Petition — Diggs v. United States
Supreme Court brief1980
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‘Gupreme Court, U. & |
FILED
FEB 29 i980
MICHAEL RODAK, JR., CLERK
IN THE
Supreme Court of the United States
OCTOBER TERM, 1979
" €9-1348
UNITED STATES OF AMERICA,
_.._ Respondent,
V. titer. 2
CHARLES C. DicGs, JR, =~
etitioner.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
DAVID POVICH
ROBERT P. WATKINS
ROBERT B. BARNETT
BERNARD J. CARL
WILLIAMS & CONNOLLY
Hill Building
Washington, D.C. 20006
Counsel for Petitioner
WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001
TABLE OF CONTENTS
Page
pe et ey» ee ii
ah dae casdasisweemvanisencnsccienesorenses 1
EEE 2
STATUTORY PROVISIONS INVOLVED ................... 2
ly | 2
Seeameens OF tae CASE cn... 2
REASONS FOR GRANTING THE PETITION ........ 6
NE SDGESTA ES CT 18
ESSE SEE SO la
ii
TABLE OF AUTHORITIES
CONSTITUTION : Page
ie ae a eres enone 2,8
U.S. Commtivwitee, Bre. £, Bet. Banc... .<s.cceiceessis--+- 18
CASES:
Baker v. Carr, 369 U.S. 186 (1962) ........................ 8,9, 11
Bouie v. City of Columbia, 378 U.S. 347 (1964)... 16
Connally v. General Construction Co., 269 U.S.
BO INN ata isccsiriaanactea Deieeieeonincovsiniabcticeteinnsawitrnieentes 13
Davis v. Passman, 99 S.Ct. 2264 (1979) ................ 7
Gravel v. United States, 408 U.S. 606 (1972) ........ 18
Lanzetta v. New Jersey, 306 U.S. 451 (1939) ........ 15
Marks v. United States, 480 U.S. 188 (1977) ........ 16
Morissette v. United States, 342 U.S. 246 (1972).. 17
Ray v. Proxmire, 581 F.2d 998 (D.C. Cir.), cert.
denied, 489 U.S. 988 (1978) ..........-.........ce.ssceesse0 8
Sandstrom v. Montana, 99 S.Ct. 2450 (1979) ........ 17
Sinking-Fund Cases, 9 Otto. 700 (1878) ...............- 8
United States v. Brewster, 408 U.S. 501 (1972)... 12
United States v. Critzer, 498 F.2d 1160 (4th Cir.
a ei ta ac hiancsMdbaisoiabandersaniesiinie 18, 16
United States v. Insco, 496 F.2d 204 (5th Cir.
BI sii tvatt ss crleccha phd ap ee tn eareighenbacangatinetadaciomees oo 16
United States v. Porter, 591 F.2d 1048 (5th Cir.
I cin csccsncbdeck ia deeiasbeseolnscaoasetitiasesinndteasreansbsiaapitnaehaniiioone 16
STATUTES:
I eters hoses 11
aN WN PII oi scsi hnnsicnntss esvonentnntessialacenen 12
Oe Ul sscasnithibesnreenenndinabbachamedoteunts 11
a es ntaaeahiee 11
I ns iseiekaiapnansananiaiee 11
Ba I co. cecuscndenrepsunnteshssnbdunteatensieossens 11
OE eS isis ncnsinnancsnsnseenens:seamenienaanaies 11
Oe a aaa aaaeu 3
i IG III aeciscesinsenbicankhecieenpesdcunnaavianomnemeapioted 3
iii
TABLE OF AUTHORITIES—Continued
18 U.S.C. & 4205 (b) (2)
Be As te I rch tliiche ee
Legislative Branch Appropriations Act, 1978, Pub.
L. No. 95-94, 91 Stat. 653, 667 (1977)
LEGISLATIVE MATERIALS:
Reports:
H.R. Rep. No. 96-351, 96th Cong., 1st Sess.
GUNN cadkbhnee eae
Manual of Offenses & Procedures, Korean Influ-
ence Investigation, pursuant to House Resolu-
tion 252, Comm. on Standards of Official Con-
duct, 95th Cong., Ist Sess. (1977) 0.000000...
Advisory Opinion No. 2 of the Committee on
Standards of Official Conduct, U.S. House of
Representatives, July 11, 1973
Rules:
House Rule X-4(e), Rules of the House of Repre-
sentatives, § 698 in H.R. Doc. No. 94-663, 94th
COM, TD I SEUUD hincicec nee
House Rule XLIV, Rules of The House of Repre-
sentatives, § 940 in H.R. Doc. No. 94-663, 94th
Cong., 2nd Sess. (1977)
MISCELLANEOUS:
Robert S. Getz, Congressional Ethics (1966) .......
Supplemental Petition for Rehearing with Sugges-
tion for Rehearing En Banc (filed December 17,
1979)
Pee meee reer ewe es wee esess cers ece aces eeeseeeseresesesecesosscescceece
14
12
IN THE
Supreme Court of the United States
OCTOBER TERM, 1979
No.
UNITED STATES OF AMERICA,
Respondent,
V.
CHARLES C. DIGGS, JR.,
Petitioner.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
PETITION FOR WRIT OF CERTIORARI
Charles C. Diggs, Jr. prays that a writ of certio-
rari be issued to review the judgment and decision of the
United States Court of Appeals for the District of Colum-
bia Circuit entered on November 14, 1979, affirming his
criminal conviction.
OPINIONS BELOW
The opinion of the Court of Appeals is set forth in
Appendix A at pages la to 43a. There is no written
opinion by the District Court.
2
JURISDICTION
The Court of Appeals entered judgment on November
14, 1979 and denied a timely petition for rehearing on
January 30, 1980. The jurisdiction of this Court is in-
voked under 28 U.S.C. 1254(1).
STATUTORY PROVISIONS INVOLVED
Sections 1001 and 1341 of Title 18 of the United
States Code are set forth in Appendix B.
QUESTIONS PRESENTED
1. Whether the rules promulgated by the House of
Representatives, pursuant to Article I, Section 5 of the
Constitution, to govern the conduct of its Members may
be interpreted and enforced by a federal court as a
predicate to a criminal prosecution?
2. Whether a crime requiring proof of a specific in-
tent may be predicated upon a violation of House rules
so ambiguous as to deprive the defendant of reasonable
notice that his conduct was prohibited?
3. Whether an instruction that the defendant could
not have acted in good faith was an unconstitutional
intrusion into the jury’s fact-finding function?
4. Whether a prosecutor’s inquiries, at trial and before
the grand jury, into the advisory role played by a con-
gressman’s aides violate the Speech or Debate Clause?
STATEMENT OF THE CASE
Petitioner is a United States Congressman from the
13th District of Michigan, and has served in that capacity
since 1955. On October 10, 1978, he was convicted on 11
3
counts of violating 18 U.S.C. § 1841 (mail fraud) and 18
counts of violating 18 U.S.C. § 1001 (false statements).
On November 20, 1978 the District Court imposed con-
current sentences of up to three years on each count
pursuant to 18 U.S.C. § 4205 (b) (2).
The convictions were affirmed by a divided panel of the
United States Court of Appeals for the District of Colum-
bia Circuit on November 14, 1979. The opinion for the
court was written by Judge Wilkey with a concurring
opinion by District Judge Oberdorfer, sitting by desig-
nation. The late Judge Leventhal dissented.
The charges against Congressman Diggs stem from an
alleged scheme to defraud the United States by misusing
his congressional clerk-hire allowance. The alleged scheme
had two facets: first, that Congressman Diggs authorized
increases in the clerk-hire payments to three of his con-
gressional employees to compensate them for expenses in-
curred in the discharge of their official duties, including
expenses relating to the operation of the Congressman’s
inner-city Detroit district offices;' and second, that he
diverted a portion of the services of two other congres-
sional employees to his personal benefit.
1 Although Petitioner was also alleged to have increased clerk-
hire payments to one or more employees to pay his personal bills,
the Court of Appeals held that, because both the government and
the trial court failed to distinguish between congressional and per-
sonal expenses, the conviction must stand or fall solely on the allega-
tions concerning payments of congressional expenses. See App. A
at 4 n.5.
None of the counts in the indictment involved only personal ex-
penses. Petitioner was convicted of several counts involving only
official expenses or a mixture of personal and official expenses. The
government tried its case and the judge instructed the jury on the
theory that both types of expenses were improper. Thus, there is no
way of knowing whether a jury would have convicted Petitioner on
the facts relating to personal expenses alone.
4
The false statement charges were based on the Payroll
Authorization Forms which the Congressman submitted to
the House Finance Office to authorize clerk-hire payments
to his employees. The mail fraud counts were based on
mailings of treasury checks to the Congressman’s Detroit
district employees.
The only statutory provision governing the Congres-
sional clerk-hire allowance is found in the annual legisla-
tive appropriations acts and is little changed since 1893.
It merely states that clerk-hire funds are “(flor staff
employed by each Member in the discharge of his official
and representative duties.” * The term “official and rep-
resentative duties” is not defined in the appropriations
acts, their legislative history or the applicable House
Administration Committee regulations. (App. A at 13
n.37 and 35).
The government attempted to prove that Petitioner’s
use of clerk-hire funds to compensate his employees for
paying official expenses was a violation of the House rules
governing the use of the clerk-hire allowance. To demon-
strate the limitations on the clerk-hire allowance, the gov-
ernment questioned extensively the Chief of the Finance
Office of the House of Representatives. After explaining
that the amount listed on Payroll Authorization Forms is
for “compensation to employees for their performance of
official duties,” this witness was asked by the prosecutor:
Q. In your answer, for the performance of official
duties, did that include any expenses which were
incidental to the employment?
A. “The regulations in that time period didn’t have
any specific definition as far as official duties,
2 See, e.g., Legislative Branch Appropriations Act, 1978, Pub. L.
No. 95-94, 91 Stat. 653, 667 (1977).
—
5
it’s silent on the question of what it might in-
clude. (App. A at 38).
Congressman Diggs’ defense—consistently asserted by
him throughout the trial and described to the jury in
summation—was a good faith belief that it was within a
Congressman’s discretion to compensate his employees
from the clerk-hire allowance for paying official expenses.
As Judge Leventhal explained, “appellant had freely ad-
mitted during the trial that he had used some of the salary
increases to reimburse employees for official expenses, a
position consistent with his good faith defense as to the
propriety of such practices... .” (App. A at 34).
The defense requested an instruction on this “good
faith” defense. However, over defense objections, the trial
judge added to his general instruction on good faith a
statement which obliterated that defense. The judge in-
structed that “the Congressman could not have acted in
good faith unless he believed that the salary described in
the employee’s payroll authorization forms would be solely
for.the personal use of the employee” and did not intend
that any portion of those funds be used as reimbursements
for congressional expenses. (App. A at 34).8
After Petitioner’s conviction, but before it was affirmed,
the House Committee on Standards of Official Conduct
reported its findings concerning the Diggs matter to the
full House of Representatives.* The Committee thoroughly
reviewed the transcript of Congressman Diggs’ trial and
recommended the sanction of formal censure. The House
accepted its Committee’s report and recommendations.
The Committee report and the subsequent House reso-
lution found that Congressman Diggs violated two House
rules, but only with respect to his alleged misuse of clerk-
hire funds for personal purposes, a matter not at issue in
3 The text of the instruction appears at note 15, infra.
4H.R. Rep. No. 96-351, 96th Cong., Ist Sess. (1979).
6
this case. In its report, the Committee made no recommen-
dation concerning the practice of reimbursing employees
for official expenses, except to state that “Representative
Diggs maintains that his use of clerk-hire funds for such
purposes was not in violation of any House Rules.” * The
House resolution also required Petitioner to make resti-
tution for all funds diverted to his personal benefit, but
not for any of the funds used to compensate his employees
for incurring official expenses.
REASONS FOR GRANTING THE PETITION
1. This case presents an important issue concerning
the respective roles of the Executive, Judicial and Legis-
lative branches in construing, applying and enforcing the
internal rules of the House of Representatives. The de-
cision below could have a substantial impact on investiga-
tions of alleged congressional misconduct and on the abi!-
ity of the Congress to police itself. This confrontation
between coordinate branches of government requires this
Court’s consideration.
The court below usurped the function of deciding
whether Congressman Diggs’ conduct violated the rules
of the House:
[W]e must decide in the first instance whether
drawing on clerk-hire funds to meet . . . congressional
expenses was illegal. We hold that it was. * * *
[T]he legal standard is the . . . rules Congress has
passed [and] for this court the law is plain. (App.
A at 11, 14n.41) (emphasis supplied).
The court below then proceeded to determine, as did the
trial judge in his instructions, the appropriate “interpre-
tation [to be] given to [this] standard governing clerk-
hire funds... .” (App. A at 14 n.41). In reaching that
determination, the court said:
5 Id. at 19.
7
No House regulation or order authorized the com-
mingling of [clerk-hire or other allowance] funds
either directly, or . . . indirectly. Had Congress in-
tended that clerk-hire funds be used to pay expenses
of the district office, it could have so provided. (App.
A at 13-14).
The Court of Appeals identified the threshold issue in
the case as whether the House rules allowed clerk-hire
funds to be used to compensate congressional employees
for official expenses. (App. A at 11). The court then held
unequivocably that such a use of clerk-hire funds was
impermissible. 7d. As a result, an alleged violation of the
House rules became a federal crime.
In questioning the majority’s willingness to apply broad
federal criminal statutes to violations of internal rules of
conduct of the House of Representatives, Judge Leventhal,
in his dissent, articulated the substance of the argument
Petitioner makes here:
[T]here is a fundamental difference between [a]
breach of [congressional] ethics and criminal vio-
lations. (App. A at 36).
And, as seve al members of this Court recently warned:
[L]ong accepted concepts of separation of powers
dictate . . . that until Congress legislates otherwise
as to employment standards for its own staffs, judi-
cial power in this area is circumscribed. Davis v.
Passman, 99 S.Ct. 2264, 2279 (1979) (Burger, C.J.,
Powell, J., and Rehnquist, J., dissenting) .
Allowing the Executive Branch in its prosecution, the trial
court in its instructions, the jury in its verdict, and the
Court of Appeals in its opinion to cast themselves in the
role of construing and enforcing the rules of the House
violates the constitutionally mandated separation of pow-
ers among the branches of government. As the court
below explained in another case:
8
“Interpretation and application of a [Senate] Rule is
a matter not for the courts, but for the Senate...
[t]he judicial function is not implicated at all, but
only in the Senate forum can observance of the rule
be compelled.” Ray v. Proxmire, 581 F.2d 998, 1001-
2 (D.C. Cir.), cert. denied, 439 U.S. 983 (1978).
“One branch of government cannot encroach on the do-
main of another without danger. The safety of our insti-
tution depends in no small degree on a strict observance
of this salutary rule.” Sinking Fund Cases, 9 Otto. 700,
718 (1878). In postulating the criteria for finding a
“political question,” see Baker v. Carr, 369 U.S. 186,
217 (1962),° this Court’s opinions suggest the mischief in-
herent in the decision of the court below.
First, there is a clear textual commitment to the Con-
gress of the responsibility to construe and enforce its own
Rules. Article I, Section 5, of the Constitution provides
that:
Each House may determine the Rules of its Pro-
ceedings [and] punish its Members for disorderly
Behaviour... .
It was pursuant to this authority that the House estab-
lished the rules which Congressman Diggs was accused of
evading.
®This Court has explained the criteria suggesting the presence
of a non-justiciable political question as including:
“a textually demonstrative commitment of the issue to a co-
ordinate political department; a lack of judicially discoverable
and manageable standards for resolving [the question]; or the
impossibility of deciding without an initial policy determination
of a kind clearly for nonjudicial discretion; or the impossi-
bility of a court’s undertaking independent resolution without
expressing lack of the respect due coordinate branches of gov-
ernment; or an unusual need for unquestioning adherence to a
political decision already made; or the potentiality of embar-
rassment from multifarious pronouncements by various depart-
ments on one question.” Baker v. Carr, supra, 369 U.S. at
217 (1976).
9
The House has jealously guarded the authority to make,
interpret and enforce its own rules. Even to its own Com-
mittee on Standards of Official Conduct the House en-
rusted only the authority to investigate violations of its
rules, reserving solely to itself the role of judging the
compliance of its Members with those rules. See House
Rule X-4(e), § 698 in H.R.Doc. No. 94-663, 94th Cong.,
2nd Sess. at 408-09 (1977). Moreover, while any violation
of a law disclosed in a committee investigation may be
reported to the appropriate executive authorities, a
violation of the House rules is to be reported only to the
House itself. House Rule X-4(e) (1), Rules of the House
of Representatives § 698.7
Second, this case plainly manifests a “lack of judically
discoverable and manageable standards” for determining
what constitutes compliance with the House rules. Baker
v. Carr, supra, 369 U.S. at 217. The members of the panel
below differed on the meaning of those rules. The Chief
of the House Finance Office was unable, under the govern-
ment’s questioning, to provide the trial court with a useful
definition of the rules. (App. A at 36-38). The only
evidence presented at trial as to how Members of the
House had interpreted the relevant rules strongly sug-
gested that Petitioner’s belief that he had discretion to
compensate his employees for official expenses, while re-
jected by the courts below, was widely shared by his col-
leagues. (App. A at 40).
The court below, having undertaken to resolve the un-
certainty as to what conduct was prohibited by the
7 The House has recently undertaken disciplinary proceedings for
violations of House rules not only against Congressman Diggs but
also against Congressmen Flood, Sikes, Eilberg, Hinshaw, and Wil-
son, as well as an investigation, trial and punishment of Congress-
men involved in the Korean influence scandals. Manual of Offenses
and Procedures, Korean Influence Investigation Pursuant to House
Resolution 252, Comm. on Standards of Official Conduct, 95th Cong.,
Ist Sess. (1977).
10.
House rules, held that clerk-hire payments intended to
compensate employees for official expenses were improper,
because they resulted in a benefit to the Member:
Payment of these [official] bills enabled [Congress-
man Diggs] to provide services to his constituents
and thus furthered his prospects for reelection:
(App. A at 12).
This standard would require a judge to determine crimi-
nal liability on the basis of whether the use of an official
allowance profited a Congressman by “further[ing] his
prospects for reelection.” Such an inquiry is not one upon
which the courts should willingly embark.
Third, the decision below evidences a clear lack of re-
spect for the views of a coordinate branch of government.
In this case, the Judicial branch declared that Petitioner
had violated the House rules. Yet, the Chief of the House
Finance Office testified that the House rules were silent
on the question of compensating employees for paying
official expenses. (App. A at 36-38). Moreover, the House
Committee on Standards of Official Conduct, after con-
sidering the very charges upon which Petitioner was tried,
did not find that he had violated any House rules by com-
pensating his employees for official expenses and did not
require restitution of any sums applied to this purpose.
For the courts to find a violation of House rules, where
the House itself was unwilling to do so, represents an
unwarranted disregard for the decisions of a coordinate
branch of government in matters of its own internal
administration.
Fourth, enforcement of the House rules is a task par-
ticularly ill-suited to judicial decision making. Histori-
cally, the process of congressional discipline has been
politically sensitive, often reflecting, as it should, the pub-
lic mood of the times and a respect for the will of the
people in choosing their elected representatives. Using
11
the House rules as a predicate for criminal prosecution
severely undermines the ability of the House. to make the
difficult political judgments intended by the Constitution
to be a part of the process of legislative rulemaking and
self-discipline. See Robert S. Getz, Congressional Ethics
89-116 (1966).
Fifth, this case demonstrates the “potentiality of em-
barrassment from multifarious pronouncements” from
different branches of government. Baker v. Carr, supra,
369 U.S. at 217. One need only contrast the decisions
reached by the court below and by the House of Repre-
sentatives. Two judges of the Court of Appeals appear
to Fave found conduct violative of the rules of the House,
while the House itself, to which the Constitution commits
the responsibility for enforcing those rules, disagreed. As
the Clerk of the U.S. House of Representatives has
warned:
[S]uch ‘embarrassment’ has already occurred in the
case involving Congressman Diggs. While the prose-
cution charged and the jury convicted defendant for
compensating his congressional employees to pay of-
ficial expenses, the House proceeding did not result
in any finding that payment of official expenses by
compensating employees to pay such expenses vio-
lated applicable standards governing clerk-hire.*®
Sixth, the use of a broad criminal statute to punish
violations of the House rules ignores Congress’s care-
fully wrought design for policing its own Members. Con-
gress has specifically chosen to enforce some standards
governing its Members’ conduct through criminal sanc-
tions. See, e.g., 2 U.S.C. § 441] (campaign finance dis-
closure requirements), 18 U.S.C. § 203 (bribery), 18
U.S.C. § 431 (contracts), 18 U.S.C. §§ 211 and 599-601
(promises of employment), or 18 U.S.C. § 602 (solicita-
8 Attachment to Supplemental Petition for Rehearing with Sug-
gestion for Rehearing En Bane, filed December 17, 1979.
12
tion of political contributions). For other standards, it has
selected the remedial mechanism of civil suits. See, e.g.,
2 U.S.C. § 701 et seg. (financial disclosure for Members
of Congress). It has chosen to enforce other rules only
through the congressional disciplinary process. See, e.g.,
House Rule XLIV (financial disclosure), Rules of the
House of Representatives, supra, at § 940.
The prosecution of Petitioner for what is judicially de-
termined to have been a violation of the House rules
ignores these distinctions. Congress should not be de-
prived of the capacity to choose the appropriate mecha-
nism for enforcement of standards of conduct for its
own Members.
Seventh, freedom for the Executive branch to base
criminal prosecutions on violations of the House rules
could deter congressional rulemaking and disrupt the
House’s discharge of its constitutional responsibility to
establish and enforce its own rules. Members of the
House may well be reluctant to promulgate rules know-
ing that violations could subject their colleagues not only
to congressional discipline, but also to criminal prose-
cution.
Finally, there is inherent in such executive power as
was recognized by the court below a potentiality for
subversion of our constitutional form of representative
democracy. Prosecutorial discretion can be abused, and
the mere fact of indictment, no matter how unfounded
the charges may be, can politically ruin a Congressman.
[T]he opportunities for an Executive in whose sole
discretion the decision to prosecute rests . . . create
an enormous potential for executive control of legis-
lative behavior by threats or suggestions of criminal
prosecution. United States v. Brewster, 408 U.S.
501, 558 (1972) (White, J., dissenting).
As the Clerk of the House of Representatives has warned,
the Diggs case “represents precisely the kind of over-
i
ioe reek
tt bilan te
13
reaching by the executive prchibited by the political ques-
tion doctrine.” ®
2. Petitioner's conviction for conduct which he rea-
sonably believed was lawful violated his Due Process
rights to fair notice. Congressman Diggs believed he had
the discretion to use his clerk-hire allowance to com-
pensate his employees for official expenses. Even if that
belief is now found to have been mistaken, Congress-
man Diggs did not have sufficient notice of the standard
to which he was obligated to conform his conduct to
justify a criminal conviction.
Petitioner was convicted of two federal felony offenses,
both requiring an intent to defraud. Before a criminal
penalty may be exacted for the violation of some norma-
tive rule, that rule:
must be sufficiently explicit to inform those who are
subject to it what conduct on their part will render
them liable to . . . penalties. . . . [A rule] which
either forbids or requires the doing of an act in
terms so vague that men of common intelligence
must guess at its meaning and differ as to its ap-
plication violates the first essential of due process.
Connally v. General Construction Co., 269 U.S. 385,
391 (1926) .7°
The clerk-hire allowance was to be used to pay com-
pensation to employees for the performance of “official
and representative duties.” (App. A at 12-13). Congress-
man Diggs asserted that he believed (and, as the record
indicates, so did many of his colleagues) that this defini-
® Attachment to Supplemental Petition for Rehearing with Sug-
gestion for Rehearing En Bane, filed December 17, 1979.
10 Fair notice is particularly relevant in a specific intent crime,
because “when the law is vague or highly debatable, a defendant—
actually or imputedly—lacks the requisite intent to violate it.”
United States v. Critzer, 498 F.2d 1160, 1162 (4th Cir. 1974).
14
tion ailowed the use of the allowance to compensate em-
ployees for expenses related to the performance of those
duties.** Over Judge Leventhal’s dissent, the majority of
the court below disagreed. (App. A at 11).
The Court of Appeals observed that the statutory his-
tory of the clerk-hire allowance and the applicable regula-
tions did not define the key terms—“official and repre-
sentative duties.” (App. A at 13 n.87, 35-36). Early in
the indictment period, a Congressional Research Service
study on the clerk-hire allowance “produced little in the
way of specific parameters in either case law or con-
gresssional intent” for the use of the allowance.”
When specifically asked whether “compensation for the
performance of official duties [could] include [such]
expenses . . .,” the Chief of the House Finance Office
answered :
The regulations in that time period didn’t have any
specific definition as far as official duties. It’s silent
rots question of what it might include. (App. A at
Not even the administrative officer of the House with
primary responsibility for administering the clerk-hire
allowance was able to say that the applicable rules pro-
hibited use of the allowance to compensate employees for
11 The only evidence of common understanding among his col-
leagues supported Congressman Diggs’ view of the permissible
uses of the clerk-hire allowance. The Director of Survey Research
of the Commission on Administrative Review of the House of Rep-
resentatives explained that:
[T]he senior staff of the’ Commission became aware of a
number of practices related to allowances, including the in-
creasing of clerk-hire salaries to compensate employees for pay-
ing expenses related to the congressman’s discharge of his
official and representational duties. (App. A at 40).
12 See Advisory Opinion No. 2 of the Committee on §
; ; 1 Standards of
Official Conduct, U.S. House of Representatives, July 11, 1973.
15
paying official expenses. The evidence suggests, at the
very least, a “significant ambiguity as to what the law
provided.” (App. A at 40).
What then, one must ask, did the court below rely
upon in concluding that, for them, the law was plain.
The majority opinion explained that:
Had Congress intended that the clerk-hire funds be
used to pay expenses of the district office it could
have so provided.
After the events relevant to the defendant’s con-
viction had already taken place, the House Adminis-
tration Committee published Committee Order No.
30 (Transfer Among Allowance), effective January
3, 1977. . . . Adoption of the order to permit the
transfers here at issue thus strongly suggests that
this practice was not permitted prior to the effective
date of the order. (App. A at 18-15) (Emphasis in
original) .**
This standard of conduct, which served as a predicate
for Petitioner’s conviction, was far too ambiguous to give
rise to criminal liability. He should not have been “re-
quired at peril of [his] liberty... to speculate” as to the
meaning of the applicable rules. Lanzetta v. New Jersey,
306 U.S. 451, 453 (1939).
13 Judge Leventhal suggested a “more plausible” explanation for
Committee Order No. 30:
What is equally plausible, I submit more plausible, is the
House Administration Committee’s awareness that some mem-
bers were using clerk-hire allowance for congressional ex-
penses, because the particularized expense allowance was pat-
ently inadequate, and were finding a predicate for this use of
clerk-hire funds in the ambiguity of ‘official duties’ of clerks.
What Order No. 30 does is to acknowledge the justification for
what had been an uncertain practice, coupled with an attempt
to cope with the problem of abuse by putting a limitation as to
amount. Of course the limitation on amount could not be retro-
active, and the bounds on the practice set by Order No. 30 are
prospective. * * * It seems likely that Congress was indirectly
acknowledging the not uncommon past practice. (App. A at 39).
16
‘The deprivation of due process inherent in conviction
without adequate notice of the standard to which the
Petitioner’s conduct was expected to conform is com-
pounded here by the panel’s reliance on an ambiguous
event, which took place after the alleged violations, to
shape their views as to the meaning of the applicable
House rules.'* The importance the court below placed on
later changes in the House rules only serves to cast fur-
ther doubt on whether Congressman Diggs could have had
fair notice at the time of his offense that his conduct
was prohibite?.
3. The trial judge’s instruction virtually obliterated
Petitioner's good faith defense and directed a guilty ver-
dict. Congressman Diggs’ defense was his good faith
belief in his discretion to compensate his employees
through clerk-hire payments for the official expenses they
had incurred. Accordingly, his defense focused primarily
on the question of criminal intent.
Defense counsel requested an instruction on good faith
to present the defense’s theory of the case to the jury.
The trial judge warned that he would only give a good
faith instruction if he added to it an explanation that
Congressman Diggs could not have acted in good faith if
he believed that any clerk-hire payments were not
solely for his employees’ personal use, but rather were to
be compensation for congressional expenses. The defense
withdrew its request for an instruction, but the judge
determined he would make this explanation to the jury
nonetheless.
The judge instructed the jury that the resolution of
whether Congressman Diggs acted in good faith or with
4 See Marks v. United States, 430 U.S. 188, 191-92 (19 . }
V. City of Columbia, 378 U.S. 347, 353-54 (1964) : Seinid Bhates
v. Porter, 591 F.2d 1048, 1053-54 (5th Cir. 1979); United States v
Insco, 496 F.2d 204, 206-9 (5th Cir. 1974) ; United States v Critzer,
498 F.2d 1160, 1162 (4th Cir, 1974). fos 5 cami
17
a fraudulent intent depended on whether, at the time he
submitted Payroll Authorization Forms for his employ-
ees, he intended that a portion of the clerk-hire payments
therein described were to be used to meet his expenses,
including official expenses.’® If the jury were to find that
the Congressman had such a purpose, they would have to
conclude that he could not have acted in good faith, hence
must have possessed the fraudulent intent necessary for
conviction. As Judge Leventhal explained in his dissent
from the decision of the court below, this instruction,
“virtually obliterated appellant’s good faith defense as to
the salary increases expended for official purposes.” (App.
A at 34). In so doing, the trial court clearly violated
this Court’s holding in Sandstrom v. Montana, 99 S.Ct.
2450 (1979), warning against the “judge invading the
fact finding function, which in a criminal case the law
assigns solely to the jury.” 99 S.Ct. at 2459.
Here, as in Sandstrom, the overriding issue in the case
was whether Petitioner possessed the intent required for
conviction. “Where intent of the accused is an ingredient
of the crime charged, its existence is a... jury issue.”
Morissette v. United States, 342 U.S. 246, 274 (1952).
Since there is no way to be certain that Petitioner’s
conviction was not based on an instruction which un-
constitutionally invaded the jury’s fact finding role on
the crucial issue of intent, the conviction must be set
aside. Sandstrom v. Montana, supra, 99 S8.Ct. at 2459-61.
15 The text of the instruction is as follows:
Good faith is a defense to a crime such as mail fraud, one of
the elements of which is fraudulent intent. The question is
whether the defendant at the time he approved the payroll
Authorizations representing that certain employees would be
paid specific salaries, intended those employees would actually
receive and have complete use of those salaries, or did he intend
that a portion of the salary would be remitted by the employee
for the payment of [the Congressman’s| obligations. What
I have said respecting good faith as a defense in a mail-fraud
charge is also applicable to false official statement charges.
(App. A at 34) (Emphasis added).
18
4. The investigation and trial of Congressman Diggs
violated the Speech or Debate Clause. In the investiga-
tion of this case through the grand jury process and its
trial before the court, the Department of Justice sought
and obtained from Petitioner’s past and present congres-
sional employees detailed disclosures of their official re-
sponsibilities and their roles as advisors to the Congress-
man in matters of legislative concern. At the close of the
prosecution’s case, the defense moved for a judgment of
acquittal, asserting, in part, that the court had exceeded
its authority in inquiring into these areas, thereby vio-
lating the Speech or Debate Clause (Article 1, Sec-
tion 6) of the Constitution.
In Gravel v. United States, 408 U.S. 606, 628-29
(1972) this Court observed that neither a Senator nor
his aides should be questioned about legislative activities,
the motives for such activities, or communications between
the Senator and his aides on such matters. In this case,
much of the government’s proof was based on just such
an intrusion into that same confidential relationship be-
tween a congressman and his aides.
CONCLUSION
For all of the above reasons, a writ of certiorari should
issue to review the judgment and opinion of the Court
of Appeals for the District of Columbia Circuit.
Respectfully submitted,
DAVID POVICH
ROBERT P. WATKINS
ROBERT B. BARNETT
BERNARD J. CARL
WILLIAMS & CONNOLLY
Hill Building
Washington, D.C. 20006
Counsel for Petitioner
Appendices
APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 78-2327
UNITED STATES OF AMERICA
Vv.
CHARLES C. DIGGS, JR.,
Appellant
Appeal from the United States District Court
for the District of Columbia
(D.C. Criminal No. 78-142)
Argued 11 June 1979
Decided 14 November 1979
Bernard J. Carl, a member of the bar of the Supreme
Court of Virginia, pro hac vice, with whom David Povich,
Robert Barnett, and Robert Watkins were on the brief,
for appellant.
Peter E. George, Assistant United States Attorney, with
whom Earl J. Silbert, United States Attorney, John A.
Terry, John T. Kotelly, and Eric B. Marcy, Assistant
- United States Attorneys were on the brief, for appellees.
2a
Before: LEVENTHAL and WILKEY, Circuit Judges and
OBERDORFER,* United States District Judge,
United States District Court for the District
of Columbia
Opinion for the Court filed by Circuit Judge WILKEY.
Concurring opinion filed by District Judge OBERDORFER.
Dissenting opinion filed by Circuit Judge LEVENTHAL.
The defendant Charles C. Diggs, United States Con-
gressman for the 13th District of Michigan, appeals
from a conviction on eleven counts of mail fraud, under
18 U.S.C. § 1341,1 and eighteen counts of making false
statements to a United States agency, under 18 U.S.C.
§ 1001, following a jury trial before J udge Oliver Gasch
* Sitting by designation pursuant to 28 U.S.C. § 292(a).
118 U.S.C. § 1341 provides:
§ 1341. Frauds and swindles
Whoever, having devised or intending to devise any scheme
or artifice to defraud, or for obtaining money or property by
means of false or fraudulent pretenses, representations, or
promises, or to sell, dispose of, loan, exchange, alter, give away,
distribute, supply, or furnish or procure for unlawful use any
counterfeit or spurious coin, obligation, security, or other
article, or anything represented to be or intimated or held out
to be such counterfeit or spurious article, for the’purpose of
executing such scheme or artifice or attempting so to do, places
in any post office or authorized depository for mail matter, any
- matter or thing whatever to be sent or delivered by the Postal
Service, or takes or receives therefrom, any such matter or
thing, or knowingly causes to be delivered by mail according
to the direction thereon, or at the place at which it is directed
to be delivered by the person to whom it is addressed, any such
matter or thing, shall be fined not more than $1,000 or im-
prisoned not more than five years, or both.
18 U.S.C. § 1341 (1976).
* 18 U.S.C. § 1001 provides:
$1001. Statements or entries generally
Whoever, in any matter within the jurisdiction of any de-
partment or agency of the United States knowingly and will-
3a
of the United States District Court.* The defendant was
sentenced to concurrent terms of incarceration of three
years on each count.
The indictment alleged that between 1 July 1973 and
2 March 1977 the defendant devised a scheme to defraud
the United States by misapplying funds allotted for the
compensation of congressional employees.* On this appeal,
fully falsifies, conceals or covers up by any trick, scheme, or
device a material fact, or makes any false, fictitious or fraudu-
lent statements or representations, or makes or uses any false
writing or document knowing the same to contain any false,
fictitious or fraudulent statement or entry, shall be fined not
more than $10,000 or imprisoned not more than five years, or
both.
18 U.S.C. § 1001 (1976).
3 Appellant was originally charged in an indictment of thirty-five
counts; the government dismissed three counts each of mail fraud
and false statements before trial.
4Counts 1 through 11 charged violations of 18 U.S.C. § 1341;
counts 12 through 29 charged violations of 18 U.S.C. § 1001. Briefly
summarizing the counts of the indictment, counts 1 through 4
alleged that Congressman Diggs engaged in a scheme to defraud
the United States by inflating the salary of Felix R. Matlock, a
congressional employee, as a means of paying various personal,
business, and House of Representative expenses; counts 5 through
7 and 8 through 11 charged that Congressman Diggs placed on the
congressional payroll Jeralee Richmond and George Johnson as
compensation for services rendered either to defendant Diggs per-
sonally or to the family business, the House of Diggs. Counts 12
through 29 alleged that the defendant filed materially false and
misleading Payroll Authorization Forms with the House of Repre-
sentatives Office of Finance: counts 12 through 20 charged that he
concealed from the agency the fact that he inflated the salaries of
Jean G. Stultz, Felix Matlock, and Ofield Dukes with the intention
of using the increase in their salaries to meet his own personal and
congressional obligations; and counts 21 through 23 and 24 through
29 charged that the defendant placed George G. Johnson and
Jeralee Richmond on the payroll to compensate them for services
that were unrelated to the defendant’s congressional duties.
4a
the defendant does not challenge the sufficiency of the
evidence but contends rather that he lacked the requisite
intent to defraud and that he acted within the bounds
of his discretion to set the duties and salaries of his
congressional employees. For the reasons discussed here-
in, we reject the defendant’s arguments and affirm his
conviction on each of the twenty-nine counts.
I. FACTUAL BACKGROUND
At different periods from October 1973 to January
1977, three of defendant Diggs’ congressional employees
—Jean G. Stultz, Felix R. Matlock, and Ofield Dukes—
paid out of the salary allotted to them from the congres-
sional clerk-hire allowance various personal, business, or
official expenses of the defendant. That these payments
were made is not contested by the defendant ; thus a
detailed itemization of each of the transactions need not
detain us. What is disputed by the defendant are the
questions of whether the clerk-hire allowance could be
used to defray his congressional expenses > and whether
the employees’ expenditures were made at his direction.
Congressman Diggs hired Jean G. Stultz in 1972 as
a legislative assistant and in the following year promoted
her to his personal secretary and staff office manager.
In October 1973 Diggs placed Mrs. Stultz on both his
personal staff and committee staff payrolls, for which
she received two monthly salary checks of approximately
5 Defendant concedes that it “may have been improper for an
employee to be compensated from the clerk-hire allowance for the
payment of personal expenses.” Brief for Appellant at 28. As a
tactical matter, defendant had no need to assert the propriety of
those types of expenditures because the Government tried its case
on the theory that either type of expenditure—for personal and busi-
ness expenses or for congressional expenses—was illegal. See
notes 31-32 infra and accompanying text.
5a
$800 and $1,200.° Although Stultz deposited both pay-
checks into her own checking account, she allocated the
$1,200 monthly check to obligations of the defendant—
either personal or congressional ones.* In August 1974
defendant removed Stultz from his personal staff payroll
and substantially increased the salary she received from
the committee staff payroll “almost to a figure to cover
the total amount that [she previously received] in the
two checks.” * From this increase in salary, Stultz con-
tinued to pay the defendant’s personal and congressional
creditors on a regular basis.®
Mrs. Stultz testified that in March or April 1976 she
informed the defendant that she “no longer wanted to be
® Her actual combined net monthly salary was $2,142.14. Her
gross annual staff salary as of October 1973 was $19,000.00; her
gross annual committee salary, $14,667.80, making a total gross of
$33,667.80. See Gov’t Exhibit No. 75, Appendix for Appellee at 281.
No argument is advanced that it was improper, standing alone, to
compensate Mrs. Stultz from two payrolls.
“A check payable to the order of “Cash” for $1,250.00, dated
2 November 1973, was the first expenditure of record. This check
substantially was used to defray an arguably personal expense of
the defendant ($1,000 toward a portrait of the defendant to hang
in the House of Representatives), and the balance to cover expenses
related to the Congressman’s official duties.
S Record (28 Sept. 1978) at 43 (testimony of 7ean G. Stultz).
Her gross annual salary was $36,000.00, with a monthly net of
$1,846.75. See Gov’t Exhibit No. 75, Appendix for Appellee at 282.
® Over a two and one-half year period, from November 1973
through March 1976, Stultz expended a total of $20,413.16 toward
the defendant’s personal and congressional obligations from her in-
creased salary. Over one-half of that amount covered personal ex-
penses of the defendant (e.g., life insurance premium payments,
home mortgage payments, etc.), while almost one-third went toward
congressionally related expenses (e.g., rent for the defendant’s dis-
trict offices in Detroit, political contributions, printing costs). It
cannot be said with certainty whether the balance covered personal
or congressional expenses. See Gov’t Exhibit Nos. 76 & 77, Appendix
for Appellee at 284.
6a
a part of [it].”'° Her gross annual salary was reduced
in April 1976 from $37,355.00 to $22,700.00. The de-
crease in salary was accompanied by no changes in duties.
One fact of importance on this appeal is whether the
defendant’s bills were paid “at the direction of Congress-
man Diggs,” as Mrs. Stultz testified,’? or on Mrs. Stultz’s
own volition, as the defendant contends. Mrs. Stultz tes-
tified that the defendant approached her with the notion
that her salary be increased in order to pay certain of his
bills, and that the scheme, after some initial objection on
her part,’ was then set into motion: each month she
would make a listing of all of the defendant’s accounts,
she and the defendant would review this list, and the
defendant then would direct her as to which bills were
to be paid from the inflated portion of her salary."
After this decision was reached, Stultz purchased either
money orders or cashier’s checks, placed the defendant’s
name on these instruments, and mailed them to the de-
fendant’s creditors.* Defendant Diggs, on the other hand,
denied increasing Mrs. Stultz’s salary for the purpose
10 Record (29 Sept. 1978) at 37.
11 Prior to her resignation on 30 August 1976, the defendant
increased Mrs. Stultz’s salary to $37,355.00 for the menths of July
and August 1976 so that she could pay her inflated taxes. For a
complete breakdown of the fluctuations in Stultz’s salary, see Gov’t
Exhibit No. 75, Appendix for Appellee at 281-83.
12 Record (28 Sept. 1978) at 106.
13 Mrs. Stultz testified that she participated in the scheme despite
her reservations because she “felt that it was almost—you might
almost say a condition of employment. [She] received no threats
but it was by sort of innuendo.” Record (29 Sept. 1978) at 42.
14 Mrs. Stultz and the defendant referred to the overage in her
salary as the “special account,” although no separate banking ac-
count physically was established.
1° Mrs. Stultz also wrote personal checks to pay the defendant’s
creditors. Stultz testified that she was allowed to retain the entire
proceeds of her paycheck once each year for tax purposes.
7a
of paying his bills, and he also denied directing her to
make these payments. He testified instead that Mrs. Stultz
“expressed a willingness” to discharge his obligations.
Felix R. Matlock, one of the defendant’s field rep-
resentatives in Detroit, also paid expenses of the Con-
gressman from his salary. The bulk of these expendi-
tures were made over an eighteen-month period from
September 1975 to January 1977.16 With one minor
exception,"’ all of these were congressionally related and
most were in some way related to the operations of the
defendant’s district offices in Detroit.'® Corresponding
with that time period, the defendant significantly in-
creased Matlock’s salary: Matlock’s annual gross salary
jumped from $14,500.00 in July 1975 to $35,000.00 in
September 1975, and to as much as $39,600.00 by the
end of 1976.'®
Again, the dispute does not center on whether the
defendant authorized the increases in Matlock’s salary
or whether Matlock actually paid the defendant’s distri +
office expenses, but whether the two events were part
and parcel of the same scheme, perpetrated by the de-
fendant. Mrs. Stultz testified that Matlock’s salary was
increased in order to pay the defendant’s district office
expenses, while the defendant denied adjusting Matlock’s
salary for this purpose. Both Matlock and Stultz tes-
16 Matlock paid a few, relatively insubstantial congressional ex-
penses in 1973 and 1974.
‘7 The one exception being a money order, dated 6 July 1976,
payable to North Carolina Mutual (for an insurance policy on Con-
gressman Diggs) in the amount of $17.68.
18The expenditures, which are evidenced by copies of money
orders or cashier’s checks, total $10,952.31 and include payments for
such items as rent on the district offices (two actual offices and a
mobile unit), media advertising costs, and electricity costs for the
district offices.
19 See Gov’t Exhibit No. 78, Appendix for Appellee at 228.
8a
tified that on the defendant’s instructions, Mrs. Stultz
advised Matlock which bills were to be paid.” Consistent
with and in confirmation of this, Matlock also asserted
that he received orders from the defendant personally
following Mrs. Stultz’s resignation in August 1976. Diggs,
on the other hand, claimed that he did not instruct
Matlock either directly or indirectly on which bills were
to be paid.
In December 1976 Matlock stopped making payments
toward the defendant’s official expenses.” In the follow-
ing month, the defendant reduced Matlock’s gross annual
salary from $39,600.00 to $20,000.00 with no apparent
change in duties.”
Ofield Dukes, hired in April 1973 as a consultant, paid
official expenses of the defendant at various times from
June 1973 through January 1976.** Dukes testified that
he received instructions on which bills to pay from Mrs.
Stultz and that he was reimbursed for these expenditures
through increases in his salary. His base pay of
$12,000.00 was raised to as much as $37,300.00 in No-
vember 1975, and finally dropped back to $12,000.00 in
20 Matlock then either sent the money to Washington or paid the
bills directly through money orders or cashier’s checks. Matlock
testified that he retained seven percent of his increased paychecks
for tax purposes.
21 Matlock claimed he only adhered to the arrangement because he
“didn’t want to make any waves.” Record (30 Sept. 1978) at 17.
22 The Government calculated that the total excess in Matlock’s
salary from August 1975 through December 1976 was $26,962.95
computed over a base of $14,500.00 (Matlock’s gross annual salary
as of July 1975). See Gov’t Exhibit No. 78, Appendix for Appellee
at 288.
23 For example, Dukes on occasion paid for political advertising
for the defendant. In two instances Dukes covered obligations of
the House of Diggs (totaling $1,148.40) but insisted that these bills
were paid inadvertently.
9a
February 1976, when Dukes ceased to discharge the de-
fendant’s obligations.
Finally, the indictment alleges that Jeralee Richmond
and George Johnson performed no congressionally related
work while they were compensated from the congres-
sional payroll. Defendant placed Jeralee Richmond on
the congressional payroll in July 1974 at a salary of
$8,500.00. She was employed at the House of Diggs’
Funeral Home in Detroit as a bookkeeper, and she was
also expected to deal with problems of constituents who
came to the funeral home. Richmond testified that while
on the House rolls from July 1974 to August 1976, ap-
proximately twenty percent of her time was apportioned
to handling constituents’ problems and eighty percent
to bookkeeping matters of the funeral home.”’ The de-
fendant did not dispute her testimony. At no time dur-
ing this period did Mrs. Richmond receive any com-
pensation from the House of Diggs: her entire salary
derived from the congressional clerk-hire funds.2°
George Johnson, a certified public accountant in De-
troit, was the defendant’s personal accountant and the
accountant for the House of Diggs. From July 1973 to
December 1974, Johnson received compensation from the
congressional clerk-hire allowance. While on the House
*4 The total excess in Duke’s salary, computed from a base of
$12,000.00 was $15,945.81. See Gov’t Exhibit No. 80, Appendix for
Appellee at 292.
*° Mrs. Richmond originally was employed as a bookkeeper for
the House of Diggs from 1949 to 1967. During that period, she
handled the same sorts of matters that sh. did while on the congres-
sional payroll—bookkeeping work and constituents’ problems—but
received no compensation for the latter function from House
unds.
26 Jeralee Richmond received a total of $20,291.64 from the con-
gressional payroll. See Gov’t Exhibit No. 81, Appendix for Appellee
at 294.
10a
payroll, Johnson continued to render accounting services
to the defendant personally and to the House of Diggs.
Defendant does not dispute that fact, asserting, how-
ever, that Johnson also aided him in his official capacity.
Defendant testified that he hired Johnson as an adviser
to draw upon Johnson’s “knowledge and expertise and
involvement in the community with respect to black
economic development projects.” *’ Johnson testified, on
the other hand, that he did no “financial or accounting
work for Congress” and that he had doubts about re-
ceiving compensation from the clerk-hire funds.** As a
result, Johnson quit the congressional payroll in Decem-
ber 1974.” ;
II. ANALYSIS
The scheme to defraud set forth in the indictment has
two subparts: (1) the allegation that the defendant “in-
flated the salaries of Jean G. Stultz, Felix R. Matlock
and Ofield Dukes in order to pay for various personal,
business and House of Representatives’’ expenses of de-
fendant Diggs,” and (2) the allegation that the defend-
ant placed on the House of Representatives’ payroll
Jeralee Richmond and George Johnson “who performed
no work for the House of Representatives.” *° We will
consider first that part of the alleged scheme to defraud
27 Record (4 Oct. 1978) at 85.
28 Record (30 Sept. 1978) at 172.
29 Johnson also testified that by the spring of 1973 the defendant
personally owed him between $2,000.00 and $10,000.00 and that the
House of Diggs was also indebted to him. He reduced the House
of Diggs’ indebtedness by the amount of money he received as
salary from the clerk-hire allowance, a total of $19,166.02.
30 The payroll transactions for employees Matlock, Richmond, and
Johnson form the basis of the mail fraud counts; the payroll trans-
actions for all five employees, the basis of the false statement
counts.
lla
involving the increases in the salaries of Matlock, Stultz,
and Dukes.
A. The Scheme to Defraud: Inflated Salaries of Con-
gressional Employees
1. The Clerk-Hire Allowance
The Government tried its case against the defendant
on the rationale that using clerk-hire funds to pay either
the Congressman’s personal and business expenses or his
official expenses was illegal. The Government combined
in the same counts of the indictment transactions relat-
ing to both types of expenditures.*' Although defendant
admits that it “may have been improper for an employee
to be compensated from the clerk-hire allowance for the
payment of personal expenses,” ** he asserts that use
ef the clerk-hire allowance to pay certain of the district
office expenses was entirely proper. Thus, putting aside
for a moment the question of the defendant’s intent in
increasing his employees’ salaries, we must decide in the
first instance whether drawing on clerk-hire funds to
meet either the defendant’s personal or congressional:
expenses was illegal. We hold that it was.
The clerk-hire allowance is an appropriation by Con-
gress providing compensation “[flor staff employed by
each Member in the discharge of his official and rep-
resentative duties.” ** On hiring an employee or on ad.
31 To simplify, we shall refer to the Congressman’s personal and
business expenses as “personal expenses.” Although some of the
counts involve only payments of congressional expenses, no count
relates solely to payments of the defendant’s personal bills.
32 Brief for Appellant at 28.
38 Legislative Branch Appropriation Act, 1978, Pub. L. No. 95-
94, 91 Stat. 653, 667 (1977); Legislative Branch Appropriation Act,
1977, Pub. L. No. 94-440, 90 Stat. 1439, 1447 (1976); Legislative
Branch Appropriation Act, 1976, Pub. L. No. 94-59, 89 Stat. 269,
220 (1976); Legislative Branch Appropriation Act, 1975, Pub. L.
No. 928-371, 88 Stat. 424, 482 (1974); Legislative Branch Appropri-
2a
justing the amount of compensation that an employee
will receive, a congressman must submit a “Payroll Au-
thorization Form” to the House of Representatives Of-
fice of Finance, marking on the form either the entry
entitled “Appointment” or the one designated “Salary
Adjustment.” The obvious reading of this payroll form
is that the monies received will accrue to the employees’
sole use and benefit as salary for services rendered. It
rules out by implication any other use of the funds.
In Diggs’ case the defendant submitted the payroll
forms to the House Office of Finance approving the in-
creases in the salaries of Stultz, Matlock, and Dukes with
the knowledge,** undeniable after the first remittitur, that
the increment would be used to pay his personal and
official expenses. These payments benefited not the em-
ployees but the defendant himself. Obviously the defend-
ant directly benefited from the payments to his personal
creditors and to the creditors of his business, the House
of Diggs. Equally clearly the defendant profited from
the payment of his congressional expenses. Payment of
these bills enabled the defendant to provide services to
his constituents and thus furthered his prospects for
reelection.**
Defendant argues nevertheless that using clerk-hire
funds to compensate employees for paying district office
expenses fell within his discretion to determine both the
salaries and responsibilities of his employees, provided
those responsibilities relate to the Congressman’s “of-
ation Act, 1974, Pub. L. No. 93-145, 87 Stat. 527, 535 (1973). See
2 U.S.C. §57(a) (1) (1976) (Committee on House Administration
may fix the amount of the allowance for clerk-hire).
34 The defendant’s actual intent will be discussed infra.
35 While it could be argued that the constituents of his District
also profited from the arrangement, the point is that the employees
who by law were the intended recipients of the money reaped no
benefit.
13a
ficial and representative duties.’’** The phrase “official
and representative duties,” so the argument goes, is
sufficiently broad to encompass an employee’s responsi-
bility for paying congressional expenses.*7 We disagree.
The defendant’s argument erroneously equates a con-
gressman’s discretion to define the duties of an employee
with the unfettered power to divert monies intended for
one purpose to another, completely unauthorized purpose.
During the period relevant to the indictment, the Com-
mittee on House Administration had fixed an allowance
for district office expenses at $500 per quarter or $2,000
per annum.** Thus the allowance for clerk-hire and the
allowance for district office expenses were separate and
distinct.** No House regulation or order authorized the
commingling of these funds, either directly, or, as in this
case, indirectly.*° Had Congress intended that the clerk-
36 See, e.g., 2 U.S.C. § 92 (1976) (establishing maximum number
of employees on clerk-hire; granting discretion to Member to set
salaries, within fixed minimum and maximum amount, and to
remove employees from the rolls at any time with or without
cause).
37 “Official and representative duties” was not defined in the
legislative history to the Appropriations Acts, or the applicable
House regulations.
38 See, e.g., House Administration Comm. Order No. 8 (effective
1 Oct. 1973); House Administration Comm. Order No. 15 (effec-
tive 18 Dec. 1974). Defendant makes no argument that he did
not receive this money. In addition, members of Congress were
reimbursed from separate allowances for their travel, the travel
of their staff, and expenses for office telephones and office equip-
ment. See 2 U.S.C. § 57(a) (1) (1976); Record (3 Oct. 1978) at 73-
74 (testimony of John Lawler, Chief of the Office of Finance).
39 That the district office allowance may have been inadequate
to meet office expenses, see Brief for Appellant at 24, has no legal
significance.
40 We note that the dissent’s assertion that the inquiry of the
so-called Obey Commission into the “perceptions and understanding
of members of the House of Representatives about the allowance
system,” Record (4 Oct. 1978) at 37, revealed “significant ambigu-
l4a
hire funds be used to pay expenses of the district office
it could have so provided.**
ity” among congressmen concerning the proper use of the clerk-
hire allowance needs a bit of clarification. See Dissenting opinion
at 8-9. On cross-examination, Mr. Victor Fischer, Director of
Survey Research for the Commission, admitted that the actual
survey administered to the members of Congress included no ques-
tions concerning the congressmen’s use of the clerk-hire funds for
the defraya! of their congressional or personal expenses. See Record
(4 Oct. 1978) at 55-56. Mr. Fischer’s perception that Congressmen
other than Representative Diggs inflated the salaries of their em-
ployees to pay congressional expenses thus derived solely from dis-
cussions with members of his Commission, see id. at 56-58. No
congressman was ever asked directly whether this was indeed
the practice that he followed because of the apparent “sensitivity of
the issue.” See id. at 58 (testimony of Victor Fischer).
41 The legal standard is the law and rules Congress has passed,
not the conduct some may have engaged in. “[F]Jacing up to
reality,” in our colleague’s phrase, may tell us that congressmen
other than Diggs convinced themselves that there was an “am-
biguity” associated with the clerk-hire rules, but the “reality” of
other offenders does not change the law; for this court the law
is plain.
Our colleague would be on more comfortable (albeit mistaken)
ground as a matter of legal reasoning if he were to conclude that
using clerk-hire funds for either the defrayal of the defendant’s
congressional or personal expenses was not clearly improper. He
argues in essence that the regulations governing the clerk-hire
funds were vague, that there was considerable doubt concerning
the propriety of using these funds for the defrayal of congressional
expenses, and that therefore the judge’s instruction on good faith
was clearly erroneous. If the regulations were as vague as the
dissent contends, then, as a matter of logic, how can anyone say
for sure that the use of the clerk-hire funds to defray Diggs’
personal expenses was clearly improper? How can our colleague
draw a principled distinction between the propriety of drawing
on clerk-hire funds to meet Diggs’ personal expenses and the
propriety of drawing on those same funds to meet Diggs’ con-
gressional expenses when the dissent supposedly is unclear as to
exactly what the regulations did and did not permit?
He offers no explanation other than the implicit one that he was
influenced by the politics involved (e.g., what he terms “facing up
to reality”). This fatal flaw in the dissent’s logic underscores the
fact that the only sensible and principled interpretation that can be
given to the standard governing clerk-hire funds is one which
15a
After ‘the events relevant to the defendant’s conviction
had already taken place, the House Administration Com-
mittee published Committee Order No. 30 (Transfer
Among Allowance), effective 3 January 1977.47 Com-
mittee Order No. 30 permits the transfer of up to $15,000
from the clerk-hire allowance to two other funds, from
which allocation then may be made to cover other ex-
penditures, including “Official Expenses Outside the Dis-
trict of Columbia.” The order has no retroactive effect.*
Adoption of the order to permit the transfers here at
issue thus strongly suggests that this practice was not
permitted prior to the effective date of the order. Even
if the order were retroactive, it would not justify the
defendant’s conduct in this instance. A congressman may
transfer funds from the clerk-hire allowance to the
allowance for official expenses provided he certifies to the
House Office of Finance of his election to do so.* Diggs
certified the opposite. If the new order had been in effect,
Diggs made false statements even by that standard.
In defense, Diggs cites the testimony of the Chief
of the House Office of Finance, Mr. John Lawler, for the
notion that the clerk-hire funds could be applied to dis-
trict office expenses. When questioned by the prosecutor
recognizes that these funds were intended for the sole use and
personal benefit of the employee. This clear standard was violated
when Congressman Diggs indirectly used the clerk-hire funds to
pay either his congressional or his personal expenses.
42 See Supplemental Certified Index to Record (filed 31 Aug.
1979).
43 Despite language in the dissenting opinion which may be
taken to suggest the contrary, Judge Leventhal does not appear
to disagree with our interpretation that House Order No. 30 has
no retroactive effect.
44 See STAFF OF COMM. ON HOUSE ADMINISTRATION, 96TH CONG.,
REGULATIONS AND ACCOUNTING PROCEDURES FOR ALLOWANCES AND
EXPENSES OF COMMITTEES, MEMBERS AND EMPLOYEES 136 (Comm.
Print 1979).
16a
regarding the purpose of the clerk-hire allowance, Mr.
Lawler testified :
It’s used to pay compensation of employees in the
performance of official duties.*°
When pressed further on whether the allowance “in-
clude{d] any expenses which were incidental to the em-
ployment,” Mr. Lawler responded:
The regulations in that time period didn’t have
any specific definition as far as official duties. It’s
silent on the question of what it might include.*°
Rather than providing support for the defendant’s posi-
tion, Mr. Lawler’s rather cautious testimony can be taken
to do no more than state the obvious: it was within a
congressman’s discretion to define the parameters of an
employee’s responsibilities so long as those responsibilities
related to the congressman’s “official and representative
duties.” Lawler’s testimony cannot be interpreted to
mean that a congressman also had the discretion, under
the guise of compensating his employees, to appropriate
clerk-hire funds for purposes other than those intended by
the appropriation and duly certified by the congressman.
2. Mail Fraud
With these conclusions in mind, we turn now to the
law applicable to the mail fraud and false statements
statutes.*7 The basic elements of the offense of mail
fraud under 18 U.S.C. § 1841 are “(1) a scheme to de-
fraud, and (2) the mailing of a letter, etc., for the pur-
45 Record (3 Oct. 1978) at 66.
46 Jd.
47 The mail fraud counts regarding salary inflation related only
to transactions and mailings involving Felix Matlock’s paychecks;
the false statement counts to transactions involving the salaries of
Dukes, Stultz, and Matlock.
17a
pose of executing the scheme.” *® Because only “a scheme
to defraud” and not actual fraud is required, proof of
fraudulent intent is critical.*
In this case, the testimony concerning the defendant’s
intent was conflicting. Briefly recalling the evidence, the
key witness for the government, Jean G. Stultz, testified
that the defendant increased her salary and the salaries of
Felix Matlock and Ofield Dukes for the purpose of using
the inflated portions to pay the defendant’s expenses.
Mrs. Stultz also asseverated that the payments she made
“were always ... at the direction of Congressman
Diggs.” ® The defendant’s testimony essentially was that
Jean Stultz voluntarily paid his bills to ease his financial
situation. Far from being voluntary, Stultz testified that
she “felt that it was almost—you might almost say a
condition of employment.” ™
Stultz also claimed that the defendant directed her to
instruct Matlock and Dukes on which district office ex-
penses to pay from their inflated salaries. Matlock and
Dukes both corroborated the fact that Stultz directed
them to make these payments, and Matlock further as-
serted that he received his instructions from the defend-
ant personally after Mrs. Stultz resigned in August 1976.
He added that he went along with the scheme only be-
48 Pereira V. United States, 347 U.S. 1, 8 (1954); See Weiss v.
United States, 122 F.2d 675 (5th Cir. 1941): “The law does not
define fraud; it needs no definition; it is as old as falsehood and
as versable as human ingenuity.” Jd. at 681, quoted in United
States v. Reid, 533 F.2d 1255, 1264 (D.C. Cir. 1976).
49 See, e.g., United States v. Brown, 540 F.2d 364, 374 (8th Cir.
1976) ; United States v. Reid, 533 F.2d 1255, 1264 (D.C. Cir. 1976) ;
United States v. Regent Office Suply Co., 421 F.2d 1174, 1180-81
(2d Cir. 1970).
50 Record (28 Sept. 1978) at 106.
51 Record (29 Sept. 1978) at 42.
18a
cause he “didn’t want to make any waves.” * While the
defendant admitted that Dukes and Matlock paid cer-
tain congressional expenses, he disclaimed any intention
of inflating their salaries for this purpose. This was the
issue the defendant’s own testimony made in regard to
his intent.
It was entirely within the province of the jury to re-
solve the conflicting testimony. The jury concluded that
the defendant personally devised and directed a scheme
to divert portions of the three employees’ salaries to
meet his personal and official expenses. We hold that
there was ample evidence to support this conclusion.
Second, we find that the actual scheme to defraud has
clearly been established. No House regulation or order
authorized the use of the clerk-hire allowance for pur-
poses other than the sole use and benefit of the staff of
a congressman; the money was to go to individual em-
ployees for their personal salaries and subsequent per-
sonal use or it was not to be expended at all. Defendant
submitted payroll authorization forms to the House Office
of Finance approving the increases in his employees’
salaries while concealing the fact that these monies would
be diverted to the Congressman’s own benefit. His con-
duct amounted to no less than a scheme to take illicit
kickbacks from his employees in the form of payments
of his personal or congressional expenses.
The courts have held that kickback schemes involving
the use of the mails run afoul of the mail fraud statute:
[T]he mail fraud statute is violated when some or
all of the following factors are present: a duty to
disclose an interest with a concomitant failure to do
so; an attempt to cover-up through false pretenses;
a taking of money or property or rights of another
through the use of kickbacks, extortion, bribery, tax
52 Record (30 Sept. 1978) at 17.
19a
evasion, perjury, or violation of some state or fed-
eral statute; a use of the United States mails.”
The defendant defrauded the public of not only substan-
tial sums of money but of his faithful and honest
services.”*
The final element under the mail fraud statute is a
use of the United States mails “for the purpose of execut-
ing the scheme.” *> One must “cause” the mails to be
used to satisfy this requirement. In Pereira v. United
States the Court held that a defendant “causes” the use
of the mails where he “does an act with knowledge that
the use of the mails will follow in the ordinary course
of business, or where such use can reasonably be fore-
seen, even though not actually intended.” ** In addition,
although the schemer need not “contemplate the use of
the mails as an essential element,” the mailings must
be “sufficiently closely related to [the] scheme to bring
his conduct within the statute.” **
53 United States v. Bush, 522 F.2d 641, 646 (7th Cir. 1975)
(emphasis added), cert. denied, 424 U.S. 977 (1976). See e.g.,
United States v. Rabbitt, 583 F.2d 1014 (8th Cir. 1978), cert.
denied, 439 U.S. 1116 (1979); United States v. Brown, 540 F.2d
364, 374-75 (8th Cir. 1976); United States v. Barrett, 505 F.2d
1091 (7th Cir. 1974); cert. denied, 421 U.S. 964 (1975). But see
United States v. McNeive, 536 F.2d 1245 (8th Cir. 1976).
54 See, e.g., United States v. Brown, 540 F.2d 364, 374 (8th
Cir. 1976 (“a public official may be prosecuted under 18 U.S.C.
§ 1341 if he devises a scheme whereby bribes or kickbacks are
accepted in the course of conduct of his office, since such conduct
operates to defraud the citizens of his government of their right
to his honest and faithful services’).
55 United States v. Maze, 414 U.S. 395, 400 (1974) (quoting
Kann v. United States, 323 U.S. 88, 94 (1944)).
56347 U.S. 1, 8-9 (1954) (citing United States v. Kenofskey,
243 U.S. 440 (1917) ).
57 Td. at 8.
58 United States v. Maze, 414 U.S. 395, 399 (1974) (footnote
omitted).
20a
Applying these principles to the case at bar, we hold
that the mailings were reasonably foreseeable and were
sufficiently closely related to the defendant’s scheme to
bring his conduct within the coverage of 18 U.S.C. § 1341.
The paychecks were mailed to Felix Matlock from Wash-
ington, D.C., to Detroit, Michigan. It was “reasonably
foreseeable” that Matlock would receive these checks via
the United States mails by virtue of the simple fact that
Matlock lived and worked in Detroit. That the checks
somehow could have been delivered otherwise than through
the mails is immaterial.» Moreover, a sufficiently close
nexus existed between the fraudulent scheme and the
mailings of the checks. The checks contained the actual
proceeds of the fraud and thus constituted the “lifeblood
of the scheme” from the defendant’s viewpoint.” Mani-
festly, these mailings were in furtherance of the scheme
to defraud.
3. False Statements
Having concluded that the defendant violated the mail
fraud statute, we address the question of whether the
defendant was also guilty of transgressing 18 U.S.C.
§ 1001. The courts have interpreted section 1001 to re-
quire that the false representations made to the “depart-
ment or agency” be material. The test of materiality is
59 See, e.g., United States v. Talbott, 590 F.2d 192, 195 (6th
Cir. 1978). Congressional employees could receive paychecks in
only one of three ways: by personal delivery to the employee via
inside mail, by deposit in one of five local banks, or by the United
States mail. See Record (27 Sept. 1978) at 25-27, 106-07 (testimony
of John Lawler); Brief for Appellee at 44.
60 United States v. Reid, 5383 F.2d 1255, 1264-65 (D.C. Cir.
1976).
61 See, e.g., United States v. Talkington, 589 F.2d 415, 417 (9th
Cir. 1978); United States v. Krause, 507 F.2d 118, 118 (5th Cir.
1975) ; Weinstock v. United States, 231 F.2d 699, 701 (D.C. Cir.
1956); Freidus v. United States, 223 F.2d 598, 601 (D.C. Cir.
1955).
Oo ar errant
a
21a
whether the statement “has a natural tendency to in-
fluence, or was capable of influencing, the decision of the
tribunal in making a [particular] determination.” *
Proof of actual reliance on the statement is not required;
the Government need only make a reasonable showing
of its potential effects.™
In this case, the defendant was accused of falsifying
the payroll authorization forms submitted to the House
of Representatives Office of Finance for his employees
Stultz, Matlock, and Dukes. In seeking the payroll in-
creases for these employees, Congressman Diggs failed
to disclose to the Office of Finance the real purpose for
which the monies were intended—the defrayal of his
personal and congressional expenses. Had the defend-
ant revealed these intentions, it reasonably could be ex-
pected that the Office of Finance would not have honored
the payroll requests or at least would have referred the
matter to the appropriate House committee for advice.®
62 Weinstock v. United States, 231 F.2d 699, 701-02 (D.C. Cir.
1956).
83 See United States v. Talkington, 589 F.2d 415, 417 (9th Cir.
1978) ; United States v. Beer, 518 F.2d 168, 172 (5th Cir. 1975).
hei The Office of Finance clearly is a “department or agency”
within the meaning of the statute. See United States v. Bramblett,
348 U.S. 503 (1955).
65 The House Committee on Standards of Official Conduct is em-
powered to “give consideration to the request of any Member,
officer, or employee of the House for an advisory opinion with
respect to the general propriety of any current or proposed con-
duct.” RULES OF THE Z1OUSE OF REPRESENTATIVES, H.R. Doc. 416,
93d Cong., 2d Sess. § 698 (1975) (rule X(e)(1)(D)). This Com-
mittee issued an advisory opinion on 11 July 1973, which stated
that “it [was] improper to levy, as a condition of employment, any
responsibility on any clerk to incur personal expenditures for the
primary benefit of the Member or of the Member’s congressional
office operations.” Advisory Op. No. 2, Comm. on Standards of
Official Conduct of the House of Representatives, Appendix for
Appellant at 177, 178. See notes 68-69 infra and accompanying text.
This strengthens the argument that the Office of Finance would
have honored the payroll requests, at least without some further
investigation.
22a
We hold, therefore, that the defendant’s omissions were
material.
4. Jury Instructions
The defendant assigns as error part of an instruction
that the trial judge gave to the jury for both the mail
fraud and false statement offenses on the question of
the defendant’s intent:
The question is whether the defendant at the time
he approved the payroll authorizations representing
that certain employees would be paid specific sal-
aries intended that those employees would actually
receive and have the complete use of those salaries,
or did he intend that a portion of the salary would
be remitted by the employee for the payment of his
obligations. What I have said respecting good faith
as a defense in a mail fraud charge is also applicable
to false official statement charges.”
66 See also Bramblett v. United States, 231 F.2d 489 (D.C. Cir.),
cert. denied, 350 U.S. 1015 (1956); Romney Vv. United States, 167
F.2d 521 (D.C. Cir.), cert. denied, 334 U.S. 847 (1948).
67 Record (6 Oct. 1978) at 19. The entire instruction on the
issue of good faith provides:
Now, ladies and gentlemen, an important concept of law in
any case where specific intent is a requisite element is the
concept of good faith. I wish to say this to you about good
faith.
Good faith constitutes a complete defense to one charge[d]
with the defense of which fraudulent intent is an essential
element. One who acts with honest intention is not chargeable
with fraudulent intent. One who acts on the basis of any
opinion honestly held by him or a belief honestly entertained
by him is not chargeable with fraudulent intent, even though
such opinion is erroneous, such belief is a mistaken belief.
Evidence which establishes only that a person has made a
mistake in judgment or an error in management or was care-
less does not establish fraudulent intent.
[Footnote continued on page 23a]
23a
The defendant claims that the instruction deprived him
of his good faith defense and erroneously directed the
jury, as a matter of law, that diverting employees’ sal-
aries for payment of congressional expenses was unlaw-
ful. The defendant’s contentions are without merit.
The charge to the jury must be considered in two parts.
The first aspect of the charge concerns the defendant’s
intent at the time he approved the adjustments in the
salaries of his employees. This part does no more than
pose the question of good faith exactly as the defendant
himself had presented the issue at trial. The defendant
denied ever having increased the salaries of his employees
with the intention of using the excess to pay his bills;
the testimony of his employees was uniformly to the con-
trary. The defendant claimed they volunteered the money;
the employees said payment to Diggs of part of their
inflated salaries was virtually a condition of employment.
The employees also pointed to the remarkable rise in
their salaries when they began payments to or for Diggs
and the immediate drastic reduction when each ceased
being a part of the scheme. The trial judge properly
called upon the jury to resolve this issue. Viewing the
67 [Continued]
In order to establish fraudulent intent on th
e part of a
person, it must be established that such person ciieatinaty
and intentionally attempted to deceive another.
Good faith is a defense to an offense such .
as l
one of the elements of which is fraudulent intent. ce ae
The question is whether the defendant i
approved the payroll authorizations Rae aes iia caren
employees would be paid specific salaries intended that those
employees would actually receive and have the complete use
of those salaries, or did he intend that a portion of the salary
would be remitted by the employee for the payment of his
rege bi obey said respecting good faith as a de-
e in a mail frau i i i
cect pameln charge is also applicable to false official
Id, at 18-19.
Nai |
a eee ere. |
24a
disputed portion of the instruction in connection with
the whole charge, we find that the instruction correctly
informed the jury on the question of the defendant’s good
faith.
The second aspect of the instruction involves the pro-
priety of combining under the term “obligations not
only the payments of the defendant's personal and busi-
ness expenses but the payments of his congressional ex-
penses as well. We need not reiterate the reasons for our
conclusion that diverting employees’ salarves to meet ei-
ther the defendant’s personal or official expenses was
unlawful. The judge merely combined under one heading
two kinds of illegal payments; he was not required to
deal with each separately in the instruction. | We hold
that no error may be attributed to the instruction.
5. House Committee Advisory Opinion
Defendant also claims that the Government predicated
its theory of prosecution of the allaged violations on an
advisory opinion of the House of epresentatives, thus
unconstitutionally casting this court into the role of in-
terpreting the internal rules of the House. The “ag?
sory opinion, issued by the Committee on Standards )
Official Conduct of the House of Representatives, sug-
gests that “it is improper to levy, as a condition of em-
ployment, any responsibility on any clerk to incur per-
sonal expenditures for the primary benefit of the ew
or of the Member’s congressional office operations.
i f its Proceedings,
68 ‘Bach House may determine the Rules 0
nunish its Members for disorderly Behaviour, and, with the er
currence of two thirds expel a Member.” U.S. Const. art. I, § 5.
69 Advisory Op. No. 2, Comm. on Standards of Official Conduct
of the House of Representatives (issued 11 July 1973), aaa
for Appellant at 177, 178. Other relevant portions of the documen
provide: pil *
The opinion clearly would prohibit any Member from retain-
ing ar sou on his clerk-hire allowance under either an
pe tne ne <i ot
25a
The defendant confuses the purpose for which the
advisory opinion was introduced in evidence and thus
misconceives our role. The opinion was admitted as evi-
dence relevant to the defendant’s intent, and not as a
legal standard to which the defendant’s conduct was re-
quired to conform. The defendant testified that he be-
lieved an employee properly could “make available . . .
funds from [his] salary” to pay his expenses. The
opinion had some bearing on the defendant’s belief or
intent. It was permissible to introduce it into evidence
to rebut the defendant’s testimony.
The defendant clearly was tried not for violating the
internal rules of the House of Representatives but for
violating the mail fraud and false statements statutes. As
the Supreme Court held in United States v. Brewster,”
a member of Congress may be prosecuted under a crimi-
nal statute provided the government’s case does not in-
trude into legislative processes or functions. No such
impropér probing is alleged in this case. Article I, $5
does not immunize a member of Congress from the oper-
ations of the criminal laws.”* As the Supreme Court has
stated :
No man in this country is so high that he is above
the law. No officer of the law may set that law at
express or tacit agreement that the salary to be paid him is in
lieu of any present or future indebtedness of the Member, any
portion of which may be allocable to goods, products, printing
costs, campaign obligations, or any other non-representational
service.
Id. Advisory Opinion No. 2 was intended merely “to provide some
guidelines and assistance” to members of Congress concerning the
proper use of the clerk-hire allowances.
7 Record (4 Oct. 1978) at 99, 100.
71 408 U.S. 501 (1972).
72 See id. at 518; United States v. Isaacs, 493 F.2d 1124 (7th
Cir.), cert. denied, 417 U.S. 976 (1974).
26a
defiance with impunity. All the officers of the gov-
ernment, from the highest to the lowest, are crea-
tures of the law, and are bound to obey it.
It is the only supreme power in our system of gov-
ernment, and every man who by accepting office
participates in its functions is only the more strongly
bound to submit to that supremacy, and to observe
the limitations which it imposes upon the exercise
of the authority which it gives.”
B. The Scheme to Defraud: Salaries for Noncongres-
sional Employees
Having concluded that the defendant engaged in a
scheme to defraud the government by inflating the sal-
aries of Matlock, Dukes, and Stultz, it remains to be
considered whether the defendant also schemed to defraud
the government, in violation of 18 U.S.C. §§ 1001 and
1341, by placing on the House of Representatives’ pay-
roll Jeralee Richmond and George Johnson. Summariz-
ing the evidence, the defendant acknowledged that George
Johnson, a certified public accountant, provided personal
services while on the House rolls from July 1973 to
December 1974 but claimed that Johnson also acted as
an adviser to him “with respect to black economic, de-
velopment projects.” * Johnson testified, in contrast, that
the defendant and the House of Diggs were indebted to
him, and that once the defendant placed Johnson on the
congressional payroll he told J ohnson to “go ahead and
adjust these checks [Johnson’s paychecks] against the
bills.” 7 Johnson also asserted the he “didn’t at least do
18 United States v. Lee, 106 U.S. 196, 220 (1882).
74 Record (4 Oct. 1978) at 85.
7 Record (30 Sept. 1978) at 175. Johnson reduced the House
of Diggs’ bills by the amount, approximately, that he received
as clerk-hire compensation.
i ee An Ctr mat
a
27a
any... financial or accounting work for Congress” ** he
quit the congressional payroll in December 1974 because
he “just couldn’t rationalize receiving those checks,” 77
Jeralee Richmond, employed at the House of Diggs’
Funeral Home, allocated approximately eighty beedisieal
her time to bookkeeping work and only twenty percent to
handling constituents’ problems. From J uly 1974 to Au-
gust 1976, however, she received her entire compensation
from the congressional clerk-hire allowance.
1. False Statements
The defendant argues that Richmond and Johnson prop-
erly were compensated from the clerk-hire allowance be-
cause they both had official responsibilities. It was a mat-
ter of his discretion to fix their duties and salaries as
congressional employees,”* and the fact that these em-
ployees concededly rendered personal services as well, he
claims, did not affect the exercise of that discretion His
failure to reveal the exact nature of the employees’ re-
sponsibilities on the payroll forms submitted to the House
Office of Finance is thus contended to be immaterial.
We find the defendant’s argument without merit. This
case presents a situation analogous to that confronted in
Bramblett v. United States. In that case, a former
United States Congressman devised a scheme to convert
to his own use monies allotted for the payment of congres-
sional employees. The defendant was convicted of ete
ing 18 U.S.C. § 1001 by falsely and fraudulently re
resenting to the disbursing office of the House A
Representatives that a named individual was entitled to
76 Td. at 172.
77 Id. at 173.
78 See notes 36-37 supra and accompanying text.
7 231 F.2d 489 (D.C. Cir.), cert. denied, 350 U.S. 1015 (1956).
28a
compensation as his official clerk, when that individual
in fact did no congressional work.”
We see no significant difference between Bramblett in
which the employee performed no congressionally related
work while on the congressional payroll and this case in
which only a nominal percentage of Richmond’s and John-
son’s responsibilities were congressionally related. The
difference is merely one of degree and not of substance.
There was sufficient evidence from which the jury could
conclude that the defendant in fact placed Richmond and
Johnson on the payroll with the intention of compensating
them for services rendered to the House of Diggs or the
defendant. The defendant’s representations to the House
Office of Finance that Johnson and Richmond were bona
fide congressional employees therefore were fraudulent
and material, in violation of 18 U.S.C. § 1001.
2. Mail Fraud
We also are of the opinion that the mail fraud viola-
tions were proven. First, there is sufficient evidence
from which to infer the defendant’s fraudulent intent as
the perpetrator of the scheme to defraud: to reiterate, the
jury reasonably could have concluded from all the evi-
dence that the defendant placed Johnson and Richmond
on the payroll in order to compensate them for services
rendered to himself and his business. Second, the re-
quirement of a use of the mails was also satisfied. The
paychecks were mailed to Richmond and Johnson in De-
troit, Michigan, from Washington, D.C. That the United
States mails would be used to deliver these paychecks
clearly was foreseeable." The mailings were also suffi-
iently related to the scheme to satisfy the requirement
8 The Court held in Bramblett v. United States, 348 US. 503
(1955), that the disbursing office was a “department or agency”
of the United States within the meaning of 18 U.S.C. § 1001.
81 See notes 55-56, 59 supra and accompanying text.
29a
a they be “for the purpose of executing the scheme.” *®
he paychecks contained the actual proceeds of the fraud-
ulent scheme. Their delivery thus was i
the scheme to defraud. - s in furtherance of
C. Selective Prosecution
Finally, the defendant claims as error the trial court’s
failure to grant the defendant’s motion for discovery and
an evidentiary hearing on his allegation of selective prose-
cution.* We find that the defendant’s claim has no merit.
The conscious exercise of some selectivity i
ing individuals for similar conduct cia
establish a prima facie case of discriminatory or selective
prosecution, a defendant must show that “ ‘the selection
[is] deliberately based upon an unjustifiable standard
such as race, religion, or other arbitrary classification.’ ” ®
; That burden has not been met in this case.*’ As a pre-
liminary matter, we note that the defendant has not
82 United States v. Maze, 414 U.S. 395, 400 (1974)
83 See United States v. Reid, 583 F.2d
: , ’ ‘ 1255, 1264-6 .
1976) ; notes 54-58, 60 supra and accompanying a (DL. Giz.
as :
The defendant filed a motion prior to trial requesting discovery
and an evidentiary hearing
Poderal eles of Cristal - Bae cog to rule 12(b)(1) of the
85 See, e.g., Oyler v. Boles, 368 U.S
, 69. " S. 448, 456 (1962): Uni
States v. Bell, 506 F.2d 207, 222 (D.C. Cir. 1974) : Somes on —
v. Berrios, 501 F.2d 1207, 1211 (2d Cir. 1974). ig
86 United States v. Bell, 506 F.2d 22
. : , .2d 207, D.C. Ci
(quoting Oyler v. Boles, 368 U.S. 448, 456 ( ae, oe
8" Because of our conclusion that the defen
se of « dant
ge at pmapriege ener prosecution, we do not end the po
ee r er the showing a defendant must make to obtain discov
elated to that claim differs from the showing that a def. van
must make at trial to establish a prima facie case of atiatie ——
rage A Compare, e.g., United States v. Cammisano, 413 F. a.
, 890-91 (W.D. Mo.), vacated on other grounds, 546 F.2d "288
(8th Cir. 1976), with Unit :
(2d Cir. 1974). nited States v. Berrios, 501 F.2d 1207, 1211
30a
demonstrated to our satisfaction that he was singled out
for prosecution. The defendant sought discovery of the
government’s reasons not to prosecute three other con-
gressmen who allegedly had engaged in conduct similar
to that forming the basis of the charges against the de-
fendant.*® One of the three, Congressman James Hast-
ings, however, in fact was prosecuted and convicted for
taking kickbacks from employees to pay his personal
bills.”
Even assuming that the defendant’s evidence of selec-
tive enforcement somehow was sufficient, he has not shown
that the decision to prosecute was based on an unjustifi-
able standard. All that the defendant could point to in
support of his claim was the general danger that the
selective prosecution of congressmen for actions relating
to their official responsibilities could “ ‘become a weapon
used to discipline political foes[s].’” * While a concern
for the integrity of the legislative process prompts care-
ful inquiry into a congressman’s claim of discriminatory
prosecution,®”? there must be at least some substance to
that contention. Defendant made no colorable showing
88 Congressmen Wayne Hays and John Young were not prosecuted
for allegedly maintaining on their congressional payrolls individ-
uals who provided no services related to the discharge of their
official responsibilities.
89 See United States v. Hastings, No. 76-606 (D.D.C. 17 Dec.
1976). Congressman Hastings did not appeal his conviction. Also,
the government obtained a civil judgment against Hastings for his
manipulations of the clerk-hire allowance. See United States V.
Hastings, No. 77-0511 (D.D.C. 25 Jan. 1978).
® Memorandum in Support of Motion to Dismiss at 7 (quoting
United States v. Berrios, 501 F.2d 1207, 1209 (2d Cir. 1974)),
Appendix for Appellant at 24.
91 See United States v. Brewster, 408 U.S. 501, 555-558 (1972)
(White, J. dissenting).
FA Hd asd Con tabte 3o. ean A
*2 The most that the defendant
broad assertion that “[b]ly
Congress, Diggs fr
incumbent administration.”
to Dismiss at 7, Appendix
given of that conflict was “the stinging dissent” filed by United
States Attorney Earl J. Silbert to a re
mer rt
District Committee, which the Pots i pete by the House
Criminal Code. Id. at 7 n.4, Appendix for Appellant at 24.
3la
whatsoever that he was prosecuted for im iti
purposes.*” proper political
III. CONCLUSION
In conclusion, we hold that the case was proved and
the conviction is
Affirmed.
could muster as support was the
virtue of his role as a Member of
equently comes into conflict with the then-
Memorandum in Support of Motion
for Appellant at 24. The only example
on the D.C.
32a
OBERDORFER, District Judge, concurring) : I agree
with Judge Wilkey’s analysis and conclusions.
Comparison of the specific form defendant executed to
authorize the “salary adjustments” (¢.g., App. 89) with
the specific vouchers signed by him to authorize payments
for “official office expenses incurred in my Congressional
District” (e.g., App. 101) makes the case, so far as I am
concerned. I am particularly influenced by the certificate
on the voucher for district office expenses: I further
certify that payment therefor has not been received. I
think those documents establish that defendant, a fiduci-
ary, knowingly authorized disbursement of funds from
the U.S. Treasury for his personal and district office use
on the false representation that he was drawing the
funds to pay additional salary to his employees and that
the disbursing authority repeatedly acted in reliance on
those representations to the detriment of the United
States and to the advantage of defendant. |
It may (or may not) be that if the forms executed
by defendant had disclosed that a portion of the “salary
adjustment” would be spent by the employee for defend-
ant’s district office expense, the disbursing authority
would have approved. But, the forms, as executed, did
not disclose and, in fact, concealed information neces-
sary to put the disbursing authority on notice of any
issue to be decided, such as the amount to be diverted
from “salary adjustment” to something else.
With great respect for the dissent, I am not persuaded
that we can or should reverse or remand.
Prete hie part o Hw oe
33a
LEVENTHAL, Circuit Judge, dissenting in part: I dis-
sent from the disposition ordered by the court. Congress-
man Diggs was indicted for having devised a scheme to
defraud the United States and to obtain money by false
pretenses and fraudulent representations by inflating the
salaries of congressional employees in order to receive
salary kickbacks. There was convincing evidence that
he did receive kickbacks which were then applied to his
personal debts and the business expenses of his Detroit
funeral home (the House of Diggs). If the case had been
tried on that basis alone, there would have been no
problem on appeal.
But there is a problem, one traceable to the govern-
ment’s theory in this prosecution. The government alleged
that there were also kickbacks which appellant used to
defray his congressional office expenses. For purposes of
the charged offenses, these uses were to stand on an equal
footing as those involving his personal uses. Thirteen
of the twenty-nine counts of the indictment relate to
kickbacks which in whole or in part reimbursed em-
ployees for congressional office expenses.' In the six counts
pertaining to the inflated salary of Felix R. Matlock, one
of appellant’s congressional employees, appellant is said
to have used the overpayments, with one trival excep-
tion, for the expenses of the congressional office in his
district. It is the government’s theory, in two of those
counts, that appellant violated the false official state-
ments act, 18 U.S.C. § 1001, when he submitted payroll
authorization forms to the House Finance Office which
represented that the full amount of money set forth as
salary for Matlock was compensatien for service as a
House employee, when in fact appellant had inflated that
salary to “pay his expenses.”
The trial judge shared the government’s theory and
also merged these two quite different situations. In the
1 Counts 1-4 and 12-20.
34a
process the court virtually obliterated appellant’s good
faith defense as to salary increases expended for official
purposes. Appellant sought a good faith instruction that
if appellant acted with a good faith belief in his right
to compensate his employees for paying official congres-
sional expenses, he should be acquitted of the pertinent
counts. The court declined to give such an instruction
unless it included a statement to the effect that the Con-
gressman could not have acted in good faith unless he
believed that the salary described in the employee’s pay-
roll authorization forms would be solely for the personal
use of the employee, and not compensation for a personal
or congressional expense. Defendant declined the giving
of the instruction with such an addendum. The trial
judge then instructed the jury:
Good faith is a defense to an offense such as mail
fraud, one of the elements of which is fraudulent
intent. The question is whether the defendant at
the time he approved the payroll authorizations rep-
resenting that certain employees would be paid spe-
cific salaries intended that those employees would
actually receive and have the complete use of those
salaries, or did he intend that a portion of the salary
would be remitted by the employee for the payment
of his [the Congressman’s] obligations.
The court thereby precluded the taking of any distinction
between personal and official expenses in the consideration
of appellant’s good faith defense. Thus, although appel-
lant had freely admitted during the trial that he had
used some of the salary increases to reimburse employees
for official expenses,? a position consistent with his good
faith defense as to the propriety of such practices, the
jury was directed to treat alike his good faith intent
as to the use of salary funds for his personal obligations
and for his congressional office expenses.
2 Record (Oct. 4, 1978) at 118.
lint tiisensestiecishciesisuctes
35a
This is a court that is instructed by Congress to dis-
charge its appellate functions with due regard for the
interest of justice, 28 U.S.C. § 2106. Justice is a victim
when courts proceed on the basis of form, without due
regard to realities. The majority today joins the trial
judge and the prosecution in stressing form over reality.
Turning first to form, it is plain that, as the majority
concluded, no statute, rule, regulation, or order expressly
authorizes the practice in which appellant was engaged.
By the same token the applicable law is not explicit in
defining the permissible use of clerk-hire funds. The
statutory provisions concerning clerk-hire allowance have
been little changed since first enacted in 1893. Their
language states merely that clerk-hire funds are: “[fl]or
staff employed by each Member in the discharge of his
official and representative duties” (emphasis added) .*
The majority concedes in note 37 that “official and repre-
sentative duties” was not defined in the legislative his-
tory to the appropriations acts, or in the applicable
House regulations. The regulations of the House Ad-
ministration Committee state only that:
No person shall be paid from any clerk-hire allow-
ance if such person does not perform the services
for which he receives such compensation in the offices
of the Member in Washington, D.C., or in the State
or the district which such Member represents.‘
The question is whether the “duties” and “services” of
a staff member may include incurring official expenses in
order to assist the Congressman in the discharge of his
congressional functions.
3 See, e.g., Legislative Branch Appropriation Act, 1978. P
No. 95-94, 91 Stat. 653, 667 (1977). ook en
* Committee on House Administration, Regulations on Allowances
and Expenses for Committees, Members, and Employees of the
U.S. House of Representatives, 94th Cong. ( May 1976) at 20.
36a
In facing up to reality, we must confront the under-
lying question, whether it was widely understood on
Capitol Hill that there was an ambiguity in the rules
governing use of clerk-hire funds which permitted Con-
gressmen to use the mechanism of inflated allowances to
cover congressional expenses. While such use was not
explicitly authorized at the time, if it was in some vogue,
however uneasy, we must seriously question whether the
broad fraud-false statement laws are fairly applicable to
reach a practice that is not specifically covered by House
rules. There is a fundamental difference between breach
of ethics and criminal violations. What is shenanigans,
bad taste, and borderline is not the same as what is
criminal.
One of the main witnesses for the government at ap-
pellant’s trial was John Lawler, Chief of the House Fi-
nance Office. The government sought to identify the ma-
teriality of appellant’s statements (materiality being a
key element of the false statements offense), and in that
endeavor repeatedly inquired into the nature of the clerk-
hire allowance restrictions. Appellant argues that Mr.
Lawler’s testimony demonstrates the uncertain nature of
the use of clerk-hire funds for official purposes. The ma-
jority, however, concludes that Mr. Lawler’s testimony
gives no support to appellant’s contention. In my view,
the jury would have been well within its province in con-
cluding, under an appropriate instruction as to the law,
that Mr. Lawler’s testimony overall gave support to
appellant on this issue. It is not without significance that
the government’s witness gave testimony that was care-
fully circumscribed. Mr. Lawler’s testimony ran as
follows:
Q. What is the Clerk-hire allowance?
A. The Clerk-hire allowance is a description of a
set of funds that each member of Congress has avail-
37a
able to pay his employees in the discharge of their
official duties.®
A few minutes later the government returned to the
same subject matter:
Q. Mr. Lawler, let me repeat the question: Re-
garding the salary amounts listed on the Payroll
Authorization Form what allowable purpose would
that be for the amount listed on tne Payroll Author-
ization Form?
A. It was payment for compensation to employees
for their performance of official duties.®
Later in the questioning:
Q. I will repeat the question. During the period
1973 through 1976, based on the regulations of the
Committee on Administration in the House of Rep-
resentatives, for what purpose could the Clerk-hire
allowance be used? Cc
A. The regulations stated that it was for the dis-
bursement to employees for the performance of offi-
cial duties.’
Note how studiously Mr. Lawler merely reiterated the
wording of the appropriations legislation and the regula-
tions of the House Administration Committee, and care-
fully sidestepped the issue of the definition of the “offi-
cial duties” of a Congressional employee. And now turn
to the significant later testimony, when Mr. Lawler was
called by the government as a rebuttal witness:
Q. The clerk hire allowance, would you again re-
peat exactly what the clerk hire allowance is for?
A. It’s used to pay compensation of employees in
the performance of official duties.
5 Record (Sept. 27, 1978) at 12.
6 Td. at 29-30.
7 Id. at 118-14.
38a
Q. My question was the compensation for the per-
formance of official duties, did that include any ex-
penses which were incidental to the employment?
A. The regulations in that time period didn’t have
any specific definition as far as official duties. It’s
silent on the question of what it might include.®
Do not let a hasty reading blur the significance of this
last answer. On direct, the government asked Mr. Lawler
three times, and three times he answered “performance of
official duties.” The government avoided probing what
that phrase meant as applied to this issue of expenses,
the issue of this case. Then the government did put the
question to Mr. Lawler on rebuttal, and asked whether
clerk-hire funds could be used for official expenses. He
did not say “No”—as the majority would categorically
declare. Instead, he said only that the regulations are
silent as to such use.
For its opinion that use of clerk-hire funds for official
expenses was patently illegal, the majority finds support—
astutely phrased as a strong suggestion—in Committee
Order No. 30 (Transfer Among Allowance), published
by the House Administration Committee effective Janu-
ary 3, 1977. Order No. 30 is described by the majority
as permitting the transfer of up to $15,000 from the
clerk-hire allowance to two other funds, from which allo-
cation then may be made to cover other expenditures,
including official expenses incurred outside the District
of Columbia. The majority glances at Order No. 30 and
says, simply: “The order has no retroactive effect.” It
reasons that promulgation with retroactive application
“strongly suggests” that the practice it now sanctions
was not permitted prior to the effective date of the order.
8 Record (Oct. 3, 1978) at 66.
nO sethantes Relea BOR Tint MA La Se
39a
If realism is added to the analysis, another explanation
emerges. What is equally plausible, I submit more plausi-
ble, is the House Administration Committee’s awareness
that some members were using clerk-hire allowance for
congressional expenses, because the particularized ex-
pense allowance was patently inadequate, and were find-
ing a predicate for this use of clerk-hire funds in the am-
biguity of “official duties” of clerks. What Order No. 30
does is to acknowledge the justification for what had been
an uncertain practice, coupled with an attempt to cope
with the problem of abuse by putting a limitation as to
amount. Of course the limitation on amount could not be
retroactive, and the bounds on the practice set by Order
No. 30 are prospective.
This view is fortified when Order No. 30 is viewed
within the entire context of prior practice. As the ma-
jority notes, during the period relevant to the indictment,
funds for district office expenses came from a meager
fixed allowance of $500 per quarter. If it was as obvious
as the majority says that clerk-hire funds simply could not
be used for district office expenses, since there was a sep-
arate and distinct appropriation for that purpose, it is
strange that Order No. 30 sought to remedy the funding
deficiency by providing for the indirect use of clerk-hire
funds for those costs rather than by directly increasing the
district office allotment. It seems likely that Congress was
indirectly acknowledging the not uncommon past practice.®
® Advisory Opinion No. 2 of the House Committee on Standards
of Official Conduct similary cannot be read as a congressional
standard prohibiting appellant from using clerk-hire allowances
for official purposes. Not only does it lack the status of an official
House rule, more significantly the opinion is ambiguous as to the
propriety of using clerk-hire funds to reimburse an employee for
voluntarily assuming obligations related to congressional expenses.
To be sure, Opinion No. 2, which was introduced into evidence and
read to the jury, is arguably relevant to the issue of appellant’s
intent, but this fact only reinforces my feeling that the jury should
have been permitted to determine on its own whether appellant
acted in good faith with respect to salary increases for official—as
opposed to personal—obligations.
40a
To provide a note of realism, the appellant called Victor
Fischer, who was employed by Congress during 1977 as
Director of Survey Research for the so-called Obey Com-
mission. That study commission, the Commission of Ad-
ministrative Reviews of the House of Representatives,
investigated various elements of financial ethics among
Congressmen. Outside the hearing of the jury, Mr.
Fischer testified to responses of congressmen concerning
inadequacy of the allowance system. He stated that in the
course of administering his survey, the senior staff of the
Commission became aware of a number of practices re-
lated to allowances, including the increasing of clerk-hire
salaries to compensate employees for paying expenses
related to the congressman’s discharge of his official and
representational duties." The Commission concluded that
the allowance system was not adequate to cover official
expenses. The trial court disposed of this testimony by
agreeing with the government that Order No. 30 was not
retroactive, and that it would confuse the issues to make
this testimony available to the jury because if other con-
gressmen committed violations of the law this did not
excuse appellant." Apart from the fact that this position
was something of a turnabout for the government, which
had in its bill of particulars emphasized that it was iden-
tifying that appellant’s activities were contrary to the
“common understanding” of congressmen, it did not grap-
ple with the point that the inquiry of the Obey Commis-
sion, and the emergence of Order No. 30, revealed that
previously there was at least significant ambiguity as to
what the law provided. The importance of ambiguity to
a good faith defense is plain enough. But the judge put
blinders on the jury as to practice, and then reined them
in with his instruction.
10 Record (Oct. 4, 1978) at 39-40.
11 Jd. at 45.
4la
The vitality of a distinction between use of clerk-hire
funds for personal and congressional obligations is
strongly confirmed by the way in which the House of
Representatives handled the internal disciplinary actions
against Congressman Diggs.'* This is not strictly part of
the record, but is in the public domain. The Diggs mat-
ter was referred to the House Committee on Standards
of Official Conduct. That committee received from its
Special Counsel a summary of the evidence against the
congressman and unanimously adopted a Statement of
Alleged Violations containing 18 counts relevant to his
alleged misconduct. The Committee’s charges against
Diggs involved “essentially the same conduct which led
to Representative Diggs’ indictment and conviction.” ™
Yet the Committee without exception kept entirely sepa-
rate counts for using salary increases for personal ex-
penses from counts concerning such use for “congres-
sional expenses.” ™
Upon receipt of a letter from Diggs in which he ad-
mitted to having personally benefitted from the use of
clerk-hire allowances for his personal expenses, the Com-
mittee withdrew the 18 counts and generally found the
congressman to have violated two broad House rules *
12 See generally H.R. Rep. No. 96-351, 96th Cong., 1st Sess.
(1979).
13 Jd. at 1.
14 See id. at 28-37.
15 Paragraphs 1 and 8, Rule XLIII, Rules of the House of Repre-
sentatives. Paragraphs 1 of the Rule XLIII (the Code of Official
Conduct) provides:
A Member, officer, or employee of the House of Representatives
shall conduct himself at all times in a manner which shall
reflect creditably on the House of Representatives.
Paragraph 8 states:
A Member of the House of Representatives shall retain no
one from his clerk hire allowance who does not perform duties
commensurate with the compensation he receives.
42a
with respect to his misuse of funds for personal purposes.
Its recommendation of formal censure was ultimately
adopted by the full House. The Committee did not pursue
the charges that Diggs violated those House rules by
using funds for congressional expenses. In its final re-
port the Committee on Standards of Official Conduct did
not contest this practice, but stated simply that in con-
nection with inflation of staff salaries for “office related
expenses, Representative Diggs maintains that his use of
clerk-hire funds for such purposes was not in violation
of any House rules.” ** I do not place great emphasis
on this development, in part because it is not in the
record and must be considered if at all on the basis of
judicial notice, and in part because it materalized after
the trial and various explanations may be considered.
Nevertheless, at the very least it indicates thai ihe idea
of a different treatment for ccngressional expenses did
not seem unrealistic to the congressmen, the persons most
likely to be familiar with the nuances of the problem.
In light of what was at best a showing of uncertainty
as to what the law provided, plus evidence that others
may have understood use of clerk-hire funds for office
expenses to have been permitted, the jury should have
_ been allowed to separately consider whether or not ap-
pellant acted with fraudulent intent in using the clerk-
hire funds for congressional expenses. The trial court’s
instruction should have permitted the jury to consider
the defense that appellant acted in good faith when he
certified the payment of compensation to clerks notwith-
standing the understanding that they would be using the
funds for office expenses.
I do not say the jury was required to find, or would
have found, that appellant in fact acted in good faith
with respect to inflated salaries which were used for his
16 H.R. Rep. No. 96-351, 96th Cong., Ist Sess. (1979) at 19.
te inananainias
43a
office expenses. But appellant was entitled to put this
defense four square.
The issue before us is not whether we would draw a
distinction between personal and office expenses if we
were filing the forms, but whether appellant was entitled
to put to the jury a good faith defense on the basis of
distinction he claims to have perceived. I would vacate
the conviction on the thirteen counts identified above,’
remand for retrial if the government be so advised, and
in any event would remand as to the other counts for
resentencing uncontaminated by the convictions I believe
should be vacated.
17 See note 1, supra.
44a
APPENDIX B
United States Constitution
Article I, Section 5, Clause 2.
Each House may determine the Rules of its Proceed-
ings, punish its Members for disorderly Behaviour,
and, with the Concurrence of two thirds, expel a
Member.
Federal Statutes —
18 U.S.C. § 1001. Statements or entries generally
Whoever, in any matter within the jurisdiction of
any department or agency of the United States know-
ingly and willfully fa. sifies, conceals or covers up by
any trick, scheme, or device a material fact, or makes
any false, fictitious or fraudulent statements or rep-
resentations, or makes or uses any false writing or
document knowing the same to contain any false,
fictitious or fraudulent statement or entry, shall be
fined not more than $10,000 or imprisoned not more
than five years, or both.
18 U.S.C. § 1341. Frauds and swindles
Whoever, having devised cr intending to devise any
scheme or artifice to defraud, or for obtaining money
or property by means of false or fraudulent pre-
tenses, representations, or promises, or to sell, dis-
pose of, loan, exchange, alter, give away, distribute,
supply, or furnish or procure for unlawful use any
counterfeit or spurious coin, obligation, security, or
other article, or anything represented to be or inti-
mated or held out to be such counterfeit or spurious
article, for the purpose of executing such scheme or
artifice or attempting so to do, places in any post
office or authorized depository for mail matter, any
Oe cant oe orn
45a
matter or thing whatever to be sent or delivered by
the Postal Service, or takes or receives therefrom,
any such matter or thing, or knowingly causes to be
delivered by mail according to the direction thereon,
or at the place at which it is directed to be delivered
by the person to whom it is addressed, any such
matter or thing, shall be fined not more than $1,000
or imprisoned nv more than five years, or both.
As amended May 24, 1949, c. 139 § 34, 63 Stat. 94;
Aug. 12, 1970, Pub.L. 91-375, § 6(j) (11), 84 Stat.
778.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.