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United States v. O'Grady

August 10, 1983


Appeal from a judgment of conviction entered in the Eastern District of New York (Platt, J.) after a jury trial on charges of extortion under color of official right in violation of the Hobbs Act, 18 U.S.C. § 1951(b)(2), through a New York City Transit Authority official's acceptance of over $30,000 worth of vacation trips, meals, season tickets and other benefits from contractors doing business with the Authority. Affirmed. Judge Meskill dissents.

Author: Mansfield



MANSFIELD, Circuit Judge:

We are called upon once more to define the limits of the Hobbs Act's prohibition against extortion affecting interstate commerce and carried out "under color of official right," 18 U.S.C. § 1951(b)(2) (1976). Edward O'Grady, a former employee of the New York City Transit Authority ("NYCTA"), appeals from a judgment of conviction entered in the Eastern District of New York, Thomas C. Platt, Jr., Judge, after a jury trial, on charges that O'Grady violated the Hobbs Act by accepting over $34,000 worth of vacation trips, meals season tickets, and other benefits from contractors doing business with the Transit Authority. We affirm.

During the period 1972-81, the NYCTA entered into and carried out the then-largest subway contract in history, the "R-46" contract. The Pullman-Standard Co. was the prime contractor on the project, and employed numerous subcontractors. All of these companies (the "vendors") had to submit their porposed subway car components to the NYCTA for approval. The NYCTA could reject a proposed component because it did not function adequately or because the NYCTA deemed its cosmetic appearance unacceptable. A NYCTA rejection could entail enorlus expenditures by the vendor to correct the problem.

At or near the center of this approval process was Edward O'Grady, who worked for the NYCTA as Superintendent of the Quality Control Section, Department of New Car Engineering. Between 1972 and 1981, O'Grady accepted more than $34,000 worth of in-kind benefits from vendors engaged in business with the NYCTA on the R-46 project.*fn1 The most common form of benefit that O'Grady accepted from the vendors was a golfing trip, often accompanied by meals and lodging. The largesse bestowed upon O'Grady without charge to him included over 40 fully paid trips to various resorts,*fn2 two all-events season tickets to Madison Square Garden, scores of rounds of golf, and numerous expensive meals for himself and sometimes for his wife as well.

O'Grady was indicted by a federal grand jury in December 1981 on a single count of violating 18 U.S.C. § 1951(b)(3)*fn3 by obtaining approximately $30,000 in entertainment from various vendors on the R-46 project. He was tried by a jury before Judge Platt in June 1982, found guilty, and in September 1982 sentenced to a year's probation and a fine of $10,000.

At trial a number of vendors testified to their practice of entertaining Mr. O'Grady during the period in question. Most of the witnesses denied that O'Grady had ever explicitly asked that the vendors provide the benefits, or that O'Grady had provided any explicit quid pro quo therefor to the vendors. However, there was overwhelming evidence that O'Grady made it his routine practice to accept gratuities of all sorts from vendors; indeed, one vendor testified that O'Grady had a reputation for "taking almost anything that was given to him." T. 208. Although some R-46 vendors may at their own expense have held outings for transit employees generally, including those from other cities as well as those from the NYCTA, the record reveals that on many occasions vendors entertained O'Grady only, providing him alone with substantial benefits, and that O'Grady received far more from the vendors than did any of his colleagues or superiors at the NYCTA. O'Grady was aware of the impropriety of his actions, instructing at least one of his subordinates "not to go to lunch or dinners or receive gifts from the [vendors]." T. 983.

There was some evidence that O'Grady solicited the benefits and/or delivered a quid pro quo therefor. One vendor testified that O'Grady had complained to him that the vendor was not "generous," and had stated that he (the vendor) was in fact "tight as a . . . excuse the language." T. 345-47. The same vendor testified that quest by the vendor with regard to certain components, but that after the company took O'Grady on a primarily-social trip to Disney World in Orlando, Florida, O'Grady agreed with the company's position. T. 326-28, 341-42. Another vendor testified that although his relationship with O'Grady was initially "difficult," his "communications" with O'Grady improved somewhat after he took O'Grady and his wife out for dinner and a show. T. 587, 592.


The Hobbs Act in pertinent part defines extortion as "the obtaining of property from another, with his consent, . . . under color of official right." Relying exclusively on this provision, the government argues that O'Grady made "Wrongful use of his office to obtain money not due him or his office." United States v. Margiotta, 688 F.2d 108, 130 (2d Cir. 1982), cert. denied, 103 S. Ct. 1891 (1983).

O'Grady first argues that his conviction must be overturned because his actions, although perhaps illegal under local law,*fn4 did not amount to a violation of the Hobbs Act as that Act is construed by the dissent in United States v. Cerilli, 603 F.2d 415, 426 (3d Cir. 1979) (Aldisert, J., dissenting), cert. denied, 444 U.S. 1043 (1980). According to the Cerilli dissent, which O'Grady urges this court to adopt, the Hobbs Act incorporates by reference the definition of "extortion" under the New York Penal Code. The Cerilli dissent argues that under that definition extortion "under color of official right" can occur in only three narrow circumstances: (1) when an official commits "oppression" by unlawfully seizing an individual or his property; (2) when an official makes a specific misrepresentation that the benefits he is accepting constitute an authorized "fee," when in fact no such fee or only a lesser fee has been authorized; and (3) when the official wrongfully uses force or fear. Id. at 433. O'Grady relies on the fact that his conduct does not fit within any of these categories of wrongdoing.

Like other circuits that have considered this question, we decline the invitation to find that the Hobbs Act incorporates every detail of the New York law of extortion. United States v. Cerilli, supra, 603 F.2d 415, 425-26 (3d Cir. 1979), cert. denied, 444 U.S. 1043 (1980); United States v. Harding, 563 F.2d 299, 304 (6th Cir. 1977), cert. dneied, 434 U.S. 1062 (1978); see also United States v. French, 628 F.2d 1069, 1073 (8th Cir.), cert. denied, 449 U.S. 956 (1980) (New York law of extortion is helpful but not controlling authority). The legislative history of the Hobbs Act is virtually silent with respect to the "color of official right" provision. See United States v. French, supra, 628 F.2d at 1073; United States v. Cerilli, supra, 603 F.2d at 425-26. While there are indications from the congressional debates over other portions of the Hobbs Act that the New York law of extortion was considered with respect to the legality of certain labor union activities, see United States v. Enmons, 410 U.S. 396, 406 n.16 (1973), we find no congressional mandate to incorporate the New York law of extortion into the Hobbs Act. As the Harding court noted, many states besides New York had statutes barring extortion "under color of official right" at the time Congress passed the Hobbs Act, see Harding, supra, 563 F.2d at 304, suggesting that Congress intended to refer not only to the law of New York state on extortion but to that of other states as well. See French, supra, 628 F.2d at 1073. In the absence of some indication that Congress intended to shackle the broad language of the Hobbs Act with the particular restrictions existing in a single state's law, we decline to read the Act so narrowly.

O'Grady makes two further arguments that this Court has already explicity rejected. First, he contends that the Hobbs Act should be read to provide that "extortion under color of official right" occurs only when payment is obtained by "force, fear, or duress." We recently rejected this argument in United States v. Margiotta, 688 F.2d 108, 131 (2d Cir. 1982), cert. denied, 103 S. Ct. 1891 (1983), and we see no need to reconsider it here. See also United States v. Harding, supra, 563 F.2d at 305-06; United States v. Mazzei, supra, 521 F.2d at 644. Second, O'Grady argues that he cannot be convicted under the "color of official right" prong of the Hobbs Act because there was insufficient proof that he delivered any quid pro quo to the donating vendors. Leaving aside evidence from which it could be inferred that O'Grady favored certain vendors after partaking of their generosity, we note that O'Grady's contention was rejected by this Court in United States v. Trotta, 525 F.2d 1096, 1100 (2d Cir. 1975), cert. denied, 425 U.S. 971 (1976), in which we point out that "a quid pro quo may, of course, be forthcoming in an extortion case, or it may not. In either event, it is not an essential element of the crime." Trotta, 525 F.2d at 1100; see also Margiotta, supra, 688 F.2d at 133 (same).

O'Grady also argues that the vacation trips, theatre and sports tickets, meals, and the like could not have been extorted from the vendors because he was "due" those benefits in light of the widespread practice in the industry of bestowing such benefits upon key transit authority officials. Even if we were to accept the remarkable argument that widespread corruption is not corruption at all, we would find that O'Grady's acceptance of benefits from vendors far outdistanced that of other NYCTA officials, and that any argument that he was entitled to such benefits is absurd.

Finally, although O'Grady has raised no objection on this appeal to the jury charge, our colleague Judge Meskill urges in dissent that the district court erred in failing to instruct the jury that it could convict only if it found that O'Grady actively "induced" or "obtained" the giving of benefits by the vendors, and that the evidence may have been insufficient to support such a finding. We disagree. First, we note that other Courts of Appeals have generally rejected the notion that an official must actively "take the initiative" or "induce payment" in order to violate the Hobbs Act. See United States v. Jannotti, 673 F.2d 578, 595 (3d Cir.) (en banc ), cert. denied, 457 U.S. 1106 (1982); United States v. Hedman, 630 F.2d 1184, 1195 (7th Cir. 1980), cert. denied, 450 U.S. 965 (1981); United States v. Butler, 618 F.2d 411, 417-18 (6th Cir. 1980), cert. denied, 447 U.S. 927 (1980), 449 U.S. 1089 (1981).*fn5

"At common law, extortion was defined as "any officer's unlawfully taking, by color of his office, from any man, any money or thing of value that is not due to him." 4 W. Blackstone, Commentaries n.* (Footnote omitted) 141. The requirement that the money be taken "by color of his office" meant "simply that the officer must have taken money not due him for the performance of his official duties." . . .

"The holding in our cases that the Hobbs Act covers the acceptance of bribes by public officials even when payment was not obtained by force, threats, or use of fear, and the further suggestion that there need be no inducement or prior request for such payments, accords with the view taken by other courts of appeals. In United States v. Hedman, 630 F.2d 1184 (7th Cir. 1980), cert. denied, 450 U.S. 965, 101 S. Ct. 1481, 67 L. Ed. 2d 614 (1981), the government proved at trial that defendants, city building inspectors, accepted money from builders who failed to conform with the building code, but no solicitation of the bribes was shown. In rejecting defendants' argument that the government must show that the officials were the "initiators' or "inducers' of the alleged payments, the court stated:

It is settled law in this Circuit as well as others that in a Hobbs Act prosecution for extortion under color of official right it is unnecessary to show that the defendant induced the extortionate payment. . . . The Government is merely required to prove that a public official obtained money to which he was not entitled and which he obtained only because of his official position.

"Id. at 1195 (footnote omitted). The Sixth Circuit has also held that the "technical overdrawn distinction" which the public officials sought to make there between bribery and extortion under the Hobbs Act is not in keeping with the legislative intent, and that "in cases of misuse of official power, bribery and extortion are not mutually exclusive." United States v. Butler, 618 F.2d 411, 417 (6th Cir. 1980), cert. denied, 447 U.S. 927, 100 S. Ct. 3024, 65 L. Ed. 2d 1121 (1980) and 449 U.S. 1089, 101 S. Ct. 811, 66 L. Ed. 2d 816 (1981)." United States v. Jannotti, supra, 673 F.2d at 595.

We are persuaded that a public official need not expressly broach the idea of payment in order to extort benefits within the meaning of the "color of official right" provision; his willing acceptance of benefits that are "induced" by the sheer power of his public office is sufficient to violate the Act. See, e.g., United States v. Jannotti, supra, 673 F.2d at 595. Although the giving of benefits to a public official may amount to bribery, the public official who wrongfully accepts the benefits is not held responsible under the Hobbs Act for the conduct of the ...

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