filed: September 25, 1992; As Corrected September 28, 1992. Second Correction October 22, 1992. Third Correction December 14, 1992.
On Appeal From the United States District Court For the District of New Jersey. (D.C. Crim. No. 90-00273)
Before: Becker, Nygaard, and Higginbotham, Circuit Judges.
This appeal from a judgment in a criminal case requires us to address several interesting and important questions arising under the Sentencing Reform Act and the Sentencing Guidelines.
Defendant Rene Spiropoulos entered into a plea agreement with the government that required him to cooperate in the investigation of individuals who had committed offenses related to his. The Agreement obligated the government, in exchange, to file a motion pursuant to USSG § 5K1.1, requesting a downward departure from the Guidelines sentencing range based on Spiropoulos's good-faith effort to assist the government. After Spiropoulos fulfilled his obligations under the Plea Agreement, the government moved for a downward departure pursuant to section 5K1.1. The district court granted the motion but tempered the extent of the requested downward departure because, by mere happenstance, the defendant's cooperation bore considerably less fruit than had been expected. The first question we must answer is whether the fruitlessness of a defendant's good-faith cooperation constitutes a legally permissible consideration in determining the amount of downward departure under section 5K1.1. We conclude that it does.
Spiropoulos also contends that he is entitled to resentencing because the district court, during a highly charged sentencing hearing, described his conduct as malicious and avaricious. We must determine whether the district court's use of this characterization, which was in large part unjustified, deprived Spiropoulos of due process and requires his resentencing. For reasons that follow, we conclude that there was no due process violation.
Finally, the district court directed Spiropoulos to pay a fine based in part on the cost of his imprisonment as provided for in USSG § 5E1.2(i). Spiropoulos contends that requiring a defendant to pay the costs of his imprisonment is not authorized by the Sentencing Reform Act and is inconsistent with the Due Process Clause of the Fifth Amendment. Spiropoulos's contentions raise a number of intricate and difficult questions of construction and application of the Act, which we will discuss at length. Because we believe that the assessment of fines under section 5E1.2(i) is inconsistent with the Act as presently drafted, we will invalidate section 5E1.2(i) and vacate that portion of the fine against Spiropoulos, leaving it to Congress to make provision for such fines if it so desires.
I. FACTS AND PROCEDURAL HISTORY
Spiropoulos was a real estate developer involved in the multi-year construction of a large development in a New Jersey township. Before constructing each subdivision, Spiropoulos was required to obtain a building permit, which the township generally granted as a matter of course. Beginning in 1985, however, the township's corrupt mayor forced Spiropoulos to pay bribes totalling more than $200,000 to obtain a subdivision permit. Howard Boswell, a consulting engineer for the township, solicited the bribes on the mayor's behalf. Although Spiropoulos paid the bribes, he neither sought, nor was he granted, anything to which he was not legitimately entitled in exchange for the bribes.
After the government had uncovered the bribery scheme, Spiropoulos entered into the Plea Agreement, in which the government promised to move for a downward departure pursuant to section 5K1.1 in exchange for Spiropoulos's cooperation. Additionally, Spiropoulos pled guilty to two counts of conspiracy, see 18 USCA § 371 (West, 1966 and 1992 Supp): 1) conspiracy to violate 18 USCA § 666 (West, 1992 Supp) by the payment of bribes; and 2) conspiracy to violate 26 USCA § 7201 (West, 1989 and 1992 Supp) by enabling the mayor to evade income taxes due on those bribes. Spiropoulos cooperated both by providing the government with information and by participating in the investigation. Specifically, Spiropoulos wore a "wire" on three occasions to monitor his meetings with others involved in the scheme, including a meeting with Boswell. The wire recorded Boswell's statements acknowledging that he had solicited bribes on behalf of the mayor. After listening to the tape, an FBI agent told Spiropoulos that he had "hit a homerun."
The evidence that Spiropoulos had helped the government to obtain did not prove as valuable to the government as anticipated, however, because Boswell died while the government was investigating him. Consequently, much of the evidence that Spiropoulos had helped accumulate was ultimately useless. Nevertheless, because of his cooperation and his fidelity to the Plea Agreement, the government moved pursuant to section 5K1.1 for a downward departure from the Guideline sentencing range. The Guideline range set forth in the Presentence Investigation Report was 21 to 27 months imprisonment, and a fine of between $5,000 and $50,000. The government recommended a sentence within the range of 10 1/2 to 13 1/2 months, or half the guideline range. The government made no reference to whether any fine was appropriate or to the amount of a possible fine.
At sentencing, Spiropoulos's counsel maintained that the degree of downward departure must be gauged by what defendant did to assist the government and not by whether, for reasons beyond his control, the government successfully prosecuted others based on information he had given them.*fn1 Counsel also stressed that Spiropoulos had sought nothing from the bribes, but rather was paying for that to which he was lawfully entitled. Based on these arguments, defense counsel contended that Spiropoulos was entitled to avoid imprisonment completely and recommended that he be sentenced to probation.
The court granted the section 5K1.1 motion but made clear that Spiropoulos's sentence would be decreased less than it would have if Boswell had lived, and Spiropoulos's cooperation had borne more fruit:
Many times individuals want to cooperate, they're not able to cooperate and the argument is made that they should be given consideration because they would want to do so if they could do so, but because of circumstances, they can't.
A spin of that argument is offered here, that although there was participation with regard to the investigation concerning Boswell, his death very close on the heels of the investigation prevented further assistance by the defendant. Also, the defendant attempted on at least one other instance to assist the Government.
This cannot be ignored. Cooperation is very important, it is something that has to be taken into consideration.
On the other hand, I'm not sure I buy, Mr. Fornari, all of your argument, that the ultimate result should not be considered. That's a spin of the prior argument that many defendants make. We'd like to cooperate, we just don't have the goods, but if we did, we'd give them to you. So I appreciate what you have both said there, to project out what would happen had Boswell lived. It is nothing more than speculation and has no place in this.
I recognize your cooperation, your attempt to cooperate. I recognize nothing came to fruition, but that in itself was not because of you, but because of the death that followed so quickly of Mr. Boswell. Whether anything would have come from that, I don't know, but I agree with the Government, that cannot be ignored. Your attempt to cooperate cannot be ignored. Indeed, much of this crime would not come to light were it not for individuals who cooperated with the Government.
During the course of its sentencing statement, the district court also responded to defense counsel's arguments regarding mitigation. It stated:
Your submissions argue, your attorney argues that you received nothing more than what was due to you and accepting that, my observation is: You obtained a lawful result through unlawful means. That is not acceptable sir. That's corrupt and it's criminal in the fullest and most complete sense of those words.
Your corrupt conduct was highly criminal, malicious, driven by avarice.
The government concedes that there was no factual basis to support a finding that Spiropoulos's conduct was "malicious." It seeks to justify the statement about "avarice" as being judgmental rather than factual. The PSI did not describe defendant's conduct as either malicious or avaricious.
The district court imposed a sentence of 14 months' incarceration concurrently on both counts, two years' supervised release, and a fine of $50,000. Thus, with respect to the term of incarceration, the district court departed downward by one-third from the 21-month lower end of the guidelines, rather than by one-half, as the government had recommended. With respect to the fine, the court imposed a fine at the high end of the guideline range. In addition to the $50,000 fine, the district court directed that Spiropoulos pay, as an additional fine reflecting the costs of incarceration:
Second, you will pay the cost of your incarceration of $1,115.56 per month as an additional fine.
Following disclosure of clerical errors in the judgment the district court entered an Order Correcting Judgment, which clarified the direction to pay costs of incarceration:
Ordered, that the sentence in the Judgment reading: "The defendant shall pay a fine of $69,817.84," shall be corrected to read: "The defendant shall pay a fine of $65,617.84." This amount reflects the $50,000.00 fine imposed on defendant and a charge of $1,115.56 per month for the fourteen months of incarceration defendant is to serve; and it is further
Ordered, that if defendant is eligible for credit toward the service of his sentence pursuant to 18 U.S.C. § 3624(b), then the charge of $1,115.56 per month to pay for defendant's incarceration will be reduced accordingly.
Spiropoulos now appeals from the judgment. We have appellate jurisdiction under 28 USCA § 1291 (West, 1966 and West Supp 1992) and 18 USCA § 3742(a) (West, 1985 and 1992 Supp).
II. DEPARTURE BASED ON SUBSTANTIAL ASSISTANCE
Spiropoulos contends that the district court applied an improper legal standard in determining the degree of downward departure when it imposed a harsher sentence on him than it would have imposed had Boswell's death not caused the investigation to cease. He submits that the Sentencing Reform Act, the Guidelines, and the Plea Agreement all make clear that downward departures based on substantial assistance should be gauged by whether defendant made a good-faith effort to provide substantial assistance to the government, and not by whether that cooperation resulted in the successful prosecution of others.*fn2 Spiropoulos urges that altering the amount of the departure based on the success of subsequent prosecutions is, therefore, inconsistent with the Act, the Guidelines, and the Plea Agreement.
Our analysis begins with the Sentencing Reform Act, which created the Sentencing Commission and contains the basic charter for the Guidelines. The Act provides:
(n) The Commission shall assure that the guidelines reflect the general appropriateness of imposing a lower sentence than would otherwise be imposed, including a sentence that is lower than that established by statute as a minimum sentence, to take into account a defendant's substantial assistance in ...