Substantial Influence Over Government Contracting Triggers the “Sensitive Position” Bribery Enhancement and Treats Fraudulent Change Orders as “Benefit” Under the Guidelines

Introduction

In United States v. Badoni (10th Cir. June 18, 2026), the Tenth Circuit affirmed a sentence imposed on contractor William Badoni for conspiring to bribe a public official and laundering the proceeds. Badoni bid on projects for a federally funded residential school and, according to the district court’s findings, worked with the school’s maintenance supervisor, Elroy Harry, to win bids and obtain inflated payments through change orders and other overcharges. In exchange for Harry’s assistance in influencing the school’s trustees and approvals, Badoni paid kickbacks.

The appeal focused on two sentencing enhancements that drove the offense level upward:

  • Whether Harry qualified as a “public official in a high-level decision-making or sensitive position” under U.S.S.G. § 2C1.1(b)(3).
  • Whether the “benefit” attributable to the bribery and fraud exceeded $250,000 under U.S.S.G. §§ 2B1.1(b)(1)(G), 2C1.1(b)(2), based primarily on change orders and an additional overcharge.

Summary of the Opinion

The Tenth Circuit affirmed. Applying de novo review to legal conclusions and clear-error review to factual findings (as framed by United States v. Rocha), the court held:

  • Harry qualified for the § 2C1.1(b)(3) enhancement because, even if not a final decisionmaker, he held a sensitive position—he could manipulate bids, possessed inside/confidential bid knowledge, and had substantial influence over the trustees’ decision-making process.
  • The district court reasonably estimated a benefit exceeding $250,000 by treating fraudulent change orders (totaling $333,893.69) plus an additional $20,050.50 overcharge as the benefit (total $353,944.19), and it did not clearly err in refusing any “offset” for purported additional work described in change orders that a witness characterized as unnecessary and serving only to enrich Badoni.

Analysis

Precedents Cited

  • United States v. Rocha, 145 F.4th 1247, 1260 (10th Cir. 2025): Used to state the appellate framework for reviewing guideline enhancements—de novo for legal conclusions and clear error for factual findings. This allocation matters because Badoni’s challenges largely attacked the district court’s characterization of Harry’s role and its estimate of benefit.
  • United States v. Whiteford, 676 F.3d 348, 365 (3d Cir. 2012): Supported treating a bid-related insider as “sensitive” where the individual had access to confidential bid information and influence (e.g., recommending projects and being “privy to confidential information about bids”). The Tenth Circuit relied on this analogy to validate sensitivity even absent top-tier rank.
  • United States v. Matzkin, 14 F.3d 1014, 1021 (4th Cir. 1994): Reinforced that participation in a procurement process—such as serving on a panel that can recommend contracts—can qualify for the enhancement. The case helped the court emphasize that influence within the contracting pipeline can be enough.
  • United States v. Hill, 645 F.3d 900, 911 (7th Cir. 2011) (and 645 F.3d at 910–11; 645 F.3d at 908): Cited for two points central to the court’s interpretation of § 2C1.1(b)(3):
    1. The guideline commentary’s examples (prosecutors, judges, agency administrators) are not exhaustive and the phrase “any other similarly situated individuals” indicates broad inclusion.
    2. A court need not resolve whether the official is a “high-level decision-maker” if the position is “sensitive.”
    This undercut Badoni’s attempt to confine the enhancement to officials with “extensive discretionary authority.”
  • United States v. Galloway, 509 F.3d 1246, 1251 (10th Cir. 2007): Supplied the principle that loss/benefit findings need not be made with “exact precision”; a reasonable estimate suffices. This was pivotal because the district court used aggregate change-order totals plus a separate overcharge figure, rather than an item-by-item forensic accounting of profit on every line.
  • United States v. Conley, 89 F.4th 815, 819 (10th Cir. 2023): Reinforced the clear-error standard when reviewing factual findings supporting the estimate’s reasonableness.
  • United States v. Hess, 106 F.4th 1011, 1026 (10th Cir. 2024): Used twice to frame how “benefit” should be distinguished from legitimate value and when an “offset” is unavailable. The panel invoked Hess to approve the district court’s separation of (a) money received for services from (b) fraudulent profit, and to deny an offset where additional goods/services are merely business expenses or mechanisms to facilitate the fraud.
  • United States v. McNair, 605 F.3d 1152, 1165, 1230 (11th Cir. 2010): Supported treating fraudulent change orders as the financial benefit to contractors for § 2C1.1 enhancement purposes, validating the district court’s reliance on change-order totals as an indicator of tainted gain.

Legal Reasoning

1) “Public official in a high-level decision-making or sensitive position” (U.S.S.G. § 2C1.1(b)(3))

The opinion’s core move is separating two ideas: (i) who counts as a “public official,” and (ii) whether that official occupies a “high-level decision-making” or “sensitive” position. The court stressed the guideline’s broad construction of “public official” (U.S.S.G. § 2C1.1 cmt. 1), including individuals responsible for carrying out governmental programs (U.S.S.G. § 2C1.1 cmt. 1(E)), and noted the school had federal funding.

On sensitivity, the court applied the commentary’s functional test: it is enough if the person has “substantial influence over the decision-making process” (U.S.S.G. § 2C1.1 cmt. 4(A)). The district court’s factual findings—upheld under clear-error review—were that Harry could help manipulate bidding, share bid information, and persuade trustees, and that he knew the process well enough to ensure acceptance of Badoni’s bids. Analogizing to United States v. Whiteford and United States v. Matzkin, the panel treated procurement-process leverage and access as hallmarks of sensitivity.

Badoni’s narrowing argument relied on the commentary’s examples (prosecutors, judges, agency administrators) to suggest the enhancement is limited to officials with extensive discretionary authority. The Tenth Circuit rejected that reading by citing United States v. Hill for the proposition that the examples are not exhaustive and that “any other similarly situated individuals” signals breadth. Critically, the panel also emphasized that the enhancement applies if the position is sensitive even if it is not “high-level decision-making,” making rank less important than function.

2) Benefit over $250,000 (U.S.S.G. §§ 2B1.1(b)(1)(G), 2C1.1(b)(2))

The court framed the benefit inquiry as an estimation problem, not a demand for precision, invoking United States v. Galloway. The district court used change orders on four projects totaling $333,893.69 as the primary measure of fraudulent benefit and added a separate $20,050.50 overcharge, yielding $353,944.19.

The key legal constraint came from United States v. Hess: the court must distinguish between legitimate compensation for value provided and fraudulent profit. The district court treated original bids as “fair benchmarks” for value, then treated the price increases via change orders as the fraudulent profit component. The panel found this reasonable based on testimony that many change orders were fraudulent and evidence Badoni acknowledged some were not “legit.”

Badoni sought a reduction for additional services purportedly provided through the change orders. The panel, relying on testimony that the work was unnecessary and served only to enrich him, and citing United States v. Hess, held the district court did not clearly err in refusing an offset—particularly where the “additional work” functioned as a fraud-enabling mechanism rather than true incremental value.

Impact

Although the disposition is labeled an “Order and Judgment” and expressly “does not constitute binding precedent” (except under law of the case, res judicata, and collateral estoppel), it is still citable for persuasive value and signals how the Tenth Circuit is likely to analyze two recurring guideline disputes in bribery/procurement cases:

  • Procurement insiders without final authority can still be “sensitive.” The opinion reinforces a functional test: access, bid knowledge, and the ability to shape or steer decisions can trigger § 2C1.1(b)(3), even where the individual is not a top-tier official.
  • Change orders can be treated as “benefit” when tied to fraud. The court’s approval of change-order totals as the benefit measure—especially where testimony characterizes the work as unnecessary—may encourage prosecutors and probation offices to present change orders as a clean proxy for tainted gain, and encourage defendants to develop concrete, credible evidence of legitimate incremental value if seeking an offset.
  • Offsets are not automatic. The reasoning—anchored in United States v. Hess—suggests that courts will scrutinize whether claimed “extra work” is genuine value or merely an expense/vehicle to perpetuate the scheme.

Complex Concepts Simplified

  • “Public official” (Guidelines sense): Not limited to elected officials. Under § 2C1.1’s commentary, it can include people involved in carrying out a governmental program—especially where federal funds are involved.
  • “Sensitive position”: A role is “sensitive” if the person can meaningfully influence outcomes (like contracting decisions) or has access to nonpublic information that can be exploited, even if they are not the final decisionmaker.
  • “Benefit” under § 2C1.1(b)(2): The financial gain attributable to the corrupt scheme. Courts try to separate money earned legitimately from the portion attributable to fraud (the “fraudulent profit”).
  • “Reasonable estimate”: Sentencing courts may approximate benefit/loss using reliable indicators (e.g., totals of fraudulent change orders) rather than calculating to the penny.
  • “Offset”: A reduction in the benefit figure for legitimate value allegedly delivered. This opinion illustrates that an offset may be denied when the “value” is unnecessary, serves to facilitate the fraud, or is indistinguishable from scheme costs.

Conclusion

United States v. Badoni affirms two practical sentencing propositions in procurement-related bribery cases: (1) an insider’s substantial influence over contracting—through bid manipulation, access to bid information, and steering trustees—can make the insider a “public official in a … sensitive position” under U.S.S.G. § 2C1.1(b)(3), even if the insider is not a high-level final decisionmaker; and (2) when supported by testimony and admissions, fraudulent change orders may be used as a reasonable measure of “benefit” exceeding $250,000 under §§ 2B1.1(b)(1)(G), 2C1.1(b)(2), without offsets for purported work found unnecessary or fraud-facilitating. Even as a nonprecedential disposition, its reasoning—built from a consistent line of circuit authority—offers a clear roadmap for how the Tenth Circuit is likely to treat influence-based “sensitive position” arguments and change-order-driven benefit calculations.