-: [Chief Justice Budd] SJC-13615
Commonwealth v. Daniel Spalding.
(paper shuffling)
Okay, Attorney Allen, whenever you're ready.
Attorney Allen: I have a slight cough, so I'm just gonna-
-: Yeah, of course. (justices chuckling)
(paper crinkling)
-: I believe good afternoon, Your Honors.
Ashley Allen for on behalf of the defendant-appellant,
Mr. Daniel Spaulding, may it please the court.
This case involves General Law Chapter 268A, Section 23,
which is commonly known as the conflict of interest statute,
and the criminal component of that, which is Section 26.
And so unless this court has another preference,
I actually wanna start with my last issue,
which is whether there was sufficient evidence
of the actual amount of the unwarranted privilege,
so whether or not the fair market value
was over $1,000 or more.
I think that that's a mathematical problem,
and it might take a little time
to get through it. -: Do you have any legal
authority for the proposition
that the fair market value of cash is not its face value?
-: Well, so, it's not (paper crinkling)
a case that says so,
but here, I think it's limited by the indictment,
how they charge the indictment,
that it was the use of the money
which was the unwarranted privilege,
how they argued the case,
they conceded right from the beginning in opening statements
that there was no intent to steal,
that this was a borrowing.
So similar to a loan, it's the use of the money
that is the value.
And they also conceded as much during the argument.
-: Right, so ultimately, the money was used,
as I understand it, to help make mortgage payments, right?
Attorney Allen: That's the inference, yes.
-: Okay, so assume that's true.
Normally mortgage payments constitute
both a repayment of principle and of interest.
Why isn't the full amount of the mortgage payment
the fair market value of the,
let's call it, loan he gave to himself?
-: Right, because he's paying that money back,
so it's the use of that amount of money
for that period of time to cover the mortgage payment.
-: Well, let me put it to you another way.
By doing that, he saved home perhaps from foreclosure.
Why wouldn't we use the home's value?
-: Well, so if you also look at any of the Ethics' opinions,
let's take another example,
where somebody uses their position to,
they use their office, and their phone,
and their assistant to do,
and this is one of the examples
that the Ethics Commission gives, is to write their book.
-: [Justice Wolohojian] But that's not cash.
-: Right, but they're not valuing the office,
the phone system, and the assistant's time there,
so what is the use of that during that period?
So it's not the whole sum total of actual property,
but the use of it that is what needs to be
the fair market value over 1,000.
-: I'm gonna give you a hypothetical, if I may.
we have a classic bribe case, let's just take it that way,
where someone's going to...
You ask a government official to do something
in exchange for a bribe, cash, $1,000,
and the public official doesn't actually
do anything with the cash, just keeps it,
makes no money on it, just keeps it.
Why is the fair market value of that cash
not the face value of the cash?
-: Because he doesn't use it and then give it back,
so he's still keeping it,
where the Commonwealth is the one that chose
to charge it this way,
and chose to present their theory
as this is not an intent to steal, this is a borrowing.
-: [Justice Wendlandt] So that was the choice,
that's the way the case was tried.
-: Right. -: It's not necessarily true
that the fair market value of $17,000 is not $17,000,
it's just that the theory of the prosecution
was that it was the time value of the use of that money,
which was the unwarranted privilege.
-: Well, that's what they limited themselves
by arguing that way.
They charged it that way
in the indictment. -: But nothing in the statute
requires that kind of construction.
-: Well, I think the only thing that is required
by the statute is that the fair market value be established.
It's not the total sum, it's how much does that cost?
Justice Gaziano: This is a sufficiency claim, correct?
-: Yes.
(paper crinkling)
So obviously, we do raise also as a void for vagueness
as applied to this set of facts,
but not the fair market value portion,
so I don't think that it's overly vague.
This is that they didn't prove this
beyond a reasonable doubt that the fair market value
of the use of this money and whatever that sum is.
So, the Commonwealth in their, I apologize,
the Attorney General's Office, in their brief,
Justice Gaziano: Bill of Commonwealth.
(everyone chuckling)
I think. (chuckles)
-: They picked three different theories, basically.
So first they say that it's the sum total.
It's not our position that it's a sum total,
and it's the use of that money of the sum total,
plus it's limited to 12-month period,
so in their chart, they give you,
I believe it's a 26-month period, and say,
"Well, here, even if-" -: Should we consider this
a no-interest loan?
This is a no-interest loan, correct?
-: If you wanna consider it that,
then there's no fair market value
to a no-interest loan as-
-: Well, no, it's the present value of all the money
and the use of the money over that period of time, right?
So it's the best loan available.
Attorney Allen: It is, it is.
-: I mean, he's using this evidence as a private piggy bank.
-: So I think here, though, it would require too much piling
of inference upon inference in order to say
that this is what the interest would be on this type of loan
during this time period.
We also don't know when this money was taken.
They didn't establish the 12-month period-
-: Counselor, I'm sorry to interrupt you,
but can you tell me how was the jury charged
to divine the amount in controversy?
-: So this was actually a jury way of trial,
so there was- -: Oh, I'm sorry,
but he still had to them show you-
-: Yeah, so there was an argument that he moved
for a required finding of not guilty.
The judge determined that he was going to decide
the fair market value based on the use of the money,
and what he used as the benchmark
was there was, I believe, three loans,
maybe four loans, that the Commonwealth had submitted
to show motive, (papers crinkling)
so to show that here's this person who's in financial,
you know, hardship, he needs this money to pay his mortgage,
he had to take these loans,
and so there's various loans that he takes
over a course of time.
They ranged in interest from 9.5,
around 9.5 to 11.75
at various times for different amounts of money
over the course of time.
So the judge used that amount to say,
"Well, here's the evidence of how much it would be."
It's our position that that's far too...
There's too much conjecture to say that that's
how much it would cost here.
There needed to be an expert,
and it's commonly done in cases
where they do property assessments,
and the fair market value of properties
that the parties will- -: But if the evidence was
that he, or in combination with his wife,
had taken these personal loans,
and there was testimony as to what the interest rate was on,
and that was in the record, so, I got it,
so I'm assuming that it was before the judge.
What is wrong with the trial judge
using what he was getting at the time for interest rates
on what he was borrowing in using the one year,
the $16,000, and ascribing that to that?
What's wrong with that?
-: So two things, is I don't think that it transfers
automatically to these.
We don't know when the money was taken,
we don't know when it was returned,
we don't know how much money during that 12-month period
that they allege was used,
The use of the money, not the sum total.
Second is that would be taking the chart
that was submitted with the brief,
and even if we take that, even if we say,
"Okay, let's give them the highest interest rate
that's in the record," which is 11.75,
they get to,
and maybe I'm wrong in my interpretation of this,
I also believe that this is why there needed
to be some sort of financial expert,
'cause these are not common knowledge,
common knowledge-type topics that we can easily understand
what the interest rate would be and how much to calculate.
But so the Commonwealth says that at the end of 26 months,
it would be $1,269, would be the total sum,
or the total market value.
We need a 12-month period.
So if we were to take that as true,
my calculations of the 12-month period
prior to May 17th, 2017 would be, I believe, it was $650.
So we're still underneath that $1,000.
-: Why do you say a 12-month period is the only aperture?
-: Because the statute Section 26 limits it
to a 12-month period.
So it says it needs to be $1,000 dollars
within a 12-month period of use.
So what they've said is $1,269.10,
is their analysis is based
on 26 months. -: 26 months.
-: So even if we were to take that calculation as true,
and use the 11.75, and this chart that they've submitted,
it still doesn't get you to the $1,000.
And we're not saying that...
He would still fall in between a civil violation,
but the problem here is that we're taking a civil violation
and turning it into a criminal offense
where there's higher penalties,
and that's the problem with the-
-: If you take the evidence in the light
most favorable to the Commonwealth,
why is the trier of fact required to find
that this was a loan?
There's certainly sufficient evidence
to think it only became,
to conclude it only became a loan
once he realized he was being caught.
-: Well, again, it goes back to how
the Commonwealth charged the case,
and the theory that they presented,
and he did use that as this was like a loan.
Justice Gaziano: So they could have charged him
with a larceny,
and they didn't. -: Right.
-: They could have charged him with...
I question why they didn't charge him with larceny,
you know, by embezzlement,
or embezzlement by a city employee,
and the question is would they be able to prove it?
Because there was no intent to permanently deprive,
case law says that you don't need to show that.
So, you know- -: (chuckles) I don't know
about that, but- -: Right, so,
that's where, was there misconduct?
Yes, we're not denying that there's misconduct.
There was probably a civil violation.
Could they have charged him with another offense?
Probably, but this does not fall
under the criminal conflict of interest statute.
-: I mean, that goes to your vagueness challenge
about whether or not someone would be alerted
that this is a crime,
and this is certainly a misuse of office benefits
that certainly aren't available to anybody else,
to use the evidence room as your piggy bank.
-: Right, and so to start with that argument,
I will go into that, if there's no other questions on-
Justice Georges: There was just one.
-: Okay. -: Because it relates
to Justice Wolohojian's earlier point,
is where the trial judge went wrong here
by articulating what his math was based on?
Attorney Allen: I don't know if he ever-
-: Because if he says nothing, right,
and just finds him, you know, guilty of this,
but he very well could have said,
"I think that the face value of the money
is the metric for the loss,
versus I'm going to use the interest rates
that he was getting on these personal loans,"
and he's saying, "This is my math."
And then if the math over the 12-month period
is less than $1,000, then the Commonwealth loses.
-: I think because we raised a sufficiency of the evidence,
and it wasn't, we're not arguing an abuse of discretion,
so however he decided it, we were still raised at same
as an abuse of a, I'm sorry,
of a sufficiency of the evidence,
so that was- -: So that that would be
evaluated at the close of the evidence.
-: I'm sorry, what was that?
-: [Justice Wolohojian] The sufficiency would be evaluated
at the close of the evidence.
-: Correct. -: It's not really dependent
upon the judge's explanation of his reasoning, correct?
-: Right.
Yeah, so we would've raised it the same way,
and it it was raised this way,
he just agreed with us that this was the use of the money
versus the total sum in this case, specifically,
because of the way that it was charged.
Justice Gaziano: If you could address
the vagueness argument?
-: I will, Your Honor.
So to start off, I just wanna say
that this was an act enacted in 1962.
It wasn't until 40 years later, about, to 2009
that they added the criminal component,
and that was to address the issues
with corruption at the time, then Governor Patrick.
When they first enacted this,
it was very broad, very sweeping.
It was intentionally vague by design
so that it would cover all sorts of misconduct,
appearance of conflict, and actual conflict of interest,
bribery, all sorts of issues,
so that was really the purpose of the statute.
It wasn't until later that they added the criminal component
without ever changing the civil portion.
When they added the criminal component,
it added fraudulent intent,
and it added the fair market value
in the 12-month period part.
So we're challenging the unwarranted privilege,
because as it was written under the first Section 23,
it was meant to be all-encompassing,
and in a civil statute, that's fine.
The court tolerates that, because the penalties are less,
and you have the Ethics Commission,
who's the one who's prosecuting these things you prosecute.
-: This is an as-applied challenge, correct?
Attorney Allen: Right, so-
-: And don't we simply define the crimes
by the conduct that's in front of us,
to say whether it's sufficient,
and that provides parameters?
-: Well, you still consider the purpose of the statute,
and the ordinary meaning,
and how to apply it to this. -: But isn't the purpose
of the statute to say that Commonwealth's employees
shouldn't use their official positions
to get benefits that other people don't get?
-: Well, yes, and that what-
-: And that's not a- -: Comtois said,
but, again, it was a civil case,
that there, they weren't challenging it
as void for vagueness.
And so we're relying on the Ethics Commission
to define what unwarranted privilege is there.
And once we've put it into-
-: But does Joe Q. Citizen get a right
to go to the evidence room and take out money?
-: He doesn't, but the question is is this a criminal
or a civil offense?
And so, we're now under the criminal-
-: Well, the question of that void for vagueness as applied
would be would a person of average intelligence understand
that going into the evidence room to borrow money
violated the statute, right?
That this was a privilege that Joe Citizen did not have?
-: I would agree with that.
I mean, that's an overarching standard,
but we looked, it needs to be strictly construed against,
because this is a criminal case,
that it needs to be strictly construed.
And so if there's any ambiguity in that,
then he needs to be given,
the defendant needs to be given the benefit of that,
and he- -: But what's the ambiguity
in that?
What would a person of average intelligence
not understand about the fact that I'm a police officer,
and I have access, one of three people
that has access to this evidence room,
and I'm gonna borrow money to pay my mortgage?
-: So that's where it goes back to yes, this is unethical,
but is this an unwarranted privilege?
What's the definition of a privilege?
And here, they've defined privilege
as some sort of legal authority.
He didn't have legal authority to do this.
He was obviously going against his duties
as an officer to go into the evidence room,
so this is...
The statute was meant, I mean,
there's so many things -: I'm getting caught up.
-: And examples. -: 'Cause it doesn't
(chuckles) make sense.
(justices chuckling) -: But so there's so many
examples of,
and the Ethics Commission had submitted a letter
with hundreds of pages of different unwarranted privileges.
And so they were someone getting a vacation,
someone using their position
as a board member to get a police officer to go serve,
fix some sort of utility for his daughter,
like, it's so all-encompassing
that when we put it in the criminal context,
that now we need to look at,
is this too broad as applied to the criminal context
opposed to civil?
So I guess it's difficult to explain
because of how broad this statute has been designed
to far reach all of the conduct,
and so, you know, it would be our position
that the criminal component does not cure that ambiguity.
-: [Chief Justice Budd] Okay, thank you very much.
-: Thank you.
-: [Chief Justice Budd] Attorney Johnston?
-: May I please the court, Assistant Attorney General
Tara Johnston on behalf of the Commonwealth.
At the beginning, I just wanna clarify something
for the court.
On the chart, I know we discussed,
my sister discussed how it's the interest rate,
if you apply it the way the judge did
in terms of the interest rate,
that you get to $1,269 after a 26-month period,
and that's not actually accurate.
The chart is done on a rolling basis,
so you get the rolling interest of $1,269
after a 12-month period, (paper shuffling)
within that 12-month period from June of 2016
to May of 2017.
So I just wanna clarify that at the start,
that the judge was correct in finding,
assuming we apply his interpretation,
which again, the Commonwealth, as stated at trial,
does not agree with that view of how
it should be interpreted, the fair market value,
but if you apply that view, you still reach
well over the $1,000 within that 12-month period.
Looking at how, just quickly, the sufficiency argument,
because I know my sister started with that,
and just addressing that, as I just said,
the Commonwealth satisfied it with respect
to if you apply it how the judge applied it,
in terms of looking at it with interest.
And there was no expert testimony needed
with respect to the math here,
because we had Mr. Spaulding's financials,
and that included the interest rates he was getting on loans
in the period of time. -: Which interest rate
is used in your charts?
-: The 11.75 interest rate, Your Honor,
and that is what he received on three
of the four private loans he received
during this range, period of time.
However, it is, as the Commonwealth argued at trial,
the Commonwealth's position is Mr. Spaulding had access to
and was using the full 17,000,
or had access to and had available to use to him
the full $17,611 that he took from the evidence room,
and he was using it, as this court has pointed out,
as his own personal piggy bank.
He was using it throughout this time, throughout many years,
but throughout that time, he had that
to help make mortgage payments,
he had that to, I believe he made the mortgage payments
previous to that 12-month period,
but he had it to pay personal expenses,
and this was money he needed.
All of the financials were before the judge,
and that actually was in Exhibit 71,
which was submitted to this court.
So there was no reason (paper crinkling)
for expert testimony in this case,
because the judge had all of the information he needed
to make that determination.
However, as the Commonwealth argued at trial, again,
Mr. Spaulding had this full amount.
He had this full amount in his possession,
and he did not return it until May 22nd, 2017
after he was instructed to return it by the chief of police.
So in that, he was using this money, the entirety of it,
and he had it, and he didn't have a loan for this money.
And also, I wanna highlight the fact
that this just isn't cash, this is evidence room cash,
and that was actually brought out at trial
by the prosecutor, right?
This isn't, when we normally think of cash,
we normally think of something
that maybe is more fungible, right?
It's replaceable, and agreed,
Mr. Spaulding did eventually return the evidence bags.
-: [Justice Wolohojian] So do you think
that the fair market value of evidence cash,
as you called it,
is different from the fair market value of other cash?
-: I would say, Your Honor, I think that in both...
I think that in both circumstances,
it should be viewed as the prosecutor argued it,
but I think there's an additional reason here,
that because it's evidence room cash,
there's no way to ever really replace that.
And I think one of the things the trial judge
brought out at trial is, well,
I would view it as a face value if it was a consumable,
like his tickets to a show, or tickets to a game,
because once the event happens,
whether or not the person who takes advantage
of that privilege goes to the show,
throws the tickets in the garbage,
gets sick and doesn't get to attend,
once the show is over, they have the ability
to attend that show, to attend that game,
and then once the show is over, it's done.
You've secured the unwarranted privilege.
They're of that face value, that full value
of the tickets to the show,
and you can't then press Rewind
and put different tickets in its place.
And I think that that would be the same
as evidence room cash.
These are, and the commonwealth actually presented evidence,
and had the dockets, I believe,
are in the record appendix of these cases,
two of the cases that were ongoing when Mr. Spaulding
took this money from them.
He was breaking chain of custody, he was compromising cases,
and these are not...
He put back bills, but as we know,
they weren't the same bills, right?
There's 105 replacement bills in total in those three bags
with a sum of over $5,000 at least,
so there's at least 135 replacement bills in minimum.
Within the 12-month period before he returned them,
70 replacement bills totaling $2,880.
He was using this money,
and but he did return evidence bags,
and yes, they had money in them,
but it wasn't the same money.
And so I do think that is an important distinction,
and it was highlighted by the prosecutor at trial,
but even with respect to cash, I think that any common...
I don't think in looking at the statute,
any reasonable person will look at the statute and say,
"Over $1,000 in fair market value?
Oh, well, then I can take a large, large sum of cash
and use it how I want it,
but as long as the interest accrued over a 12-month period
wouldn't exceed $1,000, then I'm good under the statute.
I'm not criminally liable, because I just get past that."
It would be, oh- -: Did the Commonwealth
argue below that the fair market value
was the face value of the cash?
-: Yes, the Commonwealth's position throughout
was that it's the face value of the cash.
-: And how do you reconcile that with the theory of the case,
which was that it was a loan?
-: I don't think...
So I don't think the theory of the Commonwealth's case
was that it was a loan per se.
That was what the judge said.
I think that the Commonwealth's theory of the case
was that he returned it, which he did.
He returned the evidence bags with replacement bills,
and I think in the indictment, it actually says
that he returned the bags and he replaced the money.
He replaced it.
That is different than returning something.
He replaced it with something else.
So, but I don't think that
from the Commonwealth's perspective, this was ever a loan.
And-
-: [Justice Wendlandt] So was the fair market value
the 5,000, the 17,000?
-: I think it was the 17,000,
because they had the ability to use all of it.
And if we look at some of the State
Ethics Commissions cases-
-: [Justice Wendlandt] And that's how the case was argued?
-: It was, it was argued that he had the full $17,611, yes.
And I wanna also touch upon the vagueness issue,
because I think as a common sense person,
a person using their common sense,
reading the statute would not think,
especially a public official,
would not think that taking money from an evidence room,
that they were not criminally liable.
Justice Georges: Especially a police officer.
-: Especially a police officer, Your Honor, yes.
There was clear fraudulent intent here.
There was deceit,
there was misrepresentation (justice sighing)
throughout.
When Mr. Spaulding entered that evidence room,
he knew that he was only supposed to be entering it
to protect the evidence or look at the evidence
in his capacity as a police officer.
And how is this highlighted?
This is highlighted from the fact that there was a key fob,
and there was only three people had access
to this evidence room.
He knew what he was doing,
and he was acting with deception
when he went into that evidence room,
and he took out that evidence,
and he used it for his own personal use.
And that continues throughout,
that deception and that misrepresentation.
It continues throughout through all of his acts
of what he did.
It continues when he's using that money
for his personal expenses throughout that period of time.
It continues from the time that he's informed
by the police chief in October of 2016
that he is going to, there's gonna be an audit,
and even at that time, he does not divulge
that he has this money.
It continues through the time when he's actually asked
about this money by investigators, and he lies,
and says that he doesn't have it,
and he doesn't know where it is.
It continues through the time that he waits three days
to contact the police chief,
and then inform the police chief,
and finally confessed to having it.
And then it still continues,
because even at that time, he isn't forthcoming,
and even at that point, he lies
and says the reason he took it
was because he believed the bags had been compromised
when in fact we know that's not true,
which was shown by the ongoing investigation.
So this all is just completely...
There is no public official who would think
that this was not acting with fraudulent intent,
or that he was not obtaining an unwarranted privilege,
which that term also commonly understood,
an unjustified benefit by taking this amount of money
throughout this period of time,
having it available to use as his own personal piggy bank.
If there's any other further questions from the court,
otherwise I'll rest my brief, thank you.