact that the pie is not getting any bigger in this case.

[00:28:31] Speaker 00:
Unlike other financial transactions, even the early repayment of the loan has financial value.

[00:28:36] Speaker 00:
If we accept your friend's argument that he's as well off at the end of the transaction as he was at the beginning, then we just have that service.

[00:28:46] Speaker 03:
He's not as well off because he can't get the money because the nonprofit is going to reject it.

[00:28:51] Speaker 03:
And that's the whole point.

[00:28:52] Speaker 03:
This money is going to his son and it cannot get there otherwise.

[00:28:56] Speaker 02:
A related question.

[00:28:58] Speaker 02:
There's a there's indication in the record that there was in some of the communications that there was a need for the to get the money to the nonprofit quickly.

[00:29:06] Speaker 02:
Yes.

[00:29:06] Speaker 02:
And did the jury hear evidence of that?

[00:29:09] Speaker 03:
Absolutely, it's in emails and testimony.

[00:29:11] Speaker 03:
What the defendant, what had happened was the nonprofit wanted to hire an employee and it already extended this offer of employment.

[00:29:19] Speaker 03:
The money had to get to the nonprofit for that employment to go through by May 15th.

[00:29:24] Speaker 02:
For Sebastian's employment or for the assistant?

[00:29:26] Speaker 03:
For the assistant, a woman named Zanetta Smith who testified.

[00:29:29] Speaker 02:
So that money had- And the jury had those communications?

[00:29:32] Speaker 02:
Yes.

[00:29:33] Speaker 02:
Do you have the ER sites?

[00:29:34] Speaker 03:
It's the Act with Dispatch email.

[00:29:36] Speaker 03:
It's the base- I've got that.

[00:29:38] Speaker 02:
All right.

[00:29:38] Speaker 03:
That's just one of them.

[00:29:39] Speaker 03:
There was other testimony as well.

[00:29:41] Speaker 02:
I didn't mean to cut you off.

[00:29:42] Speaker 02:
Are there other?

[00:29:44] Speaker 03:
Yes, so it's the series of emails where he's saying that he needs to get the money there by a certain time and we can pull those sites for the court.

[00:29:50] Speaker 03:
But the act with dispatch makes it perfectly clear that it has to happen by May 15th in order to onboard this employee.

[00:29:57] Speaker 03:
I have that.

[00:29:57] Speaker 02:
And those were admitted.

[00:30:00] Speaker 03:
And that goes back to why the- Sorry, that was the question.

[00:30:02] Speaker 03:
That was admitted?

[00:30:03] Speaker 03:
That was admitted, yes.

[00:30:06] Speaker 03:
And that goes back to why the loan cases matter and something defense counsel just said now, which is the immediate use of cash is a thing of value.

[00:30:13] Speaker 03:
And that's what happens with loan cases.

[00:30:15] Speaker 03:
There is an immediate use and ability to use that cash, even if it's ultimately owed to somebody.

[00:30:21] Speaker 02:
When you say loan cases, is there case law other than Renzi that you want to call our attention to?

[00:30:25] Speaker 03:
Absolutely, Your Honor.

[00:30:26] Speaker 03:
Let me pull those up.

[00:30:28] Speaker 03:
So that's Gorman, Crozier, and Kemp.

[00:30:35] Speaker 03:
Page 14 of his reply brief, the defendant concedes that any payment, like a loan, that affords a person immediate use of the cash provided can be a thing of value.

[00:30:45] Speaker 03:
And that's the point.

[00:30:47] Speaker 03:
The defendant could not have gotten that money there otherwise without Maryland Flint Services.

[00:30:52] Speaker 03:
And I would like to respond to some of the points that Your Honors raised with my counsel here.

[00:31:00] Speaker 03:
First of all, it was USC's money, factually and legally.

[00:31:04] Speaker 03:
Not that it matters.

[00:31:05] Speaker 03:
Any payment under Renzi has value.

[00:31:07] Speaker 03:
The burden makes clear that as a matter of law, it was USC's money.

[00:31:10] Speaker 03:
And yes, they had an agreement.

[00:31:12] Speaker 03:
And counsel agrees that they had an agreement, in fact, between Mark Ridley Thomas and Marilyn Flynn.

[00:31:17] Speaker 03:
But that doesn't mean that USC is going to issue the payment.

[00:31:20] Speaker 03:
Marilyn Flynn has to lie and essentially defraud USC

[00:31:23] Speaker 03:
She's pretending the money's for a survey, that a PRPI, the nonprofit, is a vendor providing services to the university.

[00:31:31] Speaker 03:
And she lies to numerous employees, including the Disbursement Control Office, to get that check issued.

[00:31:36] Speaker 03:
And one critical fact here.

[00:31:38] Speaker 02:
And I think to do it quickly, but did the jury hear all of that evidence?

[00:31:42] Speaker 03:
Yes, it did.

[00:31:43] Speaker 02:
Which part of the transcript should we look at?

[00:31:45] Speaker 03:
OK, so we should look at the testimony of Adriana Gonzalez and the emails between Marilyn Flynn and Adriana Gonzalez.

[00:31:56] Speaker 01:
I interrupted you, but go right ahead.

[00:32:00] Speaker 01:
You were saying.

[00:32:02] Speaker 03:
Right.

[00:32:02] Speaker 03:
So one of the key parts is Marilyn Flynn's not even sure she can get this money out of the university.

[00:32:08] Speaker 03:
What happens is she's made this agreement with the defendant and she's trying to move heaven and earth in the span of seven days to get this money out so that it can meet this May 15th deadline that the defendant has imposed.

[00:32:18] Speaker 03:
One critical thing happens and this is the testimony of Adriana Gonzalez a woman who works for Marilyn Flynn.

[00:32:24] Speaker 03:
She's multiple lanes of Levels of supervision between her but Marilyn Flynn one morning goes into her office slumps in a chair and says I'm gonna get a lot of trouble if this check doesn't get out and she's urging

[00:32:37] Speaker 03:
her subordinate employee to get this money out quickly.

[00:32:40] Speaker 03:
The defendant has leaned on her.

[00:32:42] Speaker 03:
She's not sure she can move it out of the university.

[00:32:45] Speaker 03:
But she ultimately does by lying to the university.

[00:32:47] Speaker 03:
And USC does issue that check.

[00:32:49] Speaker 03:
One other point, when the whistleblower comes forward and this all comes to light, USC goes to that nonprofit United Ways and PRPI and asks for its money back.

[00:33:00] Speaker 03:
It's not asking to send that money to the defendant.

[00:33:04] Speaker 03:
It's asking for its money back.

[00:33:07] Speaker 03:
Just repeatedly throughout this case the government argued that it was money coming out of USC.

[00:33:12] Speaker 03:
That's a reference to USC's money I'd like to talk briefly about the standard of review plain error on this issue is the standard of review This is an argument that not once at any time pre-trial during trial or in any post trial briefing ever was raised and

[00:33:29] Speaker 03:
It's a mixed question of long fact that's using show, and that's because this court does have to look to the indictment and the transcripts to assess what the argument was whether this theory was ever advanced before it can even get to the legal merits of it.

[00:33:47] Speaker 03:
It's not on point because that was a preserved challenge to the legal theory.

[00:33:52] Speaker 03:
This is an unpreserved challenge that involves a mixed question of law and fact.

[00:33:56] Speaker 00:
So plaintiff- Is that true in your view as to both the honest services and government contracts count?

[00:34:04] Speaker 03:
Yes.

[00:34:05] Speaker 00:
Okay.

[00:34:06] Speaker 00:
Would you help me a little bit with a question I'd ask your friend?

[00:34:10] Speaker 00:
You'd cited the loan cases.

[00:34:13] Speaker 00:
Are those all on a services cases, or in other words, are there cases in our court that would translate Renzi to the government contracts statute?

[00:34:28] Speaker 03:
Right, so Crozier is a second circuit case, but that's section 666.

[00:34:32] Speaker 03:
Renzi is a ninth circuit case on point.

[00:34:35] Speaker 03:
I believe those are either honest services fraud or bribery cases that deal with this idea of a thing of value, the loan, because it affords immediate use of the cash, can be the thing of value.

[00:34:46] Speaker 00:
So what would it take, assuming, if Renzi controls here, what would, why should we carry Renzi over to 666?

[00:34:56] Speaker 03:
because it's making clear that an item of value, any sort of payment, is an item of value.

[00:35:03] Speaker 03:
And it's an item of value because it affords immediate use of that cash.

[00:35:07] Speaker 03:
And it doesn't matter whether the defendant thought it was his own money passing through USC or not.

[00:35:11] Speaker 03:
It factually wasn't.

[00:35:12] Speaker 03:
But even if it had been,

[00:35:15] Speaker 03:
The funneling through USC is affording the defendant immediate use of that cash to his son to allow the nonprofit to get off the ground.

[00:35:23] Speaker 03:
The son has a mounting personal debt.

[00:35:25] Speaker 03:
It helps the son get an income and money and health benefits.

[00:35:29] Speaker 03:
There is personal enrichment.

[00:35:30] Speaker 03:
That's something that defense counsel said repeatedly in their briefing.

[00:35:34] Speaker 03:
Personal enrichment is a hallmark of corruption.

[00:35:36] Speaker 03:
We absolutely agree.

[00:35:38] Speaker 03:
This was personal enrichment from start to finish with benefits with the admissions, scholarship, professorship,

[00:35:43] Speaker 03:
And $100,000 payment.

[00:35:45] Speaker 00:
But he wasn't convicted on any of those others.

[00:35:48] Speaker 00:
So go ahead.

[00:35:51] Speaker 03:
The government actually disputes that with respect to Count 15.

[00:35:53] Speaker 03:
Count 15 is the count where the wiring is the your wish is my command.

[00:35:58] Speaker 03:
So basically what's happened is right after the November 28th assembly letter comes,

[00:36:03] Speaker 03:
There is this frenzy of activity trying to get Sebastian Ridley Thomas out of the California State Assembly.

[00:36:09] Speaker 03:
They're trying to get him this professorship is one of the things.

[00:36:13] Speaker 03:
It's not happening.

[00:36:14] Speaker 03:
And so Mark Ridley Thomas reaches out to Marilyn Flynn, the dean.

[00:36:18] Speaker 03:
He calls the head of DMH.

[00:36:21] Speaker 03:
He then talks with Marilyn Flynn, he then sends an email that says, John Sharon, he's ready to go within 30 minutes Marilyn Flynn is then reaching out to her staff, copying Sebastian really Thomas and saying, we've got to move forward.

[00:36:35] Speaker 03:
Highest urgency here for this.

[00:36:37] Speaker 03:
scholarship, let's tap our endowed funds, move every mountain to get this scholarship.

[00:36:43] Speaker 03:
A few days later he then there's an email from his deputy about this master contract with DMH which is a big deal to Marilyn Flynn.

[00:36:50] Speaker 03:
She then emails the dean and says look we've got to get the professorship letter out this time, that offer letter out in the interest of showing MRT that we can deliver.

[00:37:00] Speaker 03:
She then delivers an early

[00:37:02] Speaker 03:
February with the admissions, scholarship, and professorship.

[00:37:06] Speaker 03:
Immediately after she delivers, he makes good on his previous agreement with her and says, your wish is my command in response to an email with the five contract amendments that she desperately needs to make telehealth viable.

[00:37:18] Speaker 03:
The $100,000 does not come into play until months and months later.

[00:37:23] Speaker 03:
At that point, there's no contemplation that Marilyn Flynn or USC would be involved in this $100,000 transaction at all.

[00:37:30] Speaker 00:
I guess I wanted to go to the immediate use of cash framing.

[00:37:36] Speaker 00:
I'm trying to recall where I saw that in the briefs.

[00:37:40] Speaker 00:
Was the jury instructed on that?

[00:37:42] Speaker 00:
Did they need to be?

[00:37:44] Speaker 03:
They don't need to be.

[00:37:45] Speaker 03:
Again, what the jury was instructed was that the fourth quid was a $100,000 payment.

[00:37:51] Speaker 00:
Right.

[00:37:52] Speaker 00:
But I think the financial value, we've talked about the subjective value.

[00:37:57] Speaker 00:
Again, I'll go back.

[00:37:59] Speaker 00:
Maybe you raised it.

[00:38:00] Speaker 00:
I just didn't note it.

[00:38:01] Speaker 00:
The immediate use of cash, which would then be not just subjective, but would be financial value, even if it was his own money, perhaps under the Renzi theory, where should we look for that development before the jury?

[00:38:17] Speaker 03:
that the immediate use of cash.

[00:38:19] Speaker 03:
I mean, the government argued that throughout, which was they had to meet this May 15th deadline, and he wasn't going to be able to get the money to his son for the benefit of the nonprofit to also hire this employee without getting a check from USC's fund.

[00:38:32] Speaker 03:
The check that's in evidence is a check from USC's bank account.

[00:38:36] Speaker 03:
I mean, that was the whole argument throughout, and the jury was perfectly capable and rational of assessing the value of that.

[00:38:47] Speaker 02:
I'm not sure you finished your thought about Count 15.

[00:38:49] Speaker 02:
Did you?

[00:38:50] Speaker 03:
Well, so the point on Count 15 is that the quids tied to that are the admission, scholarship, and professorship.

[00:38:56] Speaker 03:
And I know in the opposition to the Rule 29 briefing, one of the things the government said was, well, those counts, the majority of the honest services fraud counts pertain to the $100,000 transaction in the telehealth contract.

[00:39:08] Speaker 03:
I mean, honestly, it should have said primarily pertain, because four of the five counts do primarily pertain to that.

[00:39:15] Speaker 03:
But the reality is,

[00:39:17] Speaker 03:
Count 15 only applies to the admission scholarship and professorship on the facts.

[00:39:22] Speaker 03:
The $100,000 doesn't come into play until months and months later when the defendant is trying to get money to his son's nonprofit.

[00:39:29] Speaker 03:
and has now realized that he needs a way to do so and he can't do it directly.

[00:39:35] Speaker 03:
And the defense in their briefing keeps talking about that.

[00:39:38] Speaker 03:
Well, Marilyn Flynn's agreement on the $100,000 is a gratuity.

[00:39:42] Speaker 03:
I want to be very clear about something.

[00:39:44] Speaker 03:
The Honest Services Fraud Instructions expressly required a quid pro quo and fulsomely did so.

[00:39:51] Speaker 03:
That's at ER 68 through 76.

[00:39:55] Speaker 03:
There is no argument that those quid pro quo instructions were in any way legally insufficient, nor could there be.

[00:40:01] Speaker 03:
These were the instructions the defense requested.

[00:40:04] Speaker 03:
Once the jury found a quid pro quo, this court can be assured there was no gratuity, because under Sun Diamond, once you have a quid pro quo, we're not talking about a gratuity.

[00:40:15] Speaker 03:
First of all, the government never argued that theory.

[00:40:18] Speaker 03:
But even if there were an errant comment here or there that could have been perceived to be that the jury instructions categorically foreclosed any conviction for a gratuity with its requirement of a quid pro quo.

[00:40:30] Speaker 03:
And that's what the jury found five times over with each of its on a services fraud convictions requiring quid pro quo bribery.

[00:40:41] Speaker 03:
I want to make sure I answer any of the court's questions.

[00:40:45] Speaker 05:
Thank you.

[00:40:46] Speaker 03:
I appreciate the time.

[00:40:47] Speaker 03:
Thank you very much.

[00:40:48] Speaker 05:
Let's have two minutes for rebuttal.

[00:40:54] Speaker 04:
Thank you, Your Honors.

[00:40:55] Speaker 04:
I first want to address the notion that a service can be a thing of value for either 1346 or 666.

[00:41:03] Speaker 04:
The government points to Schwartz.

[00:41:05] Speaker 04:
Schwartz is neither.

[00:41:07] Speaker 04:
Schwartz has to do with section 1954, which is improper influence.

[00:41:11] Speaker 04:
in the administration of employee benefit plans.

[00:41:15] Speaker 04:
Theoretically, because that does not cover core political activity, the interaction between elected officials and their constituents, that could have a broader thing of value definition than we have at issue here.

[00:41:27] Speaker 04:
But the value of the merger there was financial benefits.

[00:41:31] Speaker 04:
It was to ensure the financial health of the unions then presidents.

[00:41:37] Speaker 04:
What we have here is fundamentally different.

[00:41:40] Speaker 04:
The government has leaned very heavily into this idea that the money could not have gotten there, but for Flynn's assistance.

[00:41:49] Speaker 04:
The only impediment was the appearance of nepotism.

[00:41:53] Speaker 04:
That's why community partners returned the money.

[00:41:56] Speaker 04:
There was no evidence in the record that United Ways shared that idiosyncratic concern.

[00:42:02] Speaker 04:
The evidence in the record was that Ridley Thomas was concerned about nepotistic optics, or rather, that was the government's argument.

[00:42:10] Speaker 04:
He was so concerned about nepotistic optics that he enlisted Flynn's assistance to avoid the appearance of nepotism.

[00:42:17] Speaker 05:
Counsel, is it your view that was the government's only argument?

[00:42:20] Speaker 04:
The government's what's chart and it starts with the indictment and I'll reference the court to 6 er 11 28 to 29 in order to.

[00:42:30] Speaker 04:
They funneled the money in order to ensure the success of the university's payment to United Ways and to avoid any political fallout for defendant Ridley Thomas.

[00:42:38] Speaker 05:
That's two reasons.

[00:42:39] Speaker 04:
Yes, and they both are the avoidance of nepotism.

[00:42:42] Speaker 04:
The only impediment to the money getting from point A to point B is the testimony of Sherry Dunbarry that her organization did not like the nepotistic political optics involved.

[00:42:53] Speaker 04:
The only impediment.

[00:42:54] Speaker 02:
So why isn't that enough?

[00:42:56] Speaker 02:
He tried to send it and it didn't work.

[00:42:58] Speaker 02:
It came back.

[00:42:58] Speaker 02:
He needed to get it there quickly.

[00:43:00] Speaker 02:
I just want to, I'm trying to play devil's advocate.

[00:43:02] Speaker 02:
Why is that not enough?

[00:43:03] Speaker 02:
He needs to get it there quickly so he called somebody he had worked with.

[00:43:08] Speaker 02:
That's the government's theory.

[00:43:09] Speaker 04:
Yes.

[00:43:09] Speaker 04:
So we have the pre McNally paradigm, personal enrichment, and we have the avoidance of nepotism for a public official.

[00:43:16] Speaker 04:
There is no relationship between those two.

[00:43:19] Speaker 04:
He was not personally enriched by the avoidance of nepotism.

[00:43:23] Speaker 04:
That was a benefit fundamentally to his reputation.

[00:43:27] Speaker 02:
So in other words, what I'm hearing you say is not that it wasn't a benefit.

[00:43:29] Speaker 02:
It was.

[00:43:30] Speaker 02:
But you don't think it's a benefit that satisfies post-skilling and satisfies the statutory scheme that we need.

[00:43:37] Speaker 04:
Exactly, Your Honor.

[00:43:37] Speaker 04:
Skilling has drawn the boundaries that this court must apply.

[00:43:43] Speaker 04:
I see I'm out of time.

[00:43:45] Speaker 04:
I have plenty else I would like to respond to.

[00:43:48] Speaker 04:
But I believe the court has our arguments, especially in our supplemental brief with regard to the gratuitous theory.

[00:43:53] Speaker 04:
And I thank the court for their time.

[00:43:54] Speaker 05:
Thank you, counsel.

[00:43:55] Speaker 05:
Thank you to both counsel for your helpful arguments.

[00:43:58] Speaker 05:
The case just argued is submitted for decision by the court.