Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 1 of 14 PageID# 9631

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1 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 1 of 14 PageID# 9631 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division UNITED STATES of AMERICA, v. Case No. 3:14-cr-12 (JRS) Hon. James R. Spencer ROBERT F. MCDONNELL MAUREEN G. MCDONNELL MEMORANDUM IN SUPPORT OF DEFENDANT MAUREEN G. MCDONNELL S MOTION # 23 MOTION FOR JUDGMENT OF ACQUITTAL PURSUANT TO RULE 29 OF THE FEDERAL RULES OF CRIMINAL PROCEDURE

2 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 2 of 14 PageID# 9632 TABLE OF CONTENTS Page INTRODUCTION...1 ARGUMENT...2 I. MRS. MCDONNELL IS ENTITLED TO A JUDGMENT OF ACQUITTAL ON COUNTS 1-11 BECAUSE HER HUSBAND DID NOT PERFORM OR PROMISE TO PERFORM ANY OFFICIAL ACTS TO BENEFIT MR. WILLIAMS, AND AS A PRIVATE CITIZEN, SHE CANNOT BE GUILTY IN HER OWN RIGHT....2 II. III. MRS. MCDONNELL IS ENTITLED TO A JUDGMENT OF ACQUITTAL ON COUNT 13 BECAUSE THERE IS NO EVIDENCE THAT SHE KNOWINGLY MADE A FALSE STATEMENT TO PENTAGON FEDERAL CREDIT UNION IN ORDER TO INFLUENCE THE BANK....3 MRS. MCDONNELL IS ENTITLED TO A JUDGMENT OF ACQUITTAL ON COUNT 14 BECAUSE THERE IS NO EVIDENCE THAT SHE INTENDED TO OBSTRUCT A GRAND JURY PROCEEDING....4 A. The Note Contains No False Assertions of Fact....5 B. There Was No Existing or Prospective Federal Grand Jury Proceeding....6 C. The Government Has Not Presented Any Evidence of a Nexus Between Mrs. McDonnell s Note and Obstruction of Any Grand Jury Proceeding....7 CONCLUSION...11

3 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 3 of 14 PageID# 9633 INTRODUCTION After nearly three weeks of trial, the Government has rested its case-in-chief without presenting sufficient evidence as to any of the charges made against Maureen G. McDonnell in the Indictment. As set forth in the memorandum supporting Robert F. McDonnell s Motion for Judgment of Acquittal, Dkt. Nos. 408 & 409, 1 the Government has failed to show that Governor McDonnell performed or promised to perform any official act for Mr. Williams, as required to prove Counts 1-11 of the Indictment. This failure to produce any evidence that would allow a jury to conclude that the Governor promised to exercise (or to influence others to exercise) any actual governmental power to benefit Mr. Williams is fatal as to the charges against Mrs. McDonnell, since Mrs. McDonnell was not a public official and cannot be convicted of honest services wire fraud or Hobbs Act violations in her own right. With respect to Count 13, the Government has offered no evidence as to Mrs. McDonnell beyond the fact that she signed the loan application to Pentagon Federal Credit Union ("PenFed"). This is insufficient to establish that Mrs. McDonnell made a false statement to the bank in order to influence the bank s action respecting a loan to her, or that she made such a statement knowingly. Finally, as to the obstruction charge alleged in Count 14 of the Indictment, the Government has failed to offer evidence showing (1) that the letter Mrs. McDonnell gave to Jonnie Williams was false; (2) that in giving the letter to Jonnie Williams, Mrs. McDonnell intended to obstruct, influence or impede a grand jury proceeding; or (3) that Mrs. McDonnell s conduct, if successful, would have had the natural and probable effect of interfering with the due administration of justice. For these reasons, Mrs. McDonnell is entitled to a judgment of acquittal on Counts 1-11 and of the Indictment. 1 Mrs. McDonnell joins in Robert F. McDonnell s Motion for Judgment of Acquittal. 1

4 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 4 of 14 PageID# 9634 ARGUMENT The standard governing a Rule 29 motion for a judgment of acquittal is whether there is substantial evidence (direct or circumstantial) which, taken in the light most favorable to the prosecution, would warrant a jury finding that defendant was guilty beyond a reasonable doubt. United States v. Jaensch, 678 F. Supp. 2d 421 (E.D. Va. 2010) (quoting United States v. MacCloskey, 682 F.2d 468, 473 (4th Cir. 1982)). For the prosecution to withstand a Rule 29 motion, the evidence must be sufficient to support a reasonable inference that each of the elements necessary for conviction is satisfied beyond a reasonable doubt. Id. (citing MacCloskey, 682 F.2d at 474). Here, the evidence will not support a jury finding that Mrs. McDonnell committed the crimes charged in Counts 1-11 or of the Indictment. A judgment of acquittal should therefore be entered on all of these counts. I. MRS. MCDONNELL IS ENTITLED TO A JUDGMENT OF ACQUITTAL ON COUNTS 1-11 BECAUSE HER HUSBAND DID NOT PERFORM OR PROMISE TO PERFORM ANY OFFICIAL ACTS TO BENEFIT MR. WILLIAMS, AND AS A PRIVATE CITIZEN, SHE CANNOT BE GUILTY IN HER OWN RIGHT. It is undisputed in this case that [a]s First Lady of Virginia, defendant Maureen G. McDonnell was not a public official. See Stipulation 1, 17, Dkt As a mere volunteer, Mrs. McDonnell cannot herself be guilty of either honest services wire fraud (Counts 1-4) or Hobbs Act extortion (Counts 5-11), since she did not owe any honest services to the citizens of Virginia and had no public office to corrupt. Rather, the Government s theory in this case is that Mrs. McDonnell conspired with her husband to corrupt his public office. Thus, the corruption charges against Mrs. McDonnell necessarily rise or fall with the Government s case against Mr. McDonnell. As shown in the memorandum accompanying Robert F. McDonnell s concurrently filed Motion for Judgment of Acquittal, Dkt. Nos. 408 and 409, the Government has failed to establish 2

5 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 5 of 14 PageID# 9635 that Governor McDonnell agreed (or conspired) to perform official acts in exchange for receiving things of value from Mr. Williams, as required to prove honest services wire fraud and Hobbs Act extortion. Nor is there any evidence that Mrs. McDonnell attempted to influence her husband to corrupt his office. See July 30, 2014 Tr. 680:25 681:6 (Q: Well, to be clear, she s saying that she s going to help you, but she s not promising you that the Governor is going to help you, right? A: No. Q: And she never tells you at this meeting, I ll get Bob to do X, Y, or Z if you give us the money? A: No. ). The Government s proof as to Counts 1-11 of the Indictment is therefore deficient as to both Mr. and Mrs. McDonnell. II. MRS. MCDONNELL IS ENTITLED TO A JUDGMENT OF ACQUITTAL ON COUNT 13 BECAUSE THERE IS NO EVIDENCE THAT SHE KNOWINGLY MADE A FALSE STATEMENT TO PENTAGON FEDERAL CREDIT UNION IN ORDER TO INFLUENCE THE BANK. Count 13 of the Indictment charges Mrs. McDonnell and her husband with violating 18 U.S.C by knowingly making a false statement to PenFed on February 1, 2013 when they submitted a joint Uniform Residential Loan Application to refinance one of their properties. Specifically, the Government alleges that the McDonnells failed to list at least $120,000 in loans from Mr. Williams on the application. See Indictment 121. In order to establish a violation of 1014, the Government must prove (1) that Mrs. McDonnell made a false statement, (2) that she made that statement in order to influence a bank s action respecting a loan to her, and (3) that she made the statement knowingly. See Elliott v. United States, 332 F.3d 753, 759 (4th Cir. 2003). The evidence offered by the Government in this case is insufficient to establish either the second or third elements. The PenFed representative, Nanette Bolt, could not recall whether Maureen McDonnell was on the initial January 23, 2013 conference call in which Ms. Bolt collected general financial information in order to prepare the McDonnells loan application. See August 13, 2014 Tr. at 3

6 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 6 of 14 PageID# :2-5 (Q. And who was on the call from the Governor s family side? A. The Governor was, I think Ms. McDonnell, I don t recall, and the sister, Maureen McDonnell. ); id. at 3130:11 17 (MR. BURCK: The witness doesn t recall if Ms. McDonnell is on the phone call. He is referring to both McDonnells. THE COURT: Is that what you said? That you didn t recall whether she was, Ms. McDonnell, was on the call or not? THE WITNESS: Correct. ). The Government proffered no evidence showing that Mrs. McDonnell participated in the preparation of the loan application, nor did they demonstrate that she actually reviewed the application after it had been prepared. See August 13, 2014 Tr. 3213:5 8 (Q: Is it fair to say that even though she was on the call, that you don t recall her saying anything on that call? A: Correct. ); 3213: :5 (Q: Okay. Now, the -- you ve testified about a number of conversations and s you had with Governor McDonnell today. And do you recall having any specific conversations with Ms. McDonnell, Maureen McDonnell, the wife, about this application? A: Not very much. Q: Okay. Is it fair to say that Governor McDonnell was the person you were dealing with with respect --" A: "Point of contact, right. Q: And getting information during the various iterations of the application, that information came from Governor McDonnell, right? A: Correct. ). Rather, the sum total of the Government s evidence against Mrs. McDonnell is that her signature appears on the document. This is insufficient to establish that Mrs. McDonnell knowingly made a false statement with the intent to influence the bank s actions. III. MRS. MCDONNELL IS ENTITLED TO A JUDGMENT OF ACQUITTAL ON COUNT 14 BECAUSE THERE IS NO EVIDENCE THAT SHE INTENDED TO OBSTRUCT A GRAND JURY PROCEEDING. Finally, the Court should grant a judgment of acquittal in relation to Count 14 because the Government (a) has not presented any evidence that Mrs. McDonnell made any false assertion of fact; (b) has not presented any evidence that Mrs. McDonnell had knowledge or notice of 4

7 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 7 of 14 PageID# 9637 existing or prospective grand jury proceedings; and (c) has not presented, and cannot present, any evidence of the nexus requirement necessary to establish intent to influence a grand jury proceeding under 18 U.S.C. 1512(c)(2). Thus, the Government has failed to adduce evidence to establish the elements it bears the burden of proving to support a conviction for obstruction, namely, (1) knowledge or notice of the grand jury proceedings, and (2) that the defendant acted with corrupt intent, (3) to obstruct, influence, or impede an official proceeding. See United States v Hymer, 6:09-CR , 2011 WL (S.D. W. Va. Feb. 14, 2011) (citing United States v. Crandle, 274 F. App x 324, 327 (4th Cir. 2008) and United States v. Brooks, 111 F.3d 365, 372 (4th Cir. 1997)); United States v Reynolds, 178 F. App x 281, 287 (4th Cir. 2006). A. The Note Contains No False Assertions of Fact. The note Mrs. McDonnell sent to Mr. Williams when she returned the dresses to him cannot constitute obstruction because it contains no false assertions of fact. The note states: Dearest Celeste & Jonnie, I can t begin to thank you how special [sic] you made me feel on Cailin s wedding day and on our 35th wedding anniversary day all dressed up in the beautiful outfits you adorned me in on both momentous occasions. I m so happy we ve been able to share so many significant milestones in our lives with you both! I truly hope your daughter will now be able to enjoy these lovely outfits and show them off on many grand occasions. If not, I m sure there are many exemplary charitable organizations like we talked about who would welcome the opportunity to auction them for a wonderful cause, having been worn only once by the First Lady of Virginia to her daughter s wedding at the Executive Mansion and celebrating her 35th wedding Anniversary with the Governor! Actually, if that happens I think I ll be there to bid on them myself! Please know that we cherish our friendship with you and look forward to many more wonderful memories together ahead! Xoxo! Maureen McDonnell. See GX-3 (emphasis added). There is no statement in this note that the Government has shown to be false. The Government alleges that Mrs. McDonnell and Mr. Williams never agreed that 5

8 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 8 of 14 PageID# 9638 Mrs. McDonnell would return the dresses that she included with this note, and to be sure, Mr. Williams testified to this effect. See, e.g., August 1, 2014 Tr. at 1025:15 18 ( This is a fabrication right here.... What s not true is that this -- these clothes were never intended to be returned to me. I purchased these clothes for Maureen McDonnell. ). But Government s Exhibit 3 does not claim Mrs. McDonnell and Mr. Williams had an agreement to return the dresses. The Government apparently focuses on two aspects of the note: (1) Mrs. McDonnell s hope that Mr. Williams s daughter will now be able to enjoy these lovely outfits and show them off on many grand occasions and (2) Mrs. McDonnell s statement that there are many exemplary charitable organizations like we talked about who would welcome the opportunity to auction them for a wonderful cause. As a simple matter of grammar, there is no possible construction of these statements that amounts to a claim that Mrs. McDonnell and Mr. Williams previously had agreed that Mrs. McDonnell would return the dresses. No amount of textual exegesis can draw such a statement out of the words that appear on the face of Government Exhibit 3. It is impossible for an accurate statement to obstruct a grand jury. See, e.g., United States v. Thomas, 916 F.2d 647, (11th Cir. 1990) (reversing conviction where statement was not established to be false and where determining falsity would require conjecture and innuendo ). On this basis alone, there is no evidence to support a conviction of Mrs. McDonnell on Count 14. B. There Was No Existing or Prospective Federal Grand Jury Proceeding. The absence of an existing or pending federal grand jury proceeding at the time Mrs. McDonnell returned the dresses similarly requires acquittal on Count 14. According to testimony from the Government s own witness, there was no federal grand jury investigation into the McDonnells at the time the charged conduct occurred. August 12, 2014 Tr. at 2992: :6 (Q: At the time you went to interview Ms. McDonnell in February of 2013, was there a 6

9 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 9 of 14 PageID# 9639 federal grand jury investigation open into the McDonnells for public corruption? A: No, there was not. ). Indeed, no federal officials attended the February 15 interview of Mrs. McDonnell, see August 12, 2014 Tr. at 2971:13 17 (Q: Now, you show up at the Mansion. Do you show up with Special Agent Kennedy? A: No, I did not. Q: So it was just yourself and -- A: Special Agent Lyons. ), so Mrs. McDonnell clearly had no inkling of federal involvement. Although no state of mind need be proved with respect to the circumstance that the proceeding sought to be obstructed was, in fact, federal, 1512(g), or that the federal proceeding sought to be obstructed was pending at the time, 1512(g), the Government nevertheless must show that what Mrs. McDonnell purportedly intended to obstruct, in fact, was a federal official proceeding. United States v. Dunn, 434 F. Supp. 2d 1203, (M.D. Ala. 2006) (finding defendant did not obstruct where defendant only knew about the local murder investigation, not the federal investigation). Because the Government has not adduced any evidence that Mrs. McDonnell had the intent to obstruct a federal proceeding, a judgment of acquittal as to Count 14 is required. C. The Government Has Not Presented Any Evidence of a Nexus Between Mrs. McDonnell s Note and Obstruction of Any Grand Jury Proceeding. As the Government has conceded, it must show a nexus in time, causation, or logic with the judicial proceedings.... In other words, the endeavor must have the natural and probable effect of interfering with the due administration of justice. See United States v Aguilar, 515 U.S. 593, 599 (1995); United States v Reich, 479 F.3d 179, 186 (2d Cir. 2007) (applying nexus requirement to 1512(c)(2)); see also United States v Wein, 521 F. App x 138, 141 (4th Cir. 2013) (same); United States v. Johnson, 553 F. Supp. 2d 582, 626 (E.D.Va. 2008) (citing Aguilar); Government s Response in Opposition to Maureen McDonnell s Motion to Dismiss, Dkt No. 147, at 7 ( [I]t is true that at trial, the Government will have to establish the so-called 7

10 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 10 of 14 PageID# 9640 nexus requirement in connection with the intent element ). Courts have held that this means that the Government must show that Mrs. McDonnell wrote the note and provided it to Mr. Williams with the specific intent to obstruct the federal grand jury. Schwarz, 283 F.3d at 107 (emphasis added). This is the minimum required. See id. The Supreme Court s decision in Aguilar made clear that conduct is punishable where the defendant acts with an intent to obstruct justice, and in a manner that is likely to obstruct justice. Id. at 601 (emphasis added); United States v. Blair, 661 F.3d 755, 766 (4th Cir. 2011) (defendant must be aware that success in the allegedly obstructive conduct is likely to obstruct an official proceeding). In Aguilar, the defendant (a federal district court judge) lied to FBI agents about his participation in an embezzlement case and his knowledge of a wiretap authorized by another district court judge. 515 U.S. at 597. At the time that the defendant lied to the agents, he was aware that a grand jury was investigating an alleged conspiracy to influence the embezzlement case. Id. at There was no indication, however, that the grand jury had authorized or directed the FBI investigation, nor that the grand jury had even summoned the particular agents to testify. Id. at 600. Therefore, the Court held that it was speculative as to what use would be made of the defendant s false statements and that it could not be said that the natural and probable effect would be the interference with the due administration of justice. Id. at 601 ( But what use will be made of false testimony given to an investigating agent who has not been subpoenaed or otherwise directed to appear before the grand jury is far more speculative. ). In rejecting Justice Scalia s dissent, the Court in Aguilar said: Justice SCALIA also apparently believes that any act, done with the intent to obstruct... the due administration of justice, is sufficient to impose criminal liability. Under the dissent s theory, a man could be found guilty under 1503 if he knew of a pending investigation and lied to his wife about his whereabouts at the time of the crime, thinking that an FBI agent might decide to interview 8

11 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 11 of 14 PageID# U.S. at 602. her and that she might in turn be influenced in her statement to the agent by her husband s false account of his whereabouts. The intent to obstruct justice is indeed present, but the man s culpability is a good deal less clear from the statute than we usually require in order to impose criminal liability. In United States v. Schwarz, the defendant was aware of a federal grand jury investigation relating to the charges at issue in that case. 283 F.3d 76, 107 (2d Cir. 2002). The defendant was himself served with a federal grand jury subpoena and then interviewed two days later by federal investigators about the conduct then being investigated by a federal grand jury. Id. Indeed, the defendant initiated the meeting with the very same federal law enforcement officers that served him with the federal grand jury subpoena. Id. It was during this interview that he made the allegedly false statements that were the basis of the obstruction charge. Id. Nonetheless, the Court of Appeals determined that there was insufficient evidence to enable a rational trier of fact to conclude that the defendant knew that his false statements would be provided to the federal grand jury "or that he entertained any expectations on that score that were based on such knowledge." Id. This is so because the Court of Appeals determined the defendant "had not himself been called to testify and there is no evidence that the investigators gave him any indication that they would repeat his statements to the grand jury." Id. Count Fourteen cannot withstand scrutiny under Aguilar or Schwarz. There is no evidence in this case that Mrs. McDonnell was called to testify at the time she sent the note to Mr. Williams, or even at any time thereafter. Nor is there any evidence that Mr. Williams had been called to testify or that Mrs. McDonnell was given any other indication that the note would be provided to a prospective federal grand jury. Mrs. McDonnell did not receive a federal grand jury subpoena for documents until after she sent the note. And unlike the defendants in Aguilar and Schwarz, with respect to whom the 9

12 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 12 of 14 PageID# 9642 courts determined there was insufficient evidence to support the nexus element of obstruction, the evidence in this case, at the time she sent the note, is that: Mrs. McDonnell had received no federal grand jury subpoena for documents or testimony; Mrs. McDonnell had received no indication that the note would be provided to the federal grand jury, which did not exist at the time; Mrs. McDonnell was not aware of any federal grand jury proceeding; and There was, in fact, no federal grand jury proceeding. It is a fatal defect in the government s case that there was no showing that [Mrs. McDonnell]... knew that the allegedly false [note] she sent to Mr. Williams would be conveyed to a federal grand jury. See Schwarz, 283 F.3d at 109; see also Aguilar, 515 U.S. at 599. The government has therefore failed to offer sufficient evidence of [Mrs. McDonnell s] intent to obstruct the federal grand jury for if the defendant lacks knowledge that his actions are likely to affect the judicial proceeding, [s]he lacks the requisite intent to obstruct. Id.; see also Aguilar. If the defendants in Aguilar and Schwarz could not be convicted of obstruction of justice, it must be true that under the evidence presented in this case, Mrs. McDonnell is entitled to a judgment of acquittal as a matter of law. 10

13 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 13 of 14 PageID# 9643 CONCLUSION For the foregoing reasons, the Court should grant Mrs. McDonnell a judgment of acquittal on Counts 1-11 and of the Indictment. Dated: August 15, 2014 Respectfully submitted, By: /s/ Heather H. Martin QUINN EMANUEL URQUHART & SULLIVAN, LLP William A. Burck (pro hac vice) Stephen M. Hauss (pro hac vice) Heather H. Martin (VSB No ) Daniel R. Koffmann (pro hac vice) 777 Sixth Street NW, 11 th Floor Washington, DC Telephone: (202) Facsimile: (202) williamburck@quinnemanuel.com stephenhauss@quinnemanuel.com heathermartin@quinnemanuel.com danielkoffmann@quinnemanuel.com Attorneys for Maureen G. McDonnell 11

14 Case 3:14-cr JRS Document 413 Filed 08/15/14 Page 14 of 14 PageID# 9644 CERTIFICATE OF SERVICE I, Heather H. Martin, am a member of the Bar of this Court. I hereby certify that I caused the foregoing Motion to be filed with the Court s CM/ECF system this 15 th day of August, 2014, thereby causing it to be served on all registered users. /s/ Heather H. Martin Heather H. Martin (VSB # 65694) QUINN EMANUEL URQUHART & SULLIVAN LLP 777 6th Street NW, Suite 1100 Washington, D.C (202) (202) (fax) heathermartin@quinnemanuel.com 12